Insurance companies must provide valid reasons based on evidence when rejecting surveyor assessments to avoid unjust repudiation of claims.

ORDER

1. In brief, as per the case of the complainant, Khodashi Power Pvt. Ltd. was setting up a ‘grid connected run-of-the-river 2x2.45 MW Hydro electric power plant’, on build operate and transfer basis in Khodashi village, Karad Taluk, Satara District, Maharastra, India. Khodashi Power Pvt. Ltd. awarded contract for supply, erection, testing and commissioning of complete mechanical and electrical package of the said project to the complainant company (M/s Jyoti Limited). The work of the project was commenced at site in November, 2011 and the project was scheduled to be commissioned by mid-October, 2012. Complainant took a ‘Storage-cum-Erection Insurance Policy’ for the period 29.11.2011 to 28.11.2012, for insured sum of Rs.10,49,62,673.20 from the opposite party (United India Insurance Co. Ltd.).

2. It is further the case of the complainant that in the last week of July, 2012 due to heavy rainfall in the catchment area of river Krishna, water rushed in the plant in the night of 01.08.2012 through the manhole provided in the outlet stream near Unit-1 turbine. Consequently, the plant under erection as well as erection tools and other equipments submerged in water causing huge loss to the complainant company. Due intimation was given to the concerned department of the opposite party followed with lodging of claim for Rs.1,93,22,966/-. Surveyor was appointed by the opposite party on 01.08.2012 for assessing the loss at site, who was furnished all documents by the complainant, as demanded. Final survey report dated 29.04.2014 was submitted by the Surveyor assessing loss to the complainant company, for Rs.1,14,10,000/- against the claim of Rs.1,93,22,966/-. An Addendum dated 06.09.2014 to the final survey report, was further submitted by the Surveyor reiterating the loss of Rs.1,14,10,000/-, with minor clarifications.

3. Complainant further averred that after a lapse of three years a second Surveyor in the name of Investigator was appointed by the opposite party/Insurance Company, who submitted report dated 14.03.2018 holding that the claim is not established by the complainant and recommended the closure of the claim. Consequently, acting upon the same, the claim was repudiated by the Insurance Company vide letter dated 10.01.2019. Aggrieved against the repudiation of claim, complaint has been preferred by the complainant on 10.01.2020.

4. Insurance Company/Opposite Party in written statement took a stand that the final survey report dated 29.04.2014, submitted by the Surveyor assessed the loss for Rs.1,14,10,000/-, merely on the basis of their judgement without having actually inspected the damages and scope of repairs. Further, in view of several queries raised in the survey report, Insurance Company asked for clarification and documents from the Surveyor, which were necessary to establish the liability. Accordingly the Surveyor submitted an Addendum (Report) dated 06.09.2014. Insurance Company/opposite party thereafter asked the complainant for necessary documents and clarifications and on scrutiny found the documents to be incomplete. Since after several rounds of meetings and communications complainant failed to render the requisite clarifications, the Insurance Company appointed M/s Kunjal Shah & Co. as an Investigator to investigate the claim as per the scope of work defined as under:-

“i) To interrogate and inquire the Insured about subject loss incident,

ii) To verify the Insured's Books of Accounts, Excise and other records related to 'To & Fro Transit Movements as well as re- instatement of the properties,

iii) To inquire into any hidden aspect touching liability, which may come in your notice in course of your investigation.”

5. Insurance Company further stated that an Investigation Report