At, High Court of Bihar
By, THE HONOURABLE MR. JUSTICE NAVANITI PD. SINGH
For the Appearing Parties: N.K. Agrawal, Pancham Lal Jaiswal, Satya Prakash, Shailendra Kumar, Tripathi, Advocates.
(1.) PETITIONER had a policy of insurance with the new India Assurance Company Limited. His rice mill was gutted in a fire incident. Reports were made to the insurance company, who appointed surveyor as required under the Insurance Act. The surveyor having examined the matter recommended to the company that the claim must be repudiated for reasons given in his report. The Insurance Company then sent a formated letter merely stating that they were closing the case filed on account of the following reason. The reason was typed therein in last two lines being recommendation of the surveyor to repudiate the claim. The surveyor report or his findings were neither disclosed nor given to the petitioner. This action of the Insurance Company has been challenged.
(2.) IN the counter affidavit, the respondents have annexed the surveyor report and the letter of repudiation. The letter of repudiation as already indicated above, thus, to my mind, reflects indeed a very sorry state of affairs. It cannot be disputed that the New india Assurance Company Limited, which is a Government of India Undertaking, is a state for the purposes of Article 12 of the constitution and as such even in contrac-tual matter its actions have to be judged under Article 14 of the Constitution. The repudiation letter aforesaid clearly shows that the Insurance Company has not applied its mind at all to the correctness or otherwise of the surveyor report as if they were bound whatever the surveyor said. That in my view is not correct position in law. The Insurance act only mandates that while settling such a claim assistance of surveyor should be taken but it does not go further and say that the company would be bound foot and rnouth whatever the surveyor said. The Insurance company takes assistance and is not under dictate of the surveyor. It has to apply its independent mind. In that exercise any matter or material adverse to the interest of the beneficiary must be disclosed to the beneficiary to show that the said material or information is wrong, fallacious or inadequate to repudiate the claim. Valuable rights of the beneficiary are involved and if those materials are not disclosed, which are the foundation of repudiation of the claim then the beneficiary would have no ground to challenge the said repudiation and the insurance company would then wild the monopolist power of repudiating the claim without any reason in support thereof. In my view, this would be destructive rule of law and even in contractual matter, such a stand cannot be countenanced by a Court in any civilized society.
(3.) IN that view of the matter, I am left with no option but to quash Annexure B, the letter of repudiation, and direct the Insurance company to clearly disclose to the petitioner why they intend to repudiate the claim and solicit response from the petitioner, who would have adequate opportunity to rebut the same. It is thereafter that the Insurance Company would take a decision in
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the matter. (4.) THIS, in my view, would only make matter transparent when it goes to deciding the rights of the beneficiary. Transparency in administrative matter is desirable in a civilized democratic society. (5.) WITH the aforesaid observation and direction, this writ petition is allowed. Petition allowed.