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TMI Blog2009 (8) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal Insurance Company Ltd. hereinafter for the sake of brevity referred to as `insurer' for a total sum of ₹ 1.98 Crores during the period when the fire accident took place. The appellant made a claim of ₹ 1.90 crores towards loss of stock due to accidental fire in its business premises, with the insurer. Pursuant to the claim so made, the insurance company appointed one Sri K. Siva Prasad, a licensed surveyor for preliminary investigation and for submitting a preliminary report, about the cause of fire and the probable loss said to have been suffered by the insured. The surveyor having examined the place of fire accident gave preliminary report dated 09.09.1999 to the insurance company estimating the loss of stock at ₹ 1,73,92,310/-, however, had noticed in his report that the number of bales and borahs lying in the Godown and the actual quantity of lint damaged by fire has to be got confirmed from the accounts of the insured and also by physical verification of bale hoops. The insurer after receipt of the preliminary report of Sri K. Siva Prasad, had appointed Joint Surveyors M/s Mehta and Padamsey and Kaypens, in terms of Section 64 UM(2) of the Insurance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order, directing the insurer to pay a sum of ₹ 1,05,00,817/- with interest at 6% per annum from 01.03.2001 till the date of payment within two months from the date of receipt of the order. The reasons assigned by the Commission for accepting the concession made by the respondents is forthcoming in its order. The same is extracted for better appreciation of the case pleaded by the parties to the lis. It is as under : "7.5 As regards the quantum of loss, we need to give weightage to the estimates made by various Investigators appointed by the Insurance Co. The first three Investigators assessed the loss at about the same figures i.e. the loss is of 1350 fully pressed bales of cotton and 88 boras of lint valued that about ₹ 1.73 to ₹ 1.74 crores. However, the Insurance Co. having noticed that these Investigators had not gone into the details of transactions and stocks in a thorough manner, asked another Chartered Accountant, M/s R. Srinivasan & Co. to specially ascertain the quantum of loss caused by the fire. M/s R. Srinivasan & Co. submitted a "Accounts Verification Report" on 22.11.2000 and assessed the loss at ₹ 1,05,00,817/-. They also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its place of business and therefore, there is no illegality committed by the National Consumer Commission in accepting the report of Chartered Accountant and directing the insurance company to pay as assessed and quantified by an independent agency. The learned counsel also submits that keeping in view the facts and circumstances of the case, the National Consumer Commission was justified in awarding interest at the rate of 6% per annum from 01.03.2001, though a claim was made for awarding interest at the rate of 18% from the date of fire incident till the date of payment. 8) Two issues would arise for our consideration and decision. Firstly, whether the insurance company can repeatedly appoint Surveyors after Surveyors for getting the loss/damage assessed before settling the claim of the insured. The incidental question is, whether the National Consumer Commission was justified in awarding 6% interest per annum from 01.03.2001 as against the claim of the appellant at 18% from the date of the fire accident, viz. 24.08.1999. 9) To appreciate the issues raised in this civil appeal, we extract relevant Section by omitting what is not necessary for the purpose of this case. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured: Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal, to which he would have been subject but for the provisions of this sub-section." 10)Section 64-UM (1) of the Act speaks of licensing of Surveyors and loss assessors. We are not very much concerned with this sub-section. Sub- section (2) mandates that no claim in respect of a loss which has occurred in India and requiring to be paid in India equal to or exceeding twenty thousand rupees in value on any policy of insurance be admitted for payment, unless insurer obtains a report on the loss that has occurred from a person who holds a license issued under sub-section (1) of Section 64 UM of the Act as a Surveyor or loss assessor. The proviso to sub- section(2) however, retains the right of the insurer to settle a claim for an amount different from that assessed by the surveyor. This proviso impliedly permits an insurer to obtain a second or further report where considered appropriate or expedient in the circumstances of a case, based upon which the claim could be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,925/- on receipt of this report, the insurance company by their letter dated 7.1.2000, had sought several clarifications from their Joint Surveyors, which according to them were omitted to be noticed by the Joint Surveyors while assessing the loss caused due to the fire accident in the appellant's business premises. The letter dated 7.1.2000, is extracted for better understanding the rival claims of the parties : "THE ORIENTAL INSURANCE HYDERABAD REGION THE ORIENTAL INSURANCE COMPANY LIMITED DIVISIONAL OFFICE : GUNTUR Dear Sirs, RE: FIRE LOSS TO COTTON STOCKS ON 24-8-1999 - OUR CLAIM NO. 432301/136/0/F/04/2000 - A/c : M/S SRI VENKATESWARA SYNDICATE - GUNTUR We refer to your joint survey report bearing Nos. MR/1269 (MS/61640) and KPS/CL/1837 dated 15.11.99 respectively. On perusal of the papers, we have observed as under : 1) The cause of the accident is mentioned as electrical short circuit because of voltage fluctuations. When the stocks were kept in a locked godown and when there was no kind of activity for months together, we wonder as to why the lights in the godown were kept switched on round the clock. Had the lights been switched off the short circuit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances, we do not, from our survey and assessment point of view, consider an investigation into the purchases too essential. Nevertheless, as insurers with privy to the contract, we note that you may cause and/or carry out any investigation as necessary." [Emphasis is supplied by us] 16)In view of certain discrepancies in the joint report of the Joint Surveyors, the insurer was constrained to appoint a Chartered Accountant for verification of the books of accounts of the insured, to ascertain the actual quantum of loss caused by fire accident in the business place of the appellant. 17)Mr. Srinivasan, the Chartered Accountant, after detailed verification of the books of accounts and other relevant material had assessed the loss at ₹ 1,05,00817/-. In his report, he has stated that the Joint Surveyors without verifying the books of account and other relevant records of the appellant firm had assessed the loss which does not reflect the loss sustained by the insured. They had also pointed out various other omissions in the joint report of the Joint Surveyors. 18)The insurer for the purpose of ascertaining the actual loss sustained by the insured had sought clarifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the report of the Chartered Accountant. This submission of the learned counsel is not based on facts. A bare perusal of the report of the Chartered Accountant would clearly demonstrate that it is only after verifying the books of accounts maintained by the appellant in the regular course of business, has calculated the number of borahs that could have been available in the business premises at the time of fire incident. These finer aspects of the matter has been taken into consideration by the National Consumer Commission while rejecting the Joint Survey report of Joint Assessors and for accepting the report of Chartered Accountant. The Commission has also observed that after looking into several reports of the surveyors and the loss assessed by them, it would be fair to go by what the Chartered Accountant has said in his report. May be, the discussion is brief, but the conclusion is sound, and we concur. 21)The Insurance Regulatory Authority (`IRDA' for short) has formulated Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000, which regulate the licensing and the work of surveyors. These regulations stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond Surveyor. 23)Section 64 UM(2) of the Insurance Act, 1938, reads that `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 intimates 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 license issued under this Section to act as a surveyor. In our considered view, the Insurance Act only mandates that while settling a claim, assistance of surveyor should be taken but it does not go further and say that the insurer would be bound 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n economy and the policy of Reserve Bank of India the interest rate has been lowered. The nationalized banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed hereinbefore shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants." 27)In the case before us it has been made clear that if the insurer is not satisfied with the assessment of the surveyor, he retains the right to settle claim for a different amount. The insurer after rejecting the assessments of the surveyor and the joint surveyor has accepted the assessment made by the Chartered Accountant. Therefore, it would not be correct to say that insurer while settling the claim has caused an unnecessary delay of three years. But once the insurer has 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 legitima ..... X X X X Extracts X X X X X X X X Extracts X X X X
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