Consumer Fora Needs To Adequately Examine A Surveyor's Report To Reject It: NCDRC

Brief Facts of the Case

The complainant obtained a Standard Fire and Special Perils Policy from Oriental Insurance Company Limited/insurer, covering Plant & Machinery, Furniture & Fixtures, and Electrical Installations. A fire due to an electrical short circuit occurred, and the fire brigade and police were informed. The complainant reported the incident and the loss to the insurer, who appointed the surveyor. However, the insurer later repudiated the claim, alleging non-disclosure of a previous fire incident and unverified damage. The complainant argued that all required information was provided, and the surveyor's delay in removing debris hindered the resumption of operations, causing significant business loss. The complainant filed a complaint before the State Commission, which allowed the complaint. Consequently, the insurer appealed to the National Commission.

Contentions of the Insurer

The insurer contested that the complainant had two fire insurance policies from them. The first policy covered the godown and plastic goods manufacturing, and the second policy covered Unit-II, including plant, machinery, furniture, and electrical installations. The complainant filed fire insurance claims for incidents at various locations. The insurer appointed a surveyor who recommended an investigation. It was argued that the surveyor's report indicated that the earlier fire was not disclosed when the second policy was issued. The insurer could not verify the ownership of the damaged assets or the insurable interest, and the claim was considered exaggerated. Documents proving ownership were requested but not provided.

Observations by the National Commission

The National Commission observed the Supreme Court's judgment in Khatema Fibre Limited Vs. New India Insurance Company Limited which held that the consumer forum's jurisdiction ends if the surveyor's report is found adequate and not arbitrary. It was observed that the State Commission failed to objectively examine the evidence to disregard the surveyor's report. The commission highlighted that the complainant could not prove ownership of the claimed machinery, and the claim amounts did not match the invoices or ledger entries, proving exaggeration. Thus, the entire claim was rightly repudiated under the policy terms.

The National Commission allowed the appeal and overturned the State Commission's order.

Case Title: Oriental Insurance Co. Ltd Vs. M/S. Buildmet Fibres Pvt. Ltd

Case Number: F.A. No. 2075/2017