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