M/S NEWS INDIA ASSURANCE CO. LTD. versus M/S LUXRA ENTERPRISES PVT. LTD. & ANR.

M/S NEWS INDIA ASSURANCE CO. LTD. versus M/S LUXRA ENTERPRISES PVT. LTD. & ANR.

An insurer may appoint another surveyor only upon recording cogent and satisfactory reasons demonstrating that the earlier surveyor's report is defective, arbitrary or excessive; absent such reasons (and where Head Office had approved the first surveyor and bank verification supported the claimed stocks), repeated appointment of surveyors to obtain a favourable repudiation is impermissible, and the award based on the accepted assessment stands.

Parties
Appellant / Insurance Company: M/S NEW INDIA ASSURANCE CO. LTD.; Respondent / Complainant: M/S LUXRA ENTERPRISES PVT. LTD. & ANR.
Jurisdiction
India
Judgment Date
01 May 2019
Procedural Posture
Civil Appeal / Final Judgment on Appeal to Supreme Court
Outcome
Insurance Company's appeal (Civil Appeal No. 9668 of 2014) dismissed; Complainant's appeals (Civil Appeal Nos. 4371-72 of 2015) allowed in part
Legal Topics
Appointment of Surveyor, Repudiation of Insurance Claim, Section 64 UM (insurance Act, 1938), Interest on Award, Validity of Letter of Credit
Consumer Protection Insurance Law Appointment of Surveyor Repudiation of Insurance Claim Section 64 UM (insurance Act, 1938) Interest on Award Validity of Letter of Credit

Case Brief

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Parties

M/S NEW INDIA ASSURANCE CO. LTD.

Appellant / Insurance Company

M/S LUXRA ENTERPRISES PVT. LTD. & ANR.

Respondent / Complainant

Procedural Posture

Civil Appeal / Final Judgment on Appeal to Supreme Court

Legal Issues

  1. 1 Whether an insurer may appoint successive surveyors until a favourable report is obtained
  2. 2 Whether the insurer gave cogent reasons to reject the first surveyor's report
  3. 3 Whether the letters of credit and bank stock verification justified repudiation of claim

Ratio Decidendi

An insurer may appoint another surveyor only upon recording cogent and satisfactory reasons demonstrating that the earlier surveyor's report is defective, arbitrary or excessive; absent such reasons (and where Head Office had approved the first surveyor and bank verification supported the claimed stocks), repeated appointment of surveyors to obtain a favourable repudiation is impermissible, and the award based on the accepted assessment stands.

Court Disposition

Insurance Company's appeal (Civil Appeal No. 9668 of 2014) dismissed; Complainant's appeals (Civil Appeal Nos. 4371-72 of 2015) allowed in part

Orders

  • Civil Appeal No. 9668 of 2014 is dismissed.
  • The award of Rs. 54,93,865/- in favour of the Complainant is maintained.