About the case
According to the Telangana High Court, the insurance company surveyor’s report regarding a specific incident, which was dependent on unverified evidence and news articles, could not be used to determine the policyholder’s eligibility for the insurance amount.
Justice P. Sree Sudha determined that the complainant (defendant herein) was not accountable for the accident and that the surveyor had not conducted an accurate assessment of the loss, despite receiving acquittal in the criminal case.I have acquired knowledge. The counsel for the appellant/defendant argued that the defendant company is not responsible for paying compensation if the plaintiff is acquitted in a criminal case, as the company can independently verify the cause of the explosion through their surveyor. The argument of the appellant’s counsel is wholly unsubstantiated, as the surveyor (D.W.1) merely consulted the local populace and drew upon newspaper clippings to conclude that the plaintiff was the sole individual responsible for the factory’s destruction.
The trial court was served with a lawsuit seeking the recovery of the policy amount from the appellants in the amount of Rs.13,83,380.
Sri Naga Durga Silk Reeling Industry, the plaintiffs/respondents, argued in the trial court that it had obtained a policy from the appellants (New India Insurance Co Ltd) for the purpose of safeguarding its building, apparatus accessories, and other assets for a period of one year, 1998-1999. The policy was valued at 16 lakhs.
Fire broke out at the plaintiff’s factory on 17.11.1998, causing substantial damage. A criminal case was filed against the plaintiff after they reported the incident to the police. The plaintiff was, however, subsequently acquitted. The plaintiff submitted a claim for the insurance amount; however, the insurance company denied the claim, asserting that the damage was non-unforeseen and fraudulent.
Before the trial court, the plaintiff initiated recovery proceedings. The plaintiff was accused of engaging in fraud, and the defendant contended that the suit was precluded by limitation. The surveyor for the defendant argued that the insured’s willful actions were the cause of the loss. On the basis of the surveyor’s report and the accident’s delayed reporting, the defendant’s case was established.
In spite of this, the relief was granted by the Trial Court. After being aggrieved by the aforementioned order, the insurance company initiated the current appeal.
According to Justice Sree Sudha, the appellants’ primary arguments were that the petitioner’s claim was denied only after an independent survey was conducted, and that the petitioner had not contacted the insurance officials in a timely manner.
The Bench observed that the surveyor assigned by the Insurance Company had acknowledged that the report was submitted using newspaper clippings and word of mouth. The report was also determined to be devoid of any findings regarding the extent of losses, etc., and as a result, it was determined that it cannot be considered.
It was also determined that the claimant’s confinement in the prison rendered it impossible for her to contact the authorities in a timely manner.
The plaintiff was awarded Rs.9,52,000 for the loss and Rs.2,99,880 as pendente lite interest by the Court, which modified the judgment.. Rs.12,51,880 was the total award given to the plaintiff.
As a result, the appeal was dismissed with costs, and the modified judgment was upheld.
