NCDRC Upholds Surveyor’s Report, Reduces Compensation Against New India Assurance in Fire Insurance Claim
Pranav B Prem
The National Consumer Disputes Redressal Commission (NCDRC), comprising Mr. Subhash Chandra and AVM J. Rajendra, held that the surveyor's report plays a vital role in insurance claim assessments and must be accorded due weightage unless proven arbitrary or unreliable. In this case, while holding New India Assurance Company liable for deficiency in service, the Commission modified the relief granted by the Uttar Pradesh State Consumer Disputes Redressal Commission, terming the earlier compensation excessive and awarding the amount as assessed by the surveyor.
M/s. N.S. Industries, a government-recognized export house engaged in the manufacture and export of home furnishing goods, had taken a Fire and Special Perils insurance policy from New India Assurance for a sum insured of ₹50 lakhs. On 24 October 2002, a fire broke out at the insured premises in Farukhabad due to an electric short circuit. Prompt intimation was given to the fire brigade, local police, and the insurer. While the fire department assessed the damage to be around ₹42 lakhs, the insurer appointed a surveyor from M/s. Surveyors India to ascertain the actual loss.
The complainant alleged that, despite submitting the necessary documents, the surveyor kept delaying the report. Repeated follow-ups with both the surveyor and the insurer yielded no results. Frustrated by the inaction and alleging harassment, the complainant filed a consumer complaint before the Uttar Pradesh State Commission seeking ₹45 lakhs with 12% interest, ₹1 lakh for mental agony, and ₹50,000 as litigation costs. The State Commission allowed the complaint and directed the insurer to pay ₹45 lakhs with 12% interest, along with ₹50,000 for mental agony and ₹5,000 as litigation costs.
Challenging this order, New India Insurance Company approached the National Commission. The insurer contended that the complainant repeatedly failed to provide essential documents like the FIR, fire brigade report, bank statements, accounting records, and sales tax assessments, despite being reminded multiple times. Due to this non-compliance, the claim was closed on 08 June 2007 for "non-compliance of claim formalities". They argued that the delay in claim processing stemmed from the complainant's inaction and denied any deficiency in service. The insurer also raised the issue of limitation, arguing that the complaint was filed after a long delay and was not maintainable.
The complainant countered these allegations, stating that all required documents were submitted and that the insurer intentionally prolonged the process to avoid liability. It was further argued that the final survey report dated 14 October 2008 was never disclosed during the proceedings before the State Commission and surfaced only during final arguments. The complainant asserted that this was a clear case of concealment and delay.
Upon detailed examination of the pleadings and documents, the National Commission found that while the complainant indeed had a valid insurance policy and had suffered a fire-related loss, there was a considerable delay on both sides. However, the Commission observed that the surveyor had eventually prepared a detailed and comprehensive report based on the documents provided, assessing the net loss at ₹16,10,929.20. The report was found to be credible, objective, and not arbitrary, and thus merited reliance.
Referring to landmark judgments including Sri Venkateshwara Syndicate v. Oriental Insurance Co. Ltd [(2009) 8 SCC 507], Khatima Fibres Ltd. v. New India Assurance Co. Ltd [(2019) 9 SRC 268], and National Insurance Co. Ltd. v. Hareshwar Enterprises Pvt. Ltd [2021 SCC Online SC 628], the Commission reaffirmed the legal position that the report of a qualified and independent surveyor cannot be set aside unless it is shown to be perverse or lacking in probative value. It emphasized that surveyors act as statutory appointees under the Insurance Act and their assessments form the foundation of claim settlements.
In light of these findings, the National Commission modified the State Commission’s award. It directed New India Insurance Company to pay the complainant ₹16,10,929 along with simple interest at the rate of 6% per annum from the date of filing the complaint. If the payment is not made within two months, the interest rate will be enhanced to 9% per annum. However, the Commission did not award any compensation for mental agony or litigation costs. Thus, the appeal was partly allowed and disposed of, and the insurer was held liable to the extent of the loss assessed in the surveyor’s report.
Appearance
For the Appellant: Mr. Maibam N. Singh, Advocate
For the Respondent: Ms.Nistha Gupta, Advocate
Cause Title: New India Insurance Company V. N.S. Industries
Case No: First Appeal No. 418 of 2016
Coram: Hon’ble Mr. Subhash Chandra [Presiding Member], Hon’ble AVM J. Rajendra, AVSM, VSM (Retd.) [Member]
