Case Law Details

Case Name : New India Assurance Co. Ltd. Vs. Union of India (Delhi High Court)
Appeal Number : Appeal No: WP(C) 7569/2007 & CMs 2454/2008, 9099, 11255/2009
Date of Judgement/Order : 24/05/2011
Related Assessment Year :
Courts : All High Courts (4169) Delhi High Court (1288)

CASE LAWS DETAILS

DECIDED BY: HIGH COURT OF DELHI, IN THE CASE OF: New India Assurance Co. Ltd. Vs. Union of India,  APPEAL NO: WP(C) 7569/2007 & CMs 2454/2008, 9099, 11255/2009, DECIDED ON May 24, 2010

JUDGMENT

24.05.2010

1. Interesting questions of law concerning powers and jurisdiction of the Insurance Regulatory Development Authority (IRDA), Respondent No.2 herein under Section 64UM of the Insurance Act, 1938 (hereafter „Insurance Act?) and the powers of the Central Government, Respondent No.1 herein, as the Appellate Authority under Section 110 H of the Insurance Act, arise for consideration in the present writ petition. Background Facts

2. The Respondent No. 3 M/s J.P. Exports, having its place of business in Renigunta at Andhra Pradesh, is a proprietary concern engaged in the business of Red Sanders Wood. Respondent No.3 took a Fire Policy from the Petitioner for the stock of Red Sanders Wood in its go down at the premises located in Srikalahasti Road, Renigunta, Andhra Pradesh. The fire policy for the period 29th March 1996 to 28th March 1997 covered stocks furniture and fixtures stored at its premises for a sum of Rs. 29.5 crores. The sum ensured was enhanced by 2.25 crores on 4th June 1996 by an extra endorsement. It was further enhanced by Rs. 5.25 crores on 24th June 1996 by another extra endorsement. The total sum thereby insured stood enhanced to Rs. 37 crores. Apart from the above Fire Policy, there was a second policy for the same period covering stocks at another premises at Renigunta for the sum of Rs. 3 crores. A third policy covering stocks kept near the Check Post at Renigunta was insured for a sum of Rs. 4.5 crores.

3. On 29th June 1996, an accidental fire broke out at the godown at Srikalahasti Road, Door No. 16-237, Renigunta. According to the intimation given to the police by Respondent No. 3, there was a stock of nearly 2850 tons of Red Sanders Wood in the go down on 28th June 1996. Of this, a stock of 1150 tons of dressed Red Sanders Wood was inside the go down and 1700 tons of undressed Red Sanders Wood was outside in the compound. According to the Petitioner, till the date of loss, Respondent No. 3 had not filed income-tax or sales tax returns related to the Red Sanders Wood since its export was banned during that period and there were no earnings on that score. No market value could therefore be attributed to the stock lying in the go down. Respondent No. 3 gave a written notice to the Branch Manager of the Petitioner at the Tirupathi Branch on 4th July 1996. It preferred a claim for damages amounting to Rs. 35.67 crores which claim was revised to Rs. 40.17 crores subsequently. 4. According to the Petitioner, the claim made was in contravention of Condition No. 6 of the Insurance Policy which requires an intimation to be given to the insurer within 15 days of the loss together with a claim containing as particular an account as may be reasonably practicable of all the property damaged or destroyed and the amount of loss or damage suffered having regard to their value at the time of the accident.

5. The Petitioner appointed two Joint Surveyors, namely, Mr. C.P. Mehta and Mr. N. Velayutham for assessing the loss caused due to the fire in the premises of Respondent No. 3. The Petitioner also appointed Mr. M.V. Subbareddy, a retired Addl. I.G. (Prisons) as an Independent Investigator to investigate the claims. The said Joint Surveyors submitted their final survey report dated 31st December 1997 in which they assessed the loss at Rs.1,43,19,876. Based on the above survey report dated 31st December 1997, the Petitioner by its letter dated 21st May 2001 repudiated the claim of Respondent No. 3 on the ground of non-compliance with the terms and conditions of the fire policy and particularly with reference to the Condition Nos. 2, 3, 6 & 8. The repudiation was also based of the report of the independent investigator Mr. M.V. Subbareddy made in the year 2001.

6. It was the Petitioner?s case that the Respondent No. 3 had not cooperated with it and had not submitted the required documents such as bills, vouchers in support of the quantum of wood that was destroyed in the fire, thereby intentionally causing delay in processing the claim. It was further pointed out by the Petitioner that the required permission from the Forest Department for felling the Red Sanders Wood was not provided by Respondent No. 3 which had therefore violated the forest laws and had also been charged with an offence punishable under Section 194 and 200 IPC. It is also stated that the Respondent No. 3 had made false declarations and had adopted fraudulent means to obtain benefit under the policy. By a subsequent letter dated 1st June 2001 the Petitioner indicated additional grounds for repudiation. The Petitioner claimed that it had come to its knowledge that the Respondent No. 3 had been allegedly involved in illegal and smuggling activities and had violated the forest laws. Respondent No.3 had not taken care to repair the southern wall of the godown which put the Red Sanders Wood to greater risk of fire thereby violating the conditions 2 and 3 of the Fire Policy. Respondent No. 3 had failed to give necessary particulars in support of its claim as required under condition No. 6 of the Fire Policy.

7. Aggrieved by the repudiation of its claims, Respondent No. 3 filed an appeal before the IRDA, Respondent No. 3 herein. IRDA on its part appointed Mr. Moinuddin Mohd. and Mr. R. Madhusudan as two new Joint Surveyors on 31st July 2002 for survey and loss assessment. The said two surveyors disagreed vastly on the quantum of claim payable.

Mr. Madhusudan assessed the claim of Respondent No. 3 at Rs.21.01 crores. On the other hand, Mr. Moinuddin Mohd. assessed the claim at Rs. 2,21,34,819/-. The IRDA asked the Petitioner for its comments on the survey report. The Petitioner replied on 12th May 2003 referring to an agreement dated 6th May 1998 entered into between Mr. R. Madhusudan and Respondent No. 3 whereby Respondent No. 3 had promised to pay Mr. Madhusudan 50% of the insurance claim. An order dated 2nd June 2003 was passed by the IRDA directing the Petitioner to settle the claim at Rs. 2,21,34,819/-. This was purportedly on the basis of the assessment made by Mr. Moinuddin Mohd. 8. Aggrieved by the above direction, the Petitioner filed an appeal on 26th June 2003 under Section 110H of the Insurance Act to the Appellate Authority i.e. the Financial Sector Division, in the Ministry of Finance, Department of Economic Affairs, Government of India. The contention was that against the repudiation of a claim, the IRDA could at best enhance or reduce the assessment finalized by the surveyors appointed by the Petitioner. It could not independently appoint surveyors or intervene once the claim was repudiated. It was also contended that the claim by Respondent No. 3 was time barred.

9. By an order dated 5th March 2004, the Appellate Authority directed the IRDA to appoint yet another set of surveyors to report on the claim because the earlier surveyor Mr. Madhusudan was an interested party and therefore relying on his report could prejudice the proceedings. At that stage, the IRDA filed an application before the Appellate Authority for recalling and modifying the order dated 5th March 2004. It prayed for settlement of the claims in terms of the order dated 2nd June 2003 passed by it. 10. By an order dated 30th September 2005, the Appellate Authority reiterated its earlier order dated 5th March 2004. In the meanwhile it directed the Petitioner to pay Respondent No.3 Rs. 2,21,34,819/- as per the order dated 2nd June 2003 of the IRDA. This payment was subject to the findings of the IRDA on the basis of the fresh joint survey reports. 11. In compliance with the above directions, the Petitioner paid Rs. 2,17,55,270/- to the Respondent No. 3 after deducting an amount of Rs. 3,79,549/- towards audit recovery. 12. Pursuant to the order dated 30th September 2005, the IRDA appointed Mr. N.V.P. Sharma and Mr. R. Srivatsan as Joint Surveyors on 30th November 2005. They submitted a report dated 9th October 2006 assessing the net loss at Rs. 7,95,50,300/-. The IRDA by its order dated 1st February 2007 rejected the said assessment and directed the Petitioner to pay the sum as already settled by Mr. Moinuddin.

13. Aggrieved by the order dated 1st February 2007 of the IRDA, Respondent No. 3 filed an appeal before the Appellate Authority on 17th February 2007. By its order dated 20th June 2007, the Appellate Authority passed the impugned order directing the Petitioner to pay a sum of Rs. 7,95,50,300/- less the amount of Rs. 2,21,34,819/- already paid to Respondent No. 3. It was further directed that the Petitioner shall pay the aforementioned amount along with the interest at 2% above the bank rate at the beginning of the financial year, with effect from, 21st May 2001 till the date of payment in full within 30 days of the receipt of the order. This is the order under challenge in this writ petition. Incidentally a challenge is laid to the earlier order dated 5th March 2004 of the Appellate Authority as well as the survey report submitted by the Joint Surveyors pursuant to that order. Subsequent Proceedings 14. While directing notice to issue in this petition, this Court on 24th October 2007 suspended the operation of the impugned order. Initially a learned Single Judge of this Court by a judgment dated 20th February 2009 accepted the preliminary objection raised by Respondent No. 3 that this Court did not have jurisdiction to entertain the present writ petition and accordingly dismissed it on that ground. On an appeal by the Petitioner, a Full Bench of this Court by a judgment dated 2nd July 2009 in LPA No. 109 of 2009 reversed the learned Single Judge and held that this Court had jurisdiction to entertain the writ petition since the Appellate Authority whose decision was under challenge was located within the territorial jurisdiction of this Court. On 27th July 2009 the writ petition and the interim orders passed earlier were revived before the Single Judge.

15. CM 11255 of 2009 was thereafter filed by the Petitioner placing on record the fact that in March 2008 the Respondent No. 3 had filed a complaint in the National Consumer Disputes Redressal Commission (NCDRC) in which an interim order had been passed by the NCDRC on 27th March 2009 directing the Petitioner herein to pay Respondent No.3 Rs. 5,74,15,481/- as interim relief subject to the latter furnishing a bank guarantee. 16. Aggrieved by the said order, the Petitioner filed a SLP (Civil) No. 1250 of 2009. On 10th August 2009 the Supreme Court permitted the Petitioner to withdraw the said SLP with liberty to file an application before the NCDRC in view of the interim order dated 27th July 2009 passed by this Court reviving the earlier stay order dated 24th October 2007. When the matter went back before the NCDRC an order was passed by it on 27th August 2009 recalling its earlier order dated 27th March 2009. Respondent No. 3 thereafter urged before this court that it should take up for hearing the present writ petition and vacate the interim order dated 27th July 2009. Respondent No.3 also filed CM No. 14021 of 2009 pointing out that there was no mechanism for enforcement of an order passed by the IRDA and therefore, the Petitioner should be asked to deposit the balance amount in this court which could be released to Respondent No. 3 upon it furnishing security. Submissions of Counsel

17. This Court has heard the submissions of Mr. Atul Y. Chitale, the learned Senior counsel appearing for the Petitioner, Mr. Sukumar Pattjoshi, the learned counsel appearing for Respondent No. 3, Mr. Arunabh Basu, the learned counsel appearing for IRDA and Mr. Sachin Datta, the learned counsel appearing for the Union of India.

18. It is submitted by Mr. Chitale that Section 64 UM (1) Insurance Act deals essentially with licencing of surveyors and loss assessors. Section 64 UM (2) applies to a claim in respect of a “loss requiring to be paid or settled” in India on a policy of insurance. It is stated that such a claim shall not be admitted for payment or settled by the insurer unless he has obtained a report from an approved surveyor or loss assessor. The insurer has the right to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor. Relying upon the decision of the Supreme Court in New India Insurance Co. v. Pradeep Kumar (2009) 7 SCC 787, it is submitted that the insurance company is not bound by the survey report. The submission is that if at the very threshold the insurance company does not decide to entertain the claim and repudiates the claim then the question of appointing any surveyor does not arise. Sub-section (3) of Section 64 UM which brings in the IRDA does not get attracted unless and until the insurer decides to accept the claim for settlement. The emphasis is on a claim “requiring to be paid or settled in India.” In other words, according to Mr. Chitale if the claim is not required to be paid or settled, then the IRDA will have no jurisdiction under Section 64 UM (3). In such event, it cannot call for an independent report from any other surveyor or loss assessor within such time as may be specified.

19. Mr. Chitale submits that there is no procedure prescribed for filing an appeal before the IRDA by the insured in case its claim is repudiated. It has to only file a suit for damages against the insurance company. It is next submitted that under Section 64 UM (4) on receiving a report as directed by it under Section 64 UM (3), the IRDA can issue directions settling a claim at a figure either less or more than that at which it is proposed to be settled by the insurer. In such event, the insurer shall be bound to comply with such a direction. It is accordingly submitted that where the insurer has decided to repudiate the claim, there was no question of such a direction being issued by the IRDA.

20. On the basis of the above interpretation, it is submitted that in the instant case the direction issued by the IRDA for appointing two surveyors to prepare a survey report was itself entirely without jurisdiction. The further direction issued by it for settling the claim of the Respondent No. 3 at a particular figure was also entirely without jurisdiction.

21. It is submitted that the purpose of Section 64 UM (3) of the Insurance Act is to allow the IRDA, acting as a regulator, to appoint independent surveyors and direct payment or settlement of claims so as not to cause any hardship to the insured or the insurer. Its powers are summary in nature based on survey reports without giving the parties the right to adduce independent evidence or the right of cross-examination. It is submitted that the IRDA does not have any adjudicatory powers or trappings of a civil court. The legislative intent, it is submitted, is to leave it to the parties to go before the civil court in case there is a complete repudiation of the claims or a shortfall in the claim. As long as the claim involved complicated questions of facts, it was the civil court alone which was competent to decide such dispute. 22. As far as the powers of Appellate Authority are concerned, it is submitted that once the proceedings before the IRDA are itself without jurisdiction, the Appellate Authority under Section 110H could also not issue directions to the IRDA to again appoint fresh surveyors. It is submitted that in the instant case, the Appellate Authority exceeded its jurisdiction in issuing the impugned order dated 5th March 2004 and the subsequent order dated 20th June 2007 requiring the Petitioner to pay the sum of Rs.7,95,50,300/- less the amount already paid, i.e., Rs.2,21,34,819/-. 23. It is further contended that the mere submission to the jurisdiction of the Appellate Authority did not amount to waiver by the Petitioner of its right to challenge the jurisdiction of both the IRDA and the Appellate Authority. It is submitted that in any event since the Respondent No. 3 filed an independent claim before the NCDRC for a sum of Rs. 40 crores, the justification for its claim would be tested by that forum.

24. Appearing for Respondent No. 3, Mr. Sukumar Pattjoshi, submits that factual disputes between the parties are not to be decided by this Court in exercise of its jurisdiction under Article 226 of the Constitution. All that is required to be decided is whether the impugned orders were without jurisdiction and could be said to be perverse. It is pointed out that in the order dated 5th March 2004 the Appellate Authority had held that the IRDA had jurisdiction even in the case of a repudiated claim. That order was not challenged at that stage by the Petitioner. Even when the IRDA filed an application before the Appellate Authority for recalling the order dated 5th March 2004, the jurisdiction of the Appellate Authority to issue such direction was not questioned. The direction issued on 30th September 2005 by the Appellate Authority asking the Petitioner to pay Respondent No. 3 Rs.2,21,34,819/- was complied with. This effectively meant that any objection that the Petitioner may have had to the order dated 5th March 2004 stood extinguished. It is submitted that by filing an appeal under Section 110H against the order dated 2nd June 2003 passed by the IRDA, the Petitioner gave up a challenge to the jurisdiction of the Appellate Authority. It never objected to the jurisdiction of the IRDA as long as the IRDA was seized of the matter. It is further pointed out that the order dated 30th September 2005 passed by the Appellate Authority appointing fresh surveyors and directing the Petitioner to pay Rs. 2,21,34,819/- has not been challenged by the Petitioner. It has been complied with on 28th March 2006 by the Petitioner without protest.

25. It is submitted by Mr. Pattjoshi that notwithstanding the report of the Joint Surveyors appointed by the Appellate Authority, assessing the loss at Rs.7,95,50,300/-, the IRDA passed an order dated 1st February 2007 reiterating its earlier order. In the circumstances, the subsequent order passed by the Appellate Authority on 20th June 2007 was fully justified. It is submitted that the order dated 20th June 2007 is only by way of implementation of the earlier order dated 30th September 2005 which has not been challenged by the Petitioner. The order dated 5th March 2004 was not acted upon because that order merged into the order dated 30th September 2005 which has not been challenged by the Petitioner.

26. Mr. Pattjoshi refers to the judgment in Skandia Ins Co. Ltd. v. Kokilaben Chandravarden JT 1987 (2) SC 43 and submits that the terms of the contract cannot override the statute under which the insurer is obliged to indemnify the insured when some mishap occurs by mischance. It is submitted that a reading of Section 14(B) of the Insurance Regulatory Development Authority Act („IRDA Act?) together with Section 64 UM(2), (3) & (4) of the Insurance Act indicates the wide powers of the IRDA to deal with such claims of the insurers. Further, the Appellate Authority?s power is co-terminus with the power of the IRDA. Reliance is placed on the judgment in Jute Corporation of India Ltd. v. Commissioner of Tax JT 1990 (4) SC 346 and CIT, MP, Bhopal v. M/s Nirheram Deluram JT 1997(3) SC 688. It is further submitted that since the claim was above Rs. 20,000/- it was mandatorily required by the IRDA to appoint independent surveyors. Reliance is placed on the judgment in Sri Venkateswara Syndicate v. Oriental Insurance Company Ltd. (2009) 8 SCC 507 and

New India Assurance Company Ltd. v. Pradeep Kumar (2009) 7 SCC 787. Reliance is also placed on the decisions of this Court in Rajinder Kumar Khanna v. The Oriental Insurance Company 41(1990) DLT 176; Surveyor’s Welfare Association (Regd.) v. Union of India 59(1995) DLT 205 and Oriental Insurance Company Ltd. v. Amira Foods (India) Ltd. (passed in OMP No. 319 of 2003, judgment dated 14th October 2009). It is submitted that the IRDA?s role is independent and uninfluenced by the act of repudiation by the insurer of a claim, and it has a duty under Section 14 (2)(b) IRDA Act to settle insurance claims for the protection of the interests of the policy holders. Jurisdiction of the IRDA 27. IRDA is a statutory authority constituted under the IRDA Act. The preamble of the IRDA states that it is an “Act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalization) Act, 1972.”

28. The Statement of Objects and Reasons (`SOR?) indicates that a need was felt for the insurance industry, which was being privatized, to be regulated. After specifying in the SOR, the duties, powers and functions of the IRDA, it was stated that these functions and powers “would enable the Authority to perform the role of an effective watchdog and regulator for the insurance sector in India.” Further, in order to enable the Authority to function “in a truly independent manner and discharge its assigned responsibilities effectively”, it was proposed to vest the Authority with statutory status. 29. Section 14 of the IRDA Act specifies the duties, powers and functions of the IRDA. Under Section 14 (2) (b) IRDA Act, its powers and functions include: “(b) protection of the interests of the policy-holders in matters concerning assigning of policy, nomination by policy-holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance” 30. Therefore, it is plain that one of the functions of the IRDA includes protecting the interests of the policy holders in matters concerning settlement of insurance claims. If the above provision has to be given a meaningful interpretation, keeping in view the objective of having the IRDA as an independent statutory authority, then clearly the intention of the Parliament was to vest the IRDA with sufficient powers to discharge those functions. The powers of the IRDA under Section 64UM (2), (3) and (4) of the Insurance Act have to be understood in light of the provisions of Section 14(2) (b) of the IRDA Act. Surveyor’s Reports how far binding

31. This court is unable to accept the submission of the learned Senior counsel for the Petitioner on the interpretation of Section 64UM (2) of the Insurance Act. That provision begins with the words “No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India …..”. It refers to a claim in respect of a loss which has occurred in India. To that extent, there can be no doubt that the claim made by Respondent No. 3 is a claim in respect of a loss which has occurred in India. The second limb is that it should be a claim “requiring to be paid or settled in India.” This virtually would include every claim whether the insurance company accepts such claim for payment or not. The words “requiring to be paid” cannot be restricted to those claims which insurance company has decided to accept for payment. Every claim made against an insurance company in respect of a loss, would be a claim within the purview of the claims “requiring to be paid or settled” under Section 64UM(2) Insurance Act. 32. The Petitioner also understood that the claim made by the Respondent No. 3 was a claim which fell within the definition of Section 64UM(2) of the Insurance Act. That is why the Petitioner appointed two surveyors upon receiving the claim. It was sought to be contended by the learned Senior counsel for the Petitioner that the said appointment of the two surveyors by the Petitioner was not strictly pursuant to Section 64UM(2) Insurance Act but only as a preliminary evaluation of the claim. This contention is really an afterthought. When the Petitioner appointed two surveyors, clearly it was pursuant to the mandate of Section 64UM(2).

33. The claim made by Respondent No. 3 was above Rs. 20,000/-. Acting on the report of the surveyors, the Petitioner decided by its letters dated 21st May 2001 and 1st June 2001 to entirely repudiate the claim. This was despite the fact that the Joint Surveyors assessed the loss at Rs. 1,43,19,876/-. Under the proviso to sub-section (2) of Section 64UM, it is open to the insurer to “pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.” Under the proviso to sub-section (2), it was not open to the Petitioner to repudiate the claim once it appointed the surveyors and the surveyors gave an assessment of the loss.

34. At this juncture a reference may be made to the decisions of the Supreme Court in New India Insurance Co. v. Pradeep Kumar (supra) and Sri Venkateswara Syndicate v. Oriental Insurance Co. Ltd. (supra). Both have observations on the extent to which the insurer can be held to be bound by the report of the surveyor. In New India Insurance Co. v. Pradeep Kumar, it was observed (SCC, p.790): “22. In other words although the assessment of loss by the approved surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor?s report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor?s report may be the basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”

35. Four months later, in Sri Venkateswara Syndicate v. Oriental Insurance Co. Ltd., the Court while interpreting Section 64 UM (2) of the Insurance Act observed (SCC, p.518): “37. 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, with 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.” 36. The resultant position is that while generally a surveyor?s report is not binding on the insurer, given the fact that there is an in-built review mechanism before the IRDA and then the Central Government, the refusal by the insurer to abide by a surveyor?s report has to be for good reasons, the legal tenability of which can be tested by the IRDA or the central government as the case may be. As far as the instant case is concerned, the Petitioner was required to show good reasons why it was completely repudiating the claim of Respondent No. 3 thereby accepting none of the reports of the surveyors appointed by it. Further, it was open to the IRDA as well as the central government to appoint surveyors to verify that the assessments made earlier were justified.

Scope of IRDA’s powers

37. Turning next to sub-section (3) of Section 64UM, this is where the IRDA comes into the picture. It is empowered at any time in respect of any claim of the nature referred to in sub-section (2) of Section 64UM to call for an independent report from any other approved surveyor or loss assessor as specified by it. Therefore, even in respect of a claim that has been repudiated by the insurer it would be, within the scope of the powers and functions of the IRDA to intervene at the instance of the aggrieved claimant. Although there is no procedure prescribed as such, given the scope of the powers and the functions of the IRDA as set out in Section 14 (2)(b) of the IRDA Act, in the present case the IRDA was wholly within its jurisdiction in entertaining the Petitioner?s appeal. Therefore, by appointing the independent surveyors and calling for a report the IRDA did not commit any illegality. In deciding to act upon the report of one of them, again, the IRDA did not commit any illegality. 38. Counsel for Respondent No. 3 is right in his contention that by filing an appeal before the Appellate Authority under Section 110H, the Petitioner has waived its right to question the jurisdiction of such Appellate Authority at a later stage. Be that as it may, the question that next arises is about the scope of powers of the Appellate Authority under Section 110H. Scope of powers of the Appellate Authority

39. Learned counsel for Respondent No. 3 is correct in his submission that the powers of the Appellate Authority are co-terminus with that of the IRDA. In the instant case, the Appellate Authority could very well have exercised the powers and functions of the IRDA for the purposes of Section 64UM (3) of the Insurance Act. Consequently, this Court does not find any illegality having been committed by the Appellate Authority by passing the order dated 5th March 2004. The question whether the loss assessed by one surveyor or the other was correct is not within the scope of the present proceedings under Article 226 of the Constitution. It is essentially about the powers and functions of the different authorities under the Insurance Act. 40. In that view of the matter, this Court is of the opinion that the Appellate Authority was justified in directing the IRDA by its order dated 5th March 2004 to appoint two fresh surveyors to again assess the loss because one of the assessors who had been appointed earlier turned out to be an interested party. Given the scope and functions of the Appellate Authority, which is co-terminus with that of the IRDA, these directions could not be said to be illegal or ultra vires the powers of the Appellate Authority under the Insurance Act. Validity of impugned orders 41.The principal challenge in this petition is to the validity of the impugned order dated 20th June 2007 of the Appellate Authority by which the Petitioner has been asked to settle the claim of the Respondent No. 3 at a sum of Rs. 7,95,50,300/-. This was clearly consequential to the earlier order dated 30th September 2005 passed by the Appellate Authority. It is based on the report of the Joint Surveyors and of the Principal Chief Conservator of Forests. Since that order has not been challenged, this Court is not called upon to examine the correctness of the Joint Surveyors? report.

42. Given the scope of the powers of judicial review of this Court under Article 226 of the Constitution, this Court is not called upon to examine if the grounds on which the claim of the Respondent No.3 was repudiated by the petitioner were valid or not. The incidental challenge to the earlier order dated 5th March 2004 of the Appellate Authority as well as the survey report submitted by the Joint Surveyors pursuant to that order must also fail for the simple reason that the order dated 5th March 2004 has been reiterated by the Appellate Authority in the subsequent order dated 30th September 2005 which has not been challenged by the petitioner. Even otherwise, this Court finds no illegality having been committed in the passing of the said order dated 5th March 2004 by the Appellate Authority. 43. The challenge to the report submitted by the Joint Surveyors also cannot be entertained by this Court as a further super appellate authority. The impugned order dated 20th June 2007 of the Appellate Authority which has examined the said report is a fairly detailed one giving cogent reasons for its conclusion, with which this Court concurs. Neither the reasoning nor the conclusion arrived at in the impugned order can be said to be suffering from any legal infirmity that calls for interference. Conclusion

44. In that view of the matter, the challenge to the impugned orders and the report of the joint surveyors by the Petitioner must fail. The writ petition is dismissed with costs of Rs. 30,000/- which will be paid by the Petitioner to Respondent No. 3 within a period of four weeks. The interim orders stand vacated. The stay application, CM 9099 of stands dismissed. Miscellaneous applications, i.e., CM Nos. 2454 of 2008 and 11255 of 2009 for vacation of interim stay stand disposed of.

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