SRI VENKATESWARA SYNDICATE versus ORIENTAL INSURANCE COMPANY LTD. AND ANR.

Citation: [2009] 14 S.C.R. 57 · Decided: 24-08-2009 · Supreme Court of India · Bench: MARKANDEY KATJU · Disposal: Case Partly allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

~ 
(2009) 14 (ADDL.) S.C.R. 57 
SRI VENKATESWARA SYNDICATE 
A 
v. 
ORIENTAL INSURANCE COMPANY LTD. AND ANR. 
(Civil Appeal No. 4487 of 2004) . 
AUGUST 24, 2009 
B 
[MARKANDEY KAT JU AND H.L. DATTU, JJ.] 
-'( 
Insurance - Accidental fire resulting in Joss of cotton 
stock - Claim - Insurance company appointing Surveyor after 
Suttteyor and delaying payment towards the claim - Claimant c 
approaching National Consumer Commission !Jfhich passed 
an order directing payment of the agreed loss with 6% interest -
.... 
thereon - On appeal, Held: There is no prohibition in the 
... 
Insurance Act for appointment of second Surveyor by the 
Insurance Company but it has to give satisfactory reasons for D 
not accepting the report of the first Surveyor and the need to 
appoint second Surveyor - On the facts of the case quantum 
of loss determined and awarded by the Commission affirmed 
- However, interest awarded at 6% p.a. increased to 9% p.a. 
- Insurance Surveyors and Loss Assessors (Licensing, E 
" 
Professional Requirements and Code of Conduct) 
--
Regulations, 2000- Insurance Act, 1938, Section 64 UM (2). 
Appellant, a registered partnership firm has been 
trading in cotton. It had a ginning mill on lease. There has F 
been an accidental fire in its godown. Appellant made a 
claim of Rs.190 Crores towards the loss. The Insurance 
Company appointed a licensed Surveyor and he 
estimated the loss of stock at Rs.1, 73,92,310/-. Thereafter 
appellants had appointed a Joint Surveyor in terms of 
""( 
Section 64 UM(2) of the Insurance Act. The Joint Surveyor G 
report estimated the loss of stock at Rs.1,67 ,fl0,9251-. The 
Insurance Company was of the view that the report is 
perfunctory and appointed another Surveyor. This 
Surveyor confirmed the report of the Joint Surveyor. Still 
57 
\H 
58 
SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R. 
A 
not satisfied, the Insurance Company appointed a 
Chartered Accountant to give a fresh report, and he had 
estimated the loss of stock at Rs.1,05,00,817/-. The 
Insurance Company had placed the report before the 
Joint Surveyors for their opinion. The Joint Surveyors in 
B 
their clarificatory report, did not agree with the findings 
of the Chartered Accountant on the ground that the 
findings were based on books of accounts for the period 
1-.10.1998 to 31.3.1999 and not till the date of fire accident. 
Since there was inordinate delay in settling the claim, the -
c appellant approached 
the 
National 
Consumer 
Commission. The Commission directed the Insurance 
Company to pay Rs.1,05,00,817/- with interest at 6% p.a. 
Hence the appeal. 
The main issue that arose for consideration was 
D whether the insurance company can repeatedly appoint 
Surveyors after Surveyors for getting the loss/damaged 
assessed before settling the claim of the insured, and the 
incidental issue was whether the Nationai Consumer 
Commission was justified in awarding interest at 6% p.a. 
E 
as against 18% claimeq by the appellant. 
Partly allowing the appeal, the Court 
.HELD: 1.1. Parties have not lead in· any evidence in 
·support of their claim. In fact Natfonal Consumer 
F 
Commission has proceeded to decide the lis between the 
parties based on certain documents filed by the parties 
along with their pleadings. [Para 19] [7 4-A-B] 
1.2. A perusal of the joint su..Vey report reveals that 
G the Joint Surveyors without going into the records of the 
appellant firm had assessed the loss said to have been 
sustained by the insured in the fire accident. The Joint 
Surveyors had arrived at the cost of own Ginned lint at 
Rs. 7084/- as against the records of the insured which 
H 
i 
J. 
SRI VENKATESWARA SYNDICATE v. ORIENTAL 
59 
~ 
INSURANCE COMPANY LTD. 
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,_ 
itself shows the cost of Ginned lint at Rs. 6,229.35 and A 
wt 
Rs. 6,181.57 per quintal. Secondly, the Joint Surveyors 
' 
had taken into ~ccount 88 borahs while assessing the 
(' 
loss, whereas as per the records of the insured submitted 
to the bank, there were 551 borahs as on 31.7.1999, out 
of which 548 bor~s were sold from 1.8.1999 to 24.8.1999, B 
(the date of the .fire inciden~) thus leaving only 3 borahs 
in the stock. Mr. R. Srinivasan, Chartered Accountant, 
-I 
who gave the report h~ving noticed all these omissions 
and after detailed verification of the books of accounts 
and records maintained by the appellant has assessed c 
the loss at Rs.1,05,00817/-. In his report he has specifically 
stated that the Joint Surveyors have failed to notice 

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