Paragraph numbers below are the court’s original numbering, recovered from the source text.
11. In the said decision, it is no doubt held that though the assessment of loss by an approved surveyor is a prerequisite for payment or settlement of the claim, the surveyor report is not the last and final word. It is not that sacrosanct that it cannot be departed from and it is not conclusive. The approved surveyor’s report may be the basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured. On the said proposition, we are certain that there can be no quarrel. The surveyor’s report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the surveyor’s report.
12. The learned counsel for the appellant has also relied on the decision in the case, National Insurance Company Limited vs. Harjeet Rice Mills (2005) 6 SCC 45 with reference to paragraphs 5, 6 and 7. In the facts arising in the said case the insured was seeking to rely on the surveyor’s report to bind the insurer in view of the provisions contained in Section 64-UM (c) of the Insurance Act, 1938. The Insurer had however sought to rely on the investigation report. The State Commission refused to look into report of the private investigator. In that circumstance, this court was of the view that the State Commission should have given an opportunity to the insurer to prove the investigation report. In the said case, the very nature of the fire incident was in dispute from the very inception. The claimant had contended that the fire was caused by a short circuit, which was seriously disputed by the insurer and an investigation in that regard had been held. It is in that light, a conclusion was to be reached by the forum adjudicating the claim as to whether any fraud was committed in making the claim with reference to the very nature of the incident. In that circumstance, even though at the first instance, there was an investigation held by the police, the private investigation held by the insurer would have been relevant to decide the question. As such, in the said circumstance it was imperative that the investigator’s report was to be considered threadbare and a decision ought to have been arrived at.
13. On the other hand, in the instant facts there is no serious dispute with regard to the fire incident. Even going by the contention put forth, it is noted that the loss caused by destruction of the plant and machinery in the fire incident is not much of an issue. The dispute raised insofar as the loss caused to the raw-materials/stock is by contending that the purchase of stock during the months of August, September and October 1999 is shown excessive as compared to the stock position from April to July 1999. In that circumstance, in the facts and circumstances herein whether the investigation report was an indispensable document or as to whether the survey report is exhaustive enough to arrive at a conclusion on that aspect is the issue.
14. Having noted the said decisions, we are of the opinion that the same cannot alter the position in the instant case. On the proposition of law that the surveyor’s report cannot be considered as a sacrosanct document and that if there is any contrary evidence including investigation report, opportunity should be available to produce it as rebuttal material, we concur. However, the issue to be noted is as to whether the surveyor’s report in the instant case adverts to the consideration of stock position in an appropriate manner and in that circumstance whether an investigation report which is based on investigation that was started belatedly should take the centre stage. The fact remains that the surveyors report is the basic document which has statutory recognition and can be made the basis if it inspires the confidence of the adjudicating forum and if such forum does not find the need to place reliance on any other material, in the facts and circumstance arising in the case. If in that light, the surveyors report, on which reliance has been placed by the NCDRC is taken note insofar as the assessment relating to the loss due to destruction of stock, the consideration of the same has been adverted in clause 8.1.1 and the stock position as declared to the bank has been referred to in clause 8.1.3. The learned counsel for the appellant as also the learned counsel for the respondents has made detailed reference and taken us through details contained in the report.
15. The consideration made by the surveyors to ascertain the correctness of the details relating to the stock indicates that reference is made to the value of the stock declared to the bank; value of the stock as per audited manufacturing account and balance sheet for the year ended 31.03.1999; the explanation offered for the purchase made during the months of August 1999 to October 1999. In that regard, the surveyors NATIONAL INSURANCE COMPANY LTD. v. M/S. HARESHWAR ENTERPRISES (P) LTD. & ORS. [A. S. BOPANNA, J.] have also visited the source from which the LDPE was procured during September 1999 to 04.11.1999. It is on making such verification and inquiries, the surveyors arrived at the conclusion as follows: – “8. 1. 8 Though the purchases and sales were found to be in order as per records, we could not accept the total quantity of 73585 kgs claimed by the Insured. Opening stock considered for arriving at this balance is higher as compared to quantity declared to bank. For assessing the quantity we have taken Stock quantity as on 30.04. 99 as per Bank declaration and then made addition/ deduction for purchase & sale quantity during the period 1.5.99 to 6.11.99. Accordingly the quantity of stock as on date of loss worked out as follows: Kgs. Stock Quantity as on 30.4.99 5,367.75 Add : Purchases from 1.5.99 to 6.11.99 1,14,155.60 ____________ 1,19,523.35 Less : Sales from 1.5.99 to 6.11.99 Balance Quantity on 6.11.99 75,444.73 _______ 44,078.62 8.1.9 We have valued the stock as per the latest purchase rate viz. At market value. The last purchases made by Insured prior to loss was on 4. 11. 99. The rate including Octroi is Rs.68.238 per kg. The rate matches with the selling price fixed by IPCL. Further the entire quantity was considered to be raw material avoiding any addition of Insureds own manufacturing cost. 8.1.10 Salvage : There was small quantity of remnants of the burnt stock, in lump/me ted form. Considering the limited quantity which could be extracted and its scrap value we have deducted 1% as salvage value. 8.1.11 The Loss Assessed for Stock is as follows Cost of 44078.620 Kgs. of LDPE @ Rs. 68.238 per kg. Rs. 30,07,885 Less : Salvage value 1% Rs. 30,079 ——————— Loss Assessed Rs. 29,77,806
16. Thus, 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. In that background, as noted, 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.
17. One other aspect of matter which arises for consideration herein is with regard to the rate of interest. The learned counsel for the appellant contended that the interest rate at 12% per annum is excessive. The learned counsel for the respondent, however, contended that there was delay in payment of the amount payable to the respondent No.1 which was necessary to be compensated appropriately and the NCDRC was justified in that regard. Having considered this aspect, the rate of interest to be awarded in a normal circumstance should be commensurate so as to enable the claimant for such benefit for the delayed payment. There is no specific reason for which the NCDRC has thought it fit to NATIONAL INSURANCE COMPANY LTD. v. M/S. HARESHWAR ENTERPRISES (P) LTD. & ORS. [A. S. BOPANNA, J.] 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.
18. It is to be noted that this Court while admitting the appeal and granting stay of the order, it was made subject to deposit 50% of the amount before the National Commission. The second and third respondents were permitted to withdraw the same in the ratio of 60:40 subject to their furnishing, security to the satisfaction of the Commission. The appellant shall therefore deposit the balance amount within six weeks, before the National Commission and the disbursement shall be made in the ratio to constitute the payment of the full amount awarded. The second and third respondents shall be permitted to withdraw the same.
19. In terms of the above, the appeal is allowed in part.
20. Pending application, if any, shall stand disposed of. Divya Pandey Appeal partly allowed.