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2026 Supreme(Online)(NCDRC) 381
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Inder Jit Singh, Presiding Member, Sudhir Kumar Jain, Judicial Member
Naveen Ashoka Tent House – Appellant
Versus
Oriental Insurance Company Ltd. – Respondent
FIRST APPEAL NO. 2416 OF 2017
For the Appellants/Petitioners: Bharat Swaroop Sharma
For the Respondents: Summi Singh
In insurance claim disputes, where a surveyor's assessment is found to be arbitrary, subjective, and lacking a logical evidentiary basis, the court may re-evaluate the quantum of compensation by considering the overall evidence of the contract value and the scale of loss to ensure substantial justice.
Headnote:(A) Consumer Protection - Insurance Claim - Quantum of compensation - Surveyor's report - Under-insurance - The report of the surveyor is not based on actual evidence but on subjective judgment and ad-hoc percentages - Appellate jurisdiction - The court observed that determining precise loss after a significant passage of time for rental items is difficult; therefore, a balanced approach assessing 50% of the claimed loss, adjusted for salvage, meets the ends of justice.
Facts of the case:
The appellant had a Pandal erection contract worth Rs. 60 lacs for a VVIP function. The Pandal was damaged due to a storm on June 3, 2010. The surveyor assessed the loss at Rs. 5,85,500/- based on subjective percentages, whereas the complainant claimed a net loss of Rs. 34,78,610/-. The State Commission had allowed a claim of Rs. 3,97,750/-.
Findings of Court:
The court held that the surveyor's assessment was arbitrary and lacked logic. Given the work order value of Rs. 60 lacs, the claim was not a case of under-insurance. The court restricted the award to 50% of the claimed loss amount, applied a 10% salvage deduction, and directed the payment of Rs. 19,70,374/- with 6% interest.
Issues: The main issues were the adequacy of the surveyor's assessment of loss and whether the claim involved under-insurance.
Ratio Decidendi: When a surveyor's report is based on arbitrary, subjective percentages and fails to conduct a detailed inventory, it cannot be accepted as the sole basis for compensation; the court must intervene to determine a fair quantum of loss based on the evidence of the contract value and the scale of the incident.
Result: Appeal partly allowed.
| Table of Content |
|---|
| 1. case background, procedural history, and surveyor's assessment methodology. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. criteria for assessing loss and determining adequacy of surveyor's report. (Para 7 , 8 , 9 , 10) |
| 3. final directions and modification of order regarding payment and interest. (Para 11 , 12 , 13) |
ORDER
1. Heard counsel for both sides. The challenge in this first appeal is to the order dated 12.10.2017 of the State Commission vide which the complaint was partly allowed with a claim of Rs.3,97,750/- only, based on the surveyor’s report, against the claimed amount of Rs.34,78,610/-. Earlier, the complaint was dismissed by the State Commission vide order dated 09.12.2013. The said order was challenged before this Commission in FA/51/2014, and vide order dated 10.01.2017, the matter was remanded back to the State Commission to decide the complaint afresh.
2. The said order dated 12.10.2017 of the State Commission has not been challenged by the Insurance Company, hence, it has become final as against the Insurance Company.
3. The dispute in the present case now revolves around only on the quantum of compensation. While the complainant submitted that the total loss was Rs.43,78,610/-, which, after the estimated salvage value, comes to a net loss Rs.34,78,610/-. However, the surveyor assessed the loss at Rs.6,50,561/- and, after deducting salvage @10% assessed the net loss Rs.5,85,500/-. Further, the surveyor applied under the under insurance and stated the eligible amount as Rs.3,97,750/-. This is the amount which has been allowed by the State Commission. In this regard, the extract of the relevant portions of the report of the surveyor is reproduced below:
(B) PARTICULARS OF PROPERTY:
| S.No. | Description | Size | Qty. | Rate | Amount |
|---|---|---|---|---|---|
| 1. | White Ceiling | 20 x 20 | 68 | 2500.00 | 170000.00 |
| 2. | Tarpaulin | 10 x 150 | 42 | 18900.00 | 793800.00 |
| 3. | Side Wall Curtains | 15 x 11 | 50 | 2000.00 | 100000.00 |
| 4. | Wooden Frame with Cloth | 10 x 8 | 53 | 2000.00 | 106000.00 |
| 5. | Pandal Hanger Frame | - | 44 Ton | 60.00 | 2640000.00 |
| 6. | Dome Ceiling | 440 x 105 | 46200 Ft | 6.00 | 277200.00 |
| 7. | Side Wall Kanat Printed | 15 x 7 | 20 | 800.00 | 16000.00 |
| 8. | Nut Bolts | - | 1080 kg. | 62.00 | 66960.00 |
| 9. | Plastic Rope | - | 530 kg. | 45.00 | 23850.00 |
| 10. | Non Woven Fabrics-Carpet | - | 8800 Sqft | 7.00 | 61600.00 |
| 11. | Store Canopy | 20 x 20 | 5 | 16000.00 | 80000.00 |
| 12. | Iron Pipe | 20 Ft. | 72 | 600.00 | 43200.00 |
| Total | 4378610.00 | ||||
| Less expected salvage value | 900000.00 | ||||
| Net loss | 3478610.00 | ||||
On my demand the insured has submitted the bifurcation of salvage as follows:
| S.No. | Description | Rate | Amount |
|---|---|---|---|
| 1. | White Ceiling | 10% | 17000.00 |
| 2. | Tarpaulin | 12% | 95256.00 |
| 3. | Side Wall Curtains | 10% | 10000.00 |
| 4. | Wooden Frame with Cloth | 15% | 15900.00 |
| 5. | Pandal Hanger Frame | 25% | 660000.00 |
| 6. | Dome Ceiling | 10% | 27720.00 |
| 7. | Side Wall Kanat Printed | 10% | 1600.00 |
| 8. | Nut Bolts | 25% | 16740.00 |
| 9. | Plastic Rope | 12% | 2862.00 |
| 10. | Non Woven Fabrics-Carpet Matting | 40% | 24640.00 |
| 11. | Store Canopy | 20% | 16000.00 |
| 12. | Iron Pipe | 25% | 10800.00 |
| Total | 898518.00 | ||
(G) ASSESSMENT OF LOSS:
| S.No. | Description | Estimated | Assessed Percentage | Assessed Amount |
|---|---|---|---|---|
| 1. | White Ceiling | 170000.00 | 50% | 85000.00 |
| 2. | Tarpaulin | 793800.00 | 20% | 158760.00 |
| 3. | Side Wall Curtains | 100000.00 | 20% | 20000.00 |
| 4. | Wooden Frame with Cloth | 106000.00 | 20% | 21200.00 |
| 5. | Pandal Hanger Frame | 2640000.00 | - | - |
| 6. | Dome Ceiling | 277200.00 | 25% | 69300.00 |
| 7. | Side Wall Kanat Printed | 16000.00 | 20% | 3200.00 |
| 8. | Nut Bolts | 66960.00 | 10% | 6696.00 |
| 9. | Plastic Rope | 23850.00 | 50% | 11925.00 |
| 10. | Non Woven Fabrics-Carpet Matting | 61600.00 | 10% | 6160.00 |
| 11. | Store Canopy | 80000.00 | - | 0.00 |
| 12. | Iron Pipe | 43200.00 | 10% | 4320.00 |
| Total | 650561.00 | |||
| Less salvage 10% | 65056.10 | |||
| Net Loss | 585504.90 | |||
| Say | 585500.00 | |||
4. A perusal of the surveyor’s report itself shows that the surveyor himself has stated that the estimated cost of construction of such a Pandal should have been approximately Rs.73.60 lacs. The surveyor further states in its report that the insured had taken 5500 chairs from one Janta Tent House on r
