Can Insurance company appoint surveyors one after another

(IRDA Rules)

 

Case in hands is M.K.U. Private Ltd.Vs United India Insurance Company Limited Judgment Date:21-02-2019 National Commission

 

Main issue –Can insurance company appoint surveyors  one after another.

Defending insurance company raise two technical points to derail the entire matter

1.      Insured is not a consumer

Case of Harsolia Motors vs. National Insurance Co. Ltd., I (2005) CPJ 27

resolved this issue long back that Complainant is not getting benefitted or

earning any profit from the Insurance policy,its indemnification of loss

2.      Matter in a complicated question of law and hence consumer court cann’t deal with the same under summery procedure.The issue was resolved by  Hon’ble Supreme Court in the case of “ CCI Chambers Cooperation Housing Society .  stating and relying Section 13(4) of the Act confers the same power of investigation on the consumer courts as are enjoyed and exercised by the Civil Court.

 

 

Main issue of appointing another surveyor ;Rule &law

 

Complainants point of objection ;

 

·         Had purchased an insurance coverage vide policy No.000001/11/3/00355 (Fire Floater Policy) valid for the period 24.08.2003 to 23.08.2004 securing the stocks lying at 4, Gandhi Gram, G.T.Road, Kanpur for the sum of Rs.3 Crores.

·         A fire broke out at 4, Gandhi Gram, G.T.Road, Kanpur on 02.06.2004. It caused substantial loss and damage to the insured property

·         The intimation of the fire including the statement of loss suffered was sent to the

Insurance Company, Opposite Party No.1 on 03.06.2004.

 

·         M/s S. K. Ahuja & Associates as authorised surveyor for assessing the loss and damages suffered by the Complainant. The Surveyor took the services of M/s

R. Singh and Associates, Chartered Accountant for verifying the data. The Chartered Accountant submitted his report on 23.03.2005. The Surveyor also submitted his report on the same day.

 

·         Opposite Party No.1 appointed the second Surveyor/Investigator, namely,Lt. Col. D. P. Jairath for investigating the claim.

 

Objection-

1.      No clarification was sought from the legally appointed first surveyor about his report and unjustifiably appointed second surveyor It was illegal &unjustifiable to appoint another surveyor without any reason

2.      that there is substantial unjustified delay in finalising the claim and the Complainant had to seek directions from the Hon’ble High Court of Allahabad by filing the Writ Petition

3.      further argued that in terms of Section 64 UM (3) of the Insurance Act 1938, the power to appoint a second surveyor lies with IRDA and not with the insurer, i.e., the Opposite Party No.1.

 

 

 

Law laid down so far on this issue

 

 Sikka Papers Limited V National Insurance Company Ltd.111(2009)CPJ 90 SC

·         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,

·         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 in spite 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.

 

Dixit Oil Industries

Four surveyors one after another not justified

 

Sri Venkateswara and  Syndicate Vs. Oriental Insurance Company Limited & Anr. (2009) 8 SCC 507”

 

Explained in the judgment scope of Section 64 UM of the Insurance Act

·         Second surveyor can be appointed only when the first surveyor’s report is either inherent defects in it or that it is arbitrary, excessive, exaggerated etc.

 

·         While appointing a second surveyor the insurer has to give cogent reasons for rejecting the report of first surveyor

 

“New India Assurance Company Limited vs. and Balbir Singh, First Appeal No.628 of 2018

 

Sona Ceramic vs. New india Assurance Co. Ltd., Consumer Complaint No.399 of 2002 and has clearly held that the Insurance Company has to give decided on 01.05.2015

 

IRDA (Protection of Policy Holders’ Interest Regulations 2002)

 

·         The Opposite insurance company , on receipt of the legally appointed surveyor’s report, if found the report incomplete, was required to intimate the same to the legally appointed surveyor within 15 days with request to furnish additional report on the basic issues

·         If he fails to do so,then there can be question of second servayor

 

 

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