NCDRC Upholds Surveyor's Assessment, Directs New India Assurance To Pay 9% Interest For Delayed Fire Claim Settlement

Brief facts of the Case:

The complainant, M.K. Aggarwal Hosiery (P) Ltd., a Ludhiana-based manufacturer of synthetic knitted printed fabrics and blankets, had obtained a Standard Fire and Special Perils Policy for ₹10 crore and a Floater Fire Policy for ₹4.5 crore from New India Assurance.

In the intervening night of 26/27 April 2009, a massive accidental fire broke out at around 3:45 a.m. at the insured premises, destroying stock, plant, machinery and building structures, with the fire brigade and police confirming the incident as accidental.

The complainant lodged a claim of ₹8,08,71,327. The insurer appointed M/s Rohit Kumar & Co. as surveyor, who assessed the loss at ₹5,50,42,530, applying depreciation, salvage value, and under-insurance. On 15 June 2011, the insurer released ₹5,49,45,964 after certain deductions, but only on submission of an unconditional discharge voucher.

The complainant alleged that the discharge voucher was signed under coercion, as the company's bank accounts were on the verge of being declared NPA and it was incurring heavy monthly interest burden. Claiming wrongful deductions, delay and deficiency in service, the complainant filed the consumer complaint seeking the balance amount, interest and compensation.

Contentions of the Complainant:

The complainant alleged that the insurer unreasonably delayed settlement of the fire insurance claim despite timely submission of documents, which resulted in their bank account being declared NPA and caused a heavy monthly interest burden. They argued that the surveyor's assessment was arbitrary and far lower than the actual loss of ₹8.08 crore, as the machinery was mostly new and the stock records were regularly maintained and verified by the bank and auditors. The complainant further submitted that the insurer coerced them into signing an unconditional discharge voucher by refusing to release even the admitted amount of ₹5.49 crore unless they signed it without protest, which they did under financial compulsion.

Contentions of the Insurer:

The insurer contended that the claim had been settled strictly on the basis of the detailed surveyor's report assessing the loss at around ₹5.50 crore after considering depreciation, under-insurance and salvage. The insurer argued that the complainant themselves caused delays by providing documents in a piecemeal manner and failing to reinstate the damaged building and machinery, which prevented settlement on reinstatement-value basis. It was further asserted that the discharge voucher was voluntarily signed in full and final settlement, and therefore no further claim was maintainable.

Observation and Decision of the Commission:

The Commission noted that although the complainant accepted ₹5.49 crore and signed a discharge voucher, this did not bar the complaint; however, the complainant failed to establish any coercion, and the 14-month delay in filing the case further weakened the allegation of pressure.

The Commission observed that the complainant had not specifically challenged the surveyor's calculations nor produced any material to substantiate the higher claim of ₹8.08 crore. It found the surveyor's report to be detailed, reasoned, and based on a proper methodology—particularly since no stock register was maintained, making the use of the Modified Trading Account method appropriate. As the complainant had not reinstated the damaged building or machinery, the assessment on a market-value basis was justified. Apart from the delay in settlement, the Commission found no deficiency in the insurer's evaluation or quantification of the claim.

The Commission upheld the insurer's assessment and rejected the complainant's additional claim of about ₹2.59 crore, observing that no error or flaw had been demonstrated in the surveyor's findings. However, it held the insurer liable for delay in settling the claim beyond one month of the survey report and directed payment of:

• 9% simple interest on ₹5,49,45,964 for the period 16.10.2010 to 15.06.2011, and
• ₹50,000 as litigation cost, to be paid within two months, failing which interest would rise to 12%.

Case Title: M.K. Aggarwal Hosiery (P) Ltd. vs. New India Assurance Company Ltd.

Case No.: CC 269/2012

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