Parul Creations Through Its Proprietor Darshana Singla vs UNITED INDIA INSURANCE COMPANY Limited

THE facts of the case are these. Mrs. Darshana Singla, proprietor of petitioner-firm used to transact the business of readymade garments, gift items, crockery, artificial jewellery, plastic items, furniture fixtures etc., under the name and style of M/s Parul Creations. She insured the stocks with the United India Insurance Company Limited, respondent, for a sum of Rs.10,00,000/-. During the night falling between 18.3.2003 to 19.3.2003, fire took place in the premises and caused damage to the tune of Rs.10.20 lakhs. The insurance company after receipt of the complaint appointed a Surveyor, Mr. Deepak Malhotra. According to him, the assessed loss was Rs.1,62,745/- on 21.12.2003. The respondent-insurance company repudiated the claim on the ground of breach of condition. The petitioner filed a complaint before the District Consumer Forum on 11.5.2004. The District Consumer Forum allowed the complaint against the insurance company and directed the insurance company to pay Rs.1,62,745/- alongwith 9% interest and Rs.5,00/- as cost.

AGGRIEVED by that order, both the parties preferred separate appeals before the State Commission. The State Commission dismissed the appeal of the insurance company but allowed the cross appeal of the petitioner, by modifying the order of the District Consumer Forum and directing the insurance company to pay an amount of Rs.3,54,616/- to the petitioner, which was found justified by the Surveyor in its report but it did not award any interest.

LEARNED counsel for the petitioner submitted that he has received all the amounts as ordered by the State Commission. However, the only contention raised by him is that he has not been awarded interest. He prayed that the court should award interest as well. The State Commission went on to hold: "20. The Surveyor had assessed the loss of the respondent only Rs.63,236/- without any cogent evidence and reasons against his own conclusion that the respondent had suffered the loss to the tune of Rs.3,54,617/-, which was almost justified. 21.The loss of Rs.63,236/- assessed by the Surveyor is without any basis and only on the conjectures and surmises. 22. The District Forum also failed to discuss the conclusion of the Surveyor regarding the assessment of loss suffered by the respondent to the tune of Rs.3,54,617/-. 23. The fire brigade which was called to control the fire also assessed the loss of Rs.4 lacs which was suffered by the respondent due to fire in her premises. So, the conclusion of the surveyor that the respondent had suffered loss of Rs.3,54,617/- and the loss assessed by fire brigade to the tune of Rs.4 lacs is almost identical and seems to be correct. The loss of Rs.63,236/- assessed by the Surveyor is not correct and justified and the insured is not bound by his assessment, which is without any basis. It was also held by the Hon''ble Supreme Court in case "New India Assurance Company Ltd. Vs. Pradeep Kumar" reported in 2009 CTJ 599 (Supreme Court) (CP) in para 15, observed as follows:- ".........In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor''s report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor''s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured." In view of the above discussion, we are of the view that the respondent is entitled for the loss of Rs.3,54,617/-, which was found justified by the Surveyor, as such, we modify the impugned order dated 20.5.2005 of the District Forum and First Appeal No. 925 of 2005 filed by M/s Parul Creations is partly allowed. The appellant is directed to pay the same after deducting the amount as per terms and conditions of the policy."

THE ground of interest is a matter of discretion. The court has enhanced the amount of loss considerably. It was enhanced from Rs.63,236/- to Rs. 3,54,617/- and rightly thought that there was no need to pay further interest. The discretion exercised by the State Commission is quite reasonable and fair. It does not call for any interference. The revision petition is, therefore, dismissed.