Anoop Kumar Mendiratta, Member

The present revision petition has been preferred on behalf of the opposite party/New India Insurance Co. Ltd. challenging Order dated 15.11.2017 passed by the learned State Commission in appeal no. 154 of 2015 whereby State Consumer Disputes Redressal Commission, Bihar Patna partly allowed the appeal by the Insurance Company/Opposite Party. The claim towards the loss awarded by the District Forum was reduced from Rs. 14 lakhs (Rs. 14,00,000/-) to Rs. 10 lacs (Rs. 10,00,000/-), payable within two months, failing which the awarded amount shall carry interest @ 9% p.a. from the date of filing of complaint till realization.

2. Petitioner and respondent are hereinafter referred to as opposite party and complainant respectively, as appearing in the complaint, for convenience.

3. In brief complainant/respondent is proprietor of Basantjit Oil Extraction situated at Sasaram and dealing with manufacturing of oil from bran. Complainant had taken a Standard Fire and Perils Policy from the opposite party/lnsurance Company for the period 21.05.2009 to 20.05.2010. On 13.06.2009 on account of sudden storm, rain water entered the premises of the complainant and caused damage to the stocks and raw material. The incident was intimated to the bank as well as Insurance Company/opposite party on 15.06.2009, consequent upon which a surveyor was deputed to assess the loss. However, since the claim was not settled by the Insurance Company for about three years, a complaint was preferred before the District Forum.

4. As per the case of Insurance Company surveyor submitted his assessment report dated 26.03.2010 assessing the loss at Rs.3,05,226/-Further the Insurance Company was willing to settle the claim on the basis of survey report but the complainant denied the settlement.

5. The complaint was allowed by the Ld. District Forum Sasaram, Rohtas, Bihar vide Order dated 07.05.2015 awarding sum of Rs. 14,00,000/- with interest @ 9% p.a. from the date of Order till payment. Aggrieved against the same appeal was preferred by the opposite party/insurance company before the learned State Commission wherein the Order passed by the learned State Commission was modified and compensation was reduced to Rs. 10,00,000/- as already noticed above.

6. The reasons recorded by the learned State Commission in impugned Order dated 15.11.2017 in paras 4 to 7 may be reproduced for reference:-

                   "4 Heard the counsels for the parties. Perused the materials available on record along with the impugned order as well as the survey report in detail.

                   5 Admittedly, the finished and unfinished stocks, Motor & Machinery and the building of the premises/factory dealing in manufacturing of oil from bran of the Complainant running in name of M/s Basant Ji Oil Extraction situated at Bajala, Sasarm, Rohtas was insured with the appellants Insurance co. for total sum of Rs.3.30,000,00-/(Three crores thirty lacs) only was financed by the PNB Sasarm and the incident of cyclone and heavy rain caused to damage the stocks as well as machinery and part of building occurred on 13-06-09 is not in dispute. The appellants Insurance co. ready to pay the amount of loss as assessed by the Surveyor to the tune of Rs.03,05,226/- against the total insurance claim of the complainant worth Rs. 14,30,688/-.

                   6. It appears from the survey report dt. 26-03-10 that the complainant after intimating incident of loss due to heavy rain and cyclone to the Insurance co, timely, submitted all the related documents and the surveyor after taking in to consideration of related docents with respect to the loss as claimed by complainant to the tune of Rs.12,38,205/- which has been mentioned in para iv (1) of the survey report, finally assessed the loss to the tune of Rs.09,51,970/- as mentioned in para V of the said survey report, but thereafter deduction of amount on various count the surveyor come to net loss of Rs.3,05,226/- only. In view of the aforesaid deduction of amount in survey report after coming to loss of Rs.09,51,970/- by the surveyor, it seems to have no justification for coming to net loss assessment to Rs. 3,05,226/ Thus, we are of the opinion that the loss assessed up till to tune of Rs.9,51,970/- in survey report appears quite reasonable payable to complainant on account of loss caused due to natural calamity.

                   7. In facts and circumstances of the present case and on consideration of the entire materials along with the survey report in detail, we are of the view that the amount payable to complainant/respondent by the appellants Insurance co. against the loss to the tune of Rs. 14 acs as awarded by the District Forum needs modification. Accordingly, only the insurance amount payable to complainant/respondent against the loss stands modified to sum of Rs.10,00,000/- (Ten lacs) only in all instead of Rs. 14 lacs. The appellants are directed to pay the above amount within two months of the order, failing which payable awarded amount shall carry interest @ 9% p.a. from the date of complaint filed in District Forum till date of realization. ''

7. Ld. Counsel for the Insurance Company submits that the surveyor had assessed the loss after due consideration of the material available on record. He further submits that the deductions had been made in accordance with law and the Insurance Company is willing to settle the claim in terms of the final report of the surveyor. Reliance is placed upon Khatema Fibres Limited v. New India Assurance Company Limited and Another, (2023) 15 Supreme Court Cases 327

8. On the other hand, Ld. Counsel for the complainant / respondent submits that there are no grounds for interfering with concurrent findings of fact whereby the loss to the stock/raw material is undisputed. He further submits that the claim had been kept pending by the Insurance Company for a substantive period and the deductions had been made towards salvage and other heads contrary to the legal position.

9. We have given considered thought to the contentions raised and carefully perused the record.

Law is well settled that Surveyor's Report is not the last and final word and is not so sacrosanct as to be incapable of being departed from. Hon'ble Apex Court in Khatema Fibres Limited v. New India Assurance Company Limited and Another (supra) further noticed that Section 64UM(1A) provides that every Surveyor and Loss Assessor shall comply with the code of conduct in respect of their duties, responsibilities and other professional requirements. Further, two things flow from the said discussion that (i) the Surveyor is governed by a code of conduct, breach of which may give rise to allegation of deficiency in service and (ii) that the discretion vested in the insurer to reject the report of the Surveyor in whole or in part, cannot be exercised arbitrarily or whimsically and if so done, there could be an allegation of deficiency in service. It was further observed that proviso to sub-section 2 of Section 64UM recognizes the right of insurer to pay an amount different from the amount as assessed by the approved Surveyor or Loss Assessor.

10. Reverting back to the facts of the case, it is undisputed that the finished and unfinished stock along with machinery and building were insured for a total sum of Rs.3.30 crores (Rupees Three Crores Thirty Lacs Only) under the Standard Fire and Special Perils policy. Further loss sustained by complainant due to sudden cyclone on 13.06.2009 is also undisputed but the claim does not appear to have been settled for a period of about three years, constraining the complainant to file the complaint before the District Forum in May, 2012. Admittedly, the Surveyor having accepted the loss to the tune of Rs.9,51,970/- assessed the net loss at Rs.3,05,226/- only.

The final survey report dated 26.03.2010 by the Surveyor, reflects that the premises were inspected by the Surveyor on 15.06.2009 and photographs were taken for assessment of loss. Till 27.06.2009 the complainant had not segregated the damaged and good stock separately. However, inventory of stock and damaged stock had been taken at the time of survey. Additionally, documents were demanded from the insured i.e. cash book, purchase book, stock register, production register, annual sales tax returns, audited balance sheet and profit & loss account, bank statement, stock statement etc. After considering the documents provided by the complainant, the assessment of loss has been made by the Surveyor as follows:-

"V. ASSESSMENT

After considering available documents, facts of Accounting Policies, financial records, circumstances of the case, on the basis of claim lodged, considering the investigating part and discussion with the Insured assess the loss as follows: The loss has been arrived as on as under:



11. Mere perusal of the assessment of loss by the surveyor reflects that the value of stock of 413 bags has been calculated at Rs. 9,51,970/-@ 4600 per MT. However, thereafter, deductions have been made for gross profit @ 10%; salvage value @ 50%; non-submission of purchase bills @ 25% and policy excess @ 5% or Rs.10,000/- minimum, thereby reducing the claim to merely Rs. 3,05,226/-. The deduction of salvage value @ 50% appears to have been whimsically made without any foundation though the damage to the stock is admitted and nothing has been reflected if the stock could be re-used. Also the deduction of 25% for non-submission of purchase bills for sum of Rs. 1,07,090/- appears to be contrary to the remarks recorded in the Survey Report whereby the insured is stated to have provided the Stock Statement, Sales Bills, Purchase/Sales Register, Stock Register, Bank Statement, Audited Balance Sheet and Profit & Loss A/c, VAT Returns and Income Tax Returns. We are of the considered view that since the aforesaid deduction towards salvage value @ 50% (Rs. 4,28,386/-) and for non-submission of purchase bills @ 25% (Rs. 1,07,096/-) is arbitrary, the same deserves to be allowed. The loss is accordingly assessed for Rs. 8,40,709/- [Rs. 9,51,970/- (loss assessed by the Surveyor) minus gross profit at 10% (Rs. 95,197/-) and policy excess @ 5% (Rs. 16,064/-).] The aforesaid amount of Rs. 8,40,709/- towards net loss, is accordingly directed to be paid to the complainant along with interest @ 9% per annum from 30 days of the final survey report dated 26.03.2009 till realization.

Revision Petition is accordingly partly allowed. No order as to costs. Pending applications, if any, also stand disposed of. A copy of this Order be provided to both the parties by the Registry.