2009 Supreme(SC) 1151

2009(4) Supreme 733
SUPREME COURT OF INDIA
D.K. Jain and R.M. Lodha, JJ.
Sikka Papers Limited — Appellant
versus
National Insurance Company Ltd. & Ors. — Respondents
Civil Appeal No. 6527 of 2002
Decided on : 29-05-2009

IMPORTANT POINT
It is true that surveyor’s report is not the last word but then there must be legitimate reasons for departing from such report.

Headnote:Consumer Protection Act, 1996 – Section 23 – Complainant, Sikka Paper Limited, a limited company engaged in manufacture of paper purchased Diesel Generating Set of 1000 KVA of Kirloskar Cumins Limited -Said generating set broke down and it could not start again despite efforts – Complainant paid Rs. 25,00,000/- to the repairers as repair charges – Case of complainant that respondent company reimbursed Rs.8,07,110/- only relying upon report of last surveyor – Complaint – National Commission by its judgment and order directed insurer to pay to the complainant an amount of Rs. 10,47,491 only along with interest at the rate of 12% – Appeal – General Exceptions incorporated in the policy provided that insurer shall not be liable under policy in respect of deterioration of or wearing away or wearing out of machine caused by or naturally resulting from normal use or exposure – Policy did not provide for protection against wear and tear that machinery had undergone and that the insured may have chosen to replace – The provision of ‘sum insured’ viz., the cost of replacement of insured property by new property of the same kind and same capacity was subject to exception that repair or replacement shall not extend to machinery or parts which had undergone normal wear and tear due to its use and exposure – The parts which had suffered due to wear and tear on account of constant use, although replaced could not form part of claim for reimbursement under terms of policy –Hence surveyor in its report dated could not be said to have wrongly rejected such claim – Again, Policy provided that if sum insured is less than the amount required to be insured, insurer will pay only in such proportion as sum insured bears to the amount insured – In accordance with said provision in policy if surveyor applied the pro-rata formula and deducted 25.71% from the loss so assessed i.e. Rs.3,71,509.50 from the sum payable as under-insurance, such deduction could not be faulted – Consideration of matter by the National Commission not suffered from any legal flaw justifying interference – Appeal dismissed. (Paras 11, 17 to 21)

       Facts of the Case :

        1. Complainant, Sikka Paper Limited, a limited company engaged in manufacture of paper purchased Diesel Generating Set of 1000 KVA of Kirloskar Cumins Limited with alternator of 1250 KVA for the smooth running of its unit herein in the instant case. The said diesel generating set along with alternator was got insured by complainant. Said generating set broke down and it could not start again despite efforts. Complainant with consent of insurer, sent diesel generating set for repairs to authorized repairers at Pune. Complainant paid Rs. 25,00,000/- to the repairers as repair charges. Case of complainant that respondent company reimbursed Rs.8,07,110/- only relying upon report of last surveyor. On Complaint, National Commission by its judgment and order directed insurer to pay to the complainant an amount of Rs. 10,47,491 only along with interest at the rate of 12%.

        2. Present appeal has been filed against said order of National Commission.

       Findings of the Court :

        General Exceptions incorporated in the policy provided that insurer shall not be liable under policy in respect of deterioration of or wearing away or wearing out of machine caused by or naturally resulting from normal use or exposure. Policy did not provide for protection against wear and tear that machinery had undergone and that the insured may have chosen to replace. The provision of ‘sum insured’ viz., the cost of replacement of insured property by new property of the same kind and same capacity was subject to exception that repair or replacement shall not extend to machinery or parts which had undergone normal wear and tear due to its use and exposure. The parts which had suffered due to wear and tear on account of constant use, although replaced could not form part of claim for reimbursement under terms of policy. Hence surveyor in its report dated could not be said to have wrongly rejected such claim. Again, Policy provided that if sum insured is less than the amount required to be insured, insurer will pay only in such proportion as sum insured bears to the amount insured. In accordance with said provision in policy if surveyor applied the pro-rata formula and deducted 25.71% from the loss so assessed i.e. Rs.3,71,509.50 from the sum payable as under-insurance, such deduction could not be faulted. Consideration of matter by the National Commission not suffered from any legal flaw justifying interference. Appeal was dismissed.

       Result : Appeal dismissed.