Case: The New India Assurance Co. Ltd Vs. M/s. Protection Manufacturers Pvt. Ltd

the controversy between the parties has made us dwell on the facts of the case at some length. Despite the extensive submissions made on behalf of the parties, the issues to be resolved in this Appeal are confined to two questions, namely,(i) What was the cause of fire which broke out in the factory premises of the assured at Bhatkuri at about 8.45 a.m. on 29th March, 2000?(ii) What was the extent of loss and damage suffered by the assured on account of such fire? 31. As far as the answer to the first question is concerned, the report of the Joint Surveyors, M/s. Asthana & Joshi, dated 28th August, 2000, indicates that the exact cause of the fire was not known, though it could be due to a short circuit. Interestingly, while referring in its report dated 28th May, 2001, to the reply given by the Fire Officer, Cuttack, to the Khurda Branch Manager of the Insurance Company on 5th May, 2001, stating that the cause of fire was a "short circuit" in the raw material section of the factory premises, M/s. J. Basheer & Associates ultimately observed that the fire could reasonably be attributed to an act of "Arson" by vested interests, for some pecuniary benefit, without any factual basis for the same. Apart from the aforesaid observation made at the end of the report, no foundation has been laid down in the report for such an observation which literally appears out of the blues. 32. Even if the views expressed by the Joint Surveyors, M/s. Asthana and Joshi, on the reports submitted by M/s. J. Basheer & Associates are discounted, although they were appointed by the Insurance Company itself, one cannot ignore the views obtained by the Insurance Company from former Chief Justice, Y.V. Chandrachud, although, an attempt has been made on behalf of the Insurance Company to exclude the said views from consideration or at least to water down the same by taking refuge in Section 45 of the Evidence Act. Such a stand has no legs to stand upon, since the opinion given by Justice Chandrachud was based on an analysis of the materials placed before him by the Insurance Company, including the reports submitted by the Joint Surveyors, M/s. Asthana and Joshi and M/s. J. Basheer & Associates. Section 45 of the Evidence Act empowers the Court, in order to form an opinion upon a point of foreign law or of science or of art, or as to identity of handwriting or finger impressions, to rely upon the opinions of persons specially skilled in such matters. The case in hand is quite different, as the views expressed by Justice Chandrachud were not meant to be an opinion within the meaning of Section 45 of the Evidence Act, but an analysis of the reports and the materials provided to His Lordship by the Insurance Company. In fact, the attempt made on behalf of the Appellant Insurance Company to exclude the views expressed by Justice Chandrachud with regard to the cause of fire from the area of consideration does not commend itself to us as the same is a completely independent and unbiased assessment of the events relating to the cause of fire on the basis of the materials made available to His Lordship.33. Without any material to support the theory of arson projected by M/s. J. Basheer & Associates and sufficient material to hold otherwise, it would be entirely unjust and inequitable to accept such a theory without any evidence whatsoever in support thereof. Reference can be made in this context to the submission made by the counsel for the Insurance Company before the National Commission and quoted in para 17 above. Accordingly, we endorse the views expressed by the National Commission that the cause of fire was accidental and that the attempt made by M/s. J. Basheer & Associates to show that the fire had been caused by an act of arson, was motivated and intended to benefit the Appellant Insurance Company. The decisions cited by the parties were rendered in their own particular fact situations in accordance with law which is not disputed. The fact situations are, however, distinguishable.34. This brings us to the second question regarding the quantum of loss suffered by the Respondent Company on account of the fire. As has been commented upon by the Joint Surveyors and Chief Justice Chandrachud and subsequently by the National Commission, the almost identical amounts, barring a few rupees, arrived at by the Insurance Company and M/s. J. Basheer & Associates speak volumes of the exercise carried out by the latter on a wholly cursory investigation which has quite aptly been described as "tailor-made". The amount of loss suffered by the Respondent Company on account of the fire has been calculated by the Joint Surveyors on the basis of the amounts mentioned by the Respondent Company and the computer data available in support thereof and also upon cross-checking with the accounts of suppliers and vendors of raw materials to the Respondent Company. We see no reason to differ with the views expressed by the National Commission in this regard. We also accept the discretion exercised by the National Commission regarding the rate of interest awarded from three months after the date of the Award. The submissions made on behalf of the Respondent Company for enhancement of the same is rejected as we are of the view that such exercise of discretion was just and equitable in the absence of any agreement between the parties regarding payment of interest or the quantum thereof.35. The submissions of Mr. Piyush Gupta in regard to Section 64 UM of the Insurance Act, 1938, are also of substance, as the Appellant Insurance Company should have applied to the Regulatory Authority under the Act for a second opinion instead of appointing M/s. J. Basheer & Associates for the said purpose unilaterally. The reports submitted by M/s. J. Basheer & Associates are liable to be discarded on such ground as well.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]32. Even if the views expressed by the Joint Surveyors, M/s. Asthana and Joshi, on the reports submitted by M/s. J. Basheer & Associates are discounted, although they were appointed by the Insurance Company itself, one cannot ignore the views obtained by the Insurance Company from former Chief Justice, Y.V. Chandrachud, although, an attempt has been made on behalf of the Insurance Company to exclude the said views from consideration or at least to water down the same by taking refuge in Section 45 of the Evidence Act. Such a stand has no legs to stand upon, since the opinion given by Justice Chandrachud was based on an analysis of the materials placed before him by the Insurance Company, including the reports submitted by the Joint Surveyors, M/s. Asthana and Joshi and M/s. J. Basheer & Associates. Section 45 of the Evidence Act empowers the Court, in order to form an opinion upon a point of foreign law or of science or of art, or as to identity of handwriting or finger impressions, to rely upon the opinions of persons specially skilled in such matters. The case in hand is quite different, as the views expressed by Justice Chandrachud were not meant to be an opinion within the meaning of Section 45 of the Evidence Act, but an analysis of the reports and the materials provided to His Lordship by the Insurance Company. In fact, the attempt made on behalf of the Appellant Insurance Company to exclude the views expressed by Justice Chandrachud with regard to the cause of fire from the area of consideration does not commend itself to us as the same is a completely independent and unbiased assessment of the events relating to the cause of fire on the basis of the materials made available to His Lordship.33. Without any material to support the theory of arson projected by M/s. J. Basheer & Associates and sufficient material to hold otherwise, it would be entirely unjust and inequitable to accept such a theory without any evidence whatsoever in support thereof. Reference can be made in this context to the submission made by the counsel for the Insurance Company before the National Commission and quoted in para 17 above. Accordingly, we endorse the views expressed by the National Commission that the cause of fire was accidental and that the attempt made by M/s. J. Basheer & Associates to show that the fire had been caused by an act of arson, was motivated and intended to benefit the Appellant Insurance Company. The decisions cited by the parties were rendered in their own particular fact situations in accordance with law which is not disputed. The fact situations are, however, distinguishable.34. This brings us to the second question regarding the quantum of loss suffered by the Respondent Company on account of the fire. As has been commented upon by the Joint Surveyors and Chief Justice Chandrachud and subsequently by the National Commission, the almost identical amounts, barring a few rupees, arrived at by the Insurance Company and M/s. J. Basheer & Associates speak volumes of the exercise carried out by the latter on a wholly cursory investigation which has quite aptly been described as "tailor-made". The amount of loss suffered by the Respondent Company on account of the fire has been calculated by the Joint Surveyors on the basis of the amounts mentioned by the Respondent Company and the computer data available in support thereof and also upon cross-checking with the accounts of suppliers and vendors of raw materials to the Respondent Company. We see no reason to differ with the views expressed by the National Commission in this regard. We also accept the discretion exercised by the National Commission regarding the rate of interest awarded from three months after the date of the Award. The submissions made on behalf of the Respondent Company for enhancement of the same is rejected as we are of the view that such exercise of discretion was just and equitable in the absence of any agreement between the parties regarding payment of interest or the quantum thereof.35. The submissions of Mr. Piyush Gupta in regard to Section 64 UM of the Insurance Act, 1938, are also of substance, as the Appellant Insurance Company should have applied to the Regulatory Authority under the Act for a second opinion instead of appointing M/s. J. Basheer & Associates for the said purpose unilaterally. The reports submitted by M/s. J. Basheer & Associates are liable to be discarded on such ground as well.As far as the answer to the first question is concerned, the report of the Joint Surveyors, M/s. Asthana & Joshi, dated 28th August, 2000, indicates that the exact cause of the fire was not known, though it could be due to a short circuit. Interestingly, while referring in its report dated 28th May, 2001, to the reply given by the Fire Officer, Cuttack, to the Khurda Branch Manager of the Insurance Company on 5th May, 2001, stating that the cause of fire was a "short circuit" in the raw material section of the factory premises, M/s. J. Basheer & Associates ultimately observed that the fire could reasonably be attributed to an act of "Arson" by vested interests, for some pecuniary benefit, without any factual basis for the same. Apart from the aforesaid observation made at the end of the report, no foundation has been laid down in the report for such an observation which literally appears out of the blues.Even if the views expressed by the Joint Surveyors, M/s. Asthana and Joshi, on the reports submitted by M/s. J. Basheer & Associates are discounted, although they were appointed by the Insurance Company itself, one cannot ignore the views obtained by the Insurance Company from former Chief Justice, Y.V. Chandrachud, although, an attempt has been made on behalf of the Insurance Company to exclude the said views from consideration or at least to water down the same by taking refuge in Section 45 of the Evidence Act. Such a stand has no legs to stand upon, since the opinion given by Justice Chandrachud was based on an analysis of the materials placed before him by the Insurance Company, including the reports submitted by the Joint Surveyors, M/s. Asthana and Joshi and M/s. J. Basheer & Associates. Section 45 of the Evidence Act empowers the Court, in order to form an opinion upon a point of foreign law or of science or of art, or as to identity of handwriting or finger impressions, to rely upon the opinions of persons specially skilled in such matters. The case in hand is quite different, as the views expressed by Justice Chandrachud were not meant to be an opinion within the meaning of Section 45 of the Evidence Act, but an analysis of the reports and the materials provided to His Lordship by the Insurance Company. In fact, the attempt made on behalf of the Appellant Insurance Company to exclude the views expressed by Justice Chandrachud with regard to the cause of fire from the area of consideration does not commend itself to us as the same is a completely independent and unbiased assessment of the events relating to the cause of fire on the basis of the materials made available to His Lordship.33. Without any material to support the theory of arson projected by M/s. J. Basheer & Associates and sufficient material to hold otherwise, it would be entirely unjust and inequitable to accept such a theory without any evidence whatsoever in support thereof. Reference can be made in this context to the submission made by the counsel for the Insurance Company before the National Commission and quoted in para 17 above. Accordingly, we endorse the views expressed by the National Commission that the cause of fire was accidental and that the attempt made by M/s. J. Basheer & Associates to show that the fire had been caused by an act of arson, was motivated and intended to benefit the Appellant Insurance Company. The decisions cited by the parties were rendered in their own particular fact situations in accordance with law which is not disputed. The fact situations are, however, distinguishable.34. This brings us to the second question regarding the quantum of loss suffered by the Respondent Company on account of the fire. As has been commented upon by the Joint Surveyors and Chief Justice Chandrachud and subsequently by the National Commission, the almost identical amounts, barring a few rupees, arrived at by the Insurance Company and M/s. J. Basheer & Associates speak volumes of the exercise carried out by the latter on a wholly cursory investigation which has quite aptly been described asThe amount of loss suffered by the Respondent Company on account of the fire has been calculated by the Joint Surveyors on the basis of the amounts mentioned by the Respondent Company and the computer data available in support thereof and also uponwith the accounts of suppliers and vendors of raw materials to the Respondent Company. We see no reason to differ with the views expressed by the National Commission in this regard. We also accept the discretion exercised by the National Commission regarding the rate of interest awarded from three months after the date of the Award. The submissions made on behalf of the Respondent Company for enhancement of the same is rejected as we are of the view that such exercise of discretion was just and equitable in the absence of any agreement between the parties regarding payment of interest or the quantum thereof.35. The submissions of Mr. Piyush Gupta in regard to Section 64 UM of the Insurance Act, 1938, are also of substance, as the Appellant Insurance Company should have applied to the Regulatory Authority under the Act for a second opinion instead of appointing M/s. J. Basheer & Associates for the said purpose unilaterally. The reports submitted by M/s. J. Basheer & Associates are liable to be discarded on such ground as well.