United India Insurance Co. Ltd. vs Sanjay Kumar on 18/8/2006
ORDER
P.D. Shenoy, Member
1. This is a case in which the Insurance Company has appointed as many as five surveyors and it has to be decided as to whether the Insurance Company can appoint one surveyor after another in a routine manner without revealing adequate reasons to the concerned.
Brief facts of the case:
2. Shri Sanjay Kumar Singh secured an insurance policy from M/s. United India Insurance Co. Ltd. in respect of stock and machinery of his business establishment M/s. Anju Knitting Centre, Yaduvansh Nagar, Chas which covered the period from 5.12.2001 to 4.12.2002. Mr Singh complained to the police station that some unknown persons committed burglary by breaking the lock of his commercial establishment on the intervening night of 24.6.2002 and 25.6.2002 and an FIR was lodged in the police station. He also intimated to the branch of the State Bank of India as well as the Insurance Company on 25.6.2002. During investigation the police found the complaint to be true and submitted a final report that the culprit is untraceable.
3. The complainant lodged a claim for a sum of Rs. 2,39,545 with the Insurance Company which deputed a surveyor by the name of Mr Durgesh Kumar who found the factum of theft is correct after visiting the business premises and examining the witnesses concerned. Thereafter a second surveyor was deputed by the Insurance Company namely H S Sah, who examined several witnesses and after taking into consideration all relevant aspects including the Article s alleged to have been stolen and submitted a report to the Insurance Company assessing the loss to the tune of Rs. 2,07,891.75." Dissatisfied with the report of the second surveyor, the Insurance Company nominated the third surveyor namely M/s. Kothari "Surveyors and Investigators Pvt. Ltd. According to this surveyor certain Article s stated to have been purchased from M/s. Agarwal Stores and Supply Co., Calcutta were not found to be genuine. The Insurance Company appointed the fourth surveyor Mr Ranjit Kumar who visited Suraj Woollen Industries Chas, Bokaro. He gave his report stating that this industry was small and situated in a small house and the cash memos/bills have been stage-managed. Finally a fifth surveyor from Ludhiana namely Shri Ravinder Singh was deputed to verify the bills, which were found to be genuine by him.
4. As there was no favourable response from the Insurance Company, a complaint was filed before the District Forum on 31.3.2003. Subsequently, the Insurance Company repudiated the claim of the complainant vide their letter dated 22.4.2003 on the following grounds:
Enquiry of the claim was carried out without a surveyor.
Enquiry of the genuineness of the concerned bills of M/s. Suraj Woollen Industries and M/s. Agarwal Stores and Supply Company have been found to be forged.
No theft of hand knitting machine in respect of the bills of M/s. Arora Sales Corporation have been found.
5. The District Forum held that:
On perusal of copies of survey reports of surveyor Ranjit Kumar and M/s. Kothari Surveyor and Investigator it is clear that the detailed inquiry of the claim of the complainant has been carried out and these cannot be accepted as untrue. The theft in respect of the bills of M/s. Arora Sales Corporation is not verified. No such fact has been revealed in the preliminary and final survey report.
On perusal of facts and circumstances this claim is false. Therefore, the claim has been dismissed. The complainant is at liberty to file his claim in any Civil Court in that respect.
6. Aggrieved by the order of the District Forum, the complainant filed an appeal before the State Commission. The State Commission concluded as follows:
Having regard to this discussion aforesaid we are of the view that the District Forum, Bokaro has failed to exercise its jurisdiction in passing the impugned order merely relying upon the successive reports of the surveyors. The District Forum has rejected the report of the first and second surveyors and relegated the parties to the Civil Court for redressal of the grievance. We strongly deprecate the attitude of the District Forum in the matter in view of the law laid down by the Apex Court. In the result, the judgment and order dated 5.11.2003 passed by the District Forum, Bokaro in complaint case No. 47 of 2003 is hereby set aside consequently, this appeal is allowed with cost assessed at Rs. 1,000. The respondent Insurance Company is directed to pay the amount along with interest @ 12% from the date of repudiation till the date of payment.
7. Learned Counsel for the Insurance Company submitted that some of the suppliers who allegedly supplied raw materials to the insured are not traceable. There is no proof for certain bills issued. When the case came up for hearing on 10.11.2004 for admission, the National Commission directed that Rs. 2,07,891,75 with interest be paid to the respondent subject to furnishing security to the satisfaction of the President of the District Forum to repay the same in terms of the final decision in this petition. Rest of the amount may be deposited in fixed deposit.
Findings:
8. (1) Mr. Durgesh Kumar, Surveyor and Loss Assessor in his report dated 17.7.2002 has inter alia stated as follows:
In response of the advice received from your office on 26.6.2002 in the evening for preliminary survey of the alleged theft, I rush to M/s. Anju Knitting Centre for the same. After Enquiry from the insured, insured's staff members, in the locality of the place of alleged occurrence, police personnel (with verification of the FIR from police record), the concerned bank and two purchasers of knitting machine I append below my preliminary report accordingly.
Broken locks found at place of occurrence recovered by the police before my visit to the premises of M/s. Anju Knitting Centre on 26.7.2002 in the late evening. So I am unable to comment about their locks. The police personnel present on duty during my visit to the concerned P S have confirmed the recovery of such locks. During survey, I took care of the Kundis (handles) of the locks and found two of these damaged and one tampered.
The employees and neighbouring persons confirmed the incident. On the basis of circumstantial evidence, observations, the statements of the witness, in my opinion occurrence of theft seems true.
In his report he has also stated that
During visit to the firm, the insured could not produce the required documents. He informed that these are with the chartered accountant. He produced the following documents:
Stock register 2 No.
Purchase Bills 50 Nos.
Sales invoices 13 books
Stock statements submitted to bank 19 Nos.
List of employees
Claim letter duly filled in Copy of FIR
List of items stolen in theft.
The bank has also submitted three number of statements of stock (dated 1.4.2001, 2.5.2001 and 7.6.2001) and photocopy of paper-cutting of Bihar Observer dated 7.3.2001, which contains an Article regarding M/s. Anju Knitting Centre. All these documents are being submitted with the report.
9. (2) As the first surveyor mentioned that certain documents mentioned by insured is with the Chartered Accountant he could not verify the same. To look into these documents, the Insurance Company had appointed a second surveyor by the name Shri H L Sail, who himself is a Chartered Accountant. This surveyor inter alia had observed as follows:
The purchases invoices are verified. The size of the shop is average. The police told that the investigation is in progress and no persons has been arrested and the recovery has been made.
Assessment of Loss:
After looking all the facts and circumstances of the case and on the basis of claim lodged and considering the investigation part, we proceed to assess the loss on the basis of submitted documents. We have given due weightage to business practice. Accounting practices and Factual Basis. The insured has shown the loss of stock and machine of Rs. 2,39,545.
Summary of net loss after considering under insurance factor:
(a) Stock Loss Rs. 1,18,320.32
(b) Loss of Machine Rs. 89,571.43
Rs. 2,07,891.75
Conclusion:
This final survey report is issued without prejudice and is subject to the terms, conditions, exceptions, provisions, warranties of the policy under which the captioned claim has been made and also subject to your approval. The insurer should obtain Final Police Report and accepted order sheet of the concerned Court before settlement of the claim. No breach of trust has been committed by the insured. The insured should also see the compliance of 64UB and obtain subrogation letter from the insured.
10. It is very clear that this report has been submitted after scrutinizing all the documents and also after considering the under insurance and he has also stated that it is a final survey report. He has further stated that a perusal of his report which he calls as a survey and investigation report indicates that he has done a thorough survey and investigation by taking following steps:
(i) We took written statement of proprietor of the shop Shri Sanjay Kumar.
(ii) We took written statement of some persons who supported the case.
(iii) We met the police authorities who told that the investigation is in progress.
(iv) We meet the branch authorities of United India Insurance Co. Ltd., Branch Office, Chas and discussed about the case and took Xerox copy of various papers available in the file.
(v) We took the photographs and saw the feasibility of stock holding capacity of the shop in of average in size. Hence all the alleged stolen items can be kept in a comfortable way.
(vi) The insured submitted accounting records and the purchase invoices and it was observed that all the invoices were verifiable.
(vii) The insured submitted some account book on 12.8.2002.
(viii) We meet the divisional official and discussed about the claim and took copy of records of the insured from the insurer.
(ix) We also visited the SBI, Chas Branch and discussed the case with the Branch Manager and Field Officer. They told that the insured is a reliable person of the society.
In conclusion this surveyor has stated that no breach of trust is committed by the insured.
11. In the decision National Insurance Company Ltd. v. The New Patiala Trading Co. I (2003) CPJ 33 (NC) : 2002 CCC 619 (NS), this Commission held that:
Scheme of Section 64UM, particularly of Sub-sections (3) and (4), would show that insurer cannot appoint second surveyor just as a matter of course. If the report of the surveyor or loss assessor is not acceptable to the insurer it must specify reasons but it is not free to appoint second surveyor. Appointment by the insurer of a second surveyor itself would be a reflection on the conduct of the first surveyor. Surveyor or loss assessor is duty-bound to give a correct report. If the insurer-Insurance Company finds that surveyor or loss assessor has not considered certain relevant points or has considered irrelevant points or for any other account it has reservation about the report, it can certainly require the surveyor or loss assessor to give his views and then come to its own conclusion, but insurer cannot certainly appoint a second surveyor-cum-loss assessor to counter or even contradict or rebut the report of the first surveyor.
12. (3) Instead of compensating the insured, the Insurance Company has appointed three more surveyors. None of these three surveyors have filed their affidavits supporting their contentions nor have they been examined before the lower Fora. They have claimed to have collected some facts against the insured from certain persons including postal peons. Affidavits of these persons from whom they have collected information are also not filed. Reliance on these reports cannot be placed.
13. Accordingly, we do not find any tangible reasons to interfere with the reasoned order of the learned State Commission. Hence, revision petition is dismissed. Insurance Company shall pay Rs. 5,000 as cost to the respondent.
