D.P.S. Choudhary, President:
1. The complainant has claimed Rs. 12,16,118.30 from the O.P. (New India Assurance Co. Ltd., Bihar Sharif) for the damages and loss caused to him due to accidental fire in his business premises which was insured with the O.P.
2. The brief fact of the case is that complainant No. 1 is the firm M/s. Asian Ply and the complainant Nos. 2 and 3 are its partners. The business consist of making ply wood. The machineries for making ply wood, raw materials kept in the business premises and finished goods etc. were insured as accident insurance policy and fire policy (A) for the period 22.11.1996 to 21.11.1997, both for a sum of Rs. Seven lacs each. The insurance was in the name of S.B.I., Barh and account was in the name of M/s. Asian Ply at Barh. The valuation of the machinery and other assessories at Rs. 2,50,000/- and valuation of the stock at Rs. 4,50,000/- in each policy was accepted by the O.P., New India Assurance Company (hereinafter referred as Company). On 27.4.1997 in the night there was a sudden fire in the premises which caused extensive damage to the properties kept therein. The Barh P.S. Case No. 828/1997 dated 28.4.1997 was registered. The entire machinery and the stock in the premises are alleged to have been burnt down. The complainant assessed the loss to the tune of about Rs. 12,50,000/-. The Bank and the Insurance Company were informed of the accident. The S.B.I., Barh Branch vide its letter dated 29.4.1997 forwarded an information of accidental fire to the Company calling upon to make payment to the complainant at the earliest. The complainant has specially also informed on the same day to the Insurance Company with all the details of the insurance cover. Reminders were also sent to the Company for early settlement of the claim. The Regional Manager vide his letter dated 12.1.1998 acknowledged the receipt of the petitioners letter and he was informed that inquiry is being made in the matter but nothing was heard from the Company for long period. The Company appointed Sri H.L. Shah, the Chartered Accountant and Surveyor to inspect the premises who after verification of the records and the damages etc. submitted a report to the Company. Inspite of this, no payment was made towards the claim amount, hence this complaint petition.
3. The complainant has annexed the photostat copy of the policy, copy of the FIR dated 28.4.1997, letters written to the Bank and the Insurance Company in support of his claim.
4. The Insurance Company (O.P.) appeared and filed written statement. Its case is that after considering the entire facts of the claim the Insurance Company has repudiated the claim of the complainant as per Annexure-B. The claim of the complainant is false and fabricated. The Company after receiving information about the occurrence deputed the Surveyor Mr. H.L. Shah who submitted the report. His report was incomplete, hence Insurance Company deputed another Surveyor Mr. Avinash Deewan for investigation and assessment of the alleged loss who visited the establishment on 16.12.1997. He requested the complainant to submit the relevant documents vide letter dated 10.1.1998 (Annexure-C). The Insurance Company also asked the complainant to furnish those documents to the Surveyor, Mr. Deewan but complainant did not furnish the required documents. The complainant did not cooperate with the second Surveyor as clear from the report of Mr. Deewan dated 20.1.1999 (Annexure-D). Thereafter the O.P. repudiated the claim of the complainant on 17.5.1999 as per Annexure-E. The report of the Surveyor, Avinash Deewan is Annexure-D. The report mentions that complainant has made claim for Rs. 7,07,223/- comprising of Rs. 3,19,790/- worth of machinery and electrical items and Rs. 3,87,443/- worth raw material and finished goods. No claim has been made for the loss to the shed which was not covered under the insurance policy. In the report it is mentioned that in absence of the details of damages it cannot be ascertained whether these expenses were actually incurred as a result of damage to the plant and machinery on account of the fire. Even the payment of Rs. 1.97 lacs to Mr. Lakhan Engineering Works dated 15.5.1997 was not produced by the insured, therefore, the Surveyor held that the loss of machinery to the insured as a result of the fire cannot be assessed. As regards loss of stock the report mentions that the insured inspite of several requests made by the previous Surveyor has not produced the Cash Book, Ledger, Purchase Memo, etc. and the complainant did not comply the request of the first Surveyor in submitting the required documents. The list of closing stock with value as per stock register were also requested to be produced but have not been produced. The assured did not maintain at the Unit about the basis of the stock value given to the Bank and in the final accounts of the firm. Nothing was furnished before the Surveyor and thus the Surveyor could not assess the loss of stock alleged to have been destroyed in the fire. The O.P. further pointed out that in its subsequent report Mr. Avinash Deewan, Surveyor dated August 13, 2002 has given a detailed report and has concluded that summary of total loss payable under the head of loss against machinery is Rs. 1,34,151.58, (ii) against loss of stock - Rs. 1,12,132.96. Thus total loss assessed by the Surveyor is Rs. 2,46,284.54. The contention of the O.P. is that as per report of Mr. Avinash Deewan with regard to the loss payable to the assured, the Company is ready to pay the said amount but it is the complainant who is not ready to accept the same.
5. The O.P.-Insurance Company has filed the original report of the two Surveyors at the time of hearing of the appeal. The copy of the report of the second Surveyor Mr. A. Deewan was already on record. On the request of the complainant the report of first Surveyor Mr. H.L. Shah has been produced by the Insurance Company. This is admitted fact that Insurance Company has appointed Mr. Shah as the first Surveyor and he has submitted the report dated 9.6.1997. We have perused the report and it is a complete report and at page-17 of the report Mr. Shah has summarized the net liability and the payable amount to the complainant. It mentions that the summary of the loss was as fallows :
| (a) | Stock | 2,57,006.92 |
| (b) | Plant and machinery | 1,56,599.55 |
| Â | Total net liability | 4,13,606.47 |
This final survey report issued without prejudice subject to the terms and conditions, warranty, stipulation provision and exception of the policy under which the captioned claim has been preferred and subject to final approval.
6. The learned Lawyer appearing on behalf of the Insurance Company-O.P. on inquiry submitted that since this report was incomplete, therefore, second Surveyor Mr. Deewan was appointed. We have already discussed the report of the second Surveyor as stated above. The report of first Surveyor Mr. Shah is a complete report, as such, there is no substance in this contention of the O.P. that it was incomplete report.
7. It is settled law that the Insurance Company should not appoint second or successive Surveyors because the report of the first Surveyor is not acceptable to the Insurance Company. In the recent decision the National Commission reported in I (2003) CPJ 33 (NC), National Insurance Company Ltd. v. New Patiala Trading Company, has held that under Section 64UM of the Insurance Act, 1938 reason for non-acceptance of report of first Surveyor must be specified. Insurer not free to appoint second Surveyor to counter or contradict report of first Surveyor. The National Commission held that if the report of first Surveyor is not proved as faulty the appointment of second Surveyor and subsequent Surveyor is not according to the provision of Insurance Act. The report of the first Surveyor is to be accepted.
8. From the scheme of Section 64UM of the Act, 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 is not acceptable to the insurer it must specify reasons but it is not free to appoint second Surveyor. Such appointment would be a reflection on the conduct of the first Surveyor. Surveyor is bound to give a correct report unless proved otherwise. A Surveyor is appointed under statute and without assigning any valid reason. The insurer-Company is not liable to refuse the report of its own.
9. From the facts and the legal position as enumerated above we are of the view that insurer (Insurance Company) is bound to abide by the report of the first Surveyor which was appointed at its instance. The contention of the learned Lawyer of the O.P. that Insurance Company is ready to pay the amount assessed by the second Surveyor is without merit. As mentioned above the first Surveyor in its report dated 9.6.1997 has assessed the net liability payable to the insured amounting to Rs. 4,11,106.47. The New India Assurance Company is liable to pay this amount to the complainant and not the amount assessed by the second Surveyor. It is, therefore, ordered that O.P.-New India Assurance Company shall pay Rs. 4,11,106.47 to the complainant within three months from the date of the order besides interest @ 12% from the date of repudiation of the claim i.e., 17.5.1999. However, there shall be no order as to cost.
Complaint disposed of.