IMPORTANCE OF SURVEYOR REPORT IN INSURANCE MATTERS

Suryeyor report is a very important document in the matters concerning insurance whether it is a matter related to vehicle insurance, an accidental case or general insurance of house, factory or even insurance of goods on the way through carrier.The dispute between the parties arise only when claimant  disagrees with  the decision of the insurance company to repudiate the claim. If the decision of the insurance company is based on the survey conducted by them ,claimant cannot have a good case to challenge the report of the surveyor unless integrity of the surveyor is questioned and malafide on their part is proved on the basis of sound eveidence.Surveyor is a professional entity equipped with proper licence and his performance is considered to be as per the established system and style. If surveyor makes an asessment of loss on the basis of rules under the policy,it cannot be challenged if  the terms agreed between the parties.

As per the  Sikka Papers Limited v national insurance company ltd.111(2009)CPJ 90 SC  and number of other judgement such as  General Assurance Society Ltd. Vs. Chandumull Jain and another, AIR 1966 SC 1644, Oriental Insurance Co. Ltd. Vs. Sony Cheriyan (1999) 6 SCC 451 and United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal (2004) 8 SCC 644,’

“the endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in re- writing the contract or substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy.

But the question has arisen time and again before the various courts as to whether insurance company can appoint number of surveyors one after another to get report in their favour.As per the provisions of section 64-UM of the insurance act ,the insurance company can appoint another surveyor only after recording the reasons for doing the same.In number of cases along with one in the matter of Sikka Papers Limited V National Insurance Company Ltd.111(2009)CPJ 90 SC  had condemned the practice of some insurance companies in appointing one surveyor after another without recording reasons for the same and at the back of insured without his knowledge In the case of Sikka Papers Limited V National Insurance Company Ltd it has been agreed   that surveyor's report is not the last word but then there must be legitimate reasons for departing from such report. Hence  inspite of the fact two surveyors were appointed ,both were appointed with the consent and to the knowledge of parties,the report so prepared was considered as per the terms and deduction made from the claim amount was found justified.

In this case, court also adressed one more point as to whether a company can claim compensation for mental harassment Interstingly in this case company had asked for compensation for the mental harassment caused to them in due course. Complainat approached the National Commission and claimed a sum of Rs.25,00,000/- towards repairs of diesel generating set; Rs.10,00,000/- for mental harassment and damages along with interest and costs The court observrd that Rs.10,00,000/- made by the complainant for mental harassment is wholly misconceived and untenable. The complainant is a company and, therefore, claim for mental harassment is not legally permissible. It is only the natural person who can claim damages for mental harassment and not the corporate entity.

Once again one more case had come up before the National commission wherein a question of number of surveyors has been raised before the commission and relying upon the apex court’s verdicts in earlier cases,commission found it unjustified to ignore well reasoned with detailed investigated report prepared by the earlier appointed surveyor and appointment of fourth surveyor without the consent of complainant.The fact leading to dispute are that complainant is a self employed person in the business of in the name and style of Dixit Oil Industries and had taken an insurance policy from the Appellant/Insurance Company to cover loss or damage to his unit for a sum of Rs.33 lakhs by paying a premium of Rs.5280/- and Rs.2475/- for special peril of Floods for the period 04.09.1999 to 03.09.2000 vide Policy No. 2000/192 dated 06.09.1999.  On 29.10.1999 during the validity of this policy, there was a super cyclone followed by heavy torrential rain in the entire coastal area of Orissa, including Bhadrak town where the Respondent/Complainant’s business was located.  Because of the cyclone and heavy rains and due to overflowing of the river Salandi the entire business premises of the Respondent/Complainant was flooded and remained under 4 to 6 feet of water for about four days and as a result raw material (mustard seeds), mustard oil in tanks and it’s by-product i.e. Khal (de-oiled cakes) were washed away or spoiled.  The entire stock became unfit for human consumption. Complainant - roughly estimated loss to be Rs.27.21 Lakhs

Four Surveyors were appointed one after the other,

first surveyor after inspection  asked him to send some oil for laboratory test

But thereafter another Surveyor - M/s D.S. Consolt & Network Pvt. Ltd., Bhubaneswar was appointed who confirmed that the water had entered into the godown causing damage to the mustard seeds etc. But claim was not settled on their observation, instead Insurance Company appointed yet another Surveyor - M/s S. Soni & Co. who again inspected the premises and sought certain clarifications which were supplied-claim again not settled.

 Company appointed a fourth Surveyor - M/s Sanjeeb Kumar Mohanty And Associates.  As per the assessment of this Surveyor Insurance Company offered the Complainant a sum of Rs.2,98,145/- in settlement of the insurance claim which was not accepted since it was well below the actual loss caused due to damaged goods.

  In the first place, National commission held that  that since the fourth Surveyor was appointed behind the back of the Complainant and his report was submitted in 2000 i.e. four months after the occurrence of the incident, no correct assessment of the actual damage was possible and, therefore, as admitted by Insurance Company, it was the third Surveyor who essentially went into the details of the actual loss incurred after physical verification and examination of the stock register and related documents.

Another factual error was also found in the fourth Surveyor report who reported the factory closed in oct. 1999. Surveyor relied upon that the factory had not been closed in October, 1999 by relying on the electricity consumption, which, according to the Surveyor, indicated that the average units consumed as per the electricity bill of October, 1999 was higher than the electricity bill for the corresponding period of preceding years.This argument was not found justified by the commission.

In view of the above cases and observations made by the courts the following points have now been settled:

1.      Insurance company cannot appoint surveyors  one after another  without noting any reasons and without the cosent and knowledge of the insured.

2.      Though it is true surveyor's report is not the last word but then there must be legitimate reasons for departing from such report.

3.      It is only the natural person who can claim damages for mental harassment and not the corporate entity.

Dr Prem Lata

MEMBER Consumer court

www.consumerawakening.com

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