DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Raman Kaura, resident of H.No. 197, Sector 19-A, Chandigarh.

              ---Complainant

Vs.

1.   HDFC ERGO General Insurance Co. Limited, through its Branch Manager, SCO No. 124-125, 1^st Floor, Sector 8-C, Chandigarh.

2.   HDFC ERGO General Insurance Co. Limited, through its Managing Director, 6^th Floor, Leela Business Park, Andheri Kurla Road, Mumbai (Maharashtra).

3.   Sh. Naveen (Claim Officer) Claim Department HDFC ERGO General Insurance Co. Limited, SCO No. 124-125, 1^st Floor, Sector 8-C, Chandigarh.

---- Opposite Parties

BEFORE:   MRS.MADHU MUTNEJA            PRESIDING MEMBER

SH. JASWINDER SINGH SIDHU    MEMBER

Argued By:    Sh. Deepak Aggarwal, Counsel for Complainant.

           Sh. Paras Money Goyal, Counsel for Opposite Parties No.1 & 2.

           Opposite Party No.3 ex-parte.

PER MADHU MUTNEJA, PRESIDING MEMBER

1.          The Complainant had taken an insurance policy for his Skoda Octavia car bearing Regn. No. CH-03-W-2537, effective from 13.5.2010 to 12.5.2011. Unfortunately, the said car met with an accident on 24.05.2010 and was badly damaged. Necessary intimation was given to the OP-Insurance Company and a spot survey was conducted. The vehicle was taken to M/s Sunil Auto, Ram Darbar, Indl. Area, Phase-II, Chandigarh. M/s Sunil Auto gave an estimate of Rs.72,000/- for carrying out the requisite repairs. After necessary inspection/ assessment of loss by the Surveyor, requisite repairs were carried out by the Workshop. The Complainant paid Rs.72,000/- towards the cost of repairs, labour and spare parts etc. and took delivery of the vehicle. The Complainant also lodged his claim with the OP-Insurance Company by submitting original bills and cash memos. Against the claim of Rs.72,000/- the OP-Insurance Company sent a Cheque for Rs.23,970/- (Annexure C-2) with a condition that in the event the said cheque is deposited in the Bank, it would be understood that the Complainant has accepted the amount and given discharge for the same in full and final settlement. The Complainant was also informed that if the said amount was not acceptable, he should not deposit the cheque into his bank account and return the same to the OP-Insurance Company. The Complainant returned the cheque vide letter dated 05.10.2010 (Annexure C-3) and took up the matter with the OP-Insurance Company for settlement of his claim. However, despite efforts from the Complainant, the Opposite Parties have not released the complete amount. The Complainant has thus filed the present complaint with a prayer for payment of Rs.72,000/- along with interest, compensation and costs of litigation.      

2.          Notice of the complaint was sent to Opposite Parties seeking their version of the case.

3.          Opposite Parties No.1 & 2 in their joint reply have admitted the issuance of the insurance policy. Answering Opposite Parties have maintained that when informed about the accident, they had appointed PEE Kay & Company Surveyors and Loss Assessors who is an IRDA approved Surveyor to survey the loss as per the terms and conditions of the policy. As per the survey report prepared by the Surveyor the total amount payable as per the policy was Rs.23,970/- (Survey report Annex.R-2). On receipt of the report, the company sent a cheque for the allowed amount to the Complainant. However, the Complainant did not present the said cheque. Denying other allegations of the Complainant, Opposite Parties have prayed for dismissal of the complaint.   

4.          Despite service, nobody has appeared on behalf of Opposite Party No.3, therefore, it was proceeded against exparte on 02.02.2012.

5.          During the course of proceedings, the Complainant had made an application for production of original photographs, invoices/bills submitted by the Complainant with the Opposite Parties, on the basis of which the Survey Report Annexure R-2 was prepared by PEE KAY & Co. Surveyors and Loss Assessors. Copies of the photographs and bills were placed on record by the Opposite Parties No.1 & 2. It is seen that the invoices are from different workshops for different works.

6.          The Complainant has also filed an affidavit of Vinod Kumar Sharma, who has stated that he is an A-Grade Surveyor and bonafide license holder from IRDA bearing License No. 4165 and working for various General Insurance Companies. It is given in the affidavit that in the absence of the original survey report and photographs which have not been provided to him by the earlier Surveyor, he is unable to assess the actual loss properly. However, prima-facie it appears that the assessment report is incorrect. According to this Surveyor, the following issues have not been considered:- 

“1.  When vehicle met with an accident, headlight and bonnet got damaged and loss has been paid, then why the loss of bumper was not allowed, as it is right in front the car whereas the moulding of the front bumper has been paid and bumper reinforcement has been denied. 

2.   When the claim for fan Radiator and Fan A/C has been allowed, then why the claim for Radiator and Condenser are not allowed as both are right in front of Fan Radiator and Fan A/C. Hence, the assessment made to not stand to reason.

3.   The actual Rate of the bonnet, Front Grill Set, Fan Radiator, Fan A/C, as per the bill attached has been reduced which is wholly unjustified. (Bills Enclosed)

4.   The claim for labour charging regarding repair of the car as per assessment is Rs.17,800/- which is totally correct, but has been allowed only Rs.7900/- which is unjustified.”

          According to this Surveyor, the claim made by the Complainant is totally justified and the assessment made by M/s PEE KAY & Co. is wrong, incorrect and unjustified.

7.          Parties were permitted to place their respective evidence on record, in support of their contentions.

8.          We have heard the learned counsel for the contesting parties and have perused the record. 

9.          The case of the Complainant is based on the fact that he has not been paid the complete amount spent on the repair of his vehicle despite actual bills having been submitted to the Opposite Parties. Opposite Parties have placed reliance on the survey report and have offered Rs.23,970/- in terms of the said report which is available on record at Annexure R-2. According to the Opposite Parties reliance has been placed on the Policy (Annexure R-1) where depreciation on the claimed amount has been deducted considering the age of the vehicle. The year of manufacture of the vehicle is 2006 and accordingly depreciation on metals has been allowed @35% and plastics @50% by the Surveyor.

          But it is also seen that even the labour charges have been reduced from Rs.17,800/- to Rs.7900/-. Accordingly, the total payment offered for spares is Rs.17542.50/- against the estimate of Rs.65,137.50/-. After compulsory deduction of Rs.1000/- the net assessed loss has been shown as Rs.24442.50/-. After deduction of salvage value of Rs.472.50/- the net payable amount arrived at is Rs.23,970/-. The protest of the Complainant is by way of non-acceptance and return of the cheque sent by the OP-Insurance Company, as well as filing of the present complaint and placing on record the affidavit of Vinod Kumar Sharma, Surveyor.   

10.        It is evident that the Complainant is not satisfied with the amount offered to him by the OP-Insurance Company, as according to him the assessment by the Surveyor is inadequate.

11.        The Hon’ble Supreme Court of India in Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777 has held:-

 “Insurance Act, 1938 – S.64-UM – Surveyor/ Loss assessor’s report – Weightage to be given – Held, though not the last word, yet there must be legitimate reason for departing from report – No infirmity found in Surveyor’s report and therefore held, Insurance Company rightly admitted claim as per the report.”

          The Hon’ble National Consumer Disputes Redressal Commission in case New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) has held: -

“….Surveyor’s report being important piece of evidence, to be given weight and relied upon, unless proved unreliable.”

          In an another case Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), the Hon’ble National Consumer Disputes Redressal Commission has held that:-

12.     

“…….Surveyor’s report being important document, cannot be easily brushed aside.”

12.        It is thus clear that the Surveyor’s report is final, unless challenged by either the Complainant or the Opposite Party with specific contentions and averments. The Complainant, in the present case, has chosen to contest the assessed amount by filing this complaint and placing on record the affidavit of Vinod Kumar Sharma, Surveyor.

13.        The Hon’ble Supreme Court of India in case titled as New India Assurance Company Limited Versus Pradeep Kumar, (2009) 7 Supreme Court Cases 787 has held that obtaining of a survey report is a pre-requisite for settlement of a claim of Rs.20,000/- or more but the report is not final and binding on the parties and it is not necessary for the Complainant to accept the payment according to the assessment made by the licensed surveyor and the Complainant will have a right to furnish an independent proof in support of his claim with regard to the fact that he has incurred a higher expense. The relevant portion of the judgment is as under: -

21.  Section 64-UM(2) of the Act, 1938 reads:-

     “64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as ‘approved surveyor or loss assessor’).   

Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.”

The object of the aforesaid provision in that where the claim in respect of loss required to be paid by the insurer is Rs.20,000/- or more, the loss must first be assessed by an approved surveyor (or loss assessor) before it is admitted for payment or settlement by the insurer. The proviso appended thereto, however, makes it clear that insurer may settle the claim for the los suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor).

22.  In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor’s report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor’s report may be the basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”

14.        Keeping in view the ratio of the aforesaid judgment, and the contentions of the Complainant supported by affidavit of an independent surveyor, we are of the considered opinion that the Opposite Parties should assess the claim of the Complainant by giving weightage to the points raised by the independent surveyor and make payment accordingly.

15.        The complaint is disposed off accordingly. A time of 60 days from the date of receipt of certified copy of this order is given to the Opposite Parties to settle the claim by giving weightage to the points raised by the independent surveyor.

16.        Opposite Parties will also pay Rs.7,000/- as costs of litigation.

17.        The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

14^th June, 2013                            

Sd/-

(MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER