Surveyors Report Can Only Be Rejected on Valid Grounds NCDRC (Consumer Case)

The complainant held three insurance policies with United India Insurance, covering fire, machine breakdown, and deterioration of stock. After an ammonia gas leak caused structural damage and a fire on January 9, 2004, the insurer’s surveyor determined only building damage was covered, excluding plant and machinery.

The complainant filed a claim for Rs. 47,53,627.60, but the insurer approved only Rs. 1,20,168 after deductions, rejecting a prior cheque for Rs. 87,000. The complainant challenged this decision before the State Commission, which ordered the insurer to pay Rs. 1,20,168, Rs. 10,000 for mental agony, and Rs. 5,000 for litigation costs. Dissatisfied with the ruling, the complainant appealed to the National Commission.

The National Commission reviewed the complainant’s claim, which was assessed based on the surveyor’s report and the scope of the three insurance policies. The fire and resulting loss were not disputed, but the complainant argued that plant and machinery, as well as stocks, were excluded from the coverage under the building policy.

The Commission cited the Supreme Court ruling in Sri Venkateswara Syndicate vs. Oriental Insurance Company, emphasizing that claims over Rs. 20,000 must be surveyed by an authorized surveyor, and such reports can only be rejected for valid reasons.

The complainant’s allegations of malafide intentions by the surveyor were no substantiated, and the claim for machinery under the building policy was rejected, as no documentary evidence supported this. The Commission also dismissed arguments that the policy terms were not disclosed. Ultimately, the National Commission upheld the State Commission’s order, directing the insurer to comply within 45 days, with interest at 9% per annum for delay in payment.

Source: – Live Law
By: – Rajat Ranjan

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