Sri Venkateswara Syndicate vs Oriental Insurance Co. Ltd. & Anr

Sri Venkateswara Syndicate ..........Appellant

Versus

Oriental Insurance Company Ltd. and Anr. ........Respondents

JUDGMENT

H.L. Dattu,J.

This appeal is directed against the order passed by National Consumer

Disputes Redressal Commission, New Delhi in Original Petition

No.135 of 2001 dated 19th day of January, 2003.

2) The brief facts are as under :

The appellant is a registered partnership firm. Their line of activity is

trading in cotton. For the purpose of their business, they had taken

M/s Jai Bharat Traders Cotton Ginning Mill on lease. The claim of the

appellant is that an accidental fire took place in the godown of M/s Jai

1 Bharat Traders, leased by the appellant firm, where its cotton stocks

were stored and insured at about 2.10 a.m. in the morning hours of

24.8.1999 and according to the appellant the estimated loss was of Rs.

1.90 crores. The cotton stocks in question were covered by seven

insurance policies issued by respondent - Oriental Insurance

Company Ltd. hereinafter for the sake of brevity referred to as

`insurer' for a total sum of Rs.1.98 Crores during the period when the

fire accident took place. The appellant made a claim of Rs.1.90 crores

towards loss of stock due to accidental fire in its business premises,

with the insurer. Pursuant to the claim so made, the insurance

company appointed one Sri K. Siva Prasad, a licensed surveyor for

preliminary investigation and for submitting a preliminary report,

about the cause of fire and the probable loss said to have been

suffered by the insured. The surveyor having examined the place of

fire accident gave preliminary report dated 09.09.1999 to the

insurance company estimating the loss of stock at Rs.1,73,92,310/-,

however, had noticed in his report that the number of bales and borahs

lying in the Godown and the actual quantity of lint damaged by fire

has to be got confirmed from the accounts of the insured and also by

physical verification of bale hoops. The insurer after receipt of the

2 preliminary report of Sri K. Siva Prasad, had appointed Joint

Surveyors M/s Mehta and Padamsey and Kaypens, in terms of Section

64 UM(2) of the Insurance Act to give a joint report. They

conducted a joint survey and in that, had estimated the loss of stock

insured at Rs.1,67,80,925/- and gave a report to that effect to the

insurer. The insurer being of the view that the report is perfunctory,

had appointed yet another Surveyor viz. Dinesh Gopal and Co. who,

in turn appointed one Mr. Panchal, former DIG (Fire) CISF and Fire

Adviser to the Government of India to investigate and submit a report,

who in turn after investigation and survey submitted his report dated

07.05.2000, confirming the quantification made by the Joint Surveyor.

Since the insurer was not satisfied with the aforesaid report also,

appointed R. Srinivasan and Co., Chartered Accountant to give a fresh

report by estimating the loss of stock insured due to accidental fire

incident. After inspection of the godown and verifying the books of

accounts, estimated the loss of stock at Rs.1,05,00,817/-. The

insurance company had placed the aforesaid report before the Joint

Surveyor viz. M/s. Mehta and Padamsey and Kaypsens for their

opinion. The joint surveyors in their clarificatory report dated

06.01.2001, did not agree with the findings of the chartered

3 accountant, on the ground that the chartered accountant had based his

report only after verifying the books of accounts for the period

01.10.1998 to 31.03.1999 and not till the date of fire accident.

3) Since there was inordinate delay in settling the lawful claim under the

fire insurance policy, the appellant preferred original complaint before

the National Consumer Forum against the insurer, inter-alia, alleging that

there was deficiency in service and, therefore, they are entitled for a

sum of Rs.1,67,80,925/- being the value of loss assessed by the Joint

Surveyors and, therefore, sought a direction to the insurer for payment of

the aforesaid amount with interest at 18% from the date of fire accident

till its realization and for payment of a sum of Rs. 6,91,155/- being the

value of the salvage as assessed by the surveyors and also to award

damages in causing unnecessary and unwarranted delay in settling the

claim under the insurance policy.

4) The National Consumer Disputes Redressal Commission, hereinafter for

the sake of brevity referred to as "Commission" on the concession made

by the insurance company based on the report of Chartered Accountant

has passed the impugned order, directing the insurer to pay a sum of Rs.

1,05,00,817/- with interest at 6% per annum from 01.03.2001 till the date

of payment within two months from the date of receipt of the order. The

4 reasons assigned by the Commission for accepting the concession made

by the respondents is forthcoming in its order. The same is extracted for

better appreciation of the case pleaded by the parties to the lis. It is as

under :

"7.5 As regards the quantum of loss, we need to give weightage to the estimates made by various Investigators appointed by the Insurance Co. The first three Investigators assessed the loss at about the same figures i.e. the loss is of 1350 fully pressed bales of cotton and 88 boras of lint valued that about Rs. 1.73 to Rs. 1.74 crores. However, the Insurance Co. having noticed that these Investigators had not gone into the details of transactions and stocks in a thorough manner, asked another Chartered Accountant, M/s R. Srinivasan & Co. to specially ascertain the quantum of loss caused by the fire. M/s R. Srinivasan & Co. submitted a "Accounts Verification Report" on 22.11.2000 and assessed the loss at Rs. 1,05,00,817/-. They also furnished subsequent clarification on 22.12.2000, 22.1.2001 and 9.9.2002 pointing out the lacunae in the reports of the previous Investigators."

Finally, the opposite party themselves, while disputing their liability

to pay, have however agreed that the loss is only Rs.1,05,00,817/- and

not Rs.1.90 crore, as claimed by the appellant.

5) Being aggrieved by the aforesaid order, the claimant is before us in this

appeal.

6) The learned senior counsel Shri K.V. Viswanathan appearing for the

appellant submitted, that, the action of the insurance company in

appointing several surveyors till it got a favourable report to suit its

5 estimation of loss of stock in the fire incident is illegal and shatters the

confidence and trust of the people on the very purpose of insurance. It is

further submitted that the National Commission despite upholding the

report of the Joint Surveyors which assessed the loss at Rs.1,64,70,407/-,

ought not to have accepted the concession made by the insurer and

directed the insurance company to pay only the amount as quantified by

the chartered accountant. Lastly, it is submitted that the National

Commission despite giving a finding that there is gross deficiency in

service has only granted interest at 6% per annum from 01.03.2001 and

not from the date of fire accident, which, according to learned counsel is

improper and illegal.

7) In response to the submission made by learned senior counsel for the

appellant, the learned counsel for the insurer invites our attention to the

counter affidavit filed by them before this Court in justification of the

order passed by National Consumer Commission and then submits that

the provisions of Section 64-UM of Insurance Act, 1938 does authorize

the insurer to appoint surveyor or surveyors, may be for the second time

for the purpose of getting a fair report of the actual loss suffered by the

insured. To buttress their submission, they invite our attention to the

provision of Section 64-UM of the Insurance Act, 1938, for which we

6 will make reference at the appropriate stage. The learned counsel also

submitted several reasons for not accepting the report of Joint Surveyors

in view of the lacuna pointed out by the Chartered Accountant, who was

asked to verify the Books of Accounts maintained by the insured to

ascertain the actual loss incurred due to the fire accident by the insured in

its place of business and therefore, there is no illegality committed by the

National Consumer Commission in accepting the report of Chartered

Accountant and directing the insurance company to pay as assessed and

quantified by an independent agency. The learned counsel also submits

that keeping in view the facts and circumstances of the case, the National

Consumer Commission was justified in awarding interest at the rate of

6% per annum from 01.03.2001, though a claim was made for awarding

interest at the rate of 18% from the date of fire incident till the date of

payment.

8) Two issues would arise for our consideration and decision. Firstly,

whether the insurance company can repeatedly appoint Surveyors after

Surveyors for getting the loss/damage assessed before settling the claim

of the insured. The incidental question is, whether the National

Consumer Commission was justified in awarding 6% interest per annum

7 from 01.03.2001 as against the claim of the appellant at 18% from the

date of the fire accident, viz. 24.08.1999.

9) To appreciate the issues raised in this civil appeal, we extract relevant

Section by omitting what is not necessary for the purpose of this case.

Section 64-UM(2) of the Insurance Act, 1938 is as under :

"64- UM(2) - No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as "approved surveyor or loss assessors):

Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.

(3) The Authority may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent report from any other approved surveyor or loss assessor specified by him and such surveyor or loss assessor shall furnish such report to the Authority within such time as may be specified by the Authority or if no time limit has been specified by him within reasonable time and the cost of, or incidental to, such report shall be borne by the insurer.

(4) The Authority may, on receipt of a report referred to in sub-

section (3), issue such directions as he may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions:

Provided that where the Authority issues a direction for settling a claim at a figure lower than that at which it has already been

8 settled, the insurer shall be deemed to comply with such direction if he satisfies the Authority that all reasonable steps with due regard to the question whether the expenditure involved is not disproportionate to the amount required to be recovered, have been taken with due despatch by him:

Provided further that no direction for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the Authority is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured:

Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal, to which he would have been subject but for the provisions of this sub-section."

10)Section 64-UM (1) of the Act speaks of licensing of Surveyors and loss

assessors. We are not very much concerned with this sub-section. Sub-

section (2) mandates that no claim in respect of a loss which has occurred

in India and requiring to be paid in India equal to or exceeding twenty

thousand rupees in value on any policy of insurance be admitted for

payment, unless insurer obtains a report on the loss that has occurred

from a person who holds a license issued under sub-section (1) of Section

64 UM of the Act as a Surveyor or loss assessor. The proviso to sub-

section(2) however, retains the right of the insurer to settle a claim for an

amount different from that assessed by the surveyor. This proviso

impliedly permits an insurer to obtain a second or further report where

considered appropriate or expedient in the circumstances of a case, based

9 upon which the claim could be settled for a different amount than as

assessed earlier.

11)Sub-section (3) provides for the Authority (Insurance Regulatory and

Development Authority), the power to obtain an independent report from

any other surveyor in respect of a claim referred to in sub-section (2).

This sub-section vests in the Authority the power to call for a second

report, either suo motto or upon the application by the insured person or

on a complaint by a third party. Under sub-section (3), the second report

is required to be called by the Authority himself for use, consideration

and further directions.

12)Sub-section (4) envisages, that the authority may on receipt of a report

referred to in sub-section (3), issue such directions as he may consider

necessary with regard to the settlement of the claim including any

direction to settle a claim at a figure less than, that at which it is proposed

to settle it or it was settled and the insurer shall be bound to comply with

such directions.

13) The learned senior counsel Shri K.V. Viswanathan for the appellant,

submits that, despite the surveyors having consistently given a

specific finding that the claim was bonafide and the fire was

accidental had assessed the loss at Rs.1.70 crores, but the insurance

10 company has repudiated the claim on frivolous ground, that too after a

period of three years from the date of fire incident. It is further

contended that the company had appointed several surveyors, which

they could not have done in terms of Section 64-UM of the Insurance

Act, 1938.

14)In the instant case, the insurer had appointed a surveyor for preliminary

inspection and survey to assess the loss caused due to the fire accident in

the business premises of the appellant. In the preliminary survey report

dated 09.09.1999, Sri K. Siva Prasad had given broadly an estimate of

loss caused due to the fire accident in the business premises of the

appellant. He had specifically reported that the number of bales and

borahs lying in the godown and the actual quantity of lint damaged by

the fire has to be got confirmed from the accounts of the insured and also

by physical verification of the bale hoops. In his report, he had made it

clear that he has not finally assessed the loss. The Joint Surveyors who

were appointed to jointly assess the loss had given their report dated

15.11.1999, wherein they had assessed the loss at Rs. 1,67,80,925/- on

receipt of this report, the insurance company by their letter dated

7.1.2000, had sought several clarifications from their Joint Surveyors,

which according to them were omitted to be noticed by the Joint

11 Surveyors while assessing the loss caused due to the fire accident in the

appellant's business premises. The letter dated 7.1.2000, is extracted for

better understanding the rival claims of the parties :

"THE ORIENTAL INSURANCE HYDERABAD REGION

THE ORIENTAL INSURANCE COMPANY LIMITED DIVISIONAL OFFICE : GUNTUR Dear Sirs,

RE: FIRE LOSS TO COTTON STOCKS ON 24-8-1999 -

OUR CLAIM NO. 432301/136/0/F/04/2000 -

A/c : M/S SRI VENKATESWARA SYNDICATE - GUNTUR

We refer to your joint survey report bearing Nos. MR/1269 (MS/61640) and KPS/CL/1837 dated 15.11.99 respectively.

On perusal of the papers, we have observed as under :

1) The cause of the accident is mentioned as electrical short circuit because of voltage fluctuations. When the stocks were kept in a locked godown and when there was no kind of activity for months together, we wonder as to why the lights in the godown were kept switched on round the clock. Had the lights been switched off the short circuit causing the fire accident could not have occurred.

Please let us have your comments.

2) From the balance sheet of insured as on 31st march, 1999 nearly 50% of the purchases i.e. Rs. 1.07 crore out of Rs. 2.27 crores were from individual village ryots on credit basis. We fell in a claim of such a magnitude some random investigation is required on the credit purchases to confirm their genuinity.

3) As per the preliminary survey report there were two varities of bales/borahs viz. MCU-5 @ Rs. 7,140/- per quintal in bales and Rs. 7,040/- per quintal in borahs and LK variety @ Rs. 5,650/- per quintal in bales and Rs. 5,550/- in borahs. But, in your assessment you have taken the entire quantity as a single variety i.e. MCU-5 @ Rs. 7,193/- per quintal in FP bales and Rs. 7,084-19 ps per quital in borahs and assessed the loss @ Rs. 1,74,82,080/-. Whereas, when we have applied the different rating the assessment is claiming to Rs. 1,72,57,305/-. Please clarify.

Please let us have your clarification on the above points at the earliest to enable us to proceed further.

12 Thanking you,

Yours faithfully,

Sd/-

SR. DIVISIONAL MANAGER

cc to: Regional Office, Hyderabad, for information."

15)The Joint Surveyors by their reply letter dated 12.1.2000 had stated that

they did not consider an investigation into the purchases necessary

although they stated that the insurer may cause and/or carry out any

investigation as necessary. We intend to extract only that portion of the

reply, which may be relevant for the purpose of knowing why the insurer

thought it fit to appoint Chartered Accountants for verification of the

accounts of the insured firm :

"(2). The doubts on procurements and need for investigations (irrespective of cash or credit purchase) would arise only if the stock position as claimed did not tally with the available physical evidence. Even if purchases are proved against actual payment, the physical evidence after the incident, the single most important factor in such situations can necessitate further enquiries and investigation. That kind of a situation never arose in this particular incident as the physical evidence and the extent of damage to the building were supportive of the quantum of stocks claimed to have been held. Our local enquiries did not show any evidence other than an accidental fire. In the circumstances, we do not, from our survey and assessment point of view, consider an investigation into the purchases too essential.

Nevertheless, as insurers with privy to the contract, we

13 note that you may cause and/or carry out any investigation as necessary."

[Emphasis is supplied by us]

16)In view of certain discrepancies in the joint report of the Joint Surveyors,

the insurer was constrained to appoint a Chartered Accountant for

verification of the books of accounts of the insured, to ascertain the

actual quantum of loss caused by fire accident in the business place of

the appellant.

17)Mr. Srinivasan, the Chartered Accountant, after detailed verification of

the books of accounts and other relevant material had assessed the loss at

Rs. 1,05,00817/-. In his report, he has stated that the Joint Surveyors

without verifying the books of account and other relevant records of the

appellant firm had assessed the loss which does not reflect the loss

sustained by the insured. They had also pointed out various other

omissions in the joint report of the Joint Surveyors.

18)The insurer for the purpose of ascertaining the actual loss sustained by

the insured had sought clarifications from the Joint Surveyors in view of

the findings by the Chartered Accountant. We were taken through their

replies by learned counsel for the insurance company. To our mind, it

appears, they were not prepared to accept their omissions while

14 preparing their reports after inspection and verification of the place of

fire accident.

19)Parties have not lead in any evidence in support of their claim. In fact

National Consumer Commission has proceeded to decide the lis between

the parties based on certain documents filed by the parties along with

their pleadings.

20)We have carefully perused the joint survey report submitted by the

surveyors who were appointed by the insurer and the report of the

Chartered Accountant. The perusal of the joint survey report reveals that

the Joint Surveyors without going into the records of the appellant firm

had assessed the loss said to have been sustained by the insured in the

fire accident. The Joint Surveyors had arrived at the cost of own Ginned

lint at Rs. 7084/- as against the records of the insured which itself shows

the cost of Ginned lint at Rs. 6,229.35 and Rs. 6,181.57 per quintal.

Secondly, the Joint Surveyors had taken into account 88 borahs while

assessing the loss, whereas as per the records of the insured submitted to

the bank, there were 551 borahs as on 31.7.1999, out of which 548

borahs were sold from 1.8.1999 to 24.8.1999, (the date of the fire

incident) thus leaving only 3 borahs in the stock. Mr. R. Srinivasan,

Chartered Accountant, who gave the report having noticed all these

15 omissions and after detailed verification of the books of accounts and

records maintained by the appellant has assessed the loss at

Rs.1,05,00817/-. In his report he has specifically stated that the Joint

Surveyors have failed to notice that the accounts presented to them

belonged to one of the several firms operating from the same premises

under the same or similar names and further the Joint Surveyors had over

looked to ascertain the identity of the firm which was insured and the

firm which had in fact sustained the loss. The learned senior counsel Sri

K.V. Viswanathan would contend that the Chartered Accountant who

was deputed in conducting the survey had verified the books of accounts

of the appellant till 31.3.1999 and not till the date of incident and,

therefore, the National Commission could not have accepted the report

of the Chartered Accountant. This submission of the learned counsel is

not based on facts. A bare perusal of the report of the Chartered

Accountant would clearly demonstrate that it is only after verifying the

books of accounts maintained by the appellant in the regular course of

business, has calculated the number of borahs that could have been

available in the business premises at the time of fire incident. These finer

aspects of the matter has been taken into consideration by the National

Consumer Commission while rejecting the Joint Survey report of Joint

16 Assessors and for accepting the report of Chartered Accountant. The

Commission has also observed that after looking into several reports of

the surveyors and the loss assessed by them, it would be fair to go by

what the Chartered Accountant has said in his report. May be, the

discussion is brief, but the conclusion is sound, and we concur.

21)The Insurance Regulatory Authority (`IRDA' for short) has formulated

Insurance Surveyors and Loss Assessors (Licensing, Professional

Requirements and Code of Conduct) Regulations, 2000, which regulate

the licensing and the work of surveyors. These regulations stipulate that

the surveyor shall investigate, manage, quantify, validate and deal with

losses arising from any contingency and carry out the work with

competence, objectivity and professional integrity by strictly adhering to

the Regulations.

22)The assessment of loss, claim settlement and relevance of survey report

depends on various factors. Whenever a loss is reported by the insured,

a loss adjuster, popularly known as loss surveyor, is deputed who assess

the loss and issues report known as surveyor report which forms the

basis for consideration or otherwise of the claim. Surveyors are

appointed under the statutory provisions and they are the link between

the insurer and the insured when the question of settlement of loss or

17 damage arises. The report of the surveyor could become the basis for

settlement of a claim by the insurer in respect of the loss suffered by the

insured. There is no disputing the fact that the Surveyor/Surveyors are

appointed by the insurance company under the provisions of Insurance

Act and their reports are to be given due importance and one should have

sufficient grounds not to agree with the assessment made by them. We

also add, that, under this Section the insurance company cannot go on

appointing Surveyors one after another so as to get a tailor made report

to the satisfaction of the concerned officer of the insurance company, if

for any reason, the report of the Surveyors is not acceptable, the insurer

has to give valid reason for not accepting the report. Scheme of Section

64-UM particularly, of sub-sections (2), (3) and (4) would show that the

insurer cannot appoint a second surveyor just as a matter of course. If for

any valid reason the report of the Surveyor is not acceptable to the

insurer may be for the reason if there are inherent defects, if it is found to

be arbitrary, excessive, exaggerated etc., it must specify cogent reasons,

without which it is not free to appoint second Surveyor or Surveyors till

it gets a report which would satisfy its interest. Alternatively, it can be

stated that there must be sufficient ground to disagree with the findings

of Surveyor/Surveyors. There is no prohibition in the Insurance Act for

18 appointment of second Surveyor by the Insurance Company, but while

doing so, the insurance company has to give satisfactory reasons for not

accepting the report of the first Surveyor and the need to appoint second

Surveyor.

23)Section 64 UM(2) of the Insurance Act, 1938, reads that `No claim in

respect of a loss which has occurred in India and requiring to be paid or

settled in India equal to or exceeding twenty thousand rupees in value on

any policy of insurance, arising or intimates to an insurer at any time

after the expiry of a period of one year from the commencement of the

Insurance (Amendment) Act, 1968 shall, unless otherwise directed by

the Authority, be admitted for payment or settled by the insurer unless he

has obtained a report on the loss that has occurred from a person who

holds a license issued under this Section to act as a surveyor. In our

considered view, the Insurance Act only mandates that while settling a

claim, assistance of surveyor should be taken but it does not go further

and say that the insurer would be bound whatever the surveyor has

assessed or quantified, if for any reason, the insurer is of the view that

certain material facts ought to have been taken into consideration while

framing a report by the surveyor and if it is not done, it can certainly

depute another surveyor for the purpose of conducting a fresh survey to

19 estimate the loss suffered by the insured. In the present case, the insurer

has stated in the counter affidavit filed before the National Commission

and even before us, why the appointment of second Surveyor was

necessitated and also has given valid reasons for appointing second

Surveyor and also has assigned valid reason for not accepting the report

of Joint Surveyor. The correspondence between the insurer and the

Surveyors would indicate the particulars differed by the insurer for

differing with the assessment of loss made by the Surveyors. The option

to accept or not to accept the report is with the insurer. However, if the

rejection of the report is arbitrary and based on no acceptable reasons,

the courts or other forums can definitely step in and correct the error

committed by the insurer while repudiating the claim of the insured. We

hasten to add, if the reports are prepared in good faith, due application of

mind and in the absence of any error or ill motive, the insurance

company is not expected to reject the report of the Surveyors.

24)Now with regard to the question of awarding rate of interest as

compensation in cases where loss is caused due to deficiency/delay in

services, this court in various judgments has held that the award of

compensation must depend on facts and circumstances of each case and

has to be worked out after determining the amount of loss suffered by the

20 consumer. In the case of Secretary, Irrigation Deptt., Govt. of Orissa v.

G.C. Roy, (1992) 1 SCC 508, this court has stated that "a person

deprived of the use of money to which he is legitimately entitled has a

right to be compensated for the deprivation, call it by any name. It may

be called interest, compensation or damages."

25)It was observed in the case of Ghaziabad Development Authority v.

Balbir Singh,(2004) 5 SCC 65, that:

"it is already held that awarding interest at a flat rate of 18% is not justified. It is clear that in all these cases interest is being awarded as and by way of compensation/damages. Whilst so awarding it must be shown that there is relationship between the amount awarded and the default/unjustifiable delay/harassment. It is thus necessary that there be separate awards under each such head with reasons why such award is justified."

26)In the case of Kaushnuma Begum v. New India Assurance Co. Ltd.,

(2001) 2 SCC 9, this court has held that, "with a change in economy and

the policy of Reserve Bank of India the interest rate has been lowered.

The nationalized banks are now granting interest at the rate of 9% on

fixed deposits for one year. We, therefore, direct that the compensation

amount fixed hereinbefore shall bear interest at the rate of 9% per annum

from the date of the claim made by the appellants."

27)In the case before us it has been made clear that if the insurer is not

satisfied with the assessment of the surveyor, he retains the right to settle

21 claim for a different amount. The insurer after rejecting the assessments

of the surveyor and the joint surveyor has accepted the assessment made

by the Chartered Accountant. Therefore, it would not be correct to say

that insurer while settling the claim has caused an unnecessary delay of

three years. But once the insurer has reached a settlement he should

make the payment at the earliest. And if further delay is caused by the

insurer in making the payment then he should be made liable to pay the

interest on the amount settled, as compensation at the current rate of

interest till the payment is made, as it has deprived the appellant from

using his money for which he is legitimately entitled.

28)Thus, in view of the above discussion, we direct the respondent

Insurance Company to pay Rs.1,05,00817/- with interest at the rate of

9% as compensation from the date of assessment done by the Chartered

Accountant, within two months from the date of this order. The appeal is

partly allowed. No order as to costs.

.......................................J [ MARKANDEY KATJU ]

22 .......................................

J [ H.L. DATTU ]

New Delhi, August 24, 2009.

23