Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3253 OF  2002

New India Assurance Company Limited          ..Appellant

Versus

Pradeep Kumar       ..Respondent

J U D G E M E N T

R.M. LODHA, J.

In this appeal, by special leave,  the appellant, New

India Assurance Company Ltd. (for short, ‘insurance company’)

has challenged  the order dated September 14, 2001, passed

by the  National  Consumer   Disputes  Redressal  Commission

(for short ‘National Commission’).    By its   order  the National

Commission  dismissed  the  revision  petition  filed   by   the

insurance  company  under  Section  21(b)   of  The  Consumer

Protection Act,  1986 (for short,  ‘Act  1986’)  and affirmed the

concurrent  orders  of  State  Commission   for  Redressal  of

Consumer Disputes, Uttar Pradesh, Lucknow (for short, ‘State

Commission’)  and  Resident  Consumer  Disputes  Redressal

Forum,  Uttarkashi,  (for  short  ‘District  Forum’)  whereby  the

insurance company  has been directed to  pay  a sum  of Rs.

1,58,409/- along with  interest at the rate of 12% per annum  to

the respondent Pradeep Kumar (for short ‘complainant’).  

2. The complainant   is the owner of a  heavy motor

vehicle  (open  body  truck)  bearing  registration  no.  UP-07  F-

9095.   The vehicle  was   registered on January 2, 1997 and

was  insured   vide Policy No. 31/04825 effective  for the period

from  November 8, 1997  to November 7, 1998.    The said

vehicle   loaded  with  potatoes   met  with  an  accident   on

September 29, 1998, at Suman Kayari, near Nain Bagh, District

Tehri (Garhwal).   The vehicle  fell down into khud  300 feet

deep below the road.    As a  result  of the accident, Murari

Rawat, driver of the truck, died.   The accident was reported at

Police  Station Patwar, Kharsot on September 30, 1998.    

3. The  complainant claimed the expenses incurred by

him  for repair of  the truck from the insurance company and

2

the interest paid by him to the State Bank of India, Uttarkashi

as he obtained loan from that bank for repair of the truck.   A

legal     notice   is  also  said  to  have  been  sent  by   the

complainant to the  insurance company  but of no avail.    The

complainant  then  approached   the  District  Forum  alleging

deficiency  in service by the  insurance company and claimed

an amount of Rs.1,58,409/- along with interest at rate of 18%

per annum.  

4. The  insurance   company  in  its  reply  to  the

complaint, stated  that after receipt of intimation regarding  the

accident,  vehicle was surveyed by  Surveyor,   Manoj  Kumar

Aggarwal  and   was  taken  to  Himalaya  Motor  Workshop,

Dehradun by the owner.   The vehicle was  again surveyed by

approved  surveyor  Vivek  Arora   as  the  complainant   had

complained  that  earlier   Surveyor,   Manoj Kumar Aggarwal,

had not  made thorough investigation.   The survey was then

conducted by  Vivek Arora.    As the insurance company  was

not satisfied with the survey report  submitted by Vivek Arora, it

got the vehicle   surveyed again by another approved  surveyor,

B.B.  Garg.   B.B.  Garg  had  estimated  the  damages  to  the

vehicle  to the extent of Rs.63,771/-.  The insurance company,

3

then, approached  the complainant for payment of this amount

but he refused to accept the same.

5. It  appears  that  before  the  District  Forum,  the

complainant had filed  the affidavits  of the persons from whom

the spare parts were purchased,  repair work was got done and

charges  paid  to them.   The complainant  also submitted the

vouchers  and  bills of various  spare parts and the payment

made towards labour charges.    On the  other hand, on behalf

of the insurance company, affidavit of one Pradeep Ghai was

filed  along with survey reports of Vivek Arora and B.B. Garg.  

6. The  District   Forum,  upon  consideration  of  the

matter, held that there was  deficiency in  service on the part of

the  insurance company and ordered them  to pay a sum of

Rs.1,58,409/- along with interest  at the rate of 12% per annum

with cost  of  Rs.1,000/-.     The District  Forum also  gave an

option to the insurance company  that it may pay the  insured

amount  of Rs.6 lakhs to the complainant after transferring the

vehicle  in its name,  if it so desired.   

7. The insurance  company carried  the  order  of  the

District Forum in appeal to the State Commission but without

any success.    The  concurrent orders of the consumer fora

4

were challenged by the insurance company,  as noticed above,

to the National Commission but  there also they failed.

8. We heard Mr.  P.K.  Seth,  learned counsel  for  the

insurance company and Mr. N.S. Jain,  learned counsel for the

complainant.

9. Mr.  P.K.  Seth,  learned  counsel  for  the  insurance

company  heavily  relied  upon  Section  64-UM(2)  of  The

Insurance Act, 1938 (for short, ‘the Act 1938’)  and submitted

that  the  loss assessed by the  approved surveyors appointed

in view of the provisions of Section 64-UM  was binding, more

so, in  the absence  of any evidence on record to establish  that

the loss assessed by the approved   surveyors  was not correct

and justified.   He would  submit  that as per the scheme of the

insurance,   the  loss  caused  to  the  vehicle   has  to  be  first

assessed   by  approved surveyor   and   only  thereafter   the

vehicle could have been  repaired by the owner.   He submitted

that the complainant failed to make out any case as to why the

survey reports of the Approved   Surveyors   Vivek Arora and

B.B. Garg  should be rejected.   The learned counsel     for the

insurance  company  would  also  urge  that  the  insurance

company was not liable to indemnify   for new parts.

5

10. We  are  unable  to  accept  the  contentions  of  the

learned counsel for the insurance company.   That the vehicle

that was insured  with the insurance company  met  with an

accident and fell down into the  khud  300 feet  deep below the

road  is not in dispute.    The survey  reports  of Vivek Arora as

well as B.B. Garg, upon which reliance has been placed by the

insurance  company  show  that  the  vehicle  got  extensively

damaged in this accident.  Its Assembly, Bonnet, Cabin, Tool

Box, Body, Chasis, Diesel Tank, Pressure Regulator, Pressure

Pipe, Brake Booster, Steering Wheel, Head Lights, Main Leaf

LHS Front, Front shockers, Steering Worm, Air Cleaner, Cross

Member  Rear  2nd,  Propeller  Shafts,  Front  Axle,  Silencer,

Engine  Chamber  etc.  had  sustained  major  damage.    The

approved   surveyors  in  their  reports  have  recorded  their

satisfaction  that  the  aforementioned  damages  to  the  said

vehicle would have occurred  in that mishap.  Vivek Arora in his

survey report also noted that the damages noticed  to the said

vehicle  were in conformity with the description of the accident

mentioned in the claim form and details of  damages  noted by

the  spot  surveyor.     Curiously,  the  spot  survey  report

conducted by Manoj Kumar Aggarwal has been withheld   by

6

the  insurance  company.    At  Item  No.11,  under  the  Head

“summary of assessment”  in the survey report by Vivek Arora,

original estimate is recorded thus:    

 “Original Estimate    Total Labour Charges            Rs.1,30,440/-    Total cost of spare parts           Rs.0,36,090/-

    ------------------------    Total                                           Rs.1,66,580/-“

    ------------------------

The enclosures with the survey  report at item No.2 records:

  “Estimate: Original and Suppl. 3 pages”

        But this enclosure has been   suppressed by the insurance

company.   The vehicle was removed  by the complainant to

the workshop only after  the survey was conducted by Manoj

Kumar  Aggarwal  (approved  surveyor  nominated  by  the

insurance company for spot survey).

11.         However, Vivek Arora  in his survey report made the

following  assessment for the reasons best known to him:

“Total Labour Charges:                 Rs.52,000.00  Total cost of spare parts              Rs.11,874.37   Less:Depreciation   No.10% & 50%            Rs.  3,669.58   Excess if any -   Salvage value (Appx.)                 Rs.  1,000.00    Appx. Net Loss            Rs.59,304.82”

7

12. The insurance company  got the survey done  again

through  B.B.  Garg  (Approved  Surveyor)  who  made  an

additional assessment of Rs.3,512.72 to the assessment made

by Vivek Arora.  

13. On the face of the vouchers  and bills  for parts as

well as labour charges  submitted by the  complainant,  all the

three consumer fora accepted the complainant’s claim  and did

not  accept   these  survey reports.     Pertinently,  the vehicle

was not even  2 year  old at the time of accident.

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

“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.”

8

15. The object of the  aforesaid provision is 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.   Proviso  appended

thereto,   however,  makes it  clear  that  insurer  may settle  the

claim for the  loss 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).   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  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.

16. So far as the case in hand is concerned, the claim

of the complainant has been accepted by the  consumer fora

as  it  was  duly   supported  by  original  vouchers,  bills  and

9

receipts.  It has been held that the actual expenses  incurred by

the complainant   comes to Rs.1,39,438/-  in getting the truck

repaired  apart from the expenses  on account of  haulage  of

truck  and carrying it  to  the workshop.   Taking into  account

actual expenses incurred  and the interest that  the complainant

had to pay to   the bank   from  which the loan was obtained  for

that  amount,  the  District  Forum  awarded  a  sum  of

Rs.1,58,409/- to the complainant and insurance company was

directed to make that payment  along with interest at the rate of

12%  per  annum.    At  the  first  blush,  we  had  some  doubt

whether  the interest paid by the complainant to the bank could

have been awarded, but on deeper scrutiny we found that no

such ground has been set up in the appeal.   As a  matter of

fact,  this  aspect  was  not  even   raised  before  the  National

Commission.

17. The appeal is devoid  of any substance.    The

insurance  company  would  have  been  well  advised  in  not

spending public money unnecessarily  on avoidable and wholly

frivolous  litigation such as this.

10

18. The  appeal  has  no  merit  and  is  liable  to  be

dismissed  and is  dismissed  with  costs  which  we quantify  at

Rs.15,000/-.

…………………. J

                   (D.K. Jain)   

………………….J                (R.M. Lodha)  

New Delhi, April  9, 2009

11