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2008 DIGILAW 390 (JK)

Oriental Insurance Co. Ltd. v. Chinar Brick Kiln

2008-10-18

MANMOHAN SARIN, MOHAMMAD YAQOOB MIR

body2008
Manmohan Sarin, C. J. 1. Appellant, M/s. Oriental Insurance Company Ltd. in this appeal assails the judgment and order dated August 17, 2002 passed in complaint No. 17/2000 by the J & K State Consumer Protection Commission (hereinafter referred to as "State Commission"). The State Commission by the impugned judgment held that there was deficiency of service on the part of the appellant. It directed the appellant to make payment of Rs. 9,10,316 to the respondent, insured, M/s. Chinar Brick Kiln, through respondent No. 2, J&K Bank, financier, with 9% interest per annum within two months from the date of survey report i.e. December 20, 1997. The entire amount as aforesaid be paid to respondent No. 1 through J&K Bank within a period of six weeks, failing which interest at 12% would be payable. 2. The appellant questions the assessment of the loss at Rs. 9,10,316. (Rupees nine lac, ten thousand, three hundred and sixteen only). It is urged that the claim of respondent No. 1 was not admissible as at the time of the loss the Brick Kiln was not operational. In the alternative, it is urged that entitlement of respondent No. 1 should have been for an amount of Rs. 2,93,363 as assessed by the surveyor, Mr. Pajnoo. The appellant submits that the assessment of the loss by surveyor M/s. Saraf Investigators at Rs. 9,10,316 (Rupees nine lac, ten thousand, three hundred and sixteen only) was excessive and exorbitant. It had failed to take note of the fact that the Brick Kiln had been non-operational at the time of loss. In fact, it had ceased to manufacture bricks much before. The insured had failed to provide documentation and proof of the Brick Kiln being operational. 3. Mr. Khuroo on behalf of the appellant urged that the State Commission had erred in ignoring and brushing aside the well reasoned report of the surveyor, Mr. Pajnoo, assessing loss at Rs. 2,93,363. Lastly, it was sought to be urged that the complaint filed by the insured was barred by limitation. He submitted that under Section 18A of the J & K State Consumer Protection Act, period of two years is prescribed from the date on which the cause of action arises for filing of the complaint. In the instant case the date of incident of flood was August 28, 1997. He submitted that under Section 18A of the J & K State Consumer Protection Act, period of two years is prescribed from the date on which the cause of action arises for filing of the complaint. In the instant case the date of incident of flood was August 28, 1997. The complaint was filed on March 1, 2000, i.e. beyond two years of the date of occurrence. Mr. Khuroo submitted that the respondent neither applied for nor sought condonation of delay in terms of sub-section (2) of Section 18 of the J & K State Consumer Protection Act. In the absence of any such application for condonation, even though there was no outer limit prescribed in the proviso, the plea of condonation cannot be entertained at this stage. Mr. Khuroo also urged that the assessment of the claim by the surveyors was exaggerated. The Brick Kiln had come up in 1997. There was no need to have office buildings in the Brick Kiln. Hence, according to him, the assessment of loss of office buildings was illusory and fictional. He relied on National Insurance Company Ltd. v. Dinesh, 2001 (4) Supreme Today 563 to urge that non-consideration of objections of the appellant to the assessment by the surveyors, M/s. Saraf Investigators, at Rs. 9,10,316 was not permissible. The Commission was bound to give reasons either for placing reliance on the surveyors report of its rejection. 4. Having heard learned counsel for the appellant, and on perusal of the impugned judgment, the pleadings before the State Commission and the documents placed on record, we find that the finding reached by the State Commission of there being deficiency in service on the part of the appellant was well founded. The insurance of the Brick Kiln was for an amount of Rs. 14,15,000 and the relevant period of insurance was from June 30, 1997 to June 29, 1998. It is not disputed that as a result of the flood caused in river Jhelum, the Brick Kiln was inundated. The appellant itself had appointed M/s. Saraf Investigators as an independent surveyor who assessed the loss at Rs. 9,10,316 and submitted its report. Thereafter, the appellant at its own appointed another surveyor, Javed Hussain who re-assessed the loss at Rs. 9,29,000 and submitted his report on May 3, 1999. Still not satisfied with the assessment, the appellant appointed M/s. Jehlum Investigators to investigate the claim. 9,10,316 and submitted its report. Thereafter, the appellant at its own appointed another surveyor, Javed Hussain who re-assessed the loss at Rs. 9,29,000 and submitted his report on May 3, 1999. Still not satisfied with the assessment, the appellant appointed M/s. Jehlum Investigators to investigate the claim. The report of M/s. Jehlum Investigators is not on record. However, from the affidavit of their Chief Investigator it is revealed that the Investigator verified the genuineness of the documents for claim and satisfied that the Brick Kiln was in full swing till the floods came in. It is after this report that the appellant appointed Mr. Omkar Pajnoo as surveyor, who assessed the loss at Rs. 2,93,363 (Rupees two lac, ninety three thousand, three hundred and sixty three only). 5. We find merit in the submission of the learned counsel for the respondent and as held by the State Commission that there was no justification on the part of the appellant to have appointed one surveyor after the other simply because the assessment of loss was not palatable to it. While the appellant may be the custodian of public funds, yet it also has the corresponding responsibility and obligation to promptly settle the genuine claims of the citizens. The plea regarding claim for loss of office building not being admissible is wholly misconceived and devoid of merit. As per the Insurance Policys Schedule, the office buildings were duly insured. It is, therefore, not open for the appellant to contend that office buildings/ structures are not required for running a Brick Kiln. Whether the office buildings or structures are required for running a brick kiln or not, is a decision to be taken by the Kiln owner. Having insured the same, it is not open to the appellant to urge that the loss is not reimbursable. Accordingly, in our view, the State Commissions findings regarding deficiency in service are well founded. The claim for the loss occurred on August 28, 1997 having not been settled till 2002, a case for deficiency in service was clearly made out. 6. Coming to the plea of the complaint being barred by limitation, the J & K Consumer Protection Act, 1987 under sub-Section (1) of Section 18-A stipulates that the State Commission may not entertain a complaint unless it is filed within two years from the date when the cause of action arises. 6. Coming to the plea of the complaint being barred by limitation, the J & K Consumer Protection Act, 1987 under sub-Section (1) of Section 18-A stipulates that the State Commission may not entertain a complaint unless it is filed within two years from the date when the cause of action arises. Sub-section (2) provides for complaint being entertained on sufficient cause for not filing the complaint within two years being shown after recording reasons for condoning such delay. The appellant had urged that the two year period is to be reckoned from the date of loss, i.e., from August 28, 1997 and the complaint having been filed on March 1, 2000 it was beyond two years prescribed period. We may notice here that the appellant had not raised the plea of limitation as an objection when the complaint was filed. Moreover, the Act provides for a period of two years from the date cause of action arises. In the instant case, the appellant had neither repudiated nor closed the claim and, as such, the cause of action was continuing one. We may also notice that the period is to be reckoned from the date cause of action arises. It is a departure from the Limitation Act where for claims on a policy of insurance the period of limitation of three years is to be reckoned from the date of death or loss. Accordingly, we are in agreement with the findings of the State Commission that the complaint was not barred by limitation. Incidentally, we may observe that filing of the appeal itself was delayed by 400 days which delay was condoned. 7. We are informed that 75% of the amount as ordered by the Commission has been deposited in the High Court and 25% with the State Commission. In view of the foregoing discussion, we find that the appeal is devoid of merit and is liable to be dismissed. We notice that the State Commission had directed that in the event of default in complying with the direction of depositing the award money within a period of six weeks interest would be payable at 12%. In the facts and circumstances of the case and considering the prevalent Bank lending rates, we modify this direction and confine the rate of interest to 9%. 8. Except for the foregoing, the appeal has no merit and the same is dismissed.