Case Title: United India Insurance Co. Ltd Vs. M/S. Khadi Udhyog
Case Number: F.A. No. 223/2022
The National Consumer Disputes Redressal Commission, headed by Subhash Chandra, recently delivered a verdict that clarifies the role of a surveyor’s report in insurance disputes. The commission ruled that such reports can only be dismissed if they are found to be arbitrary or overly pervasive.
The case in question involved a policyholder who had taken out a Standard Fire and Special Perils Policy with United India Insurance for their machinery, stock, and buildings. When a fire broke out at their insured premises, supposedly caused by a generator spark, they reported the incident to their insurance company. The company, in turn, hired Royal Associates to investigate the cause of the fire and the extent of the damage.
The investigators found that only waste cotton had been destroyed in the fire, contradicting the insured’s claim that cotton yarn had been burned. The final report stated that no cotton yarn remnants were found on the premises and that the fire damage was limited to a height of one foot on the warehouse walls. The investigators concluded that the insured’s claim of ₹56,00,000 was inflated and was not covered under the specific perils of the policy.
The insured disputed the findings and lodged a complaint with the State Commission, which ruled in their favor. The insurance company subsequently appealed to the National Commission.
The insurance company argued that the State Commission’s order to settle the claim at 75% of the claim amount was against the findings of the investigator and the surveyor. They also insisted that the cause of the fire was not established, as the insured’s claim that a generator spark caused the fire was not confirmed.
However, the National Commission overruled the State Commission’s decision, stating that a surveyor’s report could only be dismissed if found to be arbitrary or pervasive. They pointed out that there was no concrete evidence to support the insured’s claim that around 28-29 tonnes of cotton yarn were in storage at the time of the fire. The commission also noted that the State Commission had relied on speculation rather than evidence in its judgment.
In conclusion, the National Commission allowed the insurance company’s appeal, stressing the importance of evidence and the role of a surveyor’s report in insurance disputes. This judgement serves as a reminder to policyholders to maintain accurate and up-to-date records, and to understand the vital role of a surveyor’s report in the event of a claim.
