National Consumer Disputes Redressal
National Insurance Company Ltd vs New Patiala Trading Company on 8 February, 2002
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 488 OF 1998 (From the order dated 29.1.1998 in Appeal No.243/97 of the State Commission, Punjab) National Insurance Company Ltd. Petitioner Vs. New Patiala Trading Company Respondent BEFORE: HONBLE MR. JUSTICE D.P. WADHWA, PRESIDENT HONBLE MR. JUSTICE J.K. MEHRA, MEMBER. MRS. RAJYALAKSHMI RAO, MEMBER. MR. B.K. TAIMNI, MEMBER Insurance Act, 1938 - Section 64 UM- sub sections (2),(3) and (4) - second surveyor if can be appointed - Scheme of Section 64UM, particularly of sub-section (3) and (4) would show that insurer cannot appoint second surveyor just as a matter of course. If the report of the surveyor or loss assessor is not acceptable to the insurer it must specify reasons but it is not free to appoint second surveyor - prima facie credence to be given to the report of the surveyor or loss assessor. For the petitioner : Mr. Kishore Rawat, Advocate For the respondent : Mr. S.L. Gupta, Advocate for Mr. R.P. Vats, Advocate ORDER
Dated the 8th February, 2002 PER JUSTICE D.P. WADHWA, (PRESIDENT).
It is the opposite party which is petitioner before us. Petitioner is aggrieved by the order of the State Commission enhancing the insurance amount payable to the respondent-complainant, on appeal filed by the complainant against the order of the District Forum. In the complaint it is stated that respondent had taken an insurance policy for Rs.1,10,000/- for his shop known as Shop Keepers Policy from the petitioner. Policy covered all the risks of all the articles lying in the shop against flood etc. It is not disputed that there was flood in the city of Patiala during the validity of the policy and the stock of the respondent was damaged. He lodged his claim under the policy with the petitioner on 15.7.1993. Petitioner appointed Shekhar & Co., Surveyors who made their report on 4.10.1993 assessing the loss to the tune of Rs.86,290.95. In spite of the report of the surveyors, no compensation was paid to the respondent.
Complaining deficiency in service, respondent-complainant approached the District Forum. On being noticed, the petitioner-insurer took up the plea that it had appointed M/s. N. Kumar Chawla & Company as second surveyor who assessed the loss at Rs.46,728/-. Claim of the respondent was settled at Rs.46,600/- which was paid to him in full and final settlement of his claim. It was, therefore stated that there was no deficiency in service on the part of the petitioner. Evidence was led by both the parties before the District Forum which on the material on record concluded that insurance claim had been settled by making payment of Rs.46,600/- but as there was delay in making the payment, an amount of Rs.4600/- was awarded as compensation to the respondent-complainant. Another sum of Rs.128/- was also awarded which was deducted from the amount assessed by the second surveyor. Plea of the respondent that he had accepted the amount of Rs.46,600/- under protest was not accepted by the District Forum. Aggrieved by the order of the district Forum, respondent-complainant went in appeal before the State Commission. It was submitted before the State Commission that there was no justification for the petitioner to appoint the second surveyor and that District Forum was wrong in not accepting the contention of the respondent that he did not accept the amount of Rs.46,600/- voluntarily to settle his claim. State Commission did not find justification on the part of the petitioner in appointing the second surveyor. Reference was made to provisions of Section 64UM of the Insurance Act, 1938. It was also held on examination of the material on record that the amount of Rs.46,600/- was accepted by the respondent under protest without losing its right to claim full amount of loss sustained by it. State Commission, therefore, allowed the appeal and directed that the respondent-complainant be paid further Rs.46,290.95 the amount of loss as assessed by the first surveyor with interest @ 12% with effect from 4.10.93 till payment. Respondent was also awarded cost of Rs.5,000/-. The amount of Rs.46,600/- which had been paid earlier by the petitioner was allowed to be adjusted. It is now the petitioner-insurer who is aggrieved. Petitioner is challenging the order of the State Commission both as regards its finding and holding that a second surveyor could not have been appointed. We, however, would not disturb the finding of the State Commission that the amount of Rs.46,600/- was accepted by the respondent under protest. The question that now arises for consideration is if second surveyor could have been appointed under Section 64UM of the Insurance Act, 1938. This Section has been amended by the Act 41 of 1999 where for the words Controller of Insurance the word Authority constituted under the Insurance Regulatory and Development Authority Act, 1999 have been substituted. This Section 64 UM prescribes as to how a surveyor or loss assessor has to be given license to practice. An application for being licensed as surveyor or loss assessor has to be submitted in a prescribed form giving such qualifications as mentioned in Clause (D) of sub-section (1) of Section 64UM. Amount of fee payable is also prescribed and so also the period of validity of the license. There is a provision for duplicate license if original is lost and also provision for renewal of license after the expiry of prescribed period. Every surveyor and loss assessor is to comply with the code of conduct in respect of their duties, responsibilities and other professional requirements as may be specified by regulations made by the Authority. Stringent action is provided against surveyor or loss assessor who is guilty of breach of his duties or willfully making of false statement or acting in a fraudulent manner, entailing cancellation of license given to him. There are ten sub-sections of Section 64UM which it would appear prescribe a complete code as to how a surveyor or loss assessor should conduct. Under sub-section (2) of Section 64UM no claim in respect of a loss equal to or exceeding Rs.20,000/- in value on any policy of insurance shall be admitted for payment or settled by the insurer unless he has obtained a report on the loss that has occurred from a person who holds a license issued under this section to act as a surveyor or loss assessor. There is a proviso to this sub-section which reads as under:
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.
Then sub-sections (3) and 4 read under:(3)
The Authority may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent report from any other approved surveyor or loss assessor specified by it and such surveyor or loss assessor shall furnish such report to the Authority within such time as may be specified by the Authority or if no time limit has been specified by it within a reasonable time and the cost of, or incidental to such report shall be borne by the insurer.
(1) The Authority may, on receipt of a report referred to in sub-section (3), issue such directions as it may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions:
Provided that where the Authority issues a direction for settling a claim at a figure lower than that at which it has already been settled, the insurer shall be deemed to comply with such direction if he satisfies the Authority that all reasonable steps, with due regard to the question whether the expenditure involved is not disproportionate to the amount required to be recovered, have been taken with due despatch by him:
Provided further that no direction for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the Authority is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured:
Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal to which he would have been subject but for the provisions of this sub-section.
Scheme of Section 64UM, particularly of sub-section (3) and (4), would show that insurer cannot appoint second surveyor just as a matter of course. If the report of the surveyor or loss assessor is not acceptable to the insurer it must specify reasons but it is not free to appoint second surveyor. Appointment by the insurer of a second surveyor itself would be a reflection on the conduct of the first surveyor. Surveyor or loss assessor is duty bound to give a correct report. If the insurer-Insurance Co. finds that surveyor or loss assessor has not considered certain relevant points or has considered irrelevant points or for any other account it has reservation about the report, it can certainly require the surveyor or loss assessor to give his views and then come to its own conclusion, but insurer cannot certainly appoint a second surveyor-cum loss assessor to counter or even contradict or rebut the report of the first surveyor..
It is a statute which prescribes licensed surveyor or loss assessor who is to be appointed to assess the loss where it is equal to or more than Rs.20,000/-. Prima facie, therefore, credence will have to be given to the report of such approved surveyor or loss assessor. There is nothing on record in the present case to show that report submitted by first surveyor Shekhar & Co. was in any way faulty. In our view, therefore, State Commission was right in acting upon the report of the first surveyor and allowing the complaint of the respondent-complainant.
We, therefore, do not find any merit in this appeal and we dismiss it with cost which we assess at Rs.2,000/-. .J. (D.P. WADHWA) PRESIDENT ..J. (J.K. MEHRA) MEMBER ..
( RAJYALAKSHMI RAO) MEMBER ..
( B.K. TAIMNI) MEMBER