9911796707
TMI Blog2019 (5) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 2015 are filed by the Complainant. 3. The Complainant is an Industrial Unit engaged in manufacture of garments. The Complainant obtained a policy of insurance for the risk of fire for the period 27.3.2000 to 26.3.2001 with the assured sum of Rs. 85,00,000/-. It was on 12.07.2000 at about 3.45 AM, the factory of the Complainant was engulfed in fire. It is thereafter, the Complainant lodged a claim for loss due to fire incident in its factory. 4. M/s R.N. Sharma & Co., was appointed as an investigator to conduct a preliminary investigation by the Insurance Company. The preliminary investigation report was submitted on 20.07.2000. It is thereafter, M/s Sunil J. Vora & Associates was appointed as the Surveyor by the Head Office of the Insurance Company on July 28, 2000. The said Surveyor submitted detailed report and accepted the claim of the Complainant for Rs. 54,93,865/-. Out of the said amount, Rs. 1,65,430.53 was the claim on account of damage to building; Rs. 3,93,779.78 was the claim towards the damage to the machinery and Rs. 49,44,657.67 was the claim towards the damage to the stocks. The amount was rounded off to Rs. 54,93,865/-. 5. The Insurance Company issued a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contradict with purchase invoices of items purchased by Luxara Enterprises Pvt. Ltd. From their vendors." 8. The Insurance Company was still not satisfied by the report and thereafter appointed Mr. R.G.Verma, a Chartered Accountant as its third surveyor. The said surveyor recommended total repudiation of claim in its report on 28.05.2002 under Clause 8 of the Insurance Policy on the ground that there were enough valid circumstantial reasons on the part of the Insured to manipulate the fire. It is after the said report furnished on 28.06.2002, the claim was repudiated by the Insurance Company on the same day i.e. 28.6.2002, inter-alia, on the ground that the Complainant had no export order and the letter of credit does not show the name and address of the buyer. It is mentioned therein that as per stocks statement furnished to Canara Bank on 05.07.2000, 34,800 shirts were ready as on 01.07.2000 and that the letter of credit was expiring on 09.07.2000. Therefore, the Complainant did not explain as to why the said consignment was not shipped on or before 01.07.2000. Another reason given was that the letter of credit was alleged to have been extended up to 08.08.2000 in favour of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 15.01.2002 submitted by the Complainant was misleading as the Complainant could not make available accounting records to the Surveyor. 12. The Complainant again submitted a letter dated 18.3.2002 aggrieved against the actions of the surveyor to the various officers of the Insurance Company. The Complainant also pointed out that the Insurance Company could not appoint one surveyor after another. It was open to the Insurance Company to apply to the Insurance Regulatory and Development Authority to appoint an independent Surveyor under Section 64 UM (3) of the Insurance Act, 1938 (1938 Act) but the Insurance Company could not appoint one surveyor after another till such time, it is successful in getting a report of total repudiation of the claim of the Complainant. The relevant provisions of the 1938 Act read as under:- "(2) 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 otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Surveyor after the report of Surveyor- M/s Sunil J. Vora & Associates was submitted on 01.02.2001. It was, inter-alia, asserted that quantum of loss has been assessed without verifying and providing any documents and that the clarification sought from the Surveyor has not led to any response. The Insurance Company concluded the reasons for appointing another Surveyor in para 3.9 of its reply which reads as under:- "Respondent No.1 sought clarification from the Surveyors as well as the insured on certain points but neither the Surveyors nor the insured submitted the clarification or the desired documents. In the absence of the said clarification/documents, Respondent No. 1 was not able to ascertain the cost of the shirts. The Surveyors had taken the value of the shirts at Rs. 235/- but it was not clear from where he had taken the said value. On the other hand, the Complainant had taken the order @ 5.9 US$ i.e. Rs. 271/- and adding overhead expenses the cost comes Rs. 295/- per shirt. The Preliminary Surveyor in his report dated 20th July, 2000, also did not give the basis of the estimate of loss at Rs. 75,00,000/-. The letters dated 11th May, 2001 was written to the Prelimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a was involved in a criminal case as it was held that such facts have no bearing on this case. Learned counsel for the Appellant-Insurance Company relies upon an order passed by this Court as reported in Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited (2009) 8 SCC 507 which case has examined Section 64 UM of the 1938 Act to hold that there is no prohibition in the Act for appointment of another Surveyor- M/s ABM Engineers & Consultants by the Insurance Company except that the Insurance Company has to record reasons for not accepting the report of the Surveyor- M/s Sunil J. Vora & Associates. Therefore, the Insurance Company has rightly appointed another Surveyor. 16. The Insurance Company relied upon newspaper report dated 09.05.2002 published in Punjab Kesari that the Delhi Police has arrested three persons on the basis of forged documents duping exporters. It was the said newspaper report which was made basis of appointing yet another Surveyor. The relevant extract from the written statement reads as under:- "3.12 On 9th May, 2002, it was reported in the "Punjab Kesari" newspaper that Delhi Police has arrested a gang of three persons who had duped the expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investigator without consulting HO. Please let us have your explanation to enable us to apprise Management. We note that correspondence by M/s. ABM Engineers and Consultants are directly addressed to the Senior Branch Manager only and copies are seen forwarded to various higher offices. Kindly inform us the current status of this claim also for our records." 18. Before considering the respective contentions of the parties, the judgment in Sri Venkateswara (supra) is required to be examined. In the said judgment, this Court has upheld the right of the Insurance Company to appoint Surveyor but such right can be exercised for valid reasons or if the report is found to be arbitrary and that Insurance Company must give cogent reasons without which it is not free to appoint the second Surveyor. The relevant extracts of the judgment read as under: - "33. Scheme of Section 64-UM, particularly of subsections (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving the appointment of second surveyor. 21. Still further, the reasoning given by the local office is that the Surveyor- M/s Sunil J. Vora & Associates has not clarified certain points when clarification was sought for. The said reason stands answered even in the report of Surveyor- M/s ABM Engineers & Consultants. Such surveyor has considered the report of the Canara Bank in respect of stocks statement. Such stocks statement was brushed aside for the reason that if said stocks statement was correct then as to why letter of credit could not be materialised. The Complainant has explained that it was on 15.06.2000, it has been communicated to the consignee to have inspection of the stocks before exporting the consignment. The consignee has not inspected the stocks which led to the extension of letter of credit up to 08.08.2000. It was argued that letter of credit is to facilitate receipt of money from the exporter and once the stock of the Complainant has been verified by the Canara Bank, which had the first charge over the property, therefore, such verification of stock could not be doubted by the Insurance Company only for the reason that letter of credit could not be materialis ..... 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