Karnataka High Court
M/S Microtex India Ltd vs Insurance Regulatory And Development ... on 1 August, 2012
Author: Mohan Shantanagoudar
Bench: Mohan Shantanagoudar
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 1st DAY OF AUGUST 2012
BEFORE
THE HON'BLE MR. JUSTICE MOHAN SHANTANAGOUDAR
WRIT PETITION NO. 4499/2012 (GM-RES)
BETWEEN:
M/s. Microtex India Ltd.,
A Company incorporated under
the provisions of Companies Act, 1956
having its registered office at
Plot No.33, Part 33-A, 34 C
KIADB Industrial Area, Hosakote
Bangalore Rural District
Bangalore-562 114
Rep by its Director
Gunna Ashok Reddy. ..Petitioner
(By Nidishree for Aditya Sondhi, Advs.,)
AND :
1. Insurance Regulatory and
Development Authority
3rd Floor, Parisrama Bhavan
Basheer Bagh, Hyderabad-04
Rep by its Controller (Chairman).
2. M/s. Cholamandalam M.S. General
Insurance Company Ltd.,
Dare House, II Floor
2
N.S.C. Bose Road, Parrys
Chennai-600 001.
Rep by its Chief Executive Officer
S.S. Gopalaratnam.
Also at
19/1, 9/1, Ulsoor Road
Opp. Ulsoor Gurudwara
Bangalore-560042. ..Respondents
(By M/s. Just Law for R1;
Sri O. Mahesh, Adv., for R2)
This Writ Petition is filed under Articles 226 and 227 of
the Constitution of India praying to direct the respondent
no.1 to call for an independent report from any other
approved surveyor in terms of the representation of the
petitioner dated 15.10.2011 vide Annexure-P and etc.,
This writ petition coming on for preliminary hearing in
'B' group this day, the Court made the following.
ORDER
The petitioner has sought for a direction to the 1st respondent to call for an independent report from any approved Surveyor as per the representation made by it vide Annexure-P dated 15.10.2011 to assess the loss caused by the fire accident in terms of Section-64 UM(3) of the Insurance Act, 1938 ('the Act' for short). Consequential reliefs are also sought for. 3
2. On 3.10.2010, fire broke out in the petitioner's premises. On the very day, the Electrical Engineer, KIADB and Sub-Inspector of Police, Hosakote inspected the petitioner's establishment and a mahazar was prepared. The Respondent No.2 - Insurance Company appointed a Forensic Science Expert to investigate into the circumstances of the accident on 5.10.2010. The jurisdictional officer of Fire Extinguishing Department, Hosakote has issued a certificate dated 6.10.2010 vide Annexure-F stating that the short circuit was the cause for fire. The petitioner laid fire insurance claim with the 2nd respondent on 10.11.2010. Ultimately, the petitioner's claim is rejected by Respondent No.2 on 7.9.2011 as per Annexure-N on the ground that it is not a case of accidental fire and hence as per the terms and conditions of the policy, the claim is not tenable. The petitioner sent a letter to the 1st respondent authority seeking appointment of the 2nd Surveyor as per Section-64 UM(3) of the Act. Copy of the 4 application dated 15.10.2011 is produced at Annexure-P to the writ petition. However, the 2nd Surveyor was not appointed by the 1st respondent. Hence this writ petition is filed.
3. The 1st respondent filed statement of objections opposing the writ petition contending that the 1st respondent is not the adjudicating authority, but it merely regulates the functioning of the insurance sector. The sum and substance of the argument of the 1st respondent is that neither the petitioner nor the insurer can compel the 1st respondent to appoint a 2nd Surveyor and that it is for the 1st respondent to take an independent decision based on the facts and circumstances of each case.
There cannot be any dispute that the 1st respondent is not the adjudicating authority. It is a regulatory authority. However, certain functions are required to be carried out by the 1st respondent while functioning as a regulatory 5 authority. Under sub-section (3) of Section 64 UM of the Act, the 1st respondent may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent report from any other approved Surveyor or loss assessor specified by him and such Surveyor or loss assessor shall furnish such report to the 1st respondent. Based on which, the further proceedings will go on under sub-section (4) of Section-64 UM of the Act.
4. The Apex Court in the case of SRI VENKATESWARA SYNDICATE -vs- ORIENTAL INSURANCE COMPANY LIMITED {(2009)8 SCC 507} has observed that sub-section (3) of Section-64 UM of the Act vests the 1st respondent Authority with the power to call for a second report, either suo motu or upon the application by the insured person or on a complaint made by a third party; Under sub-section (3), the second report is required to be called by the Authority himself for use, consideration and further directions; The Surveyor 6 appointed shall investigate, manage, quantify, validate and deal with losses arising from any contingency and carry out the work with competence, objectivity and professional integrity by strictly adhering to the Regulations; The report of the Surveyor could become the basis for settlement of a claim by the insurer in respect of the loss suffered by the insured.
5. From the above, it is clear that the exercise of jurisdiction under sub-section (3) of Section-64 UM of the Act by the 1st respondent depends upon the facts and circumstances of each case. In the matter on hand, the 1st respondent has not passed any order or sent the communication to the petitioner on the application filed by the petitioner under sub-section (3) of Section-64 UM of the Act. However, in the statement of objections filed to this writ petition, the 1st respondent has averred that the application filed by the petitioner is not considered by the 1st respondent as it has no jurisdiction to do so. Such 7 averment by the 1st respondent may not be correct. It is onething to say that it is not mandatory on the part of the 1st respondent to call for a second Surveyor's report, but it is another thing to say that the 1st respondent has no jurisdiction to act under sub-section (3) of Section-64 UM of the Act. The 1st respondent definitely has jurisdiction to appoint a 2nd Surveyor for getting the 2nd report if the facts and circumstances so desire. Ultimately, it is for the 1st respondent to take decision in the matter as to whether the 2nd Surveyor could be appointed or not. The discretion is vested with the 1st respondent in such matters and such discretion should be exercised carefully keeping in mind the observations made by the Apex Court in the case of SRI VENKATESWARA SYNDICATE cited supra. Since the application filed by the petitioner under sub-section (3) of Section-64 UM of the Act is not looked into by the 1st respondent, in my considered opinion interest of justice will be met if the 1st respondent is directed to consider the 8 application filed by the petitioner vide Annexure-P dated 15.10.2011 and take decision in the matter. The decision shall be taken by the 1st respondent within six weeks.
With these observations, writ petition stands disposed of.
Sd/-
JUDGE Gss/nk-