Surveyor's Report To Be Given Importance In Insurance Claim Cases: NCDRC Modifies State Commission's Order Against New India Insurance Company

The National Consumer Disputes Redressal Commission, presided over by Mr. Subhash Chandra and AVM J. Rajendra, held New India Insurance Company liable for deficiency in service. The Commission, however, modified the state commission's order against the insurance company, calling it excessive, while complying with the amount mentioned in the surveyor's report. Brief Facts of the Case M/s N.S. Industries, an export firm that had taken a fire insurance policy for ₹50 lakhs from New India Insurance Company/insurer. On 24 October 2002, a fire broke out at its Farukhabad unit due to a short circuit. The fire brigade and police were immediately informed. The damage was assessed to be around ₹42 lakhs, and a claim was filed with the insurer. The insurer appointed a surveyor to assess the loss. The complainant submitted documents but claimed the surveyor kept delaying the report. Despite reminders, no progress was made. Feeling harassed, the complainant filed a consumer complaint before the State Commission of Uttar Pradesh under Section 12 of the Consumer Protection Act, 1986, seeking ₹45 lakhs with 12% interest, ₹1 lakh for mental agony, and ₹50,000 for litigation. The State Commission, after considering the case, found that the complainant suffered genuine loss due to fire and that there was a delay and deficiency in service by the insurer. It directed the insurer to pay ₹45 lakhs with 12% interest from the date of the complaint, ₹50,000 for mental agony, and ₹5,000 as litigation costs. Aggrieved, the insurer appealed before the National Commission. Contentions of New India Insurance Company The insurer denied the allegations. It claimed the complainant failed to submit key documents despite repeated requests by the surveyor. Because of this, the surveyor could not complete the report on time. The insurer said that due to non-cooperation, the claim was closed in June 2007. They argued there was no service deficiency on their part. The insurer also stated the complaint was filed after a long delay and was time-barred. They maintained they had acted as per policy terms and procedures. Observations by the National Commission The National Commission observed that the complainant had a valid fire insurance policy, and the fire incident resulting in loss was undisputed. Although the insurer claimed that the complainant failed to submit required documents, it was found that the surveyor ultimately used the same documents to assess the loss, indicating that the delay was not solely due to the complainant. The survey report, which assessed the net loss at ₹16,10,929.20, was found to be detailed, credible, and based on sufficient material. Relying on the precedents Sri Venkateshwara Syndicate v. Oriental Insurance Co. Ltd., Khatima Fibres Ltd. v. New India Assurance Co. Ltd., and National Insurance Co. Ltd. v. Hareshwar Enterprises Pvt. Ltd., the Commission held that surveyor reports must be given due weight unless shown to be arbitrary or deficient. The National Commission allowed the appeal. It ruled that the State Commission's award of ₹45 lakhs was excessive and modified the relief, directing the insurer to pay ₹16,10,929 with simple interest at 6% per annum. Case Title:New India Insurance Company Vs. N.S. Industries Case Number: F.A. No. 418 of 2016 Click Here To Read/Download Order

Surveyor's Report To Be Given Importance In Insurance Claim Cases: NCDRC Modifies State Commission's Order Against New India Insurance Company

Ayushi Rani

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