SARAF ASSOCIATED vs ORIENTAL INSURANCE CO LTD

-HEARD on the application for condonation of delay as well as on merits.

THERE is delay of 108 days in filing this First Appeal. The delay is sought to be condoned on the following grounds mentioned in the application for condonation of delay: 1. That there is some delay in filing the First Appeal and the appellant submits that the same are not deliberate or intentional on the part of the appellant but has been caused due to the following reasons which is totally beyond the control of the appellant and the same may kindly be condoned in the interest of justice.

That the appellant was under general impression that a Revision Petition should be preferred before the Hon''ble National Commission against the order of the State Commission dated 14. 12. 2007. The Counsel for the appellant at Kolkata applied for the certified copy of the impugned order on 17. 12. 2007 and the same was ready on 22. 1. 2008. Thereafter the certified copy of the impugned order was sent by post by the Counsel at Malda (West Bengal) which reached the appellant only on 30. 1. 2008.

The appellant immediately contacted his Counsel at Delhi and briefed him about the present case and who, on going through the papers, advised that First Appeal does lie and should be preferred against the impugned order of State Commission for which the limitation period is 30 days.

The impugned order was undisputedly delivered on 14. 12. 2007 and a certified copy of the impugned order was also delivered to the appellant on 22. 1. 2008. It is not the delay of few days or few weeks but of several months. We are not satisfied with the grounds for condonation of delay and the application for condonation of delay is liable to be dismissed and it is dismissed accordingly.

Supposing for the sake of arguments the delay is condoned even then there is no force in this appeal for the reasons stated below.

BRIEF facts of the case are that the appellant/complainant was dealing in biscuits of different companies, confectioneries, coconut oil, cosmetics and washing powder, etc. and he had kept their stock at his godown at North Baluchar, Malda in Holding No. 45/56, Ward No. 9. He had taken a Fire Insurance Policy No. 401/0/f/99/107 including the risk of flood and inundation of water valid for the period from 31. 8. 1998 to 30. 8. 1999 for Rs. 5,00,000. On 3/4th September, 1998 his godown had been suddenly inundated with flood water and all the goods kept in the godown were damaged. The appellant informed the Insurance Company about the incident. The complainant suffered damage of goods valued at Rs. 4,79,540. He was intimated by the opposite party that there would be a inspection of the godown when the flood water would recede. On account of severe stench, foul odour and pollution by the Municipality the damaged goods were ultimately and unilaterally jettisoned in a river on or around 11. 9. 1998. Later on the opposite party Insurance Company without inquiry or survey sent a voucher for Rs. 7,500 in full and final settlement against the claim of Rs. 4,79,540 to the complainant. Since the claim was not settled, the complainant filed a complaint claiming Rs. 4,79,540 along with interest @ 18% p. a. Opposite party contested the matter, inter alia on the grounds that the incident of flood was informed by letter dated 4. 9. 1998 which reached them on 8. 9. 1998 by hand delivery. On 10. 9. 1998 the Branch Manager of the O. P. along with Surveyor went to the spot for inspection and it was stated to be inspected on 14. 9. 1998 when flood water was expected to recede. Complainant failed to adduce adequate documents in support of its claim and neglected to comply with conditions for physical verification of loss and never cooperated with the Surveyor and thereafter the claim was assessed at Rs. 7,500. The complainant was not authorized in terms of insurance policy to destroy allegedly damaged goods without the consent/approval of the opposite party and destruction of damaged goods was further flawed in absence of explicit authority of law. Complainant had mixed up damaged goods relating to two other separate cases. This was in violation of the terms of condition 6 of the policy. The said destruction was not supported by any inventory. The claim was based on a make-believe and the complainant''s bankers were also not made a party to the said destruction nor there was any endorsement of the bankers in this regard.

THE State Commission by its order dismissed the complaint. Having heard the learned Counsel for the appellant and having gone through the record it is evident that there was no dispute about the Fire Policy which would cover the risk of loss due to inundation of the godown of the appellant. The dispute relates only to the valued of the goods lost/damaged. It is the case of the complainant that on account of severe stench, foul odour and pollution the damaged goods were jettisoned in river. Supposing for the sake of argument, the damaged goods were required to be destroyed at least it was expected that the complainant would have informed the respondent/opposite party about the proposed destruction of the damaged goods to authenticate the loss. The complainant had three days to inform the insurer. We purposely asked the learned Counsel for the appellant to show anything to indicate that any information was sent to the insurer that the damage goods would be destroyed on 11. 9. 1998. Learned Counsel for the appellant could not show any such intimation or letter. This does not show any regard on the part of the complainant to abide by the terms of the policy. It does not show bona fide also. Supposing for the sake of argument, it is accepted that the intimation was given to the insurer, it could not be virtually possible to ascertain the damage or loss in the flooded godown unless the water would recede. The Surveyor and Loss Assessor appointed by the Insurance Company opined that on his visit he did not find any damaged goods and the insured failed to convince the Surveyor regarding the damage and insured also failed to file any proof regarding his business transactions. In the aforesaid circumstances, it was not possible for the Surveyor to ascertain the loss. The appellant could have procured the duplicate copies of the vouchers, etc. from the concerned supplier to substantiate his claim and if he failed to do so, he has to blame himself and cannot blame insured to say that loss had not been quantified.

IT may also be mentioned that in case we go by the provisions of the Sub-sections (3) and (4) of Section 64um of the Insurance Act, 1938, the Surveyor''s report cannot be challenged and only with the permission of Authority or earlier the Controller, the Second Surveyor could be appointed. The relevant provisions are reproduced as under: "section 64um (3) The Authority, 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 it and such Surveyor or loss assessor shall furnish such report to the Authority within such time as may be specified by the Authority or if no time limit has been specified by it within a reasonable time and the cost of, or incidental to, such report shall be borne by the insurer. (4) The Authority may, on receipt of a report referred to in Sub-section (3) issue such directions as it may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions.

IT may also be stated the dispute revolves around quantum of compensation. The appellant claimed Rs. 4,79,540 though the Insurance Company had offered Rs. 7,500 against the said claimed amount. Thus, it is apparent that dispute is only about quantum of compensation. In such a situation, we are of the view that three options were open for the complainant for fair resolution of the dispute and they are as under: (i) In terms of Sub-sections (2) and (3) of Section 64um of the Insurance Act, 1935 the complainant could approached the concerned Authority to appoint another Surveyor. (ii) The parties could seek arbitration in terms of Clause 13 of the Insurance Policy since it is a quantum dispute. (iii) Complainant should approach the Civil Court in view of the disputed question of destruction of the alleged damaged goods, evidence needed to establish the quantity and quality of the goods and value thereof in terms of the judgment of Oriental Insurance Company Ltd. v. Muni Mahesh Patel, 2006 CTJ 1073 (SC) (CP ).

In the aforesaid circumstances, if the claim was assessed at Rs. 7,500 by the Insurance Company on the basis of Surveyors report, it cannot be called as deficiency by any stretch of any imagination. The first appeal is dismissed in limine. Appeal dismissed.