M/S NEWS INDIA ASSURANCE CO. LTD. versus M/S LUXRA ENTERPRISES PVT. LTD. & ANR.

Citation: [2019] 6 S.C.R. 1172 · Decided: 01-05-2019 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 6 S.C.R.
      M/S NEW INDIA ASSURANCE CO. LTD.
v.
M/S LUXRA ENTERPRISES PVT. LTD. & ANR.
(Civil Appeal No. 9668 of 2014)
MAY  01, 2019
[DR. DHANANJAYA Y. CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Consumer Protection Act, 1986:  Compensation for loss
suffered on account of damage by fire – Right of insurance company
to appoint surveyor – The complainant obtained a policy of
insurance for the risk of fire with the assured sum of Rs.85 lacs –
The factory of complainant was engulfed in fire and he filed claim
for loss – Insurance company appointed a surveyor who accepted
the damage to the tune of Rs.54 lacs – Insurance company appointed
second surveyor who reduced the amount to Rs.24 lacs – However,
the insurance company appointed third surveyor on the basis of
report published in newspaper that the police had arrested three
persons for duping exporters – Third surveyor repudiated the claim
– Grievance of the complainant was that the insurance company
appointed one surveyor after another till such time it was successful
in getting a report of total repudiation of the claim of complainant
–  Held:  It is not open for insurance company to appoint another
Surveyor till such time, it gets a report in its favour – The first
surveyor was appointed by Head Office of the Insurance Company
– The communication was addressed by the Head Office to the
Regional Office referring to the fact that as a surveyor was
appointed by it, there was  no reason for Regional Office to appoint
another surveyor – In view of said fact, the appointment of another
surveyor could not be justified when a conscious decision was
communicated by the Head Office of not approving the appointment
of second surveyor – Still further, the reasoning given by the local
office was that the first surveyor did not clarify certain points when
clarification was sought for – The second surveyor had considered
the report of the Canara Bank in respect of stocks statement – Such
stocks statement was brushed aside for the reason that if said stocks
[2019] 6 S.C.R. 1172
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statement was correct then there was no reason to show as to why
letter of credit could not be materialised – The verification of the
stocks by the Canara Bank which had primary charge on the stocks
could not be doubted in the manner, the second surveyor  has
reported – Insurance company relied upon a newspaper report in
which three persons were arrested for duping exporters – However,
there was no such or similar allegation against the complainant –
Thus, there was no valid reason for the Insurance Company for not
accepting the report of the first surveyor nor there was any proof
that such report was arbitrary and excessive – There were no cogent
reasons to appoint surveyors time and again till such time one
Surveyor gives a report which could satisfy the interest of the
Insurance Company – Insurance Act, 1948 – s.64UM.
Disposing of the appeals, the Court
HELD: 1.1  The first surveyor was appointed by Head Office
of the Insurance Company. The Head Office of the Insurance
Company has communicated to the Regional/ Branch Office as
to why another Surveyor has been appointed. In view of said fact,
the appointment of another surveyor could not be justified when
a conscious decision has been communicated by the Head Office
of not approving the appointment of second surveyor.  Still further,
the reasoning given by the local office was that the first surveyor
did not clarify certain points when clarification was sought for.
The said reason stood answered even in the report of second
surveyor. Such surveyor had considered the report of the Canara
Bank in respect of stocks statement. Such stocks statement was
brushed aside for the reason that if said stocks statement was
correct then as to why letter of credit could not be materialised.
The Complainant had explained that it was on 15.06.2000, it has
been communicated to the consignee to have inspection of the
stocks before exporting the consignment. The consignee did not
inspect the stocks which led to the extension of letter of credit
up to 08.08.2000. The verification of the stocks by the Canara
Bank which had primary charge on the stocks could not be
doubted in the manner, the second surveyor  has reported.
[Paras 20, 21][1185-A-E]
  M/S NEW INDIA ASSURANCE CO. LTD.v. M/S LUXRA
ENTERPRISES PVT. LTD. & ANR.
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SUPREME COURT REPORTS
[2019] 6 S.C.R.
1.2  The letter of credit was a 

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