2021 Supreme(SC) 526

SUPREME COURT OF INDIA
Hemant Gupta, V. Ramasubramanian, JJ.
Khatema Fibres Ltd. - Appellant
Versus
New India Assurance Company Ltd. & Anr. - Respondents
Civil Appeal No.9050 OF 2018
Decided On : 28-09-2021

IMPORTANT POINTS
(1) Surveyor’s report is not the last and final word – Surveyor’s report is not so sacrosanct as to be incapable of being departed from.
(2) Consumer Forum which is primarily concerned with an allegation of deficiency in service cannot subject Surveyor’s report to forensic examination of its anatomy, just as a civil court could do.

Headnote:

(A) Consumer Protection Act, 1986 – Sections 2(1)(g) and 23 {Consumer Protection Act, 2019 – Section 58} – Insurance Act, 1938 – Section 64UM(2) – Insurance – Standard Fire and Special Perils policy – Fir accident inside factory premises – Amount of Rs.2,85,76,561/- awarded by National Commission – Appellant was not entitled to succeed unless they were able to establish any deficiency in service on part of Insurance Company – Claim of appellant has been admitted, to the extent of loss as assessed by Surveyor – Even any inadequacy in quality, nature and manner of performance which is required to be maintained by or under any law or which has been undertaken to be performed pursuant to a contract, will fall within definition of expression ‘deficiency’ – But to come within said parameter, appellant should be able to establish either that Surveyor did not comply with code of conduct in respect of his duties, responsibilities and other professional requirements as specified by regulations made under the Act, in terms of Section 64UM(1A) of Insurance Act, 1938, or that Insurer acted arbitrarily in rejecting whole or a part of Surveyor’s Report in exercise of discretion available under Proviso to section 64UM(2) of Insurance Act, 1938 – Judgment of National Commission does not call for any interference – Appeal dismissed. (Paras 30, 31, 32 and 39)

(B) Insurance Act, 1938 – Section 64UM(2) – Report of Surveyor – Evidentiary value – Surveyor’s report is not the last and final word – Surveyor’s report is not so sacrosanct as to be incapable of being departed from – Insurance Act, 1938 even while assigning an important role for Surveyor, casts obligation on him under sub-section (1A) of Section 64UM6 to comply with code of conduct in respect of his duties, responsibilities and other professional requirements as specified by regulations made under the Act – Surveyor is governed by a code of conduct, breach of which may give raise to an allegation of deficiency in service and discretion vested in Insurer to reject report of Surveyor in whole or in part, cannot be exercised arbitrarily or whimsically and that if so done, there could be an allegation of deficiency in service – Consumer Forum which is primarily concerned with an allegation of deficiency in service cannot subject Surveyor’s report to forensic examination of its anatomy, just as a civil court could do – Once it is found that there was no inadequacy in quality, nature and manner of performance of duties and responsibilities of Surveyor, in a manner prescribed by Regulations as to their code of conduct and once it is found that report is not based on adhocism or vitiated by arbitrariness, then jurisdiction of Consumer Forum to go further would stop. (Paras 35, 36, 37 and 38)

Facts of the case:

Aggrieved by the Judgment of the National Consumer Disputes Redressal Commission confining compensation payable to them only to the extent of the assessment as made by the final Surveyor, the complainant before the National Commission has come up with the above appeal. Grievance of the appellant is primarily with respect to the quantification of the net weight of the

raw material destroyed in the fire accident. The price of the material, fixed by the Surveyor at Rs.15137.35/- per MT, is not seriously disputed. Though a dispute is raised with regard to the salvage value, contention relating to the same is very weak.

Findings of Court:

This is not a case where the Insurance Company has repudiated claim of the appellant arbitrarily or on unjustifiable grounds. This is a case where the claim of the appellant has been admitted, to the extent of the loss as assessed by the Surveyor. In cases of this nature the jurisdiction of the special forum constituted under the Consumer Protection Act, 1986 is limited. Perhaps if the appellant had gone to the civil court, they could have even summoned the Surveyor and cross examined him on every minute detail. But in a complaint before Consumer Forum, a consumer cannot succeed unless he establishes deficiency in service on the part of the service provider.

Result : Appeal dismissed.