National Consumer Disputes Redressal
M/S. Jindal Poly Films Ltd. vs Oriental Insurance Co. Ltd. on 12 September, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 105 OF 2005 1. M/S. JINDAL POLY FILMS LTD. 56-HANUMAN ROAD, NEW DELHI - 110 001. ...........Complainant(s) Versus 1. ORIENTAL INSURANCE CO. LTD. DIVISIONAL OFFICE- 23, 2/13-14, SARAI JULANA, NEW DELHI ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT
FOR THE COMPLAINANT : MR. SAMEER NANDWANI, ADVOCATE WITH
MR. SARTHAK ARORA, ADVOCATE FOR THE OPP. PARTY : MR. VISHNU MEHRA, ADVOCATE
Dated : 12 September 2023 ORDER
1.This complaint has been filed by a Poly Film Ltd., a manufacturer, who set up a plant at Nasik in Maharashtra and for the said purpose purchased an equipment (BOPP Film Plant/Machine) from M/s Bruckner Maschinenbav GmBH, Postfach 1161, Germany that was transported to India by sea, and then by road from Mumbai to Nasik. The equipment reached the sea port at Mumbai from where the container carrying the consignment was loaded on a vehicle bearing registration No. HR 55 B 9231 of M/s TCI-Hi-ways Pvt. Ltd. The consignment headed for its destination to Igatpuri, Nasik, Maharashtra. While on its way the said vehicle carrying the container with the consignment inside, met with an accident on 04.09.2004 colliding against another transport vehicle at some distance before its final destination as a result whereof the vehicle carrying the container overturned and fell on the side of the road.
2. The plant machinery aforesaid was insured under a Marine Cargo Policy for a single voyage from Germany to Nasik in India. The cover note whereof was issued on 05.03.2004 pursuant whereto the policy was issued at a later date. A copy of the policy schedule indicating the effective date of its duration is on record, which mentions its duration from 29.06.2004 to 14.03.2005. The policy also mentions the coverage of the risk of a voyage from Germany to Nasik. The terms of insurance are stated to have been attached with the said policy schedule and also mentions the clauses applicable with a direction that in the event of loss or damage which may involve a claim under the insurance policy, immediate notice should be given to the insurance company with an application for survey at the destination.
3. The Insurance company was promptly and immediately informed whereafter an F.I.R was also lodged on 05.09.2004. The police also prepared the panchnama witnessing the said accident, that is also on record. The Insurance company entrusted the work of spot survey to one M/s Prasanna D. Deole, who is a registered Surveyor, Loss Assessor, Valuer, licensed by the Government of India. The survey was conducted by him and is captioned as 'Marine Spot Survey' that was submitted on 06.09.2004.
4. A perusal of the said report confirms the accident having taken place and the consignment, which was contained in a wooden case, was found damaged from outside and was lying on the road. It also indicated that the machine was covered with thick plastic sheet but the bolts with which the machine was attached to the wooden case had loosened and one end of the wire rope was found partially sheered. The report also stated that it was decided to tranship the consignment to the consignee's place for final survey.
5. It appears that the Insurance company again appointed one M/s S. K. Bhatia, another Surveyor & Loss Assessor, duly licensed, to visit the factory of the complainant and report about the machine survey status. Accordingly, Mr. S. K. Bhatia in his report dated 15.09.2004, which is on record, states that he had conducted the survey of the premises of the factory for assessing the loss of the goods lying there on 07.09.2004. He also noted that the spot survey was conducted by Mr. Prasanna D. Deole, but that report had not been received by him. He further noted the completion of the police formalities as well as the said container being transported from the site of accident on a new trailer back to the factory. The survey was conducted by him on 07.09.2004 as stated above and on a visual inspection, the following damages were revealed:
v Top and side of metal sheet of electrical panel found pressed.
Gear pump circulation oil pipe bent.
Feeding hopper of extruder metal sheet pressed.
Sheet metal cover of heater damaged.
Cover unit of motor of cooling unit pressed.
6. The report further says that since it was not possible to shift and offload the subject wooden case because the approach passage was not ready to take such a heavy load of about 35 tons, the package was properly covered with double tarpaulin in order to prevent any penetration of rainwater. The said report further notes the presence of the German Engineer, who had arrived on 15.09.2004 from Germany for the purpose of erection of the film plant. Mr. S. K. Bhatia again visited the factory on 15.09.2004 along with one Mr. Biswas (Project Manager of the complainant) and has noted the following in his above mentioned report:
The supplier's Engineer from Germany had arrived on 15/09/2004 for the purpose of erection of the new PP Film Plant. Therefore, the site was visited again on 15/09/2004 and Mr. Biswas (Project Manager) informed us that the Supplier's Engineer opined that entire unit will have to be sent back to Germany for detailed inspection since they have an apprehension that apart from visual damages there must have been internal damages also. In order to check each and every stage of working, Radiography, dynamic balancing ultrasonic test will have to be done for its functional test.
The Insured maintained that they will arrange all the equipment at the site to enable them to check and bring the machine in original condition. But unfortunately, the Supplier's Engineer did not concur with the views of the Insured and insists that for perfect rectification, the machine has to be sent to Germany so that the same could be checked for its performance. Final decision is yet to be taken by the Insured.
7. After having observed the above, Mr. S. K. Bhatia opined that the loss/damage could be about 1 crore and that the insurer can finally decide the matter of appointing a final Surveyor.
8. From a perusal of the narration, it is evident that the entire internal loss could not be assessed as the machine had not been dismantled because of the insistence of the engineer from Germany, as noted in the report above. The opinion of the German Engineer was that the entire unit will have to be sent back to Germany for detailed inspection in order to assess the actual damages and repair, that may be required to be done including other machinery tests like ultrasonic test in order to assess its functionality.
9. The complainant had offered that arrangements can be made to enable them to check and repair the machine at the factory site but the German engineer declined to do so. The reason was that the machine was still in the warranty period and it could not have been negotiated at the will of the purchaser or else there would be a violation of the warranty clause.
10. The complainant had already lodged a notice as against the transporter under section 10 of the Carriers Act on 06.09.2004 but it seems that the same was not pursued any further.
11. The German company that had supplied the said equipment also wrote on 16.09.2004 calling upon the consignee that the equipment can only be repaired at the manufacturer's works and therefore, the complainant was asked to ship this damaged consignment back to Germany for repairs from where it was to be re-exported back to India. The contents of the said letter are extracted hereinunder:
Dear Sir, We understand that the Container No. TOLU - 8782891 which was shipped to you vide our Invoice No. 8003091 Dated 27.06.2004 and Bill of Lading No. 2704-00096 - 06 DATED 29.06.04 fell down on way from Mumbai Port to your Nasik Plant and got damaged. We wish to inform you that this equipment can only be repaired at the manufacturer's works and therefore, we would request you to ship this damaged consignment back to us for repairs, which will be re-exported back to you after repairs.
The cost or repairs will be checked upon receipt of the consignment and will be informed you later.
12. In the above background, after the two surveys having been conducted and the opinion of Mr. S. K. Bhatia that the estimated cost may be more than Rs. 1 crore, the complainant informed the Divisional Manager of the insurance company vide letter dated 21.09.2004 about the damaged equipment to be transported to Germany seeking consent and also seeking advise about future transit risk to Germany. This information also indicated about the two surveys having been conducted by the surveyors appointed by the Insurance Company.
13. The complainant dispatched another letter dated 28.09.2004 to the insurance company about the said exercise having been undertaken as narrated above, reminding the insurance company that no copy of the survey report has been supplied in respect of two surveys referred to hereinabove nor any consent was given about sending the equipment to Germany and therefore, in the circumstances, a request was made to the Insurance company to depute a surveyor for visiting Germany to be present at the time when the assessment of the quantum of damage is made during its inspection and repair at the manufacturer's place in Germany. The complete and full address of the manufacturer company at Germany was mentioned in the said letter.
14. It appears that for the purpose of final survey, in terms of section 64UM of The Insurance Act, 1938, the Insurance Company appointed M/s A. K. Gupta and Associates to carry out a final survey. Mr. Gupta, who is also a licensed surveyor and loss assessor, visited the factory premises for survey on 24/25.09.2004. He submitted his report on 28.09.2004 stating that the machine had been re-packed and the packing was not opened in front of him so as to assess the internal damages. The machine was also ready to be transhipped back to Germany, which was the unilateral decision of the complainant. However certain information was sought by the surveyor for the purpose of assessment of the claimed loss. It also suggested the preservation of the salvage till further advise and also demanded prompt information about the developments regarding despatches, inspections/repairs/replacement at the manufacturer's end in Germany. Clause 8 of the said letter is extracted to indicate the desire of the surveyor and the insurance company to be informed about the steps aforesaid regarding despatches, inspections/repairs/replacements in Germany. The said clause is quoted hereinunder:
8. Please inform us on day to day basis the developments regarding despatches, inspections/repairs/replacements at the manufacturer end in Germany.
15. On 01.10.2004, the insurance company despatched a letter to the second surveyor M/s S. K. Bhatia & Company, who had submitted his report on 15.09.2004. This letter of the insurance company notes the assessment of loss made by Mr. S. K. Bhatia in the vicinity of Rs. 1 crore. The letter further notes that since the estimated loss was beyond the limit of the divisional office, therefore, the matter was being referred to the head office where another surveyor Mr. A. K. Gupta & Associates had been appointed and who has sought for certain documents and information vide their letter dated 28.09.2004. Accordingly, Mr. S. K. Bhatia was required to send all the reports and documents to Mr. A. K. Gupta.
16. The complainant vide letter dated 06.10.2004 informed the insurance company that the complainant was left with no option but to accept the advise of the supplier for sending the machine to Germany for the assessment of any damage or consequential loss and to conduct repairs, and since the machine was under the warranty period, the advise was accordingly followed and the machine was airlifted and sent to Germany on 03.10.2004. The destination of the manufacturer was again informed by the letter, which is on record. It was repeatedly requested to send the surveyor to Germany for assessment of the quantum of damages and loss in respect of the plant/machine that was insured. On 09.10.2004, this request was again repeated by a letter sent by the complainant to the divisional manager of the insurance company which letter is also on record. The consequences that were likely to be suffered by withholding the machine in India and not sending it to Germany for assessment and repairs are explained vide letter dated 12.10.2004, that was addressed to M/s A. K. Gupta & Associates, the final surveyor who was informed about the view of the German engineer. In the said letter it was also disputed that there was any denial on the part of the complainant to show the entire machine for checking. Full cooperation had been extended and photographs were taken alongwith the inspection made. Additionally 20 documents were furnished alongwith the said letter dated 12.10.2004 which are stated to be as follows:-
Date of shipment from suppliers works - 27.06.2004 Test certificate from manufacturer - Please indicate which type of test certificate is required as the complete plant is under suppliers warranty.
Date of arrival at at the port of the shipment - 29.06.2004.
Inspection by any independent agency at port of dispatch - NA Bill of lading no. 2704-00096-06 dt. 29.06.2004 enclosed Bill of entry - already submitted by our plant during your visit. Now enclosed again Packing list - enclosed Invoice - enclosed Date of arrival at Indian port - 19.08.2004.
10.Date of off loading from the ship - Not known may be ascertained from port trust.
11. Captain remark - not available
12. Inspection at port by the insurance company - NA
13. Bombay port trust clearance certificate - as per bill of entry
14. Date of customs clearance - see bill of entry
15. Copy of GR - already given
16. Claim lodge on carrier - copy enclosed
17. Copy of FIT - already given - may attached again.
18. Extent of losses - Will inform after checking / repairing by the suppliers in Germany.
19. Salvage Value - Will inform after repair.
20. Value of the material as per container no. toku-8782891 - Euro 831,000-CIF + 10% (Rs. 5.21 crore) supplier's copy of invoice enclosed.
This was in response to the demand of the information made by Mr. A. K. Gupta in his survey note date 28.09.2004.
17. The insurance company after a long wait responded on 13.10.2004 where it was stated that regarding the internal damages the surveyor has shown his inability to comment as the machine was not dismantled to find out the internal damages, if any. It further states that the surveyor had clearly recommended that they were unable to give them the permission to take the machine to Germany for testing and repairs and therefore decision to ship the equipment for the said purpose to Germany was entirely the decision of the complainant. However this letter again asserted about sending the clarification/documents/information as desired by the surveyor for proceeding further in the matter. It is to be noted that the information extracted hereinabove that was directly sent to the surveyor vide letter dated 12.10.2004 does not find mention in this letter, even though a copy of the same had been sent to the divisional manager of the insurance company on 28.09.2004.
18. Another advise was received from the Insurance company where referring to earlier letters of the divisional office, there was a repetition of the demand of the documents from the complainant as desired by M/s S. K. Bhatia. It may be noted that the complainant has brought on record the letter dated 12.10.2004 hereinabove indicating the information already despatched. However this letter dated 28.10.2004 further made a request that the complainant should approach the surveyor M/s A. K. Gupta as on the basis of their advise that the head office will consider the matter for survey at Germany. No further queries were raised with regard to the documents already submitted on 12.10.2004. There is a bald assertion in paragraph 19 of the reply that such documents were neither submitted to the surveyor or the insurance company.
19. The German manufacturer company also had its inspection carried out and this inspection report was presented in the shape of 'Damage Repair Report', that was dispatched to M/s A. K. Gupta on 23.11.2004 by the complainant. The damage survey was conducted on 12.10.2004 by a licensed inspector of Germany and a report was submitted by the Surveyor on 13.10.2004 indicating the extent of damage. The said reported damage is extracted hereinunder:-
Result of damage inspection:
Item 1:
The de-gassing dome of the processing section was totally deformed and has to be completely renewed. See photos item 1 pic 1, 8 and 10 All protection covers were more or less dented. See photos item 1 pic 2, 3 and 7. The terminal boxes of the first and second heating zone were bended. See photos item 1 pic 4 and 5. All unpainted parts of the machine, which were made of carbon steel, were found to be rusty. See picture item 1 pic 11, 12 and 15.
As per info of Berstorff, the machine was totally wet, when it was unpacked after arrival in Hannover. Machine might have been exposed to rainy weather after damage of the cases.
Item 2:
Two of the four gear transport lifting eyes were bended. See photos item 2 pic 6 and 7. One top edge of the gear was polluted by tar (possible from road pavement) and paint was scratched off. See photo item 2 pic 8. The grease tubing of the drive shaft for the double drive was bended and deformed. See photo item 2 pic 9 and 12. The tube support of the grease intake tube was damaged. See photo item 2 pic 10.
Item 3:
The temperature regulator was bended. See photo item 3 pic 2.
A pressure plug connection was broken. See photo item 3 pic 3.
Differential pressure switch was damaged. See photo item 3 pic 4.
Dent in oil sink. See photo item 3 pic 5.
Oil sink was polluted by lubricating oil. See photo item 3 pic 1 and 5.
Item 2 and 3 will be dispatched to the sub-manufacturers (Flender/Universal Hydraulik).
There the items will be dismounted for eventually defects, which are not visible from outside. After repair they will be sent back to Berstorff Hannover.
The item 1 which has been manufactured at Berstorff, will be dismounted and inspected for internal cracks and barrel sections will be re-measured for eventually bends.
Final repair investigations and costs can not be nominated, before the inner inspections on the above machine components are performed.
The inspection was done to the best of our knowledge and ability and with due care.
Findings are valid as for time and place of inspection.
The inspection done and the certificate issued does not absolve the manufacturer/seller from their contractual obligations towards their buyer regarding any harmful defect not visible or detected during our inspection.
20. The said damage repair report received from Germany is on record. The extent of repair that was conducted in respect of all 5 items led to incurring of actual costs by the complainant to the tune of 653393 Euros (approximately Rs. 1,79,88,093/-). This bill, that was raised by the manufacturer after the repair had been carried out, is also on record.
21. It can thus be seen that the complainant undertook this entire exercise for getting the machinery equipment repaired that had been damaged on account of the accident and all prompt steps were taken in very close proximity of the incident. The complainant was awaiting the settlement of the claim after having furnished all the documents when after a lapse of more than six months, the Headquarter of the Insurance Company from New Delhi sent a letter dated 04.07.2005 that has been filed as an evidence by way of affidavit by the opposite party in their compilation, which is extracted hereinunder:
M/s Jindal Polysters Ltd.
56, Hanuman Road, New Delhi Dear Sir Re. Transit claim No. 21/2005/00010 Policy No. 21/2004/113 Further to our letter dt. 06.05.2005 on the above subject we wish to inform you that the net assessed loss as per Surveyor's report is Rs. 4,35,740/-. You are requested to please submit us the following documents for our further necessary action.
Postal receipt of the registered letter sent to carrier lodging the monetary claim on them.
Letter of subrogation.
Letter of undertaking Letter of Indemnity as per proformas already supplied to you.
Discharge Voucher duly stamped and signed.
Kindly note on receipt of above documents only. We will be able to deal with your claim further.
22. A perusal of the said letter would indicate that information was tendered about the assessment of the claim made by the complainant and the net assessed loss as per the surveyor's report is Rs. 4,35,740/- while the complainant raised a claim bill for the damage duly signed dated 21.12.2004, copy whereof has also been brought on record as Annexure - T.
23. A demand was raised through the said letter dated 04.07.2005 for submission of 05 documents, the first was the letter/notice sent to the carrier alleging a claim against it; the second was the letter of subrogation; the third was the letter of undertaking; the fourth was the letter of indemnity as per the proforma and the fifth was the discharge voucher duly stamped and signed. The final note in the letter states that on receipt of such documents the claim will be dealt further. It is thus clear that the claim of the complainant was neither finally repudiated nor was it finally settled but at the same time the net loss of Rs. 4,35,740/- was assessed. The most significant part of the said letter is that the aforesaid net assessed loss was as per the surveyor's report.
24. Learned counsel for the complainant has emphasised on the aforesaid fact contending that neither the said surveyor's report was served on the complainant nor has it been brought on record by the insurance company. The complainant, therefore, contends that there is nothing available on record to find out as to how and on what basis the said loss had been assessed and it is alleged that had the report been on record, it could also have reflected upon the information that was tendered by the complainant from time to time about the damage. The inspection and repairs were carried out in Germany and the payments in lieu thereof were duly intimated to the Insurance company through the letter referred to above. Learned counsel, therefore, contends that this was a clear case of avoidance of consideration, a clear deficiency in service as also an unfair trade practice. It is also urged that withholding of surveyor's report as mentioned in the letter dated 04.07.2005 clearly indicates that the Insurance company through its agents and surveyors have acted deliberately in a manner so as to deprive the complainant of his genuine and bona fide claim in respect of the loss and damage suffered due to the equipment having been damaged during transit that was clearly covered under the insurance policy. The Insurance company, therefore, has failed to discharge its obligation under the contract wilfully and prolonged the matter for no plausible reason.
25. It is further pointed out that the documents referred to in the letter dated 04.07.2005 for information regarding notice under Carriers Act, had already been submitted alongwith the reply that was tendered in response to the query made by M/s A. K. Gupta. The letter dated 06.09.2004 is already on record of the present complaint at page 87 and the document mentioned at item no. 16 in the letter dated 12.10.2004 is the claim lodged with the carrier. The rest of the documents sought are for discharging the claim which could only have been given had the claim been accepted. It is urged that the letter of subrogation, letter of undertaking, letter of indemnity and the discharge voucher could have been tendered had the claim been finalised and accepted by the Insurance company. Thus, it is evident that the letter dated 04.07.2005 finally determines the claim at the assessed loss value of Rs. 4,35,740/- without even touching the evidence filed in support of the claim by the complainant as narrated hereinabove. Without a determination on the substantive part of the claim, it impliedly avoids assessment of the loss and damage sustained vis-à-vis the equipment.
26. Learned counsel for the complainant then cited the judgment rendered in the case of Sri Venkateswara Syndicate vs. Oriental Insurance Company Ltd. & Anr. 2009 (8) SCC 507. This judgment has been cited to urge that multiple surveyors are not contemplated under the provisions of the Insurance Act, 1938 and any such repetitive engagement of surveyors is not in accordance with law. Learned counsel has also invited the attention of the bench to the notification dated 26.04.2002 of the Insurance Regulatory and Development Authority to contend that the claim procedure in respect of a general insurance policy prescribes a timeline for the settlement of the claim and that the obligation of the insurer as also of the surveyor are prescribed therein. The same is extracted hereinunder:
9. Claim procedure in respect of a general insurance policy (1) An insured or the claimant shall give notice to the insurer of any loss arising under contract of insurance at the earliest or within such extended time as may be allowed by the insurer. On receipt of such a communication, a general insurer shall respond immediately and give clear indication to the insured on the procedures that he should follow. In cases where a surveyor has to be appointed for assessing a loss/ claim, it shall be so done within 72 hours of the receipt of intimation from the insured.
(2) Where the insured is unable to furnish all the particulars required by the surveyor or where the surveyor does not receive the full cooperation of the insured, the insurer or the surveyor as the case may be, shall inform in writing the insured about the delay that may result in the assessment of the claim. The surveyor shall be subjected to the code of conduct laid down by the Authority while assessing the loss, and shall communicate his findings to the insurer within 30 days of his appointment with a copy of the report being furnished to the insured, if he so desires. Where, in special circumstances of the case, either due to its special and complicated nature, the surveyor shall under intimation to the insured, seek an extension from the insurer for submission of his report. In no case shall a surveyor take more than six months from the date of his appointment to furnish his report.
(3) If an insurer, on the receipt of a survey report, finds that it is incomplete in any respect, he shall require the surveyor under intimation to the insured, to furnish an additional report on certain specific issues as may be required by the insurer. Such a request may be made by the insurer within 15 days of the receipt of the original survey report.
Provided that the facility of calling for an additional report by the insurer shall not be resorted to more than once in the case of a claim.
(4) The surveyor on receipt of this communication shall furnish an additional report within three weeks of the date of receipt of communication from the insurer.
(5) On receipt of the survey report or the additional survey report, as the case may be, an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer, for any reasons to be recorded in writing and communicated to the insured, decides to reject a claim under the policy, it shall do so within a period of 30 days from the receipt of the survey report or the additional survey report, as the case may be.
(6) Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within 7 days from the date of acceptance of the offer by the insured. In the cases of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2% above the bank rate prevalent at the beginning of the financial year in which the claim is reviewed by it.
27. It is, therefore, submitted that the aforesaid guidelines have been clearly not followed by the Insurance company without discharging their obligations in spite of full cooperation of the complainant. It is on the strength of the said submission and facts that the complainant comes forward to claim the amount of insurance under an all risk Marine Insurance Policy under a cover note no. 232616 dated 05.03.2004 where the risk was insured for an amount of Rs. 87,68,79,000/-. The claim that has been made in this complaint is for the amount spent on repair as Rs. 1,79,88,093/- and in addition thereto, Rs. 1 crore as compensation for deficiency in service together with interest at the rate of 18% per annum from 04.09.2004 till the date of payment. The charges of air lifting the machinery to Germany and back to India after repair as well as additional claim against which a sum of Rs. 4,35,740/- has been offered as assessed loss.
28. On the other hand, learned counsel for the insurance company has advanced his submission contending that failure on the part of the complainant in not allowing M/s A. K. Gupta, the final surveyor to dismantle the package and make an internal inspection, is a clear non-cooperation on the part of the complainant. In spite of the advise of the surveyor to preserve the salvage, the unilateral decision of the complainant to send the equipment back to Germany does not create any liability of the coverage of risk in as much as this was the unilateral decision of the complainant against the advise of the final surveyor. Thus, the non-cooperation for assessing the internal damage and sending the equipment to Germany was not with the consent and was rather against the advise of the Insurance company. The loss of damage which is stated to have been assessed in Germany in absence of any official of the Insurance company or a surveyor duly appointed, in this regard, will not create any liability on the Insurance company. It is further submitted that this exercise for internal damage could have been carried out at the factory premises itself but the complainant refused to do it and hence this refusal had clearly resulted in non-inspection of the machinery for assessment of internal damage by the final surveyor appointed by the Insurance company. The survey is a legal obligation and it is only on the basis of such survey that loss can be assessed. This exercise, therefore, remained unaccomplished and hence there was no occasion to assess any loss of the internal damage by the surveyor. It is submitted that the excuse taken by the complainant about the equipment being under a warranty period and the German engineer had declined to allow the said internal inspection was a clear violation of the terms and conditions of the policy, which requires the survey to be done and which was admittedly prevented at the factory site. Such action on the part of the complainant therefore disentitles the complainant from advancing any submission with regard to the claim.
29. Another argument raised on behalf of the insurance company is that if the complainant had issued a notice under section 10 of the Carriers Act to the transporter, then it was the obligation of the complainant to have pursued the said claim against the carrier which would have resulted in an indemnification of the damages by the transporter, who was clearly responsible for the accident. The complainant did not explain this avoidance of legal remedy available which in turn would have indemnified the insurance company as well. It is the submission of the learned counsel that having not pursued that remedy, which is a voluntary act on the part of the complainant, the liability in respect of the loss cannot be imposed upon the insurance company.
30. It is then contended that the terms of the policy were well known to the complainant and the argument advanced that the covernote was not accompanied by all the relevant terms and conditions of the policy is incorrect. Advancing his submission on the letter dated 04.07.2005, learned counsel submits that in the absence of any cooperation on the part of the complainant to get the internal damage assessed through the final surveyor, the assessment as conveyed in the said letter is correct and therefore, even thereafter due to non-submission of the documents that have been requested for, having not been supplied, the arguments advanced on the strength of that letter do not hold water.
31. It is urged that the complainant never cooperated in terms of the final surveyor's letter dated 28.09.2004. It is also submitted that the documents pertaining to any loss suffered and assessed at Germany was not made known and therefore, the complainant was only entitled to receive the amount which has been offered through the letter dated 04.07.2005.
32. Having heard learned counsel for the parties and on a perusal of the documents on record there are certain facts which remain undisputed. The transit of the equipment from Germany to India and risk covering the same was insured for a sum of Rs.87,68,79,000/-. This policy had a validity period between 29.06.2004 and 14.03.2005. The accident of the vehicle carrying the consignment took place on 04.09.2004. An FIR was lodged on the next date, i.e., 05.09.2004. The insurance company officials were informed promptly and immediately and the first surveyor who conducted the spot survey, namely M/s Prasanna D Deole, inspected the damage on the spot on 05.09.2004 and submitted his Marine Spot Survey report on 06.09.2004. The second surveyor, Mr. S.K. Bhatia submitted the Marine Status Survey Report conducted by him on 07.09.2004. This report was submitted by Mr S K Bhatia, Surveyor on 15.09.2004. The third survey which is stated to be a final survey was conducted by M/s A K Gupta who tendered a survey report dated 28.09.2004, where he had sought certain documents and had indicated that in his opinion internal damages could not be assessed as the goods were in a packed state and they were being shipped to Germany against his advice. However, the presence of the engineer from the German manufacturing firm during the second survey on 15.09.2004 is also recorded and not denied. The fact that the complainant could not go against the advice of the German engineer as the equipment was under warranty period was also informed to the surveyor. The second Marine Status survey report dated 15.09.2004 records external damage and also indicated the nature of the damage that has been extracted hereinabove in paragraph 5. The assertion that the machine was under warranty period is pleaded and the report of Mr S K Bhatia dated 15.09.2004 also indicates the loss estimated in the vicinity of Rs.1.00 crore. However, the final survey report of M/s A K Gupta does not indicate any acceptance of the same, nonetheless, there is no discussion of the aforesaid inspection or estimation.
33. It is also not disputed that the complainant had lodged a notice with the transporter/ carrier under Section 10 the Carriers Act calling upon him to make good the damage caused during the transit. However, this notice was not followed by or further pursued by the complainant.
34. At the very outset the position may be clarified on this issue as it was canvassed by the learned counsel for the insurance company that this was a lapse on the part of the complainant and hence, the insurance company should not be saddled with any liability. In the considered opinion of this Bench, if the complainant did not elect or opt to pursue any remedy against the carrier/ transporter, the same does not take away the right of the complainant to institute a complaint under the Consumer Protection Act, 1986. For this reference, be had to section 3 of the Act which is extracted herein under:
3. Act not in derogation of any other law - The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
35. The option of the complainant to approach the Consumer Commission does not get foreclosed nor is it barred by the provisions of the Carriers Act or any other law for the time being in force. The contention, therefore, that the complainant could not claim any damage/ compensation from the Insurance company as against the risk covered under the policy is therefore, without foundation. This fact of lodging its complaint with the carrier was duly informed to the insurance company as also to the surveyor M/s A K Gupta is referred in his letter dated 12.10.2004, the contents whereof have been extracted in paragraph 16 hereinabove. The document pertaining to lodging of the complaint with the carrier is mentioned at item no.16. The contention that the Complainant ought to have pursued his remedy against the carrier which he did not as such the complaint should not be entertained, this argument has to be noticed only for being rejected in as much as the Complaint and the jurisdiction of this forum to entertain the same is neither ousted nor barred if the Complainant has chosen not to pursue the claim against the carrier. The liability of the Insurance company does not get absolved on this ground. The choice of the Complainant does not denude him of his right to pursue the claim against the Insurance company nor does it have any dilutory effect on the legal remedies available to the Complainant. The Consumer Forum being the one of the remedies which according to the Section 3 of the 1986 Consumer Protection Act is in addition to and not derogation to any other Act. The Insurance company therefore cannot take a stand to the contrary for declining the claim of the Complainant which is based on facts discussed hereinabove.
36. The second issue which is the bone of contention between the parties is about non-cooperation of the complainant during the survey that was conducted by M/s A K Gupta. The insurance company alleges that the complainant did not cooperate with the final surveyor and did not allow dismantling and opening of the package for inspection. This has resulted in absence of any assessment, internal damage to the equipment. From the facts on record, it is evident that the complainant and its officials were present on 5th September when the spot survey was conducted by Mr Prasanna Deole and photographs etc., were taken and then again they were present when Mr S K Bhatia conducted the Marine Status Survey on 07.9.2004. On the third day i.e., 15.09.2004 Mr S K Bhatia was present when the engineer from Germany had arrived. It is recorded by Mr Bhatia in his report that the German Engineer insisted upon the damaged equipment to be transported to Germany for assessing the damage and consequential loss due to such damage which could be done only at the manufacturers unit. This was insisted as the machine/ equipment was under warranty period and in the opinion of the engineer from Germany it could not have been repaired or otherwise handled in India, as no such resources were available.
37. Learned counsel for the complainant argued that such equipments were not manufactured in India at that time and therefore, to understand the technology or conduct any assessment of loss or repair of the machine was not possible and that is why the engineer from Germany insisted for transporting the equipment back to Germany for repair and assessment of the loss. This fact was known to the insurance company when the 3rd surveyor M/s A K Gupta was appointed who also noticed these facts during his survey on 24/25.09.2004 and has also stated in his report dated 28.04.2009 calling upon the complainant to submit all the information regarding sending of the equipment back to Germany and also day to day report in this respect.
The contest between the Complainant and the Opposite Party narrows down to the issue as to whether there was non-cooperation on the part of the Complainant in not providing an opportunity to the surveyor for internal inspection of the equipment that suffered damage or there was deficiency in service on the part of the Insurance company in not carrying out the inspection as suggested by the German engineer at the manufacturer's destination. The provisions of the Insurance Act clearly provide that an Insurance company will proceed to decide a claim after an assessment of loss is made by a duly qualified surveyor appointed in terms of Section 64 UM of the Act.
38. In the present case, the sequence and chain of events indicate that the Complainant promptly informed the Insurance company on the date of the accident and an FIR was also lodged on 05.09.2004. The accident of the vehicle and the loss and damage accrued has not been denied. A preliminary spot survey was conducted by Mr. Prasanna D. Deole is on record that was submitted on 06.09.2004. This fact also indicates that at the time of spot inspection the external damage was noticed but since the equipment was covered with thick plastic sheet, the same could not be examined internally.
39. The Insurance company appointed Mr. S.K. Bhatia who in his report dated 15.09.2004 indicated the external damages which have been referred to hereinabove. But further, since the consignment was covered with double tarpaulin and the package was not opened therefore, internal assessment could not be made. The reason that appears to be is the insistence of the manufacturer's German engineer who arrived on 15.09.2004, and since the machine was in warranty period, he insisted that it should be opened, inspected and assessment for repairs and damages should be made at the manufacturer's destination in Germany. As against this there was an offer by the Complainant and an indication by the officials of the Insurance company that at least the inspection can be arranged locally. It is evident from the report of Mr. Bhatia dated 15.09.2004 that this could not be done because of the insistence of the engineer of the manufacturing company from Germany who did not agree to the opening of the package in India or its assessment.
40. The visit of the surveyor with an insistence to unpack the consignment in India was therefore, unwarranted as the equipment and machinery could be put to test in order to assess the loss or damage only by the manufacturer or his agents as this appeared to be an impossible exercise in India as the equipment was under warranty.
41. The offer by the Complainant and the instruction by the Insurance company for assessing the internal damage in India itself seems to have not been accepted as there was no indication as to whether any such experts in the field were available in India or not. The machine obviously, which had been shipped from Germany is not a machine which is manufactured in India. Consequently to expect any experts for carrying out inspection, more so when the surveyor appointed by the Insurance company does not appear to be an expert of such machinery may not have been possible more so during its warranty period. No evidence was laid by the Insurance company to demonstrate that its surveyor or any other person was equipped to carry out the internal inspection of this highly sophisticated German machine or to assess any loss or damage regarding the same. There is no evidence that the final Surveyor had indicated the availability of any expert or engineer whose services could be availed of for dismantling the equipment for further internal assessment of damage. In the absence of any such expertise, the apprehension expressed by the German engineer appears to be justified as the machine was under warranty period and the manufacturer's place was an ideal destination for any inspection or assessment.
42. The opposite parties in their written arguments dated 13.03.2014 categorically hammered upon non-existence of any documents of warranty or any evidence that the dismantling was impossible in India. Pointing out to the letter of the German manufacturer, it is urged that it did not say that the equipment could not be dismantled in India and secondly there was no whisper that if the equipment is dismantled, the warranty issued by the manufacturer would lapse. When this was argued, the complainant's counsel on 18-05-2017 sought time to file documents including that of the warranty. The order dated 18.05.2017 passed by this Commission is extracted hereinunder:-
This is a part heard matter.
Counsel for the complainant has to file some documents such as the terms & conditions of the warranty, estimate of repairs, inspection report prior to repair and the date on which the equipment was sent to Germany. The information may be given within four weeks with an advance copy to the opposite party.
Opposite party to place on record their response to the letter of the complainant asking them to depute someone to Germany for inspection after the machine is dismantled and to assess the cost of repair and give their permission to go ahead with the repair at the estimated cost. The same may also be provided within four weeks with an advance copy to the complainant.
List the case on 21-09-2017 for final hearing.
43. This was complied with by filing documents on 29.06.2017 as stands recorded in the Order dated 03.08.2018. The compilation contains answers to the queries and question no. 3 with its answer is extracted hereinunder:-
Q. 3 What were the terms of warranty?
Ans. The warranty was given for the equipment delivered for a period of 12 months after acceptance protocol or 18 months after beginning of start-up i.e. project time schedule. The warranty is given in respect of manufacturing defects only. The entire contract with the supplier is filed herewith. The relvant portion is Clause 8 on page 16.
44. The terms of warranty as mentioned above contained in the document of contract is extracted below:
8. WARRANTY 8.1 The SELLER gives a warranty for the Equipment delivered for a period of 12 (twelve) months after Acceptance Protocol, or 18 (eighteen) months after Beginning of Start-up, i.e. as per Project Time Schedule (Appendix V. Page 2) till 15.07.2006.
8.2 Under this warranty the SELLER will eliminate, without undue delay and at his own expense, all defects due to defective material or workmanship which shall be proven by BUYER by replacement or repair - such repair to be made at the SELLER'S DISCRETION - provided that such defects due to reasons attributable to the SELLER and are neither caused by damage in transit nor by assembling the equipment without the SELLER's supervision, nor by handling at site contrary to normal practice or to the SELLER'S instructions on handling and/or maintenance, nor by normal wear and tear. The SELLER shall have the right to choose between delivery of new parts, repair at the site or repair in the manufacturer's workshop.
8.3 The liability of the SELLER under this warranty is waived if such defects are not notified to the SELLER in writing within 14 days of discovery, or if repairs or replacements are carried out by the BUYER or third parties without the SELLER'S prior written consent.
8.4 If the SELLER fulfills his obligation by replacing parts, the new part(s) will be made available to the BUYER CPT Sea - or Airport. The parts so replaced shall be returned by the BUYER to the SELLER, at SELLER's discretion, either FCA BUYER's nearest airport or FOB the BUYER's nearest seaport (according to Incoterms 2000) and the BUYER will make available all the necessary documents to enable such replaced parts to be re-exported to their place of origin and to obtain the permit to import the replacement parts free of import duty.
45. A perusal thereof indicates no liability of the Seller if the Buyer acts without the Seller's prior written consent. This waiver would have been certainly detrimental for the complainant. The Letter from the German manufacturer dated 16.09.2004 extracted as para 11 above therefore clearly mandated the shipment to be despatched to Germany and the insistence of the German Engineer in the presence of Mr. S. K. Bhatia, the Surveyor appointed by the Insurance company who was present on 15.09.2004 confirms the optionless situation of the complainant. This is evident from Mr. Bhatia's report extracted in Para 6 hereinbefore.
46. The Insurance company, therefore as per the request and information tendered by the Complainant ought to have sent its surveyor if it so desired to Germany. Having failed to do so this absence of the surveyor to inspect and make his assessment in Germany in spite of the information to him is clearly a deficiency in service. The avoidance of the surveyor to be present at the time of inspection, and the insistence of the Insurance company not to send the machine to Germany, is clearly an indication of the fact that the Insurance company had refused to cooperate for an appropriate analysis and assessment of the exact status of internal damage caused to the equipment. The Insurance company had been requested time and again about the aforesaid facts but the Insurance company kept on telling the Complainant that moving of the equipment to Germany for repairs was the unilateral decision of the Complainant even though the surveyor instructed the Complainant to keep him informed on day to day basis the developments regarding the activities of inspection, repairs and assessment in Germany. The Insurance company accordingly was kept aware of all movements to Germany and back as desired by the surveyor and the insurance company reflected in Clause 8 of the report dated 28.09.2004.
47. The Complainant duly sent a copy of the entire report of the assessment at Germany to the Opposite Party as indicated above. Thus, there was cooperation at every stage by the Complainant in order to enable the Insurance company to correctly assess the loss or damage through its surveyor.
48. Thus, it is clear that the complainant cannot be blamed or held responsible in any way so as to conclude non-cooperation on their part. Not only this, the complainant in their subsequent correspondence noted above, had intimated the insurance company requesting them to send the surveyor to Germany to witness and assess the damage caused to the equipment and then form an opinion about the same, but the insurance company just kept quiet and avoided to participate in the process.
49. The spot surveyor and the second surveyor both had indicated a loss having being caused due to the accident, may be not exactly, as the internal damage could not be assessed at that moment. However, this is not a blame to be put on the Complainant as the Complainant had made all efforts to get the claim surveyed, assessed as also the repair of the machine. The report from Germany was made available as desired by the Insurance company timely without fail. All this establishes complete cooperation on the part of the Complainant. It cannot be lost sight of that the machinery was immensely sophisticated and was a necessity for the manufacturing process which had been acquired at a huge cost. Any delay in its repair and installation would have been detrimental for the Complainant and promptness had to be observed together with the fact that the machine was under warranty. It was therefore, all the more necessary that the inspection as well as the assessment ought to have been carried out by the manufacturer where the presence of the surveyor could have been made available. Not only this as per desire of the Insurance company and its surveyor all the information regarding the inspection, assessment and repair at Germany had been tendered to them.
50. In the instant case, the facts as noted in the Marine Spot Survey submitted on 06.09.2004 have not been controverted. Since the said survey seems to be a preliminary assessment, the second survey that was conducted by M/s S. K. Bhatia discloses the details that reflects damage to the Extruder, one of the components that had suffered damage as well as other observations as extracted in Para 5, 6 and 7 hereinabove. The report dated 06.09.2004 and 15.09.2004 of Mr. Deole and Mr. Bhatia both noted the presence of the officials and representatives of the complainant and also the German Engineer on the 15th of September 2004. It is also recorded by Mr. Bhatia that the representatives of the complainant were ready for getting inspection done, but the German Engineer's intervention and the insistence to transship the damaged equipment for assessment of loss and repairs resulted in the internal inspection not being carried out. This was clearly not a non-cooperation on the part of the complainant. Together with this there was a justified impediment on account of the warranty conditions of the equipment. This has been pleaded by the complainant and is clearly mentioned in its letter dated 28.09.2004 (An-L) addressed to the Div. Manager, Oriental Insurance Co. The complainant has clearly expressed itself stating that they were left with no option but to accept the advise of the representative of the manufacturer. The 3rd final Surveyor M/s A. K. Gupta in his survey of 28.09.2004 (An-M) insisted that the crates carrying the equipment were not opened and therefore no permission could be given to transship the consignment to Germany. However, the same letter again asks for some documents to assess the loss and finally also calls upon the claimant to keep him informed of all movements, inspections and repairs from Germany. This instruction was followed and all documents / information was tendered to the Insurance Company and its Surveyor regarding the developments in Germany. The complainant reasserted the issue of warranty in its letter dated 06.10.2004 (An-O).
51. The opposite parties in their written version took exception to the stand of that the dismantling of the machine for inspection was impossible. This was not the stand of the complainant on his own, rather it was on account of the reluctance of the German Engineer that this situation had emerged. The complainant on this objection clearly replied in Para 10 of their rejoinder that since it was necessary to continue the warranty, the advise of the engineer from Germany could not be refuted. It is clearly stated that the German Engineer insisted that if the warranty is to continue the machine will have to be taken to Germany for assessing any loss or carrying out repairs.
52. Consequently we are of the view that it was not non-cooperation on the part of the Complainant, rather it was a compulsion on the Complainant because of the warranty as well as the opinion of the German engineer that the machine had to be shifted back to Germany for locating any damages or assessing any claim arising there from. The journey to Germany and then back to India therefore was inevitable and the stand of the Insurance company not to act accordingly was a clear disservice and deliberate deficiency in service. This also violated the mandate of Section 64 UM of the Insurance Act as the final surveyor had been appointed by the Insurance company but who failed to undertake the journey to Germany to evidence and witness the unpacking, analysis and ultimate assessment of the consignment for which the Complainant cannot be held liable.
53. What is to be noted is that the manufacturing unit in Germany conducted an assessment and a damage report was prepared comprehensively explaining the damage incurred. This was sent and was also dispatched and tendered to the insurance company. The said assessment of damage has been extracted in paragraph 19 herein above where also the estimated damage and the actual cost incurred by the complainant for getting the equipment repaired has been mentioned. These documents are on record. The insurance company does not state that the report was fake or incorrect or false.
54. These documents were made available to the insurance company prior to the letter sent by them on 04.07.2005. Through this letter the complainant was informed about the partial acceptance of the claim by the insurance company to the tune of Rs.4,35,740/- which is mentioned as the assessed loss on the basis of the surveyor's report. There is no other survey report stated to have been obtained or otherwise accepted except the three survey reports referred to above. The survey report mentioned in the letter dated 04.07.2005 which may or may not have assessed the loss has neither been placed on record nor sought to be explained by the opposite party or their counsel. It is the case of the complainant that there is no such survey report available or made known where any estimation of the amount referred to above has been made. The other three survey reports nowhere indicate any such assessment. Thus, the communication dated 04.07.2005 is not supported by any survey document referred to therein. Consequently, there is no proof or any material so as to conclude that there was any assessment of loss or damage suffered by the surveyor for a sum of Rs.4,35,740/-.
55. Learned counsel for the opposite party contends that the letter dated 04.07.2005 has been brought on record by the Insurance company and there is no reason to disbelieve the same. This argument does not inspire confidence. This document was of the year 2005. The complainant categorically states that no copy of the survey report mentioned in the letter dated 04.07.2005 was supplied. It was therefore, the duty of the opposite party to have placed any material on record to dispel this notion. Unfortunately no steps were taken by the Insurance company for bringing such document on record and hence an, adverse inference can be safely drawn against the Insurance company to the effect that the company has avoided and has withheld that piece of material evidence which could have reflected about the application of mind to the claim made by the complainants on the basis of assessment of damage/ loss calculated and cost incurred in getting the machine repaired by the manufacturer in Germany.
56. What is conspicuous in that there is no reference to the information and material available to have been assessed or indicated to have been assessed in the letter dated 04.07.2005. The said letter does mention a surveyor's report which was never given to the Petitioner. There is no evidence that any such survey report as mentioned in the letter dated 04.07.2005 was supplied or even brought on record or even exists. The Insurance company, therefore, has deliberately withheld or chosen to ignore these aspects. Had the surveyor's report as mentioned in the letter dated 04.07.2005 been brought on record or supplied to the Petitioner, the same would have reflected the bona-fides and the genuineness of the Insurance company in either accepting or not accepting the claim. The letter dated 04.07.2005 simply conveys a partial acceptance of a claim which seems to be part of the transportation charges and nothing more.
57. The inaction on the part of Insurance company and also withholding of any such information about the surveyor's report mentioned in the letter dated 04.07.2005 is a serious deficiency in service and also amounts to an unfair treatment of the claim setup by the Complainant. The Insurance company therefore, cannot absolve itself of such a liability by its own inaction and put the blame of non-cooperation on the Complainant. Consequently, this circumstance as well goes against the Opposite Party.
58. The machine returned back to the unit and was made functional but the insurance company which is under an obligation to carry out the final survey did not and discharge its obligation and therefore, this amounts to a failure of obligated service. The Insurance company never finally repudiated the claim of the complainant and just kept silent which also amounts to unfair trade practice. The Insurance company also did not apply its mind to the estimated loss mentioned in the second surveyor's report which was also noted in the communication to the Insurance Company that it was in the vicinity of Rs.1.00 crore. The assessment of external damage caused also is not substantiated by any document to indicate that it was assessed separately and as such there was total failure of service on the part of the Insurance company and the excuse taken for not supplying the document and then asking for more documents was a lame excuse as all the documents have been supplied as is evident from the narrative and sequence of the letters sent by the complainant as explained herein above.
59. The Insurance company has erroneously tried to shift the burden on the complainant by blaming them for non-cooperation when the facts lead to no-room of doubt that the complainant had been very promptly taking every step right from the stage of the accident up to all the surveys that were conducted and to ensure that the information as sought from the Insurance Company and the Surveyor were duly supplied with each and every minute detail pertaining to the loss, damage that had occurred and the accident of the vehicle that was carrying the consignment.
60. It is not the case of the Insurance company that no accident took place or there was no consignment for which damage was being claimed. To the contrary, occurrence of the incident and the damage caused to the consignment is not disputed rather, the opportunity to assess the actual internal damage is being made the bone of contention. Had the equipment not been under warranty and had the manufacturer's German engineer not insisted upon, there was no occasion for the complainant to have with-held the internal examination of the machine.
61. Thus it was clearly beyond the control of the complainant to act contrary to the advice of the manufacture and its engineer. In the given circumstances to get the machine repaired from Germany appeared to be an urgent necessity, as any delay in the installation of the machine was causing loss to the complainant. In these circumstances there was no default on the part of the complainant. The fact that the equipment was taken to Germany for being repaired by the manufacturer establishes that there was no option available to the complainant except to get the equipment rectified for installation and proper use. The consignment having been insured, the Insurance company was clearly liable in terms thereof. This is also fortified by the minuscule amount that has been accepted as the net loss that has been paid by the Insurance company which establishes that the accident had occurred, equipment had been damaged and that there was no reason to disbelieve the incident.
62. One of the arguments advanced by the learned counsel for the complainant is about appointing multiple surveyors by the Insurance Companies that has been deprecated in the case of Sri Venkateswara Syndicate vs. Oriental Insurance Company Ltd. & Anr. 2009 (8) SCC Pg. 507. In the said case the Insurance company initially engaged a surveyor for a preliminary report and on receiving the same, the company appointed Joint Surveyors in terms of Section 64 UM(2) of the Insurance Act, 1938. Disagreeing and finding the report of the Joint Surveyors , the Insurance Company appointed a third Surveyor who in turn appointed a retired police officer to submit a report. The officer submitted his report but not being satisfied, the Insurance company appointed a Chartered Accountant Mr. R. Srinivasan and company to give a fresh report who submitted the same. The Insurance company accepted the lacunae pointed out by the Chartered accountant in the three previous reports and then proceeded to settle the claim. This was questioned through a Consumer Complaint before the National Commission (NCDRC) which was disposed off on the concession made by the Insurance company for a reduced amount with a reduced rate of interest to the dissatisfaction of the insured.
63. Consequently aggrieved, the insured preferred an appeal before the apex court contending that the Commission adopted an erroneous approach as the Insurance Co. after several attempts of Surveyors appointed one after the other, managed a report finally in their favour leading to the concession offered by it that was incorrectly accepted by the Commission. It was also contended that the rate of interest was reduced to 6% in spite of a legitimate demand of 18%.
64. The apex court framed two questions, namely, whether the Insurance Co. could repeatedly appoint surveyor after surveyor to assess a loss against a claim and incidently, whether the Commission was justified in awarding interest @6% as against the claim @18% (Pr. 8). It is only the first substantial question that has been raised in this complaint which is to be considered and answered. The ratio of the judgment relied on by the counsel for the complainant as broadly understood can be culled out as follows:-
(1) The provisions of Section 64-UM(2) and (3) of the Insurance Act, 1938 were analysed to hold that no claim equal to or exceeding Rs. 20,000/- shall be admitted for payment unless the insurer obtains a report on the loss from a licensed and qualified surveyor and the proviso to sub-section (2) permits an insurer to obtain a second or further report where considered appropriate or expedient in the circumstances of a case to be settled for a different amount than as assessed earlier (Pr. 10).
(2) The Insurance Regulatory and Development Authority (IRDA) is empowered under sub-section (3) to call for a second report either suo-moto or on a complaint or on an application by the insured person for its use, consideration and further directions (Pr. 11).
(3) The reports of surveyors are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them (Pr. 22).
(4) The Insurance company cannot go on appointing Surveyors one after another so as to get a tailor-made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reason for not accepting the report (Pr. 22).
(5) Scheme of Section 64-UM particularly, of Sub-sections (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, excessive, exaggerated, etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor / Surveyors (Pr. 22).
(6) There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor (Pr. 22).
(7) 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 insured (Pr. 23).
(8) If the reports are prepared in good faith, due application of mind and in the absence of any error or ill motive, the insurance company is not expected to reject the report of the Surveyors (Pr. 23).
65. The legal position as it emerges from the above is crystal clear. There is no statutory or legal bar for the Insurance company to appoint a second surveyor provided there are reasons to differ with the first survey report. Even otherwise an Insurance company is directly involved in dealing with finances which it should negotiate prudently and not recklessly. To avoid any pitfalls, it has to take all precautions to ensure that claims are settled fairly, justly and not disproportionately. The assessment should be as objective as possible with little chances of subjectivity or speculations. The calculations should reflect empirical perfection towards a just proportion of all genuine and bonafide claims while adhering to law. The regulations provide for the standards of conduct of surveyors and their integrity. It is for this reason that the apex court has opined about the parameters on the basis whereof the report of a Surveyor has to be weighed (See (8) above). Thus, this argument on behalf of the Complainant does not come to their aid and the appointment of successive surveyors in no way arises as an issue to be determined in this case.
66. Coming to the quantum of demands and claim it is evident from the perusal of the calculation made by the company and the bills raised in respect of the repair that was also informed to the Insurance company, they could have easily carried out the nature of exercise that was needed before sending the letter dated 04.07.2005 or even thereafter to assess the loss for complete disbursement of the amount.
67. Thus, failure on the part of the insurance company not to undertake the task of finalising the claim clearly amounts to a deficiency in service and also unfair trade practice.
68. The Opposite Party has been unable to dispute the quantum of the damage, the expenses of the repairs and the payments made by the Complainant towards the repair of the damages to the German Company. In such circumstances the only conclusion that can be drawn is that the damage as inspected, assessed and repair carried out at Germany reflect a genuine or bona-fide loss to the Complainant which deserves to be reimbursed under the policy.
69. Consequently, the complaint deserves to be allowed and is hereby allowed. The opposite party/ insurance company is directed to pay a sum of Rs.1,79,88,093/- as per the settlement of the claim made by the complainant together with 9% simple interest per annum on the above amount till actual payment is made with effect from 04.09.2004 onwards. A sum of Rs.5.00 lakh is being awarded as compensation to the complainant for deficiency in service and for not concluding the complaint till date. Rs.50,000/- as cost of litigation.
70. The Complaint is accordingly allowed.
.........................J A. P. SAHI PRESIDENT