NATIONAL INSURANCE COMPANY vs Raja Poiltry Farm

MR. Vinay Kumar, Member-This is the case of a poultry farm in Andhra Pradesh, which had obtained insurance cover for Rs. 20 lakh for the period 26.8.1996 to 25.8.1997, from the present Revision Petitioner. The poultry farm reportedly suffered huge damage in the cyclone, which hit Andhra coast on 6.11.1996, with large-scale destruction of buildings, poultry feed and birds. The insurance claim filed by the Complainant/Respondent was accepted by the Insurance Company only for Rs. 88,665 on the basis of the report of the Surveyor. This was against his claim for Rs. 5,79,000.

THE District Forum ordered the Insurance Company to pay Rs. 3,59,824 with interest at 12% and Rs. 3,000 towards cost. In the appeal by the Insurance Company, the State Commission modified the order of District Forum to the following extent: (1) The amount awarded for the loss of poultry feed stock was reduced from Rs. 2,39,850 to Rs. 2,00,000 as feed stock was insured for Rs. 2,00,000 only. (2) The District Forum had allowed interest of 12% from 6th February, 1997, which was reduced to 9%.

THE above order of the State Commission has been challenged by the National Insurance Company Ltd., in this Revision Petition, substantially on the ground that the order of the Consumer Fora amounts to interference with expert finding of the Surveyor. The award of interest is also challenged as not permissible under the law laid down by the Apex Court. We have perused the records of this case and heard the Counsel for the two parties.

WE find that the Fora below have clearly recorded reasons, wherever they have not accepted the recommendation in the Surveyor''s report. Thus, no breach of policy conditions was pointed out in the report of the Surveyor. Yet, deductions towards policy-excess and under-insurance have been made. This has been commented upon. In the course of the arguments before us, a question was directly posed to the Counsel for the Revision Petitioner on the deduction towards the under insurance factor. He accepted that the report of the Surveyor gives no explanation for it.

IN the case of the four layer sheds and the godown, the loss assessed by the Surveyor is Rs. 1,19,974. That is exactly the amount accepted by the District Forum and the State Commission. But, deductions towards under-insurance factor and policy excess have been found without any acceptable explanation and, therefore, disallowed. The State Commission has very rightly observed that there could not be any deduction towards depreciation in the case of poultry sheds when they were damaged within two months after issue of the insurance policy.

IN the above background, the plea of the Revision Petitioner that the Fora below "not only interfered with the findings of the Surveyor who is an expert but on the contrary proceeded further and substituted the findings of the Surveyor with their own findings in the absence of any material to support this or even in the absence of any other contradicting Surveyor''s Report," is found to be without any substance and cannot be accepted.

THE Revision Petitioner also questioned the award of interest in this case on the basis of the decision in L.I.C. of India v. S. Sindhu, II (2006) CPJ 18 (SC)=VII (2006) SLT 557=2006 (5) SCC 258. This was a case of a lapsed policy of Life Insurance. Upon the death of the insured, his wife was considered eligible to receive a reduced sum. The District Forum awarded interest on this sum from the date of the premiums; till the date of settlement. The State Commission rejected the contention of the L.I.C. that it was not liable to pay this interest. The National Commission confirmed the award. Hon''ble Supreme Court of India allowed the appeal of LIC and held that "Courts cannot rewrite the contract of insurance and cannot direct the insurer to pay interest contrary to the terms of the contract". The facts of the case before us are quite different. The interest awarded is from 5.2.1997 i.e. the date on which the Insurance Company itself had sent a disbursement voucher to the insured for Rs. 88,665. The voucher was withdrawn as the Complainant/Respondent had refused to accept it in full and final settlement of the claim. It may also be mentioned that in this case, only simple interest of 9% and cost of litigation have been awarded. No compensation has been awarded.

FOR the reasons above, we do not find any jurisdictional error, material irregularity or illegality in the impugned order of the Andhra Pradesh State Consumer Disputes Redressal Commission to justify interference by us under Section 21 of the Consumer Protection Act, 1986.