A survey report is an important document. It can be challenged only if there is sufficient evidence to establish it is incorrect.
Navrang Dyeing was carrying on the business of dyeing cloth and textile materials sent by different manufacturers. Even though they did not own the material, they were responsible for it while in their custody for processing. The stock was insured with National Insurance Company under a Standard Fire and Special Perils Insurance Policy. The sum insured for the period 2008-2009 was Rs 2.7 crore.
During the subsistence of the policy, on March 26, 2009, an employee of Navrang maliciously put a nail in the machine, due to which the material being dyed got damaged. A police complaint was lodged. The insurance company was also given a telephonic intimation about the incident, followed by a letter intimating that loss was to the tune of about Rs 45 lakh.
The insurance company appointed a surveyor who asked for the supporting bills. Since the material was not purchased by Navrang Dyeing, supporting documents had to be procured. Navrang then reduced the claim to Rs 26,35,776, as computed by its chartered accountant (CA).
The surveyor found the damaged material was valued at a higher rate than the material which was not damaged, though both appeared to be identical. So he opted to compute the loss on average basis. Based on the survey report, the insurance company offered to pay Rs 9,68,798.
Navrang Dyeing was willing to accept the amount under protest, but the insurance company refused to release the sanctioned amount unless the discharge voucher was signed in full and final settlement of the claim. Navrang, then, filed a consumer complaint contending that the loss had not been properly assessed as the surveyor had failed to consider that materials were of different qualities, quantities and prices, and so it was wrong to compute the loss on average basis instead of computing the loss on actual basis.
The insurance company contested the complaint reiterating its stand that for the same material, Navrang Dyeing was computing a higher rate for the damaged cloth and lower rate for the undamaged cloth. This valuation was not acceptable as it was not an equitable basis. The surveyor, who is independent, had computed the claim on a rational basis by applying the average rate. The insurance company argued that the valuation certificate given by Navrang's chartered accountant as unreliable since he had neither inspected nor verified the stock, nor put a date on the certificate. It was alleged that the certificate appeared to be prepared at the behest of Navrang Dyeing. The insurance company filed the affidavit of the surveyor to explain how the loss had been assessed.
The Forum observed that the surveyor had deposed that his conclusions were based on details and records provided by the Navrang Dyeing, such as actual bills and invoices. He had illustrated how for the very same material, Navrang had claimed the rate of the damaged cloth to be Rs 16.11 per metre, while for the undamaged closed the rate was mentioned as Rs 9 per metre. Such unreasonable variation in the rate was unacceptable for the purpose of assessment.
The Forum lay great emphasis on the surveyor's report and the explanation given about the method of assessment. The Forum concurred with the insurance company's stand that the certificate issued by Navrang's chartered accountant appeared to be suspicious.
Accordingly, by its judgment of December 31, 2015, delivered by S M Ratnakar for the Bench along with S G Chabukswar, the Forum dismissed Navrang's complaint with the observation that the law is well settled that a survey report is an important document, which cannot be ignored unless there is cogent evidence to counter it.
Thus, a survey report is binding unless there is proper evidence to prove that it is incorrect.
The author is a consumer activist
