Punjab-Haryana High Court
Bajaj Allianz General Insurance Co. Ltd vs Harpreet Kaur Through Her Lrs And Others on 5 November, 2024
Neutral Citation No:=2024:PHHC:143491
CWP-28164-2024 (O&M). -1-
IN THE PUNJAB AND HARYANA HIGH COURT AT
CHANDIGARH.
119
CWP-28164-2024 (O&M).
Date of Decision: 05.11.2024.
BAJAJ ALLIANZ GENERAL INSURANCE COMPANY LIMITED
... Petitioner(s)
Versus
HARPREET KAUR AND OTHERS
... Respondent(s)
CORAM: HON'BLE MR. JUSTICE VINOD S. BHARDWAJ.
Present: Mr. Preeet Harinder Singh Pannu, Advocate,
for the petitioner.
VINOD S. BHARDWAJ, J. (ORAL)
Challenge in the present petition is to the order dated
30.07.2024 passed by the National Consumer Disputes Redressal
Commission, New Delhi (hereinafter referred to as 'NCDRC') whereby the
petitioner-Insurance Company has been directed to pay an amount of
Rs.22,00,000/-, subject to necessary deductions, as per the policy along with
Rs.50,000/- towards litigation costs by reversing the award dated
24.12.2014 passed by the Punjab State Consumer Disputes Redressal
Commission, Chandigarh (hereinafter referred to as 'PSCDRC') in
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Complaint No.06 of 2011 which partly allowed the complaint and the
petitioner-Insurance Company had been directed to pay only a sum of
Rs.3,88,000/- to respondent No.1-applicant along with interest @ 9% per
annum from the date of claim till its actual realization.
2 Briefly summarized, the facts of the present case are that
respondent No.1-applicant (Harpreet Kaur since deceased) was proprietor of
M/s Sohi Herbal Product which was established in the year 2006-2007 in
village Sohian, District Ludhiana. The proprietorship was engaged in the
manufacturing of crystals from Menthol Oil, which has widespread
application in herbal products and medicines. An investment of about Rs.30
Lakhs had been carried out in the said business. A loan of Rs.22,80,000/-
had been obtained by respondent No.1-applicant from the Punjab National
Bank through a registered mortgage for which an insurance policy bearing
No.OG-09-1203-4001-00002627, for the period commencing w.e.f.
28.02.2009 to 27.02.2010, against theft and fire had also been obtained
from the petitioner-Insurance Company. The premium had been regularly
paid by respondent No.1-applicant.
3 On 28.09.2009, respondent No.1-applicant along with her
husband Parminder Singh had gone to village Saholi, District Ludhiana to
meet one of their relative, when at about 11:00 P.M., her husband received a
telephonic call from their labour that a blast had taken place in the said
factory premises causing damage to the property and had resulted in a fire.
The husband of respondent No.1-applicant immediately reached at the spot
on 29.09.2009 at about 1:00 A.M. and found that the building had been
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severely damaged causing loss to the stock, plant and machinery etc. lying
in the building. It was claimed that at that time of the incident, stock worth
Rs.18,15,630/- and plant and machinery worth Rs.7,48,860/- was lying in
the premises. The copy of the balance sheet and other documents were also
furnished. The matter was also reported to the police and on 03.10.2009,
DDR No.27 was registered.
4 A claim was also lodged with the petitioner-Insurance
Company whereupon a Surveyor was nominated who visited the site of the
incident and also collected the documents and the information required by
them. It is submitted that despite the total loss, the net losses were computed
at Rs.3,88,000/-, on the basis of a conjectural report. Vide letter dated
08.09.2010, the petitioner-Insurance Company called upon respondent
No.1-applicant to sign a consent for the claim of Rs.3,88,000/-, as
recommended by the Surveyor, towards full and final settlement of the dues
which was not acceptable to the petitioner. Aggrieved thereof, respondent
No.1-applicant served a legal notice and thereafter filed a complaint with
the PSCDRC.
5 The petitioner-Insurance Company entered appearance before
the PSCDRC and filed its reply wherein various objections were taken
including that the surveyor appointed by the petitioner-Insurance Company
is an IRDA approved surveyor and is duly licensed by the
Central Government. Being a technically qualified person and having
physically verified the record, books of accounts and physical inspection of
the site, he assessed the loss at Rs.3,88,000/- and that the petitioner-
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Insurance Company had always remained ready and willing to transfer the
said amount, however, respondent No.1-applicant refused to accept the
same. Hence, there was no deficiency in so far as the petitioner-Insurance
Company is concerned.
6 On consideration of the evidence led by the respective parties,
the PSCDRC partly allowed the claim and directed the petitioner-Insurance
Company to pay a sum of Rs.3,88,000/- along with interest 9% per annum
from the date when the claim was reported by placing reliance on the
surveyor's report. The operative part of the said report reads thus:-
"6. It was submitted by the learned counsel for the
complainant that from the evidence produced by the
complainant, the allegations as contained in the complaint
stands proved. It can easily be made out from the balance sheet
Ex.C-3 that at the time the blast took place in the factory the
stock worth Rs. 18,15,630/- was lying therein and the value of
the machinery fitted therein was Rs.7,48,807/- From the
affidavit of the complainant and the photographs, it stands
proved that whole of the stock and the machinery were
damaged in the fire, the value of which was more than
Rs.25,00,000/- Therefore, opposite party No. 1 was liable to
pay the assured sum of Rs 22,00,000/- under the Policy. He
further Submitted that the Surveyor gave a biased report
Ex.OP-1/2 by ignoring the records, which were submitted to
him by the complainant and he has not given any reasons in
that report as to how he came to the conclusion that the loss
suffered by the complainant was only to the tune of Rs.3,88,
789/- The act of opposite party No.1 in not allowing whole of
the claim of the complainant amounts to deficiency in service
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on its part. He prayed that direction be issued to opposite party
No.1 to pay the total assured amount of Rs.22,00,000/-.
7. On the other hand, it was submitted by the learned counsel
for opposite party No.1 that the evidence produced by the
complainant in support of the allegations made in the
complaint was duly rebutted by the evidence produced by this
opposite party. From that evidence, it stands proved that the
factory of the complainant was lying idle from the last three
months of the alleged incident and she was not having the stock
and machinery of the worth mentioned in the complaint and the
documents submitted by her to the Surveyor. It was found by
the Surveyor that in fact no such fire ever took place in the
factory and the blast occurred on account of the act of the
miscreants, who had entered the factory. The report of the
Surveyor is most important document for determining the loss
caused to the complainant and by virtue of that report, she is
not entitled to the amount in excess of Rs.3,88,789/-.
8. In support of the allegations made in the complaint, the
complainant proved on record her affidavit EXCA. For further
corroborating the deposition made by her she proved on
record the photographs Ex.C-2 and the balance sheet on
28.9.2009 Ex.C-3. As per her deposition, the stock and the
machinery/plant lying inside the factory was totally damaged
on account of the fire and the value thereof was Rs.30,00,000/-.
However, as per the balance-sheet Ex.C-3, the closing stock as
on 28.9.2009 was of the value of Rs 18,15,630/- and the
machinery/plant was of the value of Rs.7,48,807/-,
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9. Opposite party No.1 is relying upon the report of the
Surveyor Ex. OP-1/2, for rebutting the evidence so produced by
the complainant regarding the damage/loss caused to her in
the alleged incident. It has also proved on the record the
affidavit of Sachin Ohri, Manager, Ex.OP-1/A but that is of not
much relevance for deciding the controversy between the
parties. The report of the Surveyor was duly proved by that
Surveyor by proving on record his affidavit Ex.OP1/B. A very
detailed report was made by the Surveyor and as per the
settled law the report of the Surveyor is very important
document for deciding the damage/loss caused to the insured
but at the same time, it cannot be the last word on that subject.
The Surveyor detailed each and every fact in his report and
also mentioned therein the circumstances of the loss. He stated
that on the day of alleged incident the factory was not
operational and only the compressor attached to Deep Freezer
was in working condition. Under the heading" 'Cause of Fire,
he stated that exact cause of fire was not known and that the
insured was unable to provide any details on the cause of loss.
On the basis of his observations at the site he reported that it
appeared that some miscreants by taking the advantage of the
situation that nobody was available in the factory might have
entered inside the same and tried to steal the material and later
on, they tried to change/cover up the situation by burning the
material and they gave some ignition near the Deep Freezer
and the vapours, which were present in the vicinity, caused the
explosion and later on spread into fire. He also reported that
the fire remained confined to near Deep Freezer as no marks
of travel of fire were observed on the wall, ceiling and/or
material kept on the floor and that the contention of the insured
that the entire material had been burnt in the fire and/or
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evaporated was not possible as there were no marks of the fire
in the entire factory.
These observations of the Surveyor finds corroboration from
the photographs, which were proved by the complainant
herself as Ex.C2 and which are 8 in number. The sign of fire is
not visible in any of these photographs nor any burnt material
can be seen therein. As observed by the Surveyor, marks of the
fire can be seen only on some parts of the Deep Freezer
appearing in one of the photographs. This can be made out
from the photographs that all the containers were totally
empty. Those photographs belie the allegations of the
complainant that stock worth Rs. 18,15,630/- was burnt in the
fire. Similar is the position with respect to the machinery/plant,
as no signs of fire appear, on any of those parts of the plant
except the Deep Freezer
10 While calculating the loss caused in this incident, for which
the complainant has submitted her claim under the Policy, the
Surveyor took into consideration the balance sheet, which was
proved on the record by the complainant as Ex.C-3. He took
into consideration her allegation that there was stock worth Rs.
18,15,630/- In the factory on the day of incident, which had
been duly certified by the Chartered Accountant. He mentioned
in his report that the insured showed her inability to provide
any base documents for the trading account except for the
purchase and sale bills. He prepared the trading and
manufacturing account for the period 1.4.2009 till the date of
loss and tabulated the same in para 8.12 of his report. He
analysed the manufacturing and trading account for the
preceding three years and then mentioned the ratio thereof. He
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also mentioned in his report that as the factory was not
operational for the last two-three months, so it was not correct
to take the basis of gross profit percentage for the last financial
year and that it was on that account that he prepared the
trading and manufacturing account. After taking into view
each and every aspect of the case and the documents made
available to him by the complainant, he correctly assessed the
net loss caused to the complainant in the alleged incident of
fire at Rs.3,88,000/- The complainant has failed to make out
any case, which may tend us to conclude that this report of the
Surveyor, which is self-speaking and contains the detailed
reasons for the findings arrived at by him, is not admissible
and is to be ignored. To our mind, this report is the best piece
of evidence on the record for concluding as to how much loss
was caused to the complainant in the alleged incident of fire
On the basis thereof, we conclude that the total loss caused to
the complainant was Rs.3,88,000/- and not Rs.30,00,000/-, as
alleged by the complainant.
11. In the result, the complaint is partly allowed and opposite
party No.1 is directed to pay the sum of Rs.3,88,000/- to the
complainant, along with interest at the rate of 9% per annum
from the date when the claim was reported by the complainant
to opposite party No.1 till the payment of that amount."
7 Aggrieved thereof, an appeal was filed by respondent No.1-
applicant before the NCDRC.
8 It was argued by respondent No.1-applicant before the NCDRC
that the stock was hypothecated and regular statement used to be generated
and verified by the Punjab National Bank after authenticating the same
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CWP-28164-2024 (O&M). -9-
stood verified for the period pertaining to March to August 2009 as well and
showed the stock at Rs.17,62,000/- as on 03.09.2009 i.e. three weeks before
the incident. The claim of respondent No.1-applicant was that the stock in
the factory on the date of fire was Rs.18,15,630/- and the value of the plant
and machinery was Rs.7,48,860/- as per the recorded documents. Hence, the
total loss was more than Rs.25 lakhs due to the fire incident but as per the
insurance cover, the liability of the petitioner-Insurance Company was to
indemnify the insured to the tune of Rs.22 lakhs only. It was also argued
that the Surveyor's report was inadmissible as the last and final word and if
the discrepancies are evident, the report may be disregarded by the Court.
9 The contentions of the petitioner-Insurance Company and its
reliance on the Surveyors report were also noticed by the NCDRC along
with its vehemence that there was no proof of any other loss.
10 On consideration of the entire evidence and the arguments,
NCDRC recorded as under:-
"8. The issue for consideration is whether the State
Commission erred in accepting the assessment of loss by the
Surveyor which was the basis for the settlement of claim by the
respondent no.1 (Insurance Company).
9. In Sri Venkateswara Syndicate Vs. Oriental Insurance
Company Ltd. & Anr. in CA No. 4487 of 2004 dated
24.08.2009, (2009) 8 SCC 507, it has been held by the Hon'ble
Supreme Court that:
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a surveyor's report in cases of claims under a valid
policy is an essential requirement under Section 64UM
and that the Surveyor's report constitutes an important
document that must be considered.
10. However, it has also been held in New India Assurance Co.
Ltd. Vs. Pradeep Kumar, (2009) 7 SCC 787, as under:
15. The object of the aforesaid provision is that where
the claim in respect of loss required to be paid by the
insurer is Rs.20,000/- оr more, the loss must first be
assessed by an approved surveyor (or loss assessor)
before it is admitted for payment or settlement by the
insurer Proviso appended thereto, however, makes it
clear that insurer may settle the claim for the loss
suffered by insured at any amount or pay to the insured
any amount different from the amount assessed by the
approved surveyor (or loss assessor). In other words
although the assessment of loss by the approved
surveyor is a pre-requisite for payment or settlement of
claim of twenty thousand rupees or more by insurer, but
surveyor's report is not the last and final word. It is not
that sacrosanct that it cannot be departed from; it is not
conclusive. The approved Surveyor's report may be basis
or foundation for settlement of a claim by the insurer in
respect of the loss suffered by the insured but surely such
report is neither binding upon the insurer nor insured.
[Emphasis added]
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11. In the instant case, the appellant has challenged that the
Surveyor's report on the grounds that it did not consider the
value of stock held which were supported by audited books of
account by the Chartered Account, the stock position as
authenticated by the Punjab National Bank from whom the
loan had been obtained. It was contended that the Surveyor
had based the report erroneously on the ground that the
factory had not been in operation for 2-3 months and that there
had been a concealment of fact with regard to the stock held as
on the date of the incident. The Surveyor's report was also
challenged on the grounds that it did not consider the nature of
the stock and held that the loss was also on account of theft.
From the material on record and the submissions made before
us it is evident that the claim has been allowed for
Rs.3,88,000/- against the claim of Rs.22,51,030/- on the basis
of the Surveyor's report, which under normal circumstances
should be considered as the basis for settlement of the claim.
However, on examination of this report indicates that the
surveyor's report is based upon conjectures and surmises and
is qualified by terms such as might', and 'some material. Its
conclusion is not based on any investigation report of the
police or any expert opinion such as a forensic report. While
admitting that the stock insured at low evaporation points
admittedly and on account of fire product might have been
burnt or evaporated. It was held, on the basis of assumption
that the loss was only to the extent of 50% on account of fire
and 50% due to theft of stock.
12. From the above, it is manifest that while the claim of the
appellant is based on the audited statements of stock certified
by the Chartered Accountant as furnished to the financing
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Bank, the Surveyor has chosen to assess the quantity of stocks
on the basis of a theft which has not been established through a
Police report and the ratio of production. In the absence of
cogent evident regarding the theft and given the nature of
product, it is difficult to accept the quantification of loss of
stock as arrived at by the Surveyor. Since this quantification is
not based on evidence and the construction of events leading to
the fire was not supported by any report of the police or any
other agency, the basis of the surveyor's report appears to be
conjectural and speculative. For these reasons, in view of the
judgment of Pradeep Kumar (supra), the report of the surveyor
cannot be accepted to be the final word notwithstanding the
provisions of Section 64 UM of the Insurance Act 1938 and
must therefore, necessarily be disregarded. Respondent no.1
was obliged to consider the report the Surveyor keeping in
view the fact that when neither the cause of fire itself nor the
theft been established, and also the quantum of loss determined
on a rational basis, it would have been fair to provide the
benefit of doubt to the insured. In view of the above, the order
of the State Commission upholding the quantum of claim as
assessed by the surveyor cannot be sustained. The claim
preferred by the appellant for Rs 3,88,000/- for Plant and
Machinery needs to be considered afresh by the respondent
insurance company after applying the standard provisions for
salvage, etc.
13. For the aforesaid reasons, the appeal is allowed and the
impugned order is set aside with directions to the respondent to
allow the claim of Rs 22.00 lakh after considering the claim for
Plant and Machinery, as above, subject to the necessary
deduction as per the policy within a period of 45 days and to
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pay the same along with litigation cost of Rs 50,000/- to the
appellant along with claim amount. Failure to comply with the
order would attract interest @ of Rs.7.5% per annum on the
claim amount payable from the date of submission of the claim
till realization."
11 Aggrieved thereof, the instant writ petition has been filed.
12 Learned counsel for the petitioner-Insurance Company has
vehemently argued that the Surveyor had taken into consideration all the
relevant factors and had submitted a comprehensive report quantifying the
loss at Rs.3,88,000/-. He submits that without finding any fault in the
surveyors report, the NCDRC has travelled beyond the surveyor's report in
directing the petitioner-Insurance Company to pay a sum of Rs.22 lakhs
along with litigation cost to the extent of Rs.50,000/- which such order is
unsustainable being in conflict with the surveyor's report.
13 Learned counsel has also relied upon the judgment of the
Hon'ble Supreme Court in the matter of Khatema Fibres Ltd. Vs. New
India Assurance Company Ltd. and another, Civil Appeal No.9050 of
2018 decided on 28.09.2021. The relevant part of the same is extracted as
under:-
"38. A Consumer Forum which is primarily concerned with an
allegation of deficiency in service cannot subject the surveyor's
report to forensic examination of its anatomy, just as a civil
court could do. Once it is found that there was no inadequacy
in the quality, nature and manner of performance of the
duties and responsibilities of the surveyor, in a manner
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prescribed by the Regulations as to their code of conduct and
once it is found that the report is not based on adhocism or
vitiated by arbitrariness, then the jurisdiction of the
Consumer Forum to go further would stop.
39. In the light of the above we are of the considered view that
the Judgment of the National Commission does not call for any
interference. Hence the appeal is dismissed. No costs."
14 Relying on the same it is contended that the Consumer Forum
could not have gone into the forensic examination of the surveyor's report
and to discredit the same. The same has to be accepted as a proof of loss.
15 No other argument has been raised.
16 I have heard the learned counsel appearing on behalf of the
petitioner-Insurance Company and have gone through the documents
available on record.
17 Adverting to the judgment of the Hon'ble Supreme Court
relied upon by the counsel for the petitioner-Insurance Company, first, it is
evident from a perusal of the extract reproduced above that the Hon'ble
Supreme Court held that once it is found that there was no inadequacy in
the quality, nature and manner of performance of the duties and
responsibilities by the surveyor, in a manner prescribed by the Regulations
as to their code of conduct and once it is found that the report is not based
on adhocism or vitiated by arbitrariness, then the, Consumer Fora would
have no jurisdiction. The said judgment would come into play and aid of
petitioner only when no error or defect is noticed by the Consumer Forum
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in the report submitted by the Surveyor. A perusal of the award passed by
the NCDRC, however, shows that the said surveyor's report was challenged
and discredited on the specific ground that the same was prepared
erroneously and without taking into consideration the record and ground
situation. The surveyor's report reported an assumed loss on account of
theft as well. The NCDRC specifically observed that the Surveyor's report
is based upon conjectures and surmises and is qualified by terms such as
"might" and "some-material". The conclusions reached by the surveyor
were not based on any investigation report of the police or any expert
opinion, especially a forensic report. It was also recorded by the NCDRC
that while admitting that the stock insured had a low evaporation point and
the oil may have evaporated on account of the fire, yet, the surveyor
furnished the report on an assumption that loss was only to the extent of
50% on account of fire and that the balance 50% loss was due to theft of the
stock. It was also specifically noticed by the NCDRC that the surveyor had
chosen to assess the quantity of stock by assuming occurrence of theft to the
extent of 50% of the stock but which such assumption is not well founded
and is not established either by the police report or any other document.
Hence, in the absence of any evidence regarding the occurrence of theft or
any report having been furnished in this regard by the police, the
bifurcation/division of the loss equally in the ratio of theft as well as on
account of fire was ill-founded. Hence, the surveyor's report was rightly not
accepted as a correct assessment of the quantification of loss under the
circumstances referred to above. I find that the judgment in question thus
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applies against the petitioner in appreciation of facts of the present case and
noticing that there were numerous defects and deficiencies in the said report
of the surveyor which was based on conjectures.
18 A specific query was also raised to the counsel for the
petitioner-Insurance Company to refer to the part of the report of the
surveyor on the basis whereof, it can be held that the findings recorded by
the NCDRC suffers from misappreciation of the factual aspects or that the
conclusions so drawn could not have been recorded on an objective and
rational consideration of the report. He is, however, not in a position to refer
to any such evidence collected by the surveyor on the basis whereof the
findings recorded by the NCDRC declining to accept the surveyor's report
as conclusive can be ignored. Thus, no fault in the finding recorded by the
NCDRC has been established.
19 Further, the NCDRC noticed all the contentions of the
petitioner-Insurance Company and noticed the authenticated record and
balance sheets as authenticated by Punjab National Bank in the natural
course of business and did not find any reason to disregard the stock.
20 A High Court while exercising its power of judicial review
against the orders passed by the NCDRC exercise a limited revisional
jurisdiction and to interfere only in a case when there is an illegality,
impropriety or perversity in the impugned award. It would not ordinarily
supplant its own opinion for that of the Statutory Tribunals merely because
some other view may also be probable.
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21 Since no such latent or patent defect in the award passed by the
NCDRC has been pointed during the course of arguments and there is no
evidence to hold that the award suffers from any illegality, impropriety or
perversity or non/incorrect appreciation of the evidence brought on record, I
find that no sufficient grounds exist in the present writ petition that call for
interference in the award passed by the NCDRC. The present writ petition is
accordingly dismissed in limine.
November 05, 2024. (VINOD S. BHARDWAJ)
raj arora JUDGE
Whether speaking/reasoned : Yes/No
Whether reportable : Yes/No
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