In Sorout Mushroom Farm v National Insurance Co,(1) the National Consumer Disputes Redressal Commission (NCDRC) provided some useful guidance in relation to a claim assessment by an Insurance Regulatory and Development Authority licensed surveyor.
On 9 September 2012 the insured took a standard fire and special perils policy from National Insurance Co Ltd (the insurer) for his mushroom farm, which covered (among other things) machinery, building and raw materials. During the policy period, the farm caught fire and consequently the insured notified a Rs5 million loss to the insurer.
The insurer appointed a surveyor (surveyor 1) who assessed the total loss to be Rs254,407 – much less than the insured's expectation. Therefore, the insured appointed his own surveyor (surveyor 2) and there was a substantive difference in the compensation assessments given by the two surveyors.
The insurer did not pay the claim and the insured filed a complaint before the State Consumer Commission. The state commission accepted surveyor 1's assessment and also awarded Rs99,000 (a total of Rs354,000) to the insured. Dissatisfied with the quantum of claim provided by the state commission, the insured approached the NCDRC asking for more.
The insured raised the following grounds, among other things, before the national commission:
- Surveyor 1 did not account for all of the damages in his assessment, which had been addressed by surveyor 2.
- Surveyor 1 did not have the requisite qualifications to assess the damage.
However, the NCDRC dismissed the insured's contentions while making the following relevant observations:
- The insured had had to provide the relevant documentation to surveyor 1, which he did not. Therefore, the insured had been unable to take advantage of his own wrongdoing:
From the above observations of the surveyor it is clear that the complainant himself was deficient in supplying the relevant documents and, therefore, the surveyor has to apply some approximations to arrive at certain value based on the surveying principles and other existing practices. The complainant cannot claim benefit of his own wrong.
- The qualifications of the insurer's surveyor had been sufficient:
The learned counsel for the appellant has argued that the surveyor was a Chartered Accountant and he has no knowledge of plant and machinery for the mushroom industry and therefore, he has not assessed the plant and machinery correctly or for that matter even the building or the stock. The surveyors are independent loss assessors appointed under the Insurance Act, 1938. They are approved by the Insurance Regulatory and Development Authority of India (IRDA). Insurance Company is free to appoint any IRDA approved surveyor. It was not a complicated machinery, which required any specific knowledge of the industry and the surveyor in his examination-in-chief and in cross examination has admitted that he has conducted many such surveys. Keeping this in view, I do not find any merit in this assertion of the complainant.
- The insured's surveyor had played a limited role:
The surveyor appointed by the complainant has given an estimate of Rs.15,00,000/- for the repair of the building. However, the surveyor appointed by the Insurance Company only assessed a loss of Rs.50,000/- in this regard. First of all, it is to be noted that the complainant can appoint surveyor only for his own satisfaction, but in the Insurance Act, 1938, it is the Insurance Company that has to appoint a surveyor for the loss assessment. The insurance claim is to be settled on the basis of the report of the loss assessor appointed by the Insurance Company.
Accordingly, the NCDRC concluded that the assessment carried out by the insured-appointed surveyor had had limited scope, particularly as the insurer-appointed surveyor had given an unambiguous assessment.
Endnotes
(1) First Appeal 69/2016 (decided on 16 April 2019).
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