National Insurance Company Ltd. vs M/s. Hareshwar Enterprises (P) Ltd. & Ors.

Case Number: Civil Appeal No. 7033 OF 2009

Judges Name: Hon’ble Judges Hemant Gupta J, A.S. Bopanna J.

Order dated:  18.08.2021

“For the settlement of insurance claims the surveyor report is not the final word and is not conclusive”

Facts of the case:

  • The Appellant (insurer) is filed an Appeal before the Hon’ble Supreme Court being aggrieved by the order of the National Consumer Disputes Redressal Commission, New Delhi (“NCDRC”). The respondent No.1 (insured) was the claimant before NCDRC. The plant and machinery in the factory owned by respondent No.1 was charged in favour of respondent No.2 as security, while the stock in trade was hypothecated in favour of respondent No.3 (Thane Jan Sahakari Bank) for discharge of loan obtained from them. Since the respondent No. 2 and 3 are entitled to adjust the claim towards their outstanding dues, they are arrayed as parties to the proceedings. 
  • Through the Order, the NCDRC has allowed the complaint in part and directed the insurer to pay the sum of Rs.79,34,703/- with interest at 12 % per annum.

Supreme Court held/ observed:

  • The Hon’ble Supreme Court analyzed the concept of “Cause of Action”. The Court observed that a perusal of the surveyor’s report would indicate that the same is not perfunctory but has referred to all aspects, discarded what was not reliable and the assessment has been made thereafter. The Hon’ble Supreme Court analyzed the background of the matter and noted that the fire incident had occurred on 06.11.1999 and the surveyors had visited the site on 09.01.1999 itself and the interim as also the final report were submitted on 23.03.2000 and 13.03.2001 to the insurer after due deliberations. The insurer did not take any steps immediately but after much delay appointed the investigator on 22.06.2001 and had not concluded the said process though the respondent No.1 had made repeated request. The insured had approached the NCDRC and it is in the said proceedings, for the first time the insurer seeks to rely on the investigator’s report. Therefore, in the facts and circumstances herein the surveyors report was submitted as the natural process, the conclusion reached therein is more plausible and reliable rather than the investigation report keeping in view the manner in which the insurer had proceeded in the matter. Hence, the reliance placed on the surveyor’s report by the NCDRC without giving credence to the investigation report in the facts and circumstances of the instant case cannot be faulted. In that view, the conclusion reached on this aspect by the NCDRC does not call for interference.
  • NCDRC has thought it fit to award interest at 12% per annum. Therefore, the normal bank rate or thereabout would justify the grant of interest at 9% per annum. Accordingly, the amount as ordered by the NCDRC shall be payable with interest at 9% per annum instead of 12% per annum. To that extent, the order shall stand modified.

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