IMPORTANT POINTS
Surveyor Reports Are Not the Ultimate Truth. An insurance surveyor’s report is important, but it is not the final word. If there is strong, contradictory evidence (like the prior ‘OK’ safety report and the FIR showing a sudden burst), the court or commission has the power to reject the surveyor’s assumptions and rule in favor of the insured.
• Companies Do Not Feel “Mental Agony.” Under consumer law, a corporate entity or registered company cannot be awarded extra financial compensation for “mental agony and harassment.” Because a company is a legal fiction and not a living human being, it cannot experience emotional distress.

ORDER

Anoop Kumar Mendiratta, Member.—Appellant (opposite party in the complaint) assails Order dated 22.12.2017 passed by the Ld. State Commission whereby the complaint was allowed in following terms:-

“1) pay Rs.36,12,225.95 on account of loss occurred as worked out by surveyor in his report dated 17.08.2015. The above amount also carries interest @8% pa from the date of institution of complaint.

2) Rs.1,00,000/- on account of mental harassment and agony.

3) Rs.25000/- as litigation expenses.”

Appellant/United India Insurance Co. Ltd. and respondent/Bhogpur Co-operative Sugar Mills Ltd. are hereinafter referred to as opposite party and complainant respectively, as appearing in the complaint.

2. In brief, complainant had been obtaining insurance policy from OP since 2007 for covering the stock of molasses against fire and allied perils which was renewed from time to time. The policy in question relates to the period 31.01.2015 to 30.01.2016 for assured amount of Rs.220 lakhs for the stock of molasses. The tanks used for purpose of storing of molasses were inspected by one M/s K.D. Safety Consultants, Panchkula vide their report dated 15.11.2014 at request of complainant much prior to the incident. On 08.04.2015, one of the tanks storing molasses suddenly burst resulting in spill-over of the molasses causing extensive loss to the mill. Information was communicated by the complainant to the Insurance Company/OP vide letter dated 09.04.2015 pursuant to which Shri V.K. Mehta, Insurance Surveyor and Loss Assessor was deputed for assessment of loss by OP. As per the complainant, even though the documents demanded by the surveyor were furnished on 16.06.2015 and 05.08.2015, the claim remained pending with the OP. Consequently, left with no option, a legal notice was issued on behalf of the complainant to the OP on 25.03.2016. Thereupon, claim was repudiated by OP vide letter dated 12.07.2016 as under:-

You have intimated loss of molasses under the said policy. V.K Mehta Insurance Surveyors and Loss assessors Pvt Ltd. were deputed by the competent authority to assess the loss. On receipt of the final survey report of the surveyor competent authority has repudiated the claim as recommended by the surveyor for the reason the loss occurred due to tearing of welding of molasses tank due to normal wear and tear.

Thanks and regards, Kamaljit Sing Branch Manager B.O. Dasuya”

3. Aggrieved against repudiation of claim, complaint was preferred before the learned State Commission which stands allowed vide Order dated 22.12.2017 as noticed above.

4. As per stand of appellant Insurance Company/Opposite Party, Shri V.K. Mehta, Insurance Surveyor and Loss Assessor submitted survey report dated 17.08.2015, whereby it was observed that the tank storing molasses had burst vertically along with the welding joints about 2 meters from bottom owing to failure of the welded joint due to normal wear and tear. The said tearing/breaking of welding joint on account of normal wear and tear of the metal is claimed to be not covered under the scope of coverage of insurance policy. It is specific case of the Insurance Company that the Fire and Perils Policy covers only the risk arising out of the operation of insured perils mentioned in the policy from clauses I to XII. The liability of the Insurance Company to indemnify the complainant for the losses due to poor maintenance and normal wear and tear of the tank is stated to be outside the ambit of the terms of the policy. It is further the case of Insurance Company that even if the alleged cause of loss is considered due to bursting of tank containing molasses, the same is not covered under the scope of Clause IX of the policy which is in relation to “IX-Bursting and/or overflowing of water tanks, apparatus and pipes.”

5. Insurance Company/OP further claims that inspection carried by of KD Safety Consultants, Panchkula who had inspected the tank storing molasses at the behest of complainant is not binding a