Bharatkumar Pandya, Member

This appeal has been filed by the OP insurer against the order dated 05.01.2022 passed by the State Commission whereby State Commission allegedly committed an error in holding that the amount of compensation should be double the assessment made by the surveyor. The brief facts of the case are that the respondent/complainant purchased a round Drip Irrigation Pipe Machinery on 26.02.2014 at a cost of Rs.37,13,823/- and obtained a Marine Cargo Specific Voyage policy from the petitioner insurer to cover the entire insurance cover of the full consideration of the machinery paid by the complainant during transit. The truck in which the equipment was being transported met with an accident on 27.02.2014 during the transit and a police complaint was also registered. Since the truck carrying the consignment met with an accident, machinery was again sent back to the consignor for detailed inspection. After a detailed and thorough inspection of the Irrigation Pipe Plant Machinery, it was concluded that the respondent/complainant suffered entire loss of the machinery and the said machinery could not be used further. Respondent claimed a loss of Rs.47,13,823/- from the insurance company. After receiving the intimation about the loss, insurer appointed surveyor. Preliminary survey report dated 18.03.2024 (page 67 to 70 of the appeal) was submitted by the surveyor estimating the loss of around Rs.25 lakhs to Rs.30 lakhs on external visual basis and also requested insurer for appointment of a final surveyor. Final surveyor Mr. Pranav Kumar submitted his report on 09.05.2014 (page 71 to 77 of the appeal). Relevant portion of the final survey report is extracted below:









3. After examining the preliminary, final and addendum reports, the appellant offered a sum of Rs.2,68,894/- in full and final settlement of the claim by following the terms and conditions as prescribed in the policy but the respondent refused to accept the same and proceeded to file consumers complaint before the State Commission. After considering the facts stated in the complaint, and after hearing the submissions advances by learned counsel for both the parties and on carefully examining the evidence and record, the State Commission partly allowed the complaint vide its order dated 05.01.2022, relevant portion of which is reproduced below:

                   ".......

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                   73. Therefore I am of the opinion that 20% of the repairing cost should be taken up and it should be entitled in my view that in absence of other conclusive document, report or estimate by the complainant side the Pranav Kumar has reported only a loss of only 3,58,525/- is a mere small amount considering the cost of the machinery in question i.e. 37,13,823/- and thereby I am not in a possession to accept the report submitted by Mr. Pranav Kumar are conclusively as just observation and considering the papers on record.

                   74. Ld. Ad. Mr. Mehta has drawn my attention upon citation 2020 SCC online NCDRC 493 Wilson Home Appliances Vs. New India Assurance Co. Ltd and Another para 8. "Investigation and Survey by an insurance company are fundamental in determining the amount payable to the insured. An Insurance Company is duty bound to appoint its surveyor in accordance with the provisions of the Insurance Act, 1938(Section 64 UM Surveyors or loss assessors specifically refers.) Essentially, its surveyor has to possess the prescribed qualifications, it is accountable, inter alia also to the regulator. A survey cannot be disregarded or dismissed without cogent reason (it, but, also goes concomitantly that the rationale and computation recorded in the Survey should be convincing and pass credence in scrutiny).

                   75. I endorse my view with this judgement but I would like to observe that when comparing circumstances that is not producing the estimated repairing cost or demanding information form the complainant side by the surveyor, the surveyor has assessed damage on his own rational ground and thereby calculation of the damage is not recorded in the survey report by convincing and pass scrutiny material and thereby according to my view this is a case wherein the assessment of Rs. 3,58,525/- are on general terms by the surveyor and that's why I would like to double the amount and as it is roughly about 20% loss of the actual cost of the machinery and i.e. 7,20,000/- should be taken up as just, fair reasonable approximate repairing cost or it should be treated as damage to the complainant side.

                   76. Further Ld. Ad. Mr. Mehta Has drawn my attention at 2014 I SC Cases page no. 686 further he has submitted, cited a judgment of (1991) 4S CC page no. 22, further he has submitted NCDRC Virendra Kumar Tiwari & Ann Vs. Bharti Axa Gen. Insurance Co. & on 14 Aug, 2019 and also cited (2009)7 SCC. 777 where in it is held that surveyor report be legitimate weightage to be given there must be a legitimate reason to be departing from the report no infirmity found in the surveyor report and therefore held that insurance company has rightly admitted the claim as per the report.

                   77. I gone through the judgement and thereby one thing is very much clear that I endorse my view that the surveyor report is to be accepted unless there is a cogent reason to depart of the report submitted by the surveyor here we have discussed that surveyor has assessed damages in absence of necessary document is to be submitted by the complainant side thereby the loss about Rs.3,58,525/- is without scrutiny of any material it is merely on observation and also it is reported and that's why as we have to looked into a complainant himself has reported approximate loss 33% is also considered well with that document produced before the Pranav Kumar surveyor appointed by the insurance company and even though he has not assign any best reason that why he has came to conclusion is not accepted the estimated loss for the repairing cost of the total amount of the purchasing disputed machinery and that's why I am incline to damage cause assessment of Rs. 3,58,525/- are on general terms by the surveyor and that's why I would like to double the amount and as it is roughly about 20% loss of the actual cost of the machinery and i.e. 7,20,000/- should be taken up as just, fair reasonable approximate repairing cost or it should be treated as damage to the complainant side.

                   78. I came to conclusion that the claim is require to be partly allowed and thereby this complaint is partly allowed and I pass necessary order as under.

                   FINAL ORDER

                   i) Complaint No. 239 of 2014 is partly allowed.

                   ii) Opponents are directed amount of to pay Rs.7,20,000/-(Seven Lakh Twenty thousand) with 7% interest from the date of filing the complaint, and further Rs. 10,000/- for mental agony and Rs. 5,000/- for the cost of complaint. "

4. Being aggrieved by the Order dated 05.01.2022 passed by the State Commission, the appellant insurer preferred the present First Appeal. As per appellant, respondent/complainant failed to provide the entire documents as required hence his claim for total loss could not be accepted and it was only on the basis of damage caused and repair basis that the assessment was made. The appellant preferred the present first appeal on the following main ground that the State Commission failed to appreciate that the appellant had appointed the surveyors who submitted their report which was duly considered by the responsible officers of the insurance company and it was only on the basis of final survey report that the insurer offered the amount as full and final settlement of the claim. As per appellant there is no deficiency in service on their part and therefore the appeal is liable to be dismissed. Further, it is averred by the appellant that State Commission erred in not holding that the surveyor had made his assessment after, thoroughly examining the relevant facts and circumstances and it was the failure on the part of the complainant/respondent in submitting the estimate of damaged item of extrusion instrument and other parts with repairing cost and any service report by components manufacturer. Respondent even also failed to provide the payment details of the alleged new equipment. State Commission had no reason or material to justify the amount awarded by them by doubling the amount of settlement. Hence, as per appellant, the order passed by the State Commission may be set aside. Recommendations of the surveyor were not followed by the State Commission, and, without any justification and arbitrarily, it was decided by the State Commission that the amount should be double the amount assessed by the surveyor/offered by the appellant.

5. We have heard the learned counsel for the parties and have carefully perused the material available on record. It is the submission of Mr. Ravi Bakshi on behalf of the appellant insurer that insurance claim has been processed by them based on assessment of the loss by following the terms and conditions of the policy. It is further submitted that there is no fault on their part if the respondent is not ready to accept the claim so offered to be settled on the basis of the survey report of a duly licensed surveyor duly appointed under S.64UM of the Insurance Act. The report dated 18.03.2014 submitted by the surveyor was a preliminary report only and it was not a conclusive report. Appellant totally denies the demand raised by the respondent for Rs.47,13,823/- and the reasons for the same were very well explained in the survey report. The consignment had suffered only a partial loss and there was not a total loss. Hence, the insistence of the respondent for considering the claim on total loss is not acceptable to the appellant insurer. The claim of the respondent was approved by the Insurer for Rs.2,68,894/- on repair basis as assessed by the surveyor and the same informed to the respondent on 16.09.2014 as also on 20.09.2014. However, the respondent claimed for total loss of the machine which was not justifiable. Hence there is no deficiency of service on the part of the appellant insurer. The State Commission, in arriving at the finding of deficiency in service and in unilaterally and arbitrarily estimating the loss at double the amount assessed by the surveyor, has acted in violation of the settled law that the survey report cannot be lightly and whimsically brushed aside, more so, when there is no cogent material relied upon by either the complainant or the State Commission to interfere with the assessment of the surveyor.

6. On the other hand, as per the written arguments filed by the respondent complainant, it is the contention of the respondent/complainant that it suffered a complete loss of machinery due to accident and the same was accepted by way of inspection report in which it was stated that "the complainant suffered entire loss of round irrigation plant machinery and the said cannot be used further". Even the surveyor Mr. Ankur Pandya also calculated that the estimated cost of loss to the respondent is between Rs.25 lakhs to Rs.30 lakhs. Still their claim was not settled by the insurer inspite of repeated requests. Respondent was compelled to issue notice to the appellant insurer through their counsel when no reply to their queries were being given by the insurer. As per the respondent/complainant, their specific case is that the machinery was damaged during the transit and not during the usage hence appellant insurer is liable to pay the full amount of compensation. As the machinery got fully damaged and it could no longer be used, the respondent is right in claiming the full cost of the machine and the same is liable to be compensated by the insurance company.

7. After considering the rival contentions and the material on record including the Final Survey Report and the addendum report, we are of the opinion that the appeal must succeed. We firstly reproduce the order condoning the delay in filing the appeal dated 05.09.2024:

                   IA/3064/2022

                   Heard the learned Counsel for the Appellant who points out that it was on account of administrative delays that the Appeal came up to be filed with a reported delay of 54 days. Having heard learned Counsel for the Respondent and having considered the explanation given we find it sufficient and condone the delay of 54 days in filing the Appeal. The Application is allowed. The Appeal is admitted and shall be treated to be within time.

                   From the records it appears that the challenge raised is to the Impugned Order of the State Commission whereby the Complaint has been allowed awarding Rs.7,20,000/- with 7% interest from the date of filing the Complaint, and further Rs. 10,000/- for harassment and Rs. 5,000/- as cost.

                   The claim was in regard to deficiency in service on the part of Insurance Company in not having allowed the entire claim and having made an offer to settle the claim at a lesser amount in respect of the goods that were insured that had been allegedly damaged during transit.

                   A Spot Surveyor had conducted the survey and a status report was submitted on 07.04.2014. A Final Survey Report was submitted on 09.05.2014 whereafter an addendum is said to have been issued by the Surveyor on 18.05.2014.

                   Mr. Bakshi, learned Counsel for the Appellant submits that since the Respondent had failed to provide the entire documents as required, his claim for total loss could not be accepted and it was only on the basis of damage caused and repair basis that the assessment was made. The submission therefore is that the Impugned Order is nothing else but the reproduction of the entire pleadings with no consideration on the issues raised more particularly the facts stated in the addendum report dated 18.05.2014. Mr. Bakshi has also urged that the findings recorded in paragraph No. 77 of the Impugned order are unsustainable because of lack of any supporting evidence.

                   Learned Counsel for the Respondent submits that the report of the Surveyor had not been submitted earlier and reached only on 07.08.2014 which was the contention raised and has been recorded in Paragraph No. 51 of the Impugned Order. He therefore submits that the documents on record may be required for assessment.

                   However since no time is left today let the matter be listed on 14.02.2025.

                   Learned Counsel for both the Parties may submit their Written Submissions by the next date of hearing."

8. Now coming to the merits of the case, we find merit in the contention of Mr. Bakshi that when the insurer has offered a settlement after duly considering the Final Survey Report, the allegation of deficient service cannot lightly accepted unless supported by cogent and clinching material. The policy conditions requiring the insured to discharge his primary burden of establishing the cause and quantum of loss before the Surveyor, and while doing so, provide the requisite further relevant information, documents, and other evidence, as called for, can neither be overlooked nor be brushed aside. Insurance is a matter of contract between the parties, and the insured, after palpably failing to discharge the primary burden of establishing the quantum of loss as stipulated under the policy-contract, cannot raise a vague and unsustainable allegation of deficient service against the insurer who has, after applying mind to the well-reasoned and evidence-based report of the surveyor, has offered a settlement, unless the specific errors, un-sustainability, unconscionability or arbitrariness in the action or attitude of the Surveyor or in the survey report, or, the insurer's non-application of mind thereto is pleaded and substantiated. The position of law is well-settled that the Surveyor's statutory report, though not sacrosanct, is the primary and significant evidence, which can also normally be subjected to forensic examination. The preliminary surveyor though has estimated the loss "on visual basis" to be 25-30 lacs, the final surveyor has, in his conclusion, estimated the loss, subject to the verification of the actual estimate of repairs costs, which was not provided by the insured, to be around Rs. 8 lacs. However, it is also the categorical observation in the conclusion portion of the survey report dated 09.05.2014 that the insured had failed in providing the estimate of damage parts and that the insured only wants to settle the claim on total loss basis which is not acceptable to us. Subsequently, the insurer, through email dated 16.04.2014 sought an addendum report in which report dated 18.05.2014 it has been further reiterated by the surveyor that the insured has failed to provide the documents to establish the loss as claimed, though they have been wrongly and repeatedly writing that they have submitted all the required documents. In para 5 onwards of the addendum report, the surveyor has categorically mentioned that (a) as per the OEM's report mailed to him on 12.05.2014, the repairing costs of three items is Rs.1.44 lakhs plus taxes, (b) the repair cost and the quantum of damage to the main extruder costing Rs.23.54 lakhs, and vacuum tank and cooling tank, which can be ascertained only after dismantling the same has yet not been provided by the insured, (c) despite several reminders to the insured through telephone and emails, the insured is not providing the required documents to establish the quantum of loss and insist only for settlement on total loss basis which is not acceptable to us. It appears that thereafter, the insurer, as pleaded in para 34 of the written version, offered an amount of Rs.2,68,894/-, on repair basis "as assessed by the surveyor". The State Commission, however, in para 68 of its order has mentioned that the learned counsel for the insurance company pointed out from the survey report that assessment of loss has been arrived at by the surveyor at Rs.3,58,525/- in his report dated 09.05.2014, which only can be awarded as the complainant has failed in providing any further information. The State Commission in para 73 comes to the conclusion, without disclosing any basis, that the surveyor's estimate of loss of Rs.3,58,525/- "is a mere small amount considering the cost of machinery in question i.e. Rs.37,13,823/- and thereby I am not in a position to accept the report submitted by Mr. Pranav Kumar" and, as added in para 75 of the order, "I would like to double the amount and as it is roughly 20% loss of the actual cost of machinery, Rs.7.2 lakhs shall be just, fair and reasonable approximate repairing cost".

9. After considering the totality of the facts and circumstances, we are unable to find any merit either in the complaint or in the State Commission's action of arbitrarily "doubling" the loss estimated by the surveyor, as rightly contended by Mr. Bakshi. As a matter of fact, what we find is that the surveyor himself has not provided the figure of estimated repair cost of Rs.3,58,525/- at all anywhere in his report dated 09.05.2014. In conclusion (page 77 of the file), the surveyor did mention that the approximate repairing/replacement cost of the damaged parts would be Rs.8 lakhs, such assessment of indemnification is made by him to be conditional on getting the estimate of the repairs/damaged parts by supplier/component's manufacturer which, as noted by the surveyor has not been done by the insured. Even in addendum report dated 18.05.2014, in para 5, the repairing cost with regard to three items on which the OEM's report has been obtained, is stated to be only Rs.1.44 lakhs. The insurer categorically mentioned in para 34 of its reply that the insured was offered the settlement on repair basis, "as assessed by the surveyor", for a sum of Rs.2,68,894/- on 16.09.2014 and on 20.09.2014 which fact in para 37 of the rejoinder is not categorically denied by the complainant. Therefore, we are of the considered opinion that the complainant is not entitled for any sum in excess of what has been assessed by the surveyor and what was offered as settlement which is to the tune of Rs.2,68,894/-. We do not agree with the approach of the State Commission in estimating or in "doubling" the assessed loss in absence of any supporting circumstance or material. As a matter of fact, we particularly do not agree with the State Commission in interfering with the estimate of the surveyor and of offer of settlement made by the insurer without finding any particular defect or deficiency either in the survey report or in the action of the insurer. Once the particular lack of evidence has been pointed out by the surveyor and there is no improvement in the evidentiary basis of the insured in quantification of loss, the assessment of the surveyor cannot be interfered with. Otherwise also as held in Venkateshwara Syndicate vs. Oriental Insurance Co. Ltd. (2009) 8 SCC 507 SC, survey report is an important and significant piece of evidence which need to be dealt with and rebutted on cogent grounds in complaint, which has not been done. To that extent, the State Commission's order is erroneous and hence, while setting aside the impugned order we also dismiss the complaint, however, with a direction to the insurer that the admitted liability amount of Rs. 2,68,894/- along with 8% simple - interest thereon for the period 18.06.2014(one month from the date of survey report) till the actual date of payment shall be paid within a period of three months from the date of this order, failing which the rate of interest shall be 11% for the period from 18.05.2026 onwards on the amount remaining unpaid till that date.

10. In the result, the appeal is disposed of in terms of the above order.