M/S NEWS INDIA ASSURANCE CO. LTD. versus M/S LUXRA ENTERPRISES PVT. LTD. & ANR. on 1 May 2019

1172

SUPREME COURT REPORTS

[2019] 6 S.C.R.

A

M/S NEW INDIA ASSURANCE CO. LTD.

v.

M/S LUXRA ENTERPRISES PVT. LTD. & ANR.

(Civil Appeal No. 9668 of 2014)

BMAY 01, 2019

[DR. DHANANJAYA Y. CHANDRACHUD ANDHEMANT GUPTA, JJ.]

Consumer Protection Act, 1986: Compensation for losssuffered on account of damage by fire – Right of insurance companyCto appoint surveyor – The complainant obtained a policy ofinsurance for the risk of fire with the assured sum of Rs.85 lacs –The factory of complainant was engulfed in fire and he filed claimfor loss – Insurance company appointed a surveyor who acceptedthe damage to the tune of Rs.54 lacs – Insurance company appointedDsecond surveyor who reduced the amount to Rs.24 lacs – However,the insurance company appointed third surveyor on the basis ofreport published in newspaper that the police had arrested threepersons for duping exporters – Third surveyor repudiated the claim– Grievance of the complainant was that the insurance companyappointed one surveyor after another till such time it was successfulEin getting a report of total repudiation of the claim of complainant– Held: It is not open for insurance company to appoint anotherSurveyor till such time, it gets a report in its favour – The firstsurveyor was appointed by Head Office of the Insurance Company– The communication was addressed by the Head Office to theFRegional Office referring to the fact that as a surveyor wasappointed by it, there was no reason for Regional Office to appointanother surveyor – In view of said fact, the appointment of anothersurveyor could not be justified when a conscious decision wascommunicated by the Head Office of not approving the appointmentof second surveyor – Still further, the reasoning given by the localGoffice was that the first surveyor did not clarify certain points whenclarification was sought for – The second surveyor had consideredthe report of the Canara Bank in respect of stocks statement – Suchstocks statement was brushed aside for the reason that if said stocks H

statement was correct then there was no reason to show as to whyletter of credit could not be materialised – The verification of thestocks by the Canara Bank which had primary charge on the stockscould not be doubted in the manner, the second surveyor hasreported – Insurance company relied upon a newspaper report inwhich 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 notaccepting the report of the first surveyor nor there was any proofthat such report was arbitrary and excessive – There were no cogentreasons to appoint surveyors time and again till such time oneSurveyor gives a report which could satisfy the interest of theInsurance Company – Insurance Act, 1948 – s.64UM.

Disposing of the appeals, the Court

Conclusion

Disposing of the appeals, the Court

HELD: 1.1 The first surveyor was appointed by Head Officeof the Insurance Company. The Head Office of the InsuranceCompany has communicated to the Regional/ Branch Office asto why another Surveyor has been appointed. In view of said fact,the appointment of another surveyor could not be justified whena conscious decision has been communicated by the Head Officeof not approving the appointment of second surveyor. Still further,the reasoning given by the local office was that the first surveyordid not clarify certain points when clarification was sought for.The said reason stood answered even in the report of secondsurveyor. Such surveyor had considered the report of the CanaraBank in respect of stocks statement. Such stocks statement wasbrushed aside for the reason that if said stocks statement wascorrect then as to why letter of credit could not be materialised.The Complainant had explained that it was on 15.06.2000, it hasbeen communicated to the consignee to have inspection of thestocks before exporting the consignment. The consignee did notinspect the stocks which led to the extension of letter of creditup to 08.08.2000. The verification of the stocks by the CanaraBank which had primary charge on the stocks could not bedoubted in the manner, the second surveyor has reported.[Paras 20, 21][1185-A-E]

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A1.2 The letter of credit was a valid document which couldnot be said not to be genuine only on the basis of reason thatsuch letter of credit was not in favour of the Complainant whenthe order was placed on the Complainant by a Singapore basedfirm. [Para 22][1185-F-G]

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1.3 In the FIR lodged on 6.4.2002, there was no allegationin respect of export by the Complainant. The allegation againstaccused was of duping the exporters whereas, there was no suchor similar allegation against the Complainant. Thus, there wasno valid reason for the Insurance Company not to accept theCreport of the first surveyor nor there was any proof that suchreport is arbitrary and excessive. There were no cogent reasonsto appoint Surveyors time and again till such time one Surveyorgives a report which could satisfy the interest of the InsuranceCompany. [Paras 23, 24][1185-G-H; 1186-A-B]

DSri Venkateswara Syndicate vs. Oriental InsuranceCompany Limited (2009) 8 SCC 507 : [2009] 14 SCR57 – relied on Case Law Reference [2009] 14 SCR 57E

relied onPara 15

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9668of 2014

From the Judgment and Order dated 01.08.2014 of the NationalConsumer Disputes Redressal Commission, New Delhi in OriginalFPetition No. 182 of 2002

With

Civil Appeal Nos. 4371-4372 of 2015.

GSantosh Kumar, Shekhar Kumar, Nagesh, Sushant, ShantanuKumar, Rohitash K. Sharma, Vishnu Mehra, Ms. Manjeet Chawla,Ms. Sakshi Mittal, Vipin Kumar Jai, Dushyant Parashar, Vipul Jai,Ms. Shailly Dinkar, Advs. for the appearing parties.

The Judgment of the Court was delivered by HEMANT GUPTA, J. 1. This order shall dispose of CivilAppeals filed under Section 23 of the Consumer Protection Act, 1985[1]preferred by both the parties against an order passed by the NationalConsumer Disputes Redressal Commission[2] against its order dated01.08.2014 wherein, a sum of Rs. 54,93,865/- has been awarded ascompensation for loss suffered on account of damage by fire to theComplainant, subject to the condition that the said amount will be paidwithin 45 days by the Insurance Company otherwise it will carry interestat the rate of 10 % per annum till its realisation.

2. For the facility of reference, the respondent in Civil AppealNo. 9668 of 2014 will be called hereinafter as the Complainant, whereasthe Appellant- New India Assurance Co. Ltd. will be called as InsuranceCompany. Civil Appeal Nos. 4371-72 of 2015 are filed by theComplainant.

3. The Complainant is an Industrial Unit engaged in manufactureof garments. The Complainant obtained a policy of insurance for therisk of fire for the period 27.3.2000 to 26.3.2001 with the assured sum ofRs. 85,00,000/-. It was on 12.07.2000 at about 3.45 AM, the factory ofthe Complainant was engulfed in fire. It is thereafter, the Complainantlodged a claim for loss due to fire incident in its factory.

4. M/s R.N. Sharma & Co., was appointed as an investigator toconduct a preliminary investigation by the Insurance Company. Thepreliminary investigation report was submitted on 20.07.2000. It isthereafter, M/s Sunil J. Vora & Associates was appointed as the Surveyorby the Head Office of the Insurance Company on July 28, 2000. Thesaid Surveyor submitted detailed report and accepted the claim of theComplainant for Rs. 54,93,865/-. Out of the said amount, Rs. 1,65,430.53was the claim on account of damage to building; Rs. 3,93,779.78 wasthe claim towards the damage to the machinery and Rs. 49,44,657.67was the claim towards the damage to the stocks. The amount wasrounded off to Rs. 54,93,865/-.

5. The Insurance Company issued a communication dated09.04.2001 to the Complainant asking for certain information after thesaid report was submitted to the Insurance Company on 12.02.2001.The information sought is as under:- 1 1985 Act 2Commission A

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[2019] 6 S.C.R.

A“1. List of Machineries (copy of assets register)

2. Loss and profit accounts

3. Purchase details of raw materials

4. Verified copy of Balance Sheet for last 2 years.

B5. Original copy of LC & LC with extended date of expiry

6. Details of Financial arrangements forincreasing the turnover.

7. Clarify the status of insurable interest on building.”

C6. The Surveyor in his report has given loss to the machinerygiving details of the machinery damaged in fire and the amount admissiblein respect of its loss. The Insurance Company also communicated aletter to its Senior Branch Manager on 26.09.2001 that the letter ofcredit dated 11.05.2000 of Singapore Branch of Bank of India wasestablished for Gurcharan Singh & Co. Pvt. Ltd., but the said letter ofDcredit expired without receipt of any document. It was also mentionedthat the Complainant is neither a beneficiary nor a notified party of saidletter of credit.

7. Subsequently, M/s ABM Engineers & Consultants wasappointed as the second Surveyor by the Insurance Company. The saidESurveyor accepted the loss of Rs. 24,76,585/- in its report dated28.02.2002. The second surveyor has taken into consideration stocksstatement submitted by the Complainant to Canara Bank on 30.4.2000,31.05.2000 and 01.07.2000 respectively. Though, the Manager of CanaraBank is said to have pointed out that these statements are like statutoryFrequirements but the surveyor brushed them aside for the reason thatthese documents cannot be treated as documents for finalising the stockvalue. It was further observed that if the stocks statement is to be referredto, there is no reason as to why letter of credit could not be materialized.The relevant extracts from the report of the second surveyor are asunder:-G“(i) Stock statement as on 1.7.2000, 31.5.2000, 30.4.2000 submittedby insured to bank.

These statements are just like statutory requirement (Refer opinionof Canara Bank Manager, 13B, Investigation verification). These H

documents cannot be treated as document for finalizing stockvalue. If we refer to the quantity in these stock statements thenthere was no reason why LC could not materialize. Further thesedocuments contradict with purchase invoices of items purchasedby Luxara Enterprises Pvt. Ltd. From their vendors.”

8. The Insurance Company was still not satisfied by the reportand thereafter appointed Mr. R.G.Verma, a Chartered Accountant as itsthird surveyor. The said surveyor recommended total repudiation of claimin its report on 28.05.2002 under Clause 8 of the Insurance Policy on theground that there were enough valid circumstantial reasons on the partof the Insured to manipulate the fire. It is after the said report furnishedon 28.06.2002, the claim was repudiated by the Insurance Company onthe same day i.e. 28.6.2002, inter-alia, on the ground that the Complainanthad no export order and the letter of credit does not show the name andaddress of the buyer. It is mentioned therein that as per stocks statementfurnished to Canara Bank on 05.07.2000, 34,800 shirts were ready as on01.07.2000 and that the letter of credit was expiring on 09.07.2000.Therefore, the Complainant did not explain as to why the said consignmentwas not shipped on or before 01.07.2000. Another reason given wasthat the letter of credit was alleged to have been extended up to08.08.2000 in favour of somebody else. Therefore, there was no reasonfor extension of letter of credit when the goods were allegedly ready on01.07.2000 and that the garment could not be exported withoutendorsement of invoice by Apparel Export Promotion Council but nosuch endorsement was obtained by the Complainant. The Surveyorfurther gave another reason, that 104203 meters of fabric was purchasedfrom M/s S.V. Traders but the address given on the invoice and thechallans was not of fabric shop but that of a photocopy shop. Still further,another reason communicated was that the letter of credit was openedby M/s Sirdanwal Overseas of Ajay Verma who is facing a criminalcase under Sections 420, 406, 120(B) of IPC in FIR No. 98 dated06.04.2002.

9. The Complainant in his complaint filed on 16.5.2002, has inter-alia averred that he has taken a credit facility from Canara Bank to thetune of Rs. 50,00,000/- and that the loan amount was disbursed in themonths of March and May, 2000. Such advance was secured by primarysecurity of stocks and goods lying in the factory of the Complainantapart from the personal guarantee of the Directors of the Complainant A

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Aand equitable mortgage/residential house of one of the Directors andplant & machinery installed at the above said factory as collateralsecurity. The Bank also got insured the factory building as well as thestocks from the Insurance Company for which premium was paid bydebiting the account of Complainant by the Bank.B10. The grievance of the Complainant is that the Insurance B10. The grievance of the Complainant is that the InsuranceCompany has appointed one surveyor after another. The first surveyor-M/s Sunil J. Vora & Associates has accepted the damage preferred bythe Complainant to the extent of Rs. 54,93,865/- whereas, the secondsurveyor- M/s ABM Engineers & Consultants reduced the amount toRs. 24,76,585/- and the third surveyor-R.G. Verma repudiated the totalCclaim.

11. In respect of second survey report, it is pointed out that ShriB. S. Aggarwal of the surveyor- M/s ABM Engineers & Consultantsattended the meeting in the office of the Complainant which was attendedby the Officers of the Insurance Company. The Complainant submittedDa letter to the Regional Manager of the Insurance Company as well asto the Branch Office at Delhi apart from the Grievance Cell, Mumbai on15.01.2002. Shri B.S. Aggarwal communicated a letter dated 30.01.2002pointing out that the letter dated 15.01.2002 submitted by the Complainantwas misleading as the Complainant could not make available accountingErecords to the Surveyor.

12. The Complainant again submitted a letter dated 18.3.2002aggrieved against the actions of the surveyor to the various officers ofthe Insurance Company. The Complainant also pointed out that theInsurance Company could not appoint one surveyor after another. ItFwas open to the Insurance Company to apply to the Insurance Regulatoryand Development Authority to appoint an independent Surveyor underSection 64 UM (3) of the Insurance Act, 1938[3] but the InsuranceCompany could not appoint one surveyor after another till such time, it issuccessful in getting a report of total repudiation of the claim of theComplainant. The relevant provisions of the 1938 Act read as under:-G

“(2) No claim in respect of a loss which has occurred in India andrequiring to be paid or settled in India equal to or exceeding twentythousand rupees in value on any policy of insurance, arising orintimated to an insurer at any time after the expiry of a period of H31938 Act one year from the commencement of the Insurance (Amendment)Act, 1968, shall, unless otherwise directed by the Authority, beadmitted for payment or settled by the insurer unless he has obtaineda report, on the loss that has occurred, from a person who holds alicence issued under this section to act as a surveyor or lossassessor (hereafter referred to as “approved surveyor or lossassessors) :

Provided that nothing in this sub-section shall be deemed to takeaway or abridge the right of the insurer to pay or settle any claimat any amount different from the amount assessed by the approvedsurveyor or loss assessor.

(3) The Authority may, at any time, in respect of any claim of thenature referred to in sub-section (2), call for an independent reportfrom any other approved surveyor or loss assessor specified byhim and such surveyor or loss assessor shall furnish such reportto the Authority within such time as may be specified by theAuthority or if no time limit has been specified by him withinreasonable time and the cost of, or incidental to, such report shallbe borne by the insurer.

(4) The Authority may, on receipt of a report referred to in sub-section (3), issue such directions as he may consider necessarywith regard to the settlement of the claim including any directionto settle a claim at a figure less than, or more than, that at whichit is proposed to settle it or it was settled and the insurer shall bebound to comply with such directions:

Provided that where the Authority issues a direction for settling aclaim at a figure lower than that at which it has already beensettled, the insurer shall be deemed to comply with such directionif he satisfies the Authority that all reasonable steps with dueregard to the question whether the expenditure involved is notdisproportionate to the amount required to be recovered, havebeen taken with due dispatch by him:

Provided further that no direction for the payment of a lesser sumshall be made where the amount of the claim has already beenpaid and the Authority is of opinion that the recovery of the amountpaid in excess would cause undue hardship to the insured:

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AProvided also that nothing in this section shall relieve the insurerfrom any liability, civil or criminal, to which he would have beensubject but for the provisions of this sub-section.”

13. In the written statement filed before the Commissioner, theInsurance Company explained the reason for appointing another SurveyorBafter the report of Surveyor- M/s Sunil J. Vora & Associates wassubmitted on 01.02.2001. It was, inter-alia, asserted that quantum ofloss has been assessed without verifying and providing any documentsand that the clarification sought from the Surveyor has not led to anyresponse. The Insurance Company concluded the reasons for appointinganother Surveyor in para 3.9 of its reply which reads as under:-C

“Respondent No.1 sought clarification from the Surveyors aswell as the insured on certain points but neither the Surveyors northe insured submitted the clarification or the desired documents.In the absence of the said clarification/documents, RespondentNo. 1 was not able to ascertain the cost of the shirts. The SurveyorsDhad taken the value of the shirts at Rs. 235/- but it was not clearfrom where he had taken the said value. On the other hand, theComplainant had taken the order @ 5.9 US$ i.e. Rs. 271/- andadding overhead expenses the cost comes Rs. 295/- per shirt.The Preliminary Surveyor in his report dated 20[th] July, 2000, alsoEdid not give the basis of the estimate of loss at Rs. 75,00,000/-.The letters dated 11[th] May, 2001 was written to the PreliminarySurveyor asking about the basis of the figure of Rs. 75,00,000/-which was not responded. This was followed by reminder dated28[th] June, 2001 which was also not responded. The letters dated11[th] May, 2001 and 28[th] June, 2001 is Annexure R-14 and R-15Fhereto”.

14. Such are the only reasons available in the written statementas to why another Surveyor was appointed. No other record has beenfurnished for appointment of M/s ABM Engineers & Consultants, secondsurveyor on 22.08.2001. The Commission in its order held as under:-G

“22. There is no evidence on record that the appointment ofSurveyor Nos. 2, 3 & 4 was with the consent of the Head Quarters.After the second Surveyor, there is no reasoning given as to whythird and fourth Surveyors were appointed. This is an admitted fact that the fire broke out in the premises of the complainant. Allthe first three Surveyors spoke about this fact in one voice. Eventhe Investigator/Fourth Surveyor, did not deny the happening ofincident and admitted in no uncertain terms that shirts worth rupeesfew lakhs must have been burnt. There can be no conflictions onthe point that some loss was occurred to the complainant. Whetherthe Order or LCs were fake or manipulated or the Order forimport of shirts could not be proved or Mr. Ajay Verma wasinvolved in a criminal case has got no bearing on this case. Thereis no inkling on evidence of record that Mr. Ajay Verma wasinvolved in this particular case.

23. It cannot be laid down as a rule of thumb that the Surveyorcannot ask for other documents after he has informed thecomplainant that the documents are complete. There lies no rub.

24. Under these circumstances, we have no hesitation to acceptthe second Surveyor, M/s Sunil J. Vohra’s report. The same ispartly accepted and we allow the complaint and direct theInsurance Company, OP1, to pay a sum of Rs. 54,93,865/- to thecomplainant, within 45 days from the receipt of this order,otherwise, it will carry interest @ 10% p.a., till its realization. Inview of peculiar facts of this case, there is no order as to costs orpendente lite interest.”

15. The learned counsel for the Appellant-Insurance Companyargued that the Commission has gravely erred in law in not examiningthe question whether letter of credit was fake or manipulated or that theorder of import of shirts could not be proved or Mr. Ajay Verma wasinvolved in a criminal case as it was held that such facts have no bearingon this case. Learned counsel for the Appellant-Insurance Companyrelies upon an order passed by this Court as reported in SriVenkateswara Syndicate vs. Oriental Insurance CompanyLimited[4 ]which case has examined Section 64 UM of the 1938 Act tohold that there is no prohibition in the Act for appointment of anotherSurveyor- M/s ABM Engineers & Consultants by the Insurance Companyexcept that the Insurance Company has to record reasons for notaccepting the report of the Surveyor- M/s Sunil J. Vora & Associates.Therefore, the Insurance Company has rightly appointed anotherSurveyor.

4(2009) 8 SCC 507

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A16. The Insurance Company relied upon newspaper report dated09.05.2002 published in Punjab Kesari that the Delhi Police has arrestedthree persons on the basis of forged documents duping exporters. It wasthe said newspaper report which was made basis of appointing yet anotherSurveyor. The relevant extract from the written statement reads asunder:-B

“3.12 On 9[th] May, 2002, it was reported in the “Punjab Kesari”newspaper that Delhi Police has arrested a gang of three personswho had duped the exporters of crores of rupees on the basis offorged documents. It also came to the notice of Respondent No.1 that Mr. Ajay Verma of M/s. Sirdanwal Overseas from whom,Cthe Complainant is alleged to have dealings for LC and procurementof the export order had been arrested in a cheating case in FIRNo. 98 dated 6[th] April, 2002, P.S. Chitranjan Park, under Sections420/406/12B of the Indian Penal Code. The newspaper reportdated 9[th] May, 2002 is Annexure R-25 hereto. Respondent No. 1Dappointed Shri R.G. Verma, Chartered Accountant to conduct aninvestigation of the claim. Shri R.G. Verma conducted the detailedinvestigation and submitted his report dated 28[th] May, 2002 inwhich he observed that the claim was fraudulent. The report ofShri R.G. Verma is Annexure R-26 hereto. The followingdocuments were collected by the investigator:-E

i. List of bail applications dated 24[th] May, 2002.

ii. FIR NO. 98 dated 6[th] April, 2002.

iii. Application for request for judicial custody by the Accused.

iv. Respondent No.1 took the photographs of the office ofF S.V. Traders which are Annexure R-27 hereto”.

17. On the other hand, learned counsel for the Complainant rebuttedthe arguments raised and referred to communication dated 07.12.2001Gaddressed by the Head Office of the Insurance Company to its DelhiRegional Office, inter-alia, to the facts that Head Office has appointedM/s Sunil J. Vohra & Associates as the final Surveyor and that the HeadOffice is unable to understand as to why and who has appointed M/sABM Engineers & Consultants as Surveyor. The extracts from the saidletter read as under: -H

M/S NEW INDIA ASSURANCE CO. LTD.v. M/S LUXRAENTERPRISES PVT. LTD. & ANR. [HEMANT GUPTA, J.]

“07.12.2001

DELHI RO IIKind Attn. : MR. S. MAMMAN, ASSTT. GEN. MANAGER,Re: Fire Claim under Policy No.11/310830/99/9010 A/cM/s. Luxra Enterprises Pvt. Ltd.Date of Loss : 11/12.7.2000

We note from our record that based on your request vide letter dt.24.7.2000, HO had appointed Sunil J. Vora & Associates as theFinal Surveyor and we have communicated the decision to youvide our letter dt. 27.7.2000. we understand that surveyor hadalready submitted their report also.

We have received a bunch of papers dt. 20.11.01 from M/s ABMEngineers and Consultants pertaining to this claim. We are unableto understand what for they are appointed and who has appointedthem. Please note that once HO has appointed a surveyor, youcannot appoint surveyor or investigator without consulting HO.Please let us have your explanation to enable us to appriseManagement.

We note that correspondence by M/s. ABM Engineers andConsultants are directly addressed to the Senior Branch Manageronly and copies are seen forwarded to various higher offices.Kindly inform us the current status of this claim also for ourrecords.”

18. Before considering the respective contentions of the parties,the judgment in Sri Venkateswara(supra) is required to be examined.In the said judgment, this Court has upheld the right of the InsuranceCompany to appoint Surveyor but such right can be exercised for validreasons or if the report is found to be arbitrary and that InsuranceCompany must give cogent reasons without which it is not free to appointthe second Surveyor. The relevant extracts of the judgment read asunder: - “33. Scheme of Section 64-UM, particularly of sub-sections (2),(3) and (4) would show that the insurer cannot appoint a second A

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surveyor just as a matter of course. If for any valid reason thereport of the surveyor is not acceptable to the insurer may be forthe reason if there are inherent defects, if it is found to be arbitrary,excessive, exaggerated, etc., it must specify cogent reasons,without which it is not free to appoint the second surveyor orsurveyors till it gets a report which would satisfy its interest.Alternatively, it can be stated that there must be sufficient groundto disagree with the findings of surveyor/surveyors. There is noprohibition in the Insurance Act for appointment of second surveyorby the insurance company, but while doing so, the insurancecompany has to give satisfactory reasons for not accepting thereport of the first surveyor and the need to appoint second surveyor.

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35. In our considered view, the Insurance Act only mandates thatwhile settling a claim, assistance of a surveyor should be takenbut it does not go further and say that the insurer would be boundby whatever the surveyor has assessed or quantified; if for anyreason, the insurer is of the view that certain material facts oughtto have been taken into consideration while framing a report bythe surveyor and if it is not done, it can certainly depute anothersurveyor for the purpose of conducting a fresh survey to estimatethe loss suffered by the insured.

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37. The option to accept or not to accept the report is with theinsurer. However, if the rejection of the report is arbitrary andbased on no acceptable reasons, the courts or other forums candefinitely step in and correct the error committed by the insurerwhile repudiating the claim of the insured. We hasten to add, ifthe reports are prepared in good faith, with due application ofmind and in the absence of any error or ill motive, the insurancecompany is not expected to reject the report of the surveyors”.

19. In view of above, the question to be examined is whether theInsurance Company has reasons or there were inherent defects in thesurvey report of Surveyor- M/s Sunil J. Vora & Associates or that suchreport is arbitrary, excessive and exaggerated, before another Surveyorcould be appointed.

20. The Surveyor- M/s Sunil J. Vora & Associates was appointedby Head Office of the Insurance Company. The Head Office of theInsurance Company has communicated to the Regional/ Branch Officeas to why another Surveyor has been appointed. In view of said fact, theappointment of another surveyor could not be justified when a consciousdecision has been communicated by the Head Office of not approvingthe appointment of second surveyor.

21. Still further, the reasoning given by the local office is that theSurveyor- M/s Sunil J. Vora & Associates has not clarified certain pointswhen clarification was sought for. The said reason stands answeredeven in the report of Surveyor- M/s ABM Engineers & Consultants.Such surveyor has considered the report of the Canara Bank in respectof stocks statement. Such stocks statement was brushed aside for thereason that if said stocks statement was correct then as to why letter ofcredit could not be materialised. The Complainant has explained that itwas on 15.06.2000, it has been communicated to the consignee to haveinspection of the stocks before exporting the consignment. The consigneehas not inspected the stocks which led to the extension of letter of creditup to 08.08.2000. It was argued that letter of credit is to facilitate receiptof money from the exporter and once the stock of the Complainant hasbeen verified by the Canara Bank, which had the first charge over theproperty, therefore, such verification of stock could not be doubted bythe Insurance Company only for the reason that letter of credit could notbe materialised. The verification of the stocks by the Canara Bank whichhad primary charge on the stocks could not be doubted in the manner,the surveyor- M/s ABM Engineers & Consultants has reported.

22. Still further, it is explained in the affidavit that the letter ofcredit was by M/s Sirdanwal Overseas which was endorsed to GurcharanSingh Company Pvt. Ltd. PTE Singapore. Therefore, the letter of creditwas a valid document which could not be said not to be genuine only onthe basis of reason that such letter of credit was not in favour of theComplainant when the order was placed on the Complainant by theabove said Singapore based firm.

23. Mr. Ajay Verma is an accused in FIR in which there is noallegation in respect of export by the Complainant. The allegation againstAjay Verma is of duping the exporters whereas, there is no such orsimilar allegation against the Complainant. The Complainant has also AB

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Aaverred that there was endorsement by the Apparel Export PromotionCouncil, therefore factually such assertion of the Insurance Company isincorrect.

24. Thus, we find that there was no valid reason for the InsuranceCompany not to accept the report of the surveyor- M/s Sunil J. Vora &BAssociates nor there is any proof that such report is arbitrary & excessive.There are no cogent reasons to appoint Surveyors time and again tillsuch time one Surveyor gives a report which could satisfy the interest ofthe Insurance Company.

25. In fact, in the present case it is evident that the claim of Rs.C54,93,865/- was accepted by the surveyor- M/s Sunil J. Vora &Associates. The second surveyor- M/s ABM Engineers & Consultantsaccepted the claim in the sum of Rs. 24,76,585/-. The third surveyor -R.G. Verma recommended total repudiation of claim. It is the thirdSurveyor’s report which sub-served the interest of the InsuranceCompany which was made basis of repudiation of the claim of theDComplainant on the same day, when the report was furnished. We findthat in view of the judgment in Sri Venkateswara (supra), it is notopen to appoint another Surveyor till such time, it gets a report in itsfavour. In fact, the appointment of the Surveyors was to repudiate theclaim of the Complainant on one pretext or the other.

E26. Thus, we do not find any illegality in the order passed by theCommission. Consequently, Civil Appeal No. 9668 of 2014 is dismissed.

27. However, we find that the Commission has not granted intereston the amount found due and payable to the Complainant. Therefore,Civil Appeal Nos.4371-72 0f 2015 preferred by the Complainant areFallowed. The Complainant shall be entitled to the interest on the amountof Rs. 54,93,865/- at the rate of 6% per annum from the date of filing ofpetition till the payment of the amount.

Devika GujralG

Appeals disposed of.

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