NATIONAL INSURANCE CO LTD Vs. HARJIT RICE MILLS

JUDGEMENT

(1.) Paddy bags, which were stacked in the mill premises of the respondent, were destroyed as same were engulfed in fire. The fire incident took place in the year 1992. The Canara Bank which had advanced loan for the purchase of stocks had obtained insurance cover from the appellant company for the benefit of the respondent. The appellant company in terms of insurance contract had undertaken to indemnify the respondent in the event of loss suffered to the extent of Rs. 15.00 lacs.

(2.) Respondent filed the complaint before the J&K State Consumers Redressal Commission (for short Commission ). The Commission vide its order dated 17.01.1997 directed the appellant to pay the respondent sum of Rs. 8,96,500/- along with interest @ Rs. 18% Per annum. The interest was to be paid from the date of loss till the final payment was made.

(3.) Mr. Kawoosa, learned counsel appearing for the appellant-company invited the attention of the court to the judgment of the Hon ble Supreme Court passed in this case which is reported in (2005) 6 SCC 45. Learned counsel referred to paragraph 6 of the judgment. Learned counsel submitted that the Hon ble Supreme Court was of the view that the Commission should have given an opportunity to the appellant to prove the investigation report. Learned counsel also submitted that Hon ble Supreme Court ruled that Section 64-UM of the Insurance Act would not stand in the way of the appellant in establishing that the claim was fraud or that it was a case of deliberately causing fire, so as to lay foundation for an insurance claim. The Hon ble Supreme Court further observed that the Commission did not apply its mind to the grievance of the appellant that the first police investigation was reported to be perfunctory and a fresh proper investigation was recommended. It was also observed that discrepancy in the capacity of Godown and the possibility that what was lost was paddy husk, should have been the reason for the Commission to make proper enquiry before deciding to accept the surveyors report in this case. The Hon ble Supreme Court further observed that High Court, as appellate authority, had the duty to satisfy itself that no fraud was involved and the claim was genuine and sustainable. Learned counsel also submitted that author of the report of the private investigating agency was examined by the appellant before the initial award was passed and that without considering the report and without applying its mind to the entire conspectus of the case, the impugned award has been passed. Learned counsel extensively referred to the report of the private investigating agency and submitted that the Engineer, who was involved by the said private agency, had opined that the Godown of the respondent had not the capacity of stacking the stocks, which were alleged to have been destroyed in the fire incident.