2009 Supreme(SC) 1481

2009(6) Supreme 326
SUPREME COURT OF INDIA
Markandey Katju and H.L. Dattu, JJ.
Sri Venkateswara Syndicate — Appellant
versus
Oriental Insurance Company Ltd. and Anr. — Respondents
Civil Appeal No. 4487 of 2004
Decided on 24-08-2009

IMPORTANT POINT
While settling a claim, assistance of surveyor should be taken but insurer is not bound by whatever the surveyor has assessed or quantified. If for any reason, the insurer is of the view that certain material facts ought to have been taken into consideration while framing a report by the surveyor and if it is not done, it can certainly depute another surveyor for the purpose of conducting a fresh survey to estimate the loss suffered by the insured.

Headnote:Insurance Act, 1938 – Section 64-UM – Damage to Cotton stocks insured due to a fire accident – Cotton stocks in question covered by seven insurance policies issued by respondent Insurance Company – Non settlement of claim by respondent company in spite of obtaining report of a Surveyor and Joint Surveyor – Appointment of a Chartered Accountant to give a fresh report – Complaint alleging deficiency in service – National Commission, on the concession made by the insurance company based on the report of Chartered Accountant passed the impugned order, directing insurer to pay a sum of Rs.1,05,00,817/- with interest at 6% per annum – Appeal – Plea that action of the insurance company in appointing several surveyors till it got a favourable report to suit its estimation of loss of stock in the fire incident was illegal – Perusal of the joint survey report revealed that Joint Surveyors without going into the records of the appellant firm had assessed the loss said to have been sustained by the insured in the fire accident- Joint Surveyors had taken into account 88 borahs while assessing the loss, whereas as per the records of the insured submitted to the bank, there were 551 borahs as on 31.7.1999, out of which 548 borahs were sold from 1.8.1999 to 24.8.1999, (the date of the fire incident) thus leaving only 3 borahs in the stock – Chartered Accountant, who gave the report having noticed all these omissions and after detailed verification of the books of accounts and records maintained by the appellant had assessed the loss at Rs.1,05,00817/- In his report he had specifically stated that Joint Surveyors had failed to notice that the accounts presented to them belonged to one of the several firms operating from the same premises under the same or similar names and further the Joint Surveyors had over looked to ascertain the identity of the firm which was insured and the firm which had in fact sustained the loss- Finer aspects of the matter had been taken into consideration by National Commission while rejecting the Joint Survey report of Joint Assessors and for accepting the report of Chartered Accountant – Appeal partly allowed. (Paras 20 to 23)

        Interest – The insurer after rejecting the assessments of the surveyor and the joint surveyor had accepted the assessment made by the Chartered Accountant – Hence, it could not be said that insurer while settling the claim has caused an unnecessary delay of three years- But once the insurer had reached a settlement he should make the payment at the earliest- And if further delay is caused by the insurer in making the payment then he should be made liable to pay the interest on the amount settled, as compensation at the current rate of interest till the payment is made, as it has deprived the appellant from using his money for which he is legitimately entitled-Hence direction given to respondent Insurance Company to pay Rs.1,05,00817/- with interest at the rate of 9% as compensation from the date of assessment done by the Chartered Accountant. (Paras 27, 28)

       Facts of the Case :

        1. Damage was caused to Cotton stocks insured herein in the instant case due to a fire accident. Cotton stocks in question were covered by seven insurance policies issued by respondent Insurance Company. Appellant made a claim of Rs.1.90 crores towards loss of stock due to accidental fire in its business premises, with the insurer. on settlement of claim by respondent company in spite of obtaining report of a Surveyor and Joint Surveyor. Appointment of a Chartered Accountant by insurance company to give a fresh report who after inspection of godown and verifying books of accounts, estimated the loss of stock at Rs.1,05,00,817.On Complaint alleging deficiency in service, National Commission, on the concession made by the insurance company based on the report of Chartered Accountant passed the impugned order, directing insurer to pay a sum of Rs.1,05,00,817/- with interest at 6% per annum.

        2. Present appeal has been filed against said order of National Commission. Plea of appellant that action of the insurance company in appointing several surveyors till it got a favourable report to suit its estimation of loss of stock in the fire incident was illegal.

       Findings of the Court :

        Perusal of the joint survey report revealed that Joint Surveyors without going into the records of the appellant firm had assessed the loss said to have been sustained by the insured in the fire accident.Joint Surveyors had taken into account 88 borahs while assessing the loss, whereas as per the records of the insured submitted to the bank, there were 551 borahs as on 31.7.1999, out of which 548 borahs were sold from 1.8.1999 to 24.8.1999, (the date of the fire incident) thus leaving only 3 borahs in the stock. Chartered Accountant, who gave the report having noticed all these omissions and after detailed verification of the books of accounts and records maintained by the appellant had assessed the loss at Rs.1,05,00817/. In his report he had specifically stated that Joint Surveyors had failed to notice that the accounts presented to them belonged to one of the several firms operating from the same premises under the same or similar names and further the Joint Surveyors had over looked to ascertain the identity of the firm which was insured and the firm which had in fact sustained the loss. Finer aspects of the matter had been taken into consideration by National Commission while rejecting the Joint Survey report of Joint Assessors and for accepting the report of Chartered Accountant. Appeal was partly allowed.

       Result : Appeal partly allowed.