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2006 DIGILAW 994 (PAT)

Shree Ram Swara Centre v. State Of Bihar

2006-11-03

NAVANITI PRASAD SINGH

body2006
Judgment 1. Heard the parties. 2. Initially this writ application was directed challenging the action of respondent-State Bank of India Agriculture Development Branch, Saran, in initiating certificate proceeding for recovery of its dues as against the petitioner. One of the grounds for challenge the certificate proceeding was that the stocks of the petitioner were insured by the State Bank of India through New India Insurance Company. Chapra. Petitioners stocks were damaged entitling him to raise the claim. He had raised the said claim but the same was rejected by the insurance company aforesaid in respect thereof. He had moved the District Consumer Forum and failed to get relief therefrom and thereafter the petitioner moved the State Commission for redressal of its grievance where also he failed to get the relief. He wanted the said amount which he was entitled to get from the Insurance Company to be set out against his liability as being sought to be enforced to the certificate proceeding. 3. By order, of this Court the New India Insurance Company was made a party and notices were accepted by them and Mr. Ashok Priyadarshi learned counsel appeared on behalf of them. 4. It may be mentioned here that the petitioner filed an interlocutory application being I.A. No. 4414/06 in the present application seeking leave to amend the writ application and prayed for additional relief. The same was allowed. 5. All the parties are being represented and with the consent of the parties this writ application is being disposed of at the admission stage itself. 6. The petitioner was a retail dealer in fertilizer at Chapra. He had a financial arrangement with the State Bank of India, Agricultural Development Branch, Chapra, by which he has received certain advance against hypothecation of stocks. The State Bank of India had got the stocks insured with the New India Insurance Company and it is not in dispute that at the relevant time the Insurance policy was valid and operative. It so appears that on 27.03.2000 some persons duly armed with clubs, arrows etc. entered the shop premises of the petitioner in the evening and asked him to vacate the shop. In not doing so there was altercation and some people ran away with the cash box. He went to the police but no action was taken. It so appears that on 27.03.2000 some persons duly armed with clubs, arrows etc. entered the shop premises of the petitioner in the evening and asked him to vacate the shop. In not doing so there was altercation and some people ran away with the cash box. He went to the police but no action was taken. Next morning when he came he found that his locked godown adjoining the shop premises had been merged into adjoining space by constructing a fresh brick wall and the portion was merged into the next door occupant, who was the landlord, All fertilizers, which were stocked in the godown, were looted away. On Information being given to the bank, immediately claim was lodged. The insurance company in turn appointed one of Its Surveyor to survey the loss and filed an assessment report. The Surveyor did not dispute the occurrence. His first objection was as to why FIR was not registered at the first instance. Though he admits that a criminal complaint was lodged, which is pending. To my mind, this fact is not really material in the present case. 7. The only ground on which the Surveyor recommended for repudiating the claim is that no doubt the fertilizers were looted and cash box was also looted, but the proximate cause of this malicious act had been originated due to dispute between the landlord and the tenant over the issue of vacating the shop. From this it is clear that so far as looting of cash and fertilizers is concerned, its stand confirmed. In the opinion of the Surveyor, notwithstanding the looting of the said articles as it was constituting a dispute between the landlord and the tenant the petitioner was not entitled to be paid. It appears that report having been submitted, the insurance company apparently finding Itself bound by the report of the Surveyor apparently in view of the judgment of the Apex Court in the case of United India Insurance Co. Ltd. V/s. Roshan Lal Oil Mills Ltd. & Ors., 2000 10 SCC 219 blindly repudiated the claim. The petitioner unsuccessfully challenged the same before the District Forum and the State Commission under the provision of the Consumer Protection Act, who followed the same reasonings. While all this was pending, the respondent-bank initiated proceeding for recovery of its dues as through certificate proceeding, the writ application was thus filed. 8. The petitioner unsuccessfully challenged the same before the District Forum and the State Commission under the provision of the Consumer Protection Act, who followed the same reasonings. While all this was pending, the respondent-bank initiated proceeding for recovery of its dues as through certificate proceeding, the writ application was thus filed. 8. The question now is whether the claim was rightly or wrongly repudiated by the insurance company. The insurance was in favour of the bank. Bank was the beneficiary under the policy. 9. I have referred to the finding of the Surveyor on the basis of which the claim was rejected by the New India Insurance Company. To my mind, the surveyors report is totally unacceptable so far as the liability in law is concerned. Surveyor is required to report on facts and not on law. Inference would be drawn basing on this fact. Legal inference is to be drawn by the insurance authority. The surveyor is not learned in law or trained in law to report on legal aspect of the matter. The insurance company cannot abdicate its Jurisdiction in this regard to the surveyor. 10. In the present case the surveyor had clearly found that cash and fertilizers were looted as a consequence of malicious act. That act entitles the petitioner to claim the dues from the insurance company. What caused damage was not relevant. Under the policy it has merely to be seen that hypothecated goods were damaged or not and whether such damage was caused by the petitioner himself or not or attributable to the petitioner or not. Here the act of causing damage was not attributable to the petitioner as also accepted by the insurance company. It was a third party act not within the control of the petitioner. Insurance policy nowhere says that if a landlord commits theft in the premises of his tenant such a theft is not covered by the insurance policy. I, therefore, find that the legal inference as drawn by the surveyor was impermissible in law. His finding was wrong in law. 11. Now coming to the decision of the Apex Court as referred to above on the strength of which it is submitted that the surveyor report is an authentic document and it cannot be ignored by the insurance company who have to abide by the surveyor report. His finding was wrong in law. 11. Now coming to the decision of the Apex Court as referred to above on the strength of which it is submitted that the surveyor report is an authentic document and it cannot be ignored by the insurance company who have to abide by the surveyor report. Having perused the said judgment, I do not find a single line or a word in the said judgment in these lines. All that the apex Court has said that the State Commission could not be proceeded to deal with the case claiming damages before it ignoring the report of the surveyor. The surveyor having given cogent reason its report could not have been totally ignored. The Apex Court nowhere said that the finding of surveyor in all aspect of the matter was the last word and binding on all and no one could differ from it. I, therefore, find that the insurance company totally misdirected itself in blindly accepting the surveyor report. 12. To my mind, there is another aspect of the matter also. The surveyor is a person who is required to survey the thing at the spot and give findings of fact. They are to be statutorily appointed in cases of certain claim but the statute does not say that whatever the surveyor says is binding on the insurance company to the end, much less, in respect of matters of law. 13. In the present case, the surveyor had no competence to recommend that proximate cause of looting was the dispute between the landlord and the tenant which would entitle the insurance Co. to deprive the insured his legitimate claim under the policy. This decision had to be taken by the insurance company itself with the help of facts as found by the Surveyor. 14. I therefore find that the survey report, the order of the District Consumer Forum and the order of the State Commission for redressal stands vitiated on matters of law and is an error apparent on the face of the record and are liable to be quashed. They are accordingly quashed. 15. The result is that the repudiation of the insurance claim is found to be on non est ground. They are accordingly quashed. 15. The result is that the repudiation of the insurance claim is found to be on non est ground. The insurance company is directed to reconsider the matter in view of the finding given by the surveyor and the observation of this Court and to proceed in accordance with law preferably within a period of one month from the date of receipt of a copy of this order. Till such time as the claim is not settled, further proceeding in the certificate case would remain stayed and any amount which become payable under insurance policy would be paid to be respondent-bank itself. This is further subject to petitioner depositing a sum of rupees one lakh in the certificate Court within a period of two months from today as the insurance claim is of about 1.65 lacs where as the certificate dues are to the extent of Rs. 2.75 lacs. After settlement of claim and payment of aforesaid amounts, the balance would then be payable by petitioner. 16. This writ application is accordingly allowed.