Consumer Protection Act, 1986 – Insurance claim – Respondent No.1-insured was engaged in the business of manufacture of polyethylene, plastic films etc. – Plant and machinery in respondent no.1’s factory was charged in favor of respondent no.2 as security and stock in trade was hypothecated to respondent no.3 for discharge of loan obtained from them – The factory, plant and machinery were covered under the insurance policies of appellant-insurer against risk of fire, flood and earthquake – Fire broke out causing total destruction – Appellant was intimated – Joint Surveyors appointed by appellant assessed the loss – Final report submitted – Despite said report, the appellant appointed investigators – Eventually, complaint filed by respondent no.1 – NCDRC allowed claim in part, further apportioning the amount in favour of respondent nos.2 and 3 – On appeal, held: Fire occurred on 06.11.99 – Surveyors visited the site on 09.11.99 itself – Interim and final report were submitted to the insurer on 23.03.2000 and
13.03.01 but, it did not take any steps immediately – After much delay, it appointed the investigator on 22.06.01 but did not conclude the said process despite repeated requests by respondent no.1 – Further, for the first time the insurer relied on the investigator’s report in the NCDRC proceedings – Surveyors report was submitted as the natural process – Conclusion reached therein is more reliable rather than the investigation report keeping in view the manner in which the insurer proceeded in the matter – Hence, reliance placed on the surveyor’s report by NCDRC without giving credence to the investigation report cannot be faulted – Such conclusion does not call for interference – However, amount ordered by NCDRC shall be payable with interest at 9% p.a. instead of 12% p.a. Consumer Protection Act, 1986 – s.24A – Cause of action – Held: s.24A indicates that the complaint is required to be filed within two years from the date on which the cause of action arises – Cause of action will remain flexible and is to be gathered from the facts of each case – In the present case, though the cause of action arose for the first time when the fire broke out but it did not remain static at that point – As the matter kept oscillating, fresh cause of action arose – On facts, complaint filed was within time – Consideration of the same on merits by NCDRC justified.
Consumer Protection Act, 1986 – Insurance Claim – Surveyors report, reliance on – Held: Surveyors report is the basic document which has statutory recognition – It can be relied upon if it inspires confidence of adjudicating forum and if on facts, the forum does not find the need to place reliance on any other material. Partly allowing the appeal, the Court
HELD: 1.1 Section 24A of the Consumer Protection Act, 1986 indicates that the complaint is required to be filed within two years from the date on which the ‘cause of action’ has arisen. The cause of action will remain flexible to be gathered from the bundle of facts arising in each case. In the instant case the fire incident had occurred on 06.11.1999. The appellant had informed the insurer on 07.11.1999, where after the joint surveyors were appointed and on verification had submitted their final report on 13.03.2001. Despite said report, the insurer through their letter dated 22.06.2001 had appointed an investigator but did not proceed to either accept the claim or repudiate the same. Further, in the reply filed on behalf of the insurer before the NCDRC reference is contained that correspondence was exchanged between the investigator appointed by the insurer and the respondent No.1 through the letters dated 07.03.2002, 05.04.2002, 03.05.2002, 03.06.2002 and 13.07.2002. If in the above context the fact situation herein is noticed, though the fire incident occurred on 06.11.1999, the same merely provided the cause of action for the first time to make the claim but the same did not remain static at that point. On the other hand, the process of joint survey though had concluded with its final report on 13.03.2001, the letter dated 22.06.2001 addressed by the insurer to the respondent No.1 regarding appointment of the investigator had created a fresh cause of action and kept the matter oscillating. Thereafter, the matter did not rest at that but there was repeated action being taken by the investigators seeking for details. When the same did not conclude in an appropriate manner, the respondent No.1 got issued a legal notice dated 05.01.2003 to which reply was issued, when in fact the repudiation was gathered and the complaint was filed. Even if the date on which the process of intimation of appointment of the investigator through the letter dated 22.06.2001, received by the respondent No.1 is taken into consideration, from that date also the complaint filed on 26.03.2003 is within time. There was no need for the NCDRC to pass any separate order at the outset to hold the claim to be within limitation and then proceed when it is clear on the fact of it. As such the consideration of the complaint on merits by the NCDRC was justified. [Paras 6-8][902-E-F; 903-C-D, G-H; 904A-E]
Kandimalla Raghavaiah and Company v. National
Insurance Company and Another (2009) 7 SCC 768 : [2009] 10 SCR 870 – distinguished.
1.2 On the merits of the claim, a perusal of the impugned order passed by the NCDRC indicates that the NCDRC has made detailed reference to the report submitted by the joint surveyors, dated 13.03.2001 and has ultimately allowed the claim, in part. In the surveyor report dated 13.03.2001 consideration was made to two parts; firstly, the assessment of loss relating to the stock of LDPE plastic, powder, granules, tubings and films as contained in clause 8.1 of the report. Next, the loss caused due to the destruction of plant and machinery is assessed in clause 8.2 and the sum of Rs.46,60,459/- being the depreciated value has been awarded for loss of plant and machinery. In respect of the said claim the respondent No.2 (Maharashtra State Financial Corporation) is interested. There is no serious dispute with regard to the consideration made either by the surveyors or the NCDRC on the aspect of plant and machinery. In that view of the matter the only question on merits which needs consideration herein is with regard to the loss assessed towards destruction of the stock-in- trade in the fire incident. The surveyor’s report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the surveyor’s report. In the instant facts there is no serious dispute with regard to the fire incident. The loss caused by destruction of the plant and machinery in the fire incident is not much of an issue. The dispute raised insofar as the loss caused to the raw- materials/stock is by contending that the purchase of stock during the months of August, September and October 1999 is shown excessive as compared to the stock position from April to July 1999. In that circumstance, in the facts and circumstances herein whether the investigation report was an indispensable document or as to whether the survey report is exhaustive enough to arrive at a conclusion on that aspect is the issue. The proposition of law that the surveyor’s report cannot be considered as a sacrosanct document and that if there is any contrary evidence including investigation report, opportunity should be available to produce it as rebuttal material, is concurred by this Court. However, the issue to be noted is as to whether the surveyor’s report in the instant case adverts to the consideration of stock position in an appropriate manner and in that circumstance whether an investigation report which is based on investigation that was started belatedly should take the centre stage. The fact remains that the surveyors report is the basic document which has statutory recognition and can be made the basis if it inspires the confidence of the adjudicating forum and if such forum does not find the need to place reliance on any other material, in the facts and circumstance arising in the case. If in that light, the surveyors report, on which reliance has been placed by the NCDRC is taken note insofar as the assessment relating to the loss due to destruction of stock, the consideration of the same has been adverted in clause 8.1.1 and the stock position as declared to the bank has been referred to in clause 8.1.3. [Paras 9-11, 13 and 14][904-E-G; 905-A-B; 906-C-D; 907-A-F] National Insurance Company Limited v. Harjeet Rice Mills (2005) 6 SCC 45 : [2005] 1 Suppl. SCR 794 – distinguished.
New India Assurance Company Limited v. Pradeep Kumar (2009) 7 SCC 787 : [2009] 16 SCR 508 –
referred to.
1.3 The consideration made by the surveyors to ascertain the correctness of the details relating to the stock indicates that reference is made to the value of the stock declared to the bank; value of the stock as per audited manufacturing account and balance sheet for the year ended 31.03.1999; the explanation offered for the purchase made during the months of August 1999 to October 1999. In that regard, the surveyors have also visited the source from which the LDPE was procured during September 1999 to 04.11.1999. Thus, a perusal of the surveyor’s report would indicate that the same is not perfunctory but has referred to all aspects, discarded what was not reliable and the assessment has been made thereafter. In that background, as noted, the fire incident had occurred on 06.11.1999 and the surveyors had visited the site on 09.11.1999 itself and the interim as also the final report were submitted on 23.03.2000 and 13.03.2001 to the insurer after due deliberations. The insurer did not take any steps immediately but after much delay appointed the investigator on 22.06.2001 and had not concluded the said process though the respondent No.1 had made repeated request. The insured had approached the NCDRC and it is in the said proceedings, for the first time the insurer seeks to rely on the investigator’s report. Therefore, in the facts and circumstances herein the surveyors report was submitted as the natural process, the conclusion reached therein is more plausible and reliable rather than the investigation report keeping in view the manner in which the insurer had proceeded in the matter. Hence, the reliance placed on the surveyor’s report by the NCDRC without giving credence to the investigation report in the facts and circumstances of the instant case cannot be faulted. In that view, the conclusion reached on this aspect by the NCDRC does not call for interference. [Paras 15, 16][907-GH; 908-A; 909-C-F]
1.4 The rate of interest to be awarded in a normal circumstance should be commensurate so as to enable the claimant for such benefit for the delayed payment. There is no specific reason for which the NCDRC has thought it fit to award interest at 12% per annum. Therefore, the normal bank rate or thereabout would justify the grant of interest at 9% per annum. Accordingly, the amount as ordered by the NCDRC shall be payable with interest at 9% per annum instead of 12% per annum. To that extent, the order stands modified. This Court while admitting the appeal and granting stay of the order, it was made subject to deposit 50% of the amount before the National Commission. The second and third respondents were permitted to withdraw the same in the ratio of 60:40 subject to their furnishing, security to the satisfaction of the Commission. The appellant shall therefore deposit the balance amount within six weeks, before the National Commission and the disbursement shall be made in the ratio to constitute the payment of the full amount awarded. The second and third respondents shall be permitted to withdraw the same. [Paras 17, 18][909-G-H; 910-AC] State Bank of India v. B.S. Agriculture Industries (I) (2009) 5 SCC 121 : [2009] 4 SCR 762 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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