In a recent legal case, the court delves into the complexities of surveyor’s reports and insurance claim assessments. With a focus on the technical aspects of volumetric analysis versus stock records, the court’s legal analysis sheds light on the nuances of such disputes. Stay tuned to understand the significance of following regulations and the implications of discrepancies in insurance claim assessments.
Facts
- The appellant company estimated the quantity of waste paper burnt in the fire to be 8500 MT valued at Rs.13,00,00,000/-.
- Two options were considered by Adarsh Associates for arriving at the quantity of material destroyed by fire: stock registers and records or volumetric analysis.
- The Surveyor adopted the volumetric analysis method and assessed the quantity of raw material damaged at 2264.400 MT.
- The appellant filed a consumer complaint claiming compensation for the loss suffered in the fire accident and financial stress caused by the respondent.
- The National Commission rejected part of the appellant’s claim but directed the respondent to pay a certain amount with interest.
- The appellant appealed the decision of the National Commission under Section 23 of the Consumer Protection Act, 1986.
- Adarsh Associates conducted a survey and submitted a final report assessing the loss suffered by the appellant due to the fire accident.
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Arguments
- The National Commission made an error in determining the net weight of waste paper bales damaged during the incident, resulting in a discrepancy in the claim amount.
- The appellant contended that the Surveyor used arbitrary methods and double standards in assessing the damage.
- The Surveyor incorrectly took the net weight per bale as 900 kgs instead of 988.889 kgs, leading to further injustice in the assessment of loss.
- The appellant was claimed to have used volumetric analysis for quantifying the stock, which contributed to the Insurance Company admitting only a fraction of the total loss amount.
- The Surveyors appointed by the respondent were considered experts who assessed the loss scientifically, despite discrepancies highlighted by the appellant.
- Learned senior counsel relied on previous court decisions to support the contention that the surveyor’s report is important.
- Court may need to show deference to the report of the surveyor appointed under section 64UM(2) of the Act.
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Analysis
- The appellant’s objections to the Surveyor’s Report were found to be unsubstantiated by the National Commission.
- The Surveyor justified the adoption of volumetric analysis over stock records due to discrepancies in the appellant’s records.
- The Surveyor’s decision to include space for movement in calculations was deemed logical.
- The Surveyor rejected the stock records of the insured after discrepancies were found in the quantity of material.
- The Surveyor reconciled different measurements to arrive at the final assessment of the damaged material.
- The Surveyor’s reliance on Shri Kapil Vaish’s measurement during the fire was considered justified.
- The appellant’s weak contention regarding salvage value was not delved into extensively.
- The Surveyor adjusted the weight per bale based on provided information rather than paper calculations.
- The National Commission upheld the rejection of the appellant’s objections unless deficiency in service by the Insurance Company was established.
- The Surveyor’s measurement of the affected area for volumetric analysis was supported by the circumstances.
- The Insurance Act, 1938 assigns a significant role to the surveyor
- The surveyor is obligated to comply with the code of conduct specified by the regulations under the Act
- The insurer retains the right to pay or settle a claim at a different amount than assessed by the surveyor
- The surveyor’s report is not considered as the final word
- Claims exceeding twenty thousand rupees in value require a report from an approved surveyor or loss assessor
- The insurer has the right to pay a different amount than assessed by the approved surveyor or loss assessor
- Surveyors and loss assessors must comply with a code of conduct specified by regulations made by the Authority.
- The breach of the code of conduct by a surveyor may lead to an allegation of deficiency in service.
- Insurers cannot reject the surveyor’s report arbitrarily or whimsically; such actions may also lead to an allegation of deficiency in service.
- Consumer Forums, focused on deficiencies in service, cannot scrutinize a surveyor’s report in the same way a civil court would.
- National Commission judgment does not require interference.
- If surveyor’s duties were performed as prescribed by regulations and report was not arbitrary, Consumer Forum’s jurisdiction ends.
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Decision
- The appeal is dismissed.
- No costs awarded.
Case Title: KHATEMA FIBRES LTD. Vs. NEW INDIA ASSURANCE COMPANY LTD. (2021 INSC 565)
Case Number: C.A. No.-009050 / 2018
