JAGDAMBA INDUSTRIES vs National Insurance Company Limited

THE complaint filed by M/s. Jagdamba Industries against National Insurance Company having been dismissed by the District Forum, Gurdaspur vide order dated February 18, 1997 the present appeal has been filed by the complainant challenging the same. During arguments, it was noticed that the first Surveyor appointed by the National Insurance Company, Mr. Sanjeev Mahajan had submitted a report assessing the loss, however, the same was not produced before the District Forum. THE same was got produced as it was considered necessary for proper adjudication of the case to have it on the record.

THE complainant firm had taken an Insurance Policy from the National Insurance Company covering risk of raw material, finished goods and the factory. On the night of May 1, 1993, fire occurred in the factory with the result was lodged with the Insurance Company. Subsequently the claim was repudiated that the District Forum was approached. THE Insurance Company took up the plea that the repudiation of the claim was based on the report of an Investigator appointed who reported that there was no fire and no loss. Parties produced their evidence on affidavits and documents on the basis of which the impugned order was passed. THE District Forum referred to different grounds as considered by the Investigator to decline the relief holding that there was evidence before the Insurance Company on the basis of which bona fide decision was taken to repudiate the claim and there was no deficiency in rendering service and, thus, the complaint was dismissed. The practice of appointment of Surveyors one after the other till the one makes report favourable to the Insurance Company has been deprecated by the Courts. In the present case, as already stated above, Sanjeev Mahajan, Surveyor was appointed by the Insurance Company on receipt of the claim. We have perused the aforesaid report which is a detailed one holding that the fire took place on account of short circuit and on the basis of relevant records produced by the complainant firm, the existing stock, raw material as well as finished goods were verified viz-a-viz such documents of the Bank from whom cash credit limit had been taken and finally keeping in view the existing stocks which were not affected and on the basis of stocks which were damaged loss was assessed at Rs. 62,614/-. This report is dated 24.6.1996 : On receipt of this report, straightaway it was expected of the Insurance Company to settle the claim and if the report was not acceptable, to repudiate the claim. However, the Insurance Company without doing anything as above, proceeded to appoint another person Mr. Chabra as Investigator. He differed with the report of M/s. S. Mahajan and Associates as referred

At the outset, it may be stated that the so- Called Investigator was not to act as an Appellate Authority against the report of the previous Surveyor. Furthermore, such an Investigator/ surveyor was not appointed after taking approval of the Insurance Controller as envisaged under Section 64UM(G)(3) which reads as under : "The Controller may, at any time, in respect of any claim of the nature referred to in Sub-section (2), call for an independent report from any other approved Surveyor or Loss Assessor specified by him and such time as may be specified by the Controller or if no time-limit has been specified by him within a reasonable time and the cost of, or incidental to, such report shall be borne by the insurer."

LEARNED Counsel for the Insurance Company, relying upon the report of Mr. Chabra, argued that such points should be taken into consideration by the FORA as well as this Commission and a finding should be recorded in favour of the Insurance Company. In our view, this course is not open. We find nothing wrong with the report of M/s. S. Mahajan and Associates and hold deficiency in rendering service on the part of the Insurance Company in not settling the claim as per the above report and we further hold that the complainant is entitled to the amount of Rs. 62,614/- as compensation for the loss suffered as assessed. For the reasons stated above, this appeal is allowed. The order of the District Forum is set aside. A direction is given to the Insurance Company to pay a sum of Rs. 62,614/- with 18% p.a. interest thereon w.e.f. September 24,1996 (a date after three months of submission of the Surveyor''s report) till payment. The opposite party would further pay cost of litigation amounting to Rs. 2,000/-. Let these directions be complied within a period of one month from receipt of copy of this order. Appeal allowed with costs. _____________