Gujarat High Court
M/S vs The on 5 September, 2008
Author: Jayant Patel
Bench: Jayant Patel
Gujarat High Court Case Information System
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SCA/7095/2008 10/ 10 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 7095 of 2008
=========================================================
M/S
GIRIRAJ PHARMA - Petitioner(s)
Versus
THE
REGIONAL MANAGER & 6 - Respondent(s)
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Appearance :
DR
MAHESH THAKAR for Petitioner(s) : 1,MS MONA N
TRIVEDI for Petitioner(s) : 1,
(MR PV NANAVATI) for Respondent(s)
: 1 - 3.
MR VIBHUTI NANAVATI for Respondent(s) : 1 - 3, 6,
MS
DHARMISHTA RAVAL for Respondent(s) : 4,
MRS KALPANA K RAVAL for
Respondent(s) : 4,
NOTICE SERVED BY DS for Respondent(s) : 5,
7,
MR PREMAL R JOSHI for Respondent(s) :
7,
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CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 05/09/2008
ORAL
ORDER
The petitioner by this petition has challenged the direction of the insurance company of rejecting the claim for flood damage etc. and it is prayed by the petitioner to issue suitable direction to the respondent Insurance Company to make the payment of the claim amount as per the first report of the Surveyor.
Heard Mr.Thakar, learned counsel appearing for the petitioner, Mr.Nanavati for respondents Nos. 1, 2,3 & 6, Ms. Raval for respondent No.4 and Mr.Premal Joshi has filed his appearance for respondent No.7.
Upon hearing the learned advocates appearing for both the sides, it appears that there is no dispute on the following aspects:
The goods of the petitioner were covered by the risk of flood.
On the date when the goods of the petitioner were damaged by flood, the insurance was in existence.
The liability of the insurance company to indemnify the loss caused to the petitioner on account of the flood.
However, it appears that initially the petitioner lodged the claim. The same was processed by the Surveyor. The report was submitted to the Insurance Company and he had recommended for payment of Rs. 10 Lakhs at the initial stage and thereafter, he certified the loss at Rs.18 Lakhs. Thereafter, at the later stage, on account of the subsequent inquiries, the amount was reduced. As per the Insurance Company, for examining the genuineness of the claim, the investigation was assigned to one former IPS Officer and thereafter, the claim was reprocessed and it was found that as per the report of the Surveyor, after further investigation, the loss was assessed of Rs.3,82,932/- and the same is an admitted position.
It appears that the Insurance Company further proceeded on the basis that as the claim was not submitted by the petitioner based on the genuine invoice and the documents, which are found in the investigation report, the insurance company invoked condition No.8 for repudiation of the claim on the basis of alleged fraud and declined to make any payment. Under these circumstances, the petitioner has approached to this Court.
This Court (Coram :C.K.Buch, J.) on 08.05.2008 had passed the following order:
1. Heard Shri Mahesh Thakar, learned counsel appearing for the petitioner. The petitioner has prayed that the petitioner may be permitted to delete the respondent no.3 and in place of that, the petitioner may be permitted to join United India Insurance Company Ltd., having its corporate office at 24, Whites Road, Chennai-600 014. The petitioner is permitted to join the said United Insurance Company as party respondent no.3. Necessary amendment be carried out forthwith.
2. Notice, returnable on 01st July 2008.
3. Having considered the contents of the petition and the documents produced with the petition and also the stand taken by the respondent-Indian Overseas Bank in the matter, the Court is of the view, as submitted by Shri Thakar, that some interim mandatory orders are required to be passed. The Court is conscious that ultimately the dispute brought before the Court by the petitioner is in reference to the contract of insurance and the Court should normally go slow in invoking inherent jurisdiction vested in the Court under Article 227 of the Constitution of India in the matter of contract. The Court is also aware that there is an arbitration clause in the policy, but ultimately, the Trader who is indemnified by the respondent-Company under the policy referred to in the petition, has approached this Court by making some serious allegations as to the administration of the Company and their officers, including the Surveyor appointed by the company as well as the violation of guidelines of the statutory nature.
4. In this contingency, by way of an interim arrangement, it is hereby ordered that, without prejudice to the rights and contentions of the respondent no.3-Insurance Company which may be raised by it, the respondent nos.1, 2 and 3 are directed to deposit the amount of Rs.10 lakhs (Rupees Ten Lakhs only) with the Registry of this Court within a period of 15 days from the date of receipt of writ of this Court.
On receipt of the said amount, the Registry shall invest the said amount tentatively for a period of six months in the State Bank of India, High Court Complex Branch, so that none of the parties may lose the interest on the amount so deposited.
It is an admitted position that thereafter, pursuant to the order passed by this Court, the respondent Insurance Company has deposited the amount of Rs.10 Lakhs on 12.06.2008 with this Court.
The learned counsel for the Insurance Company by relying upon the the decision of the Insurance Company, communicated to the petitioner vide letter dated 14.11.2007, contended that in view of the repudiation of the claim by the Insurance Company, vide condition No.8, no amount is payable by the insurance company and it is open to the insurance company to repudiate the claim if it is found that the claim was submitted by producing a fraudulent document etc. Whereas, it has been contended on behalf of the petitioner that such condition is not applicable nor is it open to the Insurance Company to repudiate the claim on that basis and the insurance company must abide by the survey report submitted at the first instance by the surveyor, more particularly when certain documents as well as the goods as were damaged are also destroyed with prior intimation to the insurance company. Therefore, it was submitted that this Court may consider the matter accordingly.
It appears to the Court that the matter is pertaining to flood affected person who admittedly paid the premium to the insurance company for coverage of the risk and even as per the report of the Surveyor of the Insurance Company, communicated vide letter dated 14.11.2007, the loss caused is assessed by the said Surveyor of Rs.3,82,932/-. Therefore, in a case where the insurance was in existence, the risk was covered and the loss is assessed by the Surveyor, which is accepted by the Insurance Company, it would be absurd on the part of the Insurance Company to repudiate the claim on the ground that in respect of certain portion of the claim, the documents submitted were not genuine as per the investigation report, more particularly when it is a statutory body. It would be expected for the Insurance Company to act as an ideal insurer and such would require that the claim should have been accepted to the extent of the admitted loss as per the Survey Report and for the remaining portion, the claim could have been disallowed by the Insurance Company. Merely because in respect of part of the claim, some documents are not found genuine by the insurance company as per its investigation report, would not be a valid ground to avoid the liability of indemnification qua the amount for which the documents are found genuine and the loss is assessed by the Surveyor of the insurance company and the said report is also not challenged by the insurance company. The perusal of the letter dated 14.11.2007, which is sought to be relied upon by the insurance company as the basis of the decision for repudiation of the claim shows that at para 3, it has been stated as under:
The entire investigation report was forwarded to the surveyor for finalisation of the assessment of the loss. The surveyor issued the final survey report on 21.09.2007. As per the report the surveyor has assessed the loss in the sum of Rs.3,82,932/- only and has given a finding to the effect that there were many incorrect/erroneous bills/invoices.
The aforesaid, even if accepted on its face value, would show that the surveyor had observed that there was certain incorrect/erroneous bills/invoices but, having considered the same, ultimately, when the conclusion is given for assessment of the loss of Rs.3,82,932/-, such alleged incorrect/erroneous bills/invoices would automatically stand excluded.
Therefore, there is no valid reason on the part of the insurance company to repudiate the claim on the ground as sought to be canvassed in respect of the assessment of the loss by the surveyor of the insurance company to the extent of Rs.3,82,932/-. As the claim was required to be processed and finalised within reasonable time, the delay has been caused in finalisation of the claim and the period of about 21 months has passed. Since the claim was pertaining to flood insurance and the guidelines were issued for finalisation of the claim by 15th September, in any case, even if considered by the end of September, it would be required for the Insurance Company to pay additional bank rate of interest by way of compensatory measure for non-payment of the amount on the admitted loss of Rs.3,82,932/- from 01.10.2006 till 31.08.2008 @ 9% p.a. In view of the aforesaid, the petitioner would be in any case entitled to the amount of Rs.3,82,932/- with interest @ 9% p.a. from 01.10.2006 to 31.08.2008.
Much grievance has been raised by the learned counsel appearing for both the sides on the aspect that remaining amount of the claim as lodged by the petitioner which was found admissible as per the Surveyor report at the first instance and subsequently, diluted at the later investigation and the final report. In my view, it appears that there are different survey reports and the findings for the loss caused to the petitioner for the amount exceeding the amount of Rs.3,82,932/-. If the petitioner is to succeed in establishing the claim exceeding Rs.3,82,932/-, it will be required for this Court to undertake the fact finding inquiry of various disputed questions of facts raised by both sides, or which have arisen on account of two survey reports and the investigation report at the later stage. Such cannot conveniently be undertaken by this Court while exercising jurisdiction under Article 226 of the Constitution. As the matter is pertaining to the claim of insurance, the petitioner can approach to the Consumer Forum under the Consumer Protection Act for claiming the amount exceeding Rs.3,82,932/-. In such proceedings, the petitioner as well as the insurance company will have an opportunity to lead the evidence and the Consumer Forum after undertaking the fact finding inquiry can conclude the aspects of the actual loss caused to the petitioner and the insurance company can be directed to make the payment. Until the aforesaid exercise is undertaken, direction cannot be issued to the insurance company to pay the amount on the claim exceeding Rs.3,82,932/-.
Mr.Thakar, learned counsel appearing for the petitioner at this stage has also declared before this Court that the petitioner is ready to approach before the Consumer Forum, but he submitted that, as the matter is pertaining to the insurance claim of flood affected area, this Court may issue suitable directions for directing the Consumer Forum to decide such dispute, if ultimately filed by the petitioner.
In view of the aforesaid, I find that the following directions shall meet with the ends of justice:
The claim of the petitioner to the extent of Rs.3,82,932/- with interest at the rate of 9% p.a. from 01.10.2006 to 31.08.2008, deserves to be allowed. Hence, the Insurance Company shall be liable to pay the said amount to the petitioner towards the said claim. As the respondent insurance company has deposited the amount of Rs.10 Lakhs with this Court pursuant to the interim order passed by this Court, the petitioner shall be at the liberty to withdraw the amount of Rs.3,82,932/- with interest as ordered from the said amount of Rs.10 lakhs and the office shall pay to the petitioner by A/c. payee cheque. The remaining amount shall be returned to the respondent insurance company by the office. However, both shall be subject to further observations and clarification as stated hereinafter.
The petitioner shall be at the liberty to approach before the Consumer Forum for recovery of the claim/indemnification of the loss caused to him for the amount exceeding Rs.3,82,932/- with the interest as may be permissible in accordance with law.
If such complaint is filed under the Consumer Protection Act before the Consumer Forum by the petitioner, the same shall be examined and decided by the Consumer Forum as early as possible.
Petition is disposed of in terms of the aforesaid direction. No order as to costs.
(JAYANT PATEL, J.) *bjoy Top