In settlement of insurance claims, the surveyor report is not final and conclusive.

In the matter of National Insurance Company Ltd. vs. M/s. Hareshwar Enterprises (P) Ltd. & Ors. [Civil Appeal No. 7033 of 2009] decided by the Supreme Court on 18.08.2021.

Facts:

The factory premises of Respondent No. 1 were covered under the insurance policy of the Appellant against the risk of fire, flood and earthquake. A fire broke out in the factory premises damaging the plant and machinery, raw material, finished and unfinished goods. Surveyors were appointed to assess the extent of the loss. The loss was assessed at Rs. 1,06,00,000/- The Appellant did not repudiate the surveyors’ report but appointed another investigator who also submitted a report. Respondent No. 1 made repeated demands for the amount to be paid and ultimately filed a complaint before the NCDRC. The NCDRC awarded Rs. 79,34,703/- with 12% interest per annum to the Respondent Nos. 1,2 and 3. This order of the NCDRC was challenged, inter alia, on the ground that the NCDRC committed an error by relying solely on the surveyors’ report without giving any credence to the investigation report.

Held:

The court held that the assessment of loss by an approved surveyor is a prerequisite for the settlement of insurance claims. A surveyor report is statutorily recognized and is a basic document in determining claims. However, the surveyor report is not the final word and is not conclusive. The surveyor report is not binding on the insurer or the insured. Any contrary evidence, including the investigation report, can be produced to rebut the surveyor report. It is for the adjudicating forum to assess which evidence is credible and can be relied upon. A surveyor report can be relied upon if it inspires confidence, and there is no need to place reliance on any other material. A surveyor report can be relied upon if it is not perfunctory and refers to all aspects.