Insurance:
Insurance claim – Case of the insured was that while the rice mill (insured property) was in operation, a lorry collided with the boiler unit which resulted in collapse of the boiler unit causing damage estimated at Rs. 76 lakhs – Preliminary survey was conducted within a week which suggested appointment of structural expert – Thereafter Structural Expert was appointed who in his report opined that the accident was as a result of exceeding the load carrying capacity and due to breach in storage capacity of the system and not due to the reason as stated by the insured – Investigation was also conducted which agreed with the previous report – Thereafter surveyor licenced by IRDA was appointed, who in his final survey report opined that structure had collapsed due to overload – Insurance claim repudiated – Complaint before State Consumer Commission was dismissed – In appeal, National Consumer Commission awarded insurance claim holding that delayed submission of reports was in breach of provisions of s.9 of IRDA Regulations, 2002 – Appeal to Supreme Court – Held: Though under Section 64- UM(2) of Insurance Act, it is not open to insurer to appoint a succession of surveyors with a view to obtain a tailormade report – There is no absolute prohibition on the insurer appointing more than one surveyor – In the present case all the reports maintained a consistent line of reasoning with regard to nature and genesis of the incident – There exists no malafide on part of the insurer – National Commission has not acted reasonably in overturning the well considered decision of State Commission – Insurance Act, 1938 – s. 64-UM(2) – Insurance Regulatory and Development Authority of India (Protection of Policy holders’ Interest) Regulations, 2002 – Regulation 9.
Allowing the appeal, the Court
HELD: 1. The impugned judgment of the NCDRC has incorrectly analysed the basis by the insurer for the appointment of surveyors for the purpose of inspection and assessment. The record indicates that immediately upon receipt of an intimation of the incident, the insurer initially appointed a surveyor to submit a preliminary survey report. The inspection was carried out on
19 April 2005 close on the heels of the incident. The report of the preliminary surveyor found serious anomalies in the claim of the insured in regard to the genesis of the incident. It was on the suggestion of the surveyor that the appellant obtained an opinion from a structural expert. The insurer thereafter proceeded to obtain the opinion of an investigator on 8 December 2006, and eventually, a final survey report was submitted on 29 June 2007. The purpose of the final survey was to determine, on the basis of the material which had emerged during the course of an inspection the cause of the incident, and to assess the extent of damage and loss. [Para 12][558-D-F]
2. While determining whether the appointment of a second or successive surveyor is justified, one must take into consideration the necessity of doing so and it must be weighed in the context of relevant facts and circumstances including the deficiencies or omissions in the report of the first surveyor. Each case must be independently considered based on relevant facts and circumstances. There ought to be cogent reasons for appointing a second surveyor. [Para 14][560-D-E]
3. The report of a surveyor must be given due importance and that there should be sufficient grounds for explaining a disagreement with an assessment made by a report of the surveyor. Yet at the same time, under Section 64-UM(2) of the Insurance Act 1938, it is not open to the insurer to merely appoint a succession of surveyors with a view to obtain a tailor-made report. It is open to the insurer to appoint another surveyor for valid reasons bearing on the deficiencies found in the survey report and the reasons which must be indicated by the insurer. There is no absolute prohibition on the insurer appointing more than one surveyor. In the present case the process which was followed by the insurer was not designed to obtain a report which would adopt a position adverse to the claim of the insured. There exist no mala fides on part of the insurer. On the contrary, it is evident from the record that the reports which have been relied upon maintained a consistent line of reasoning in regard to the nature and genesis of the incident. In this backdrop, the NCDRC has not acted reasonably in overturning the considered decision of the SCDRC. Cogent reasons were given by the SCDRC for rejecting the claim of deficiency of service on the part of the insurer. On the basis of the material which has emerged from the record, the opinion of the SCDRC is found to be correct. The view which has been taken by the NCDRC is not consistent with the statement of legal position and is contrary to the material evidence on the record. [Paras 13 and 16][559-D-E; 561-D-F]
Sri Venkateswara Syndicate v Oriental Insurance Company Limited and Another (2009) 8 SCC 507 : [2009] 14 SCR 57 – relied on
New India Assurance Company Limited v Protection Manufacturers Private Limited (2010) 7 SCC 386 : [2010] 8 SCR 61 – distinguished.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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