IMPORTANT POINTS
Assessment of loss by approved surveyor a re-requisite for settling claim. However it is not sacrosanct and not binding on either the Insurer or the insured.
Insurance Companies should avoid spending public money unnecessarily on avoidable and wholly frivolous litigation like the present one.

Headnote:(a) Insurance Act, 1938 – Section 64-UM(2), Proviso – Assessment of loss by approved surveyor a re-requisite for settling claim – However it is not sacrosanct – Not binding on either the Insurer or the insured – Spot surveyor’s report suppressed by the Company – Actual expenditure being 1,39,438 – Besides, complainant has to pay interest to the Bank - District Forum awarding 1,58,409 with interest @ 12% – No infirmity. (Para 16)
       (b) Insurance law – Insurance Companies should avoid spending public money unnecessarily on avoidable and wholly frivolous litigation like the present one. (Para 17)
       Facts of the case:
       The complainant is the owner of a heavy motor vehicle (open body truck) registered on January 2, 1997 and insured for the period from November 8, 1997 to November 7, 1998. The vehicle loaded with potatoes met with an accident on September 29, 1998, and fell down into khud 300 feet deep below the road. As a result of the accident driver of the truck, died.
       The complainant claimed the expenses incurred by him for repair of the truck from the insurance company and the interest paid by him to the State Bank of India as he obtained loan from that bank for repair of the truck.
       The complainant approached the District Forum alleging deficiency in service by the insurance company and claimed an amount of Rs.1,58,409/- along with interest at rate of 18% per annum.
       The District Forum held that there was deficiency in service on the part of the insurance company and ordered them to pay a sum of Rs.1,58,409/- along with interest at the rate of 12% per annum with cost of Rs.1,000/-. The District Forum also gave an option to the insurance company that it may pay the insured amount of Rs.6 lakhs to the complainant after transferring the vehicle in its name, if it so desired.
       The insurance company carried the order of the District Forum in appeal to the State Commission but without any success.
       The concurrent orders of the consumer fora were challenged by the insurance company to the National Commission but there also they failed.
       Finding of the Court:
       The appeal has no merit.
       Result:
       Appeal dismissed.

Judgement Key Points

The Supreme Court held that the report of an approved surveyor, while an important pre-requisite for settling a claim under insurance law, is not sacrosanct or binding on either the insurer or the insured. The Court clarified that although the surveyor’s assessment is a valuable basis for settlement, it is not conclusive or final. The report may serve as a foundation for the insurer to determine the claim amount, but the insurer retains the discretion to settle the claim for an amount different from that assessed by the surveyor. The Court emphasized that the surveyor’s report is neither binding nor sacrosanct, and the insurer can depart from it if justified.

Judgment :-

R.M. Lodha, J.

In this appeal, by special leave, the appellant, New India Assurance Company Ltd. (for short, `insurance company) has challenged the order dated September 14, 2001, passed by the National Consumer Disputes Redressal Commission (for short `National Commission). By its order the National Commission dismissed the revision petition filed by the insurance company under Section 21(b) of The Consumer Protection Act, 1986 (for short, `Act 1986) and affirmed the concurrent orders of State Commission for Redressal of Consumer Disputes, Uttar Pradesh, Lucknow (for short, `State Commission) and Resident Consumer Disputes Redressal Forum, Uttarkashi, (for short `District Forum) whereby the insurance company has been directed to pay a sum of Rs. 1,58,409/- along with interest at the rate of 12% per annum to the respondent Pradeep Kumar (for short `complainant).

2. The complainant is the owner of a heavy motor vehicle (open body truck) bearing registration no. UP-07 F- 9095. The vehicle was registered on January 2, 1997 and was insured vide Policy No. 31/04825 effective for the period from November 8, 1997 to November 7, 1998. The said vehicle loaded with potatoes met with an accident on September 29, 1998, at Suman Kayari, near Nain Bagh, District Tehri (Garhwal). The vehicle fell down into khud 300 feet deep below the road. As a result of the accident, Murari Rawat, driver of the truck, died. The accident was reported at Police Station Patwar, Kharsot on September 30, 1998.

3. The complainant claimed the expenses incurred by him for repair of the truck from the insurance company and the interest paid by him to the State Bank of India, Uttarkashi as he obtained loan from that bank for repair of the truck. A legal notice is also said to have been sent by the complainant to the insurance company but of no avail. The complainant then approached the District Forum alleging deficiency in service by the insurance company and claimed an amount of Rs.1,58,409/- along with interest at rate of 18% per annum.

4. The insurance company in its reply to the complaint, stated that after receipt of intimation regarding the accident, vehicle was surveyed by Surveyor, Manoj Kumar Aggarwal and was taken to Himalaya Motor Workshop, Dehradun by the owner. The vehicle was again surveyed by approved surveyor Vivek Arora as the complainant had complained that earlier Surveyor, Manoj Kumar Aggarwal, had not made thorough investigation. The survey was then conducted by Vivek Arora. As the insurance company was not satisfied with the survey report submitted by Vivek Arora, it got the vehicle surveyed again by another approved surveyor, B.B. Garg. B.B. Garg had estimated the damages to the vehicle to the extent of Rs.63,771/-. The insurance company, then, approached the complainant for payment of this amount but he refused to accept the same.

5. It appears that before the District Forum, the complainant had filed the affidavits of the persons from whom the spare parts were purchased, repair work was got done and charges paid to them. The complainant also submitted the vouchers and bills of various spare parts and the payment made towards labour charges. On the other hand, on behalf of the insurance company, affidavit of one Pradeep Ghai was filed along with survey reports of Vivek Arora and B.B. Garg.

6. The District Forum, upon consideration of the matter, held that there was deficiency in service on the part of the insurance company and ordered them to pay a sum of Rs.1,58,409/- along with interest at the rate of 12% per annum with cost of Rs.1,000/-. The District Forum also gave an option to the insurance company that it may pay the insured amount of Rs.6 lakhs to the complainant after transferring the vehicle in its name, if it so desired.

7. The insurance company carried the order of the District Forum in appeal to the State Commission but without any success. The concurrent orders of the consumer for a were challenged by the insurance c

Click Here to Read the rest of this document

2009 Supreme(SC) 666

Supreme Court of India THE HONOURABLE MR. JUSTICE D.K. JAIN & THE HONOURABLE MR. JUSTICE R.M. LODHA New India Assurance Company Limited Versus Pradeep Kumar Civil Appeal No. 3253 of 2002 Decided on : 09-04-2009

Supreme Court of India
THE HONOURABLE MR. JUSTICE D.K. JAIN & THE HONOURABLE MR. JUSTICE R.M. LODHA
New India Assurance Company Limited
Versus
Pradeep Kumar
Civil Appeal No. 3253 of 2002
Decided on : 09-04-2009