VISHNU TEX vs NEW INDIA ASSURANCE CO LTD

HEARD the learned Counsel for the parties.

IN this matter, in an unfortunate incident fire took place on 14. 10. 2002 and the complainant, who was running a factory of readymade garments and carpets, suffered a loss of Rs. 1,81,23,405. The complainant intimated about the incident to the Insurance Company and the Insurance Company appointed Surveyor. Mr. Avinash Sharma, Surveyor and Loss Assessor gave his final survey report on 29. 4. 2003 assessing the loss at Rs. 1,23,03,280. In terms of the Surveyor''s report, a sum of Rs. 1,22,93,970 was paid to the complainant on 16. 10. 2003. It is contended that the complainant signed a receipt for full and final settlement of the claim under pressure and financial constraints, though a sum of Rs. 57,86,030 remained unpaid. On 15. 3. 2004, the remaining amount was demanded and thereafter a Legal Notice was also sent in the month of April 2004, alleging as under: 1. That your Surveyor Mr. Avinash Sharma is a dishonest person who was arrested red handed taking the bribe in Patiala on January 2004 which was published in Newspaper and your Surveyor also asked my client to oblige him, if not, he will reduce the claim upto the minimum limits.

That you, after making survey, remit Rs. 1,22,93,970 without considering the actual facts and evidence regarding stocks. It is relevant to mention that you have erroneously and illegally paid Rs. 57,86,030 less.

That you have reduced the claim from Rs. 1,80,83,200 to Rs. 1,22,93,970 of my client without taking into account of all the area of the godown where the goods, material and carpet, etc. were kept and area of the godown has been clearly explained in the Site Plan.

That Mr. T. P. Rao from Loss Prevention Association of India Limited made investigation on 30. 10. 2002 and Mr. J. K. Chakerverti from Tariff Advisory Committee, New Delhi also made the investigation on November 12, 2002.

That as you have committed deficiency in service and the claim of Rs. 1,07,15,689 has not been paid till date. Therefore, you are directed to pay to my client a sum of Rs. 1,07,15,689 (Rs. 57,86,030 as balance payment plus 24% interst Rs. 49,29,659 ).

The O. P. /respondent insurer, through that reply dated 4. 5. 2004 to the aforesaid Notice, denied all these allegations.

The complainant ultimately filed complaint and sought following reliefs: (a) Respondent be directed to pay to complainant a sum of Rs. 1,14,97,705 (Rs. 57,86,030 as balance payment + @ 18% interest Rs. 42,11,675 + Rs. 10,00,000 as business loss and Rs. 5,00,000 as mental agony and harassment ). (b) Pass such other order (s) as this Hon''ble Court may deem fit and proper in the facts and circumstances of the case.

IN the reply filed by the Insurance Company, preliminary objections were raised to the effect that the matter involved complicated question of facts requiring detailed investigation and cross-examination; the complainant had not approached the Commission with clean hands; the complainant was not a consumer and the claim had been settled on the complainant''s giving clean discharge voucher in the full and final settlement of the claim on the basis of report of Surveyor, who is an independent Surveyor. The Insurance Company denied all other allegations. The parties have filed their affidavit of evidence, etc. in support of their contentions.

IN the above background, it is apparent that the dispute between the parties relates to quantum of compensation for there is no dispute about the fire incident and the fact that the amount of Rs. 1,22,93,970 was paid to the complainant on 16. 10. 2003. Learned Counsel for the complainant made a submission that the complainant accepted the amount and the representative of the complainant signed the discharge voucher in full and final settlement of the claim due to financial constraints and compulsion for the complainant needed the money for urgent revival of the concern. It is also submitted that the Surveyor, Mr. Avinash Sharma, was not a right person, criminal complaint was also lodged against him and, therefore, his report could not be relied upon. But the aforesaid submission does not find and support from letter dated 15. 3. 2004. There is not an iota of allegation about undue influence or coercion, etc. in the letter dated 15. 3. 2004. The said letter reads as under: "with reference to our above claim, the fire broken out in our godown on 14. 10. 2002 and we lodged the claim for Rs. 1,80,80,000. In the above claim, you remit us Rs. 1,22,93,970 (Ch. No. 609050 for Rs. 97,99,999 + Ch. No. 609051 for Rs. 24,93,971) on 16. 10. 2003 ). You made us less payment of Rs. 57,86,030 against the above claim. You are requested to please make the balance payment of Rs. 57,86,030 plus 24% interest Rs. 49,29,659 (Total = Rs. 1,07,15,689) from the date of fire without any further loss of time. If we do not receive the balance payment along with interest within 7 days, we will be constrained to take appropriate proceedings in the case. "

IN the absence of any allegation in either the letter or the Notice mentioned earlier and the delay of over 5 months in protesting, would not justify any interference by this Commission in the matter.

THERE is yet another reason. As per the report given by the Surveyor, the amount is to be paid in terms of Sub-section (2) of Section 64 UM of the Insurance Act, which reads as under: no claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the [authority], be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred from a person who holds a licence issued under this section to act as a Surveyor or Loss Assessor (hereafter referred to as "approved Surveyor or Loss Assessor"): provided that nothing in this sub-suction shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved Surveyor or Loss Assessor. If the amount is to be paid only in terms of the report of Surveyor, unless there was amicable settlement between the parties, in the aforesaid circumstances, the only course open to the complainant/petitioner would be either to approach the Insurance Regulatory and Development Authority (IRDA) in terms of Sub-section (3) of Section 64 UM of the Insurance Act or to go for arbitration in terms of the insurance policy, if it is permissible in law. It would be relevant here to reproduce the said Sub-section (3) of Section 64 UM of the Insurance Act, which reads as under: 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.

In the aforementioned circumstances, it is not possible to accept the contention of the complainant and the complaint is required to be dismissed.

HOWEVER, in view of the contentions and disputes and the gravity of situation, we feel it appropriate to grant liberty to the complainant either to seek arbitration in terms of the arbitration clause in the insurance policy or to approach the Authority under Sub-section (3) of Section 64 UM of the Insurance Act or to approach the Civil Court, as may be advised. In so far as the time spent before this Commission is concerned, the complainant may take advantage of the observations made in the judgment rendered by the Apex Court in Laxmi Engineering Works v. P. S. G. Industrial Institute, II (1995) CPJ 1 (SC)= (1995) 3 SCC 583. The complaint is dismissed in above terms and, in peculiar facts and circumstances, parties are left to bear their own costs. Complaint dismissed.