United India Insurance Co. Ltd vs KULWANT SINGH

THIS is an appeal by United India Insurance Company Ltd. against order dated 22.9.1994 of District Forum, Basti in Complaint Case No. 163 of 1994. By this order the appellant-Company has been directed to pay certain amounts to the complainant who had lodged a claim in respect of an accident that took place on 23.2.1992 to a truck which was insured with the appellant Company.

THE case of the complainant was that after the aforesaid accident to the truck which took place during the currency of a valid insurance policy obtained from the appellant-Company a claim was lodged with the Company and after getting the spot inspection report from the Surveyor, Sri Rajesh on 27.2.1992 the Company appointed Sri K.P. Singh Chauhan as a Surveyor and Loss Assessor, who gave his report on 23.4.1992 assessing the loss at Rs. 1,51,268/-. THE complainant says that the Insurance Company for some ulterior motives did not accept this report and appointed another Surveyor, Sri B.N. Tewari, who made his report on 4 October, 1992. Inspite thereof another Surveyor Sri Vinod Pal was appointed by the Company who ultimately gave report acceptable to the Insurance Company on 18.7.1993. THE Company communicated to the complainant through its letter dated 23.11.1993 offering a sum of Rs. 98.042/- only as the amount payable to the complainant in respect of the claim. Since there was deficiency in service on the part of the Company which had illegally refused to accept the report made by Sri K.P. Singh Chauhan and had drastically reduced the amount of loss by obtaining a subsequent report from Sri Vinod Pal, the necessity for tiling the complaint for redressal of the grievance aross for him. The case of the Company, briefly, before the District Forum has been that there were some glaring defects found in the report of Sri K.P. Singh Chauhan so that verious queries were made from him through letters sent in the months of May and June, 1992 and since the reply to those queries were not satisfactory another Surveyor and Loss Assessor Sri Vinod Pal had to be appointed. The Company also asserted that Sri B.N. Tewari was appointed to find out only whether repairs had actually taken place to the truck as claimed by the complainant or not and not for any other matter. It has also been pleaded that in his report dated 18.7.1993 Sri Vinod Pal has given reasons for disagreeing with the assessment made by Sri K.P. Singh Chauhan and further that taking into account the assessment made by Sri Vinod Pal a sum of Rs. 98,042/- was offered to the complainant which he did not accept. It is said that there was no deficiency on the part of the Insurance Company in these circumstances.

The District Forum has written out a very detailed order running into nearly 16 pages. It has discussed at length the various circumstances appearing from the material available to it on the record which included the various survey re- ports as well as the correspondence and con- cluded that there was deficiency in service on the part of the Insurance Company in not accepting the report of Sri K.P. Singh Chauhan and making an offer only of a sum of Rs. 98,042/- belatedly through letter dated 23.11.1993. The District Forum has also come to the conclusion that the assessment made by Sri K.P. Singh Chauhan was proper and valid and has awarded the amount of Rs. 1,91,268/- as the amount of loss suffered by the truck as assessed by Sri K.P. Singh Chauhan alongwith 15% interest thereon for a period of 129 months amounting to Rs. 54,834.65. The District Forum has awarded a sum of Rs. 8,000/- as compensation for harassment and mental agony caused to the complainant and has further awarded a sum of Rs. 2,000/- by way of costs of proceedings. A total sum (rounded off) Rs. 2,16,000/- was directed to be paid to the complainant by the Insurance Company.

AFTER filing the appeal the appellant-Company prayed for an interim order and by an order dated 7.12.1993; after hearing learned Counsel for the parties, the Commission directed that in case a sum of Rs. 1,25,000/- was paid by the appellant-Company to the complain- ant-respondent within a month, the realisation of the remaining amount was to remain stayed till the disposal of the appeal. This amount, it is undisputed has been received by the complain- ant-respondent. We have heard Mr. V.P. Sharma, Advocate for the appellant-Company and Mr. M.H. Khan, Advocate for the complainant-respondent at some length in the appeal today.

FROM the dates given out to the Commission and mentioned earlier in this order it is more than clear that even though the claim had been made before it on or about 23.2.1992 the ultimate decision was taken by the Insurance Company and communicated to the complainant by it after a lapse of more than a year and a half through its letter dated 23.11.1993. Mr. V.P. Sharma has tried to justify the delay by pointing out that the Insurance Company had been making enquiries and getting the claim processed throughout this period and as such no deficiency could be attributed to it. We are, however, unable to accept this submission in the circumstances of the present case where indisputably a period of more than a year and a half was taken by the Insurance Company in finalising the claim. We are not impressed by the submission that during this period repeated queries had to be made by the Insurance Company and the matter got examined by it by various Surveyors. We agree with the District Forum in its conclusion that there has been a deficiency in service on the part of the Insurance Company in taking a final decision in the matter after a long lapse of time. We also uphold the conclusion recorded by me District Forum about the quantum of compensation amounting to a sum of Rs. 8,000/- for the mental agony and harassment suffered by the complain- ant in the case due to the delayed disposal of his case. We find no fault with the direction for payment of a sum of Rs. 2,000/- by way of costs of the proceedings. The main thrust of the submission of Mr. Sharma has been that it was open to me Insurance Company, in the event of a reasonable doubt in its mind about the assessment made by the first Surveyor and Loss Assessor, to seek opinion of a subsequent Surveyor as was done in the instant case. Mr. Sharma has also convassed that the report of Sri Vinod Pal on the basis whereof the Insurance Company has assessed the loss at Rs. 98,042 / - and offered the amount to the complain- ant was not arbitrary. Mr. M.H. Khan, learned Counsel for the complainant has, reiterated the reasonings which commended themselves to the District Forum for acceptance of the assessment made by Sri K.P. Singh Chauhan, the first Surveyor and has urged that there was no justification for the Insurance Company for not accepting that assessment.

IT is unnecessary for the Commission to go into the question whether the assessment made by Sri K .P. Singh Chauhan, the first Loss Assessor or that made by Sri Vinod Pal, the second Loss Assessor is correct. The legal position in this respect has been settled beyond doubt by the National Commission by its repeated pronouncements that where dispute between the parties relates to the quantum of the loss assessed by the Surveyor of the Insurance Company and offered that by it to the complainant the matter is to be resolved by resort to arbitration proceedings in accordance with the conditions of the insurance policy. In the present case, also we feel that in view of the law so laid down by the National Commission the difference between the parties relating to the quantum of the loss caused to the truck should be gone into in arbitration proceedings in accordance with the terms of the insurance policy.

WE allow the appeal in part insofar as it relates to the award of a sum of Rs. 1,51,268/- with interest thereon and quash that part of the order of the District Forum. The remaining part of the order is upheld. WE, however, direct the Insurance Company to refer the dispute relating to the quantum to the Arbitrator in accordance with the terms of insurance policy within six weeks from today. The Arbitrator shall after notice to both the parties take a decision in the matter within three months of the reference to him. The parties shall be free to raise all their plea before the Arbitrator in respect of quantification on the material which they have brought on the record of these proceedings. The amount of Rs. 1,25,000/- which has been received by the complainant under the interim orders of the Commission shall be subject to adjustment in accordance with the decision made in the arbitration proceedings.

We may add that a prayer for grant of some compensation for deficiency on the part of the Company for delaying the decision in the matter, over and above the amount awarded by the District Forum was made on behalf of the complainant. However, since the decision of the District Forum has not been challenged by the complainant by filing an appeal we find our- selves unable to grant this relief. In view of the divided success in the appeal we leave parties to bear their own costs in it. Let a copy of this order be made available to the learned Counsel for the parties in accordance with rules. Appeal partly allowed.