2021 INSC 0577
REPORTABLE
   IN THE SUPREME COURT OF INDIA
  CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.9050 OF 2018
Khatema Fibres Ltd.              ... Appellant (s)
Versus
New India Assurance Company Ltd. & Anr. ... Respondent(s)
 
J U D G M E N T
V. Ramasubramanian, J.
1. Aggrieved   by   the   Judgment   of   the   National   Consumer   Disputes
Redressal   Commission   (for   short   “National   Commission” )   confining   the
compensation   payable   to   them   only   to   the  extent   of   the  assessment   as
made   by   the   final   Surveyor,   the   complainant   before   the   National
Commission has come up with the above appeal.
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2. We   have   heard   Ms.   Meenakshi   Arora,   learned   senior   counsel   for
the   appellant   and   Mr.   Joy   Basu,   learned   senior   counsel   for   the
respondent­Insurance Company.
3. The appellant took a  “Standard Fire and Social Perils”  policy for the
period   from   7.05.2007   to   6.05.2008,   for   a   sum   of   Rs.42,40,00,000/­.
When the policy was in force, a fire broke out in the factory premises of
the appellant on 15.11.2007.
4. The   appellant   submitted   a   claim   on   19.11.2007,   estimating   the
quantity  of  waste  paper  destroyed  by  fire  at  8500  MT    and  its  value  at
Rs.13,00,00,000/­.
5. One   M/S   Adarsh   Associates,   appointed   by   the   respondent­
Insurance   Company,   conducted   a   survey,   sought   documents   from   the
appellant,   raised   queries   and   received   clarifications   from   the   appellant
and   submitted   a   final   report   dated   9.01.2009,   assessing   the   loss
suffered   by   the   appellant   on   account   of   the   fire   accident   as
Rs.2,86,17,942/­.
6. Though the appellant, vide their letter dated 2.5.2009, objected to
the   survey   and   assessment   report   and   sought   the   appointment   of
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another  surveyor, the respondent informed the appellant by  their letter
dated   21.08.2009   that   the   claim   of   the   appellant   has   been   approved
only to the extent of Rs.2,85,76,561/­, in full and final settlement. The
appellant,   through   letter   dated   14.09.2009,   again   raised   objections   to
the   Survey   Report,   but   the   respondent   informed   the   appellant   by   their
letter   dated   7.10.2009   that   the   claim   could   be   finalized   only   for   the
amount indicated in the letter dated 21.08.2009.
7. Therefore,   the   appellant   filed   a   consumer   complaint   before   the
National Commission under Section 21(a)(i) of the Consumer Protection
Act,   1986,   claiming:   (i)   compensation   in   a   sum   of   Rs.1364.88   lakhs
towards the loss suffered in the fire accident;  (ii)  compensation in a sum
of   Rs.2095.52   lakhs,   for   the   financial   stress   caused   by   the   respondent
by delaying the processing of the claim;  (iii)   interest  @ 18% p.a. on the
compensation   amount   of   Rs.1364.88   lakhs   from   November,   2007   till
31.12.2009; and  (iv)  the cost of litigation estimated at Rs.1,00,000/­.
8. The   National   Commission,   by   its   Judgment   dated   3.07.2018
rejected   the   claim   of   the   appellant   under   both   the   heads,   but   directed
the respondent to pay only the amount of Rs.2,85,76,561/­ as admitted
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by   them.   This   amount   was   directed   to   be   paid   to   the   appellant   with
interest   @   9%   p.a.   from   15.11.2007,   only   till   the   date   the   Insurance
Company   had   made   the   offer.   It   is   against   the   said   Judgment   of   the
National   Commission   that   the   appellant   has   come   up   with   the   above
appeal under Section 23 of the Consumer Protection Act, 1986.
9. Admittedly,   the   respondent­Insurance   Company   appointed   one
Shri Kapil Vaish, a Chartered Accountant, on 16.11.2007 itself  (the day
following the date of fire accident) , to conduct a spot inspection and file a
status report. When he visited the factory premises, the fire fighting was
still going on and it was found that the fire had taken place only in the
waste   paper   yard   of   the   factory.   In   the   status   report   submitted   by
Shri Kapil Vaish  on  16.11.2007,  he indicated  that  the  fire had  affected
waste   paper   bales   lying   in   an   area   measuring   27   mtrs.   X   55   mtrs.   =
1485   sq.mtrs.   in   open   compound.   Presuming   that   waste   paper   would
have been stacked in bunches of six bales, one on top of the other and
that   the   quantity   of   affected   waste   paper   could   be   around   5000   MT,
whose   cost   may   be   around   Rs.20­22   per   kg.,   Shri   Kapil   Vaish   roughly
estimated   the   loss   to   be   around   Rs.10­11   crores.   The   appellant
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themselves estimated the quantity of waste paper burnt in the fire to be
8500 MT valued at Rs.13,00,00,000/­.
10. M/s   Adarsh   Associates   who   conducted   the   actual   survey   with
reference to the records and other evidence available with the appellant,
had   two   options   before   them   for   arriving   at   the   quantity   of   material
destroyed   by   fire.   The   first   option   was   to   proceed   on   the   basis   of   the
stock   registers   and   other   records   of   the   appellant   company   to   fix   the
quantum   of   loss.   The   next   option   was   to   proceed   on   the   basis   of
volumetric   analysis,   by   taking   the   measurement   of   the   open   yard   in
which  the  fire   broke   out,   finding   out   the   optimum   capacity   of  the   yard
with reference to  the  measurement  of  the  bales  of paper   stored  therein
and then working out the quantum of material destroyed. 
11. The Surveyor adopted the second option namely that of volumetric
analysis   and   assessed   the   quantity   of   raw   material   damaged   at
2264.400   MT.   He   valued   this   raw   material   @   Rs.15137.35/­   per   MT,
inclusive   of   CENVAT.   Thus,   he   arrived   at   the   value   of   the   material
damaged to be Rs.3,42,77,015.34/­. Then the Surveyor fixed the salvage
value   at   Rs.18,92,200/­   and   deducted   the   same   from   the   value   of   the
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raw material, to arrive at the gross assessed loss at Rs.3,23,84,815.34/­
From out of this amount the Surveyor deducted the CENVAT as well as
1%   towards   soiled   goods.   After   so   doing,   the   surveyors   arrived   at   the
value of loss at Rs.2,86,17,942/­.
12. For   proceeding   on   volumetric   analysis   method,   the   Surveyor   took
the   measurement   of   the   open   yard   as   27   mtrs.   X   55   mtrs.   =   1485   sq.
mtrs.   This   was   on   the   basis   of   the   Status   Report   of   the   Chartered
Accountant who made the spot inspection on 16.11.2007 when the fire
fighting was still in progress. There was a finding in the status report of
the Chartered Accountant that the material affected by the fire was lying
in the yard measuring 27 mtrs. X 55 mtrs. = 1485 sq. mtrs. Therefore,
the Surveyor took this measurement as the starting point and proceeded
as detailed above.
13. Keeping   the   above   background   in   mind,   let   us   now   come   to   the
grievance   of   the   appellant,   against   the   Judgment   of   the   National
Commission.   Ms.   Meenakshi   Arora,   learned   senior   counsel   for   the
appellant contended that the National Commission committed a serious
error first in taking the net weight of waste paper bales burnt/damaged
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during   the   incident   as   2264.400   MT,   as   against   the   claim   of   the
appellant   that   the   net   weight   of   the   material   damaged   was   8332   MT.
According to the learned senior counsel, there were no discrepancies in
the various records and stock registers maintained by the appellant with
respect  to the quantity  and  weight  of material stored in  the  open yard,
but the Surveyor chose to reject the same arbitrarily and proceeded on
volumetric analysis basis. The learned senior counsel further contended
that   even   while   proceeding   on   volumetric   analysis   basis,   the   Surveyor
did not do justice. Though, the total area of the open yard was 27 mtrs.
X 100 mtrs. = 2700 sq. mtrs., the Surveyor took the measurement as 27
mtrs. X 55 mtrs = 1485 sq. mtrs., despite they themselves finding that
the area was 22.5 mtrs. X 105 mtrs. = 2362 mtrs. This, according to the
learned   senior   counsel   for   the   appellant,   resulted   in   gross   injustice   to
the appellant in the matter of assessment of the quantum of loss.
14. Another   gross   error   committed   by   the   Surveyor,   according   to   the
learned senior  counsel for  the appellant, is that  despite finding  the net
weight   per   bale   as   988.889   kgs.   as   per   Annexure   A­3   to   the   Survey
Report   dated   9.01.2009,   the   Surveyor   took   the   net   weight   as   900   kgs.
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per bale, merely because the complainant had indicated the same to be
900 kg.  per  bale. The  Surveyor  had thus  adopted  double standards, in
taking either what is found by them or what is claimed by the appellant,
whichever was less. This according to the learned senior counsel for the
appellant   resulted   in   the   Insurance   Company   eventually   admitting   the
claim   only   to   the   extent   of   less   than   25%   of   the   total   amount   of   loss
suffered by the appellant.
15. Justifying   the   judgment   of   the   National   Commission,   it   is
contended   by   Mr.   Joy   Basu,   learned   senior   counsel   for   the   respondent
that   M/S   Adarsh   Associates   were   appointed   by   the   respondent   as
Surveyors to  act as such  in terms of Section  64UM(2) of the  Insurance
Act,   1938   and   that   they   have   assessed   the   loss   in  a  scientific   manner.
As   the   Surveyors   appointed   by   the   respondent   are   experts   in   the   field,
who have gone into every minute detail by examining the records of the
appellant scientifically, their report is unassailable. In the case on hand,
it   was   admitted   even   by   the   appellant,   to   Shri   Kapil   Vaish   who
conducted spot inspection that there was no physical verification of the
stock   of   raw   material   in   the   recent   past   and   that   the   consumption   of
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raw material was recorded only on estimated yield basis. Therefore, the
learned   senior   counsel   for   the   respondent   contended,   by   drawing   our
attention   to   the   letter   dated   5.12.2007   sent   by   the   appellant   that   the
appellant   themselves   were   adopting   volumetric   analysis   for   the
quantification   of   the   stock.   The   learned   senior   counsel   relied   upon   the
decisions   of   this   Court   in   (i)   United   India   Insurance   Company   Ltd.
And   Others     vs.   Roshan   Lal   Oil   Mills   Ltd .   And   others 1
;   (ii)   Sikka
Papers   Limited   vs.   National   Insurance   Company   Limited   And
Others 2
; and   (iii)   New   India   Assurance  Company  Limited   vs.   Luxra
Enterprises   Private   Limited   And   Another. 3
,   in   support   of   his
contention that the report of the surveyor is an important document and
that   Courts   may   have   to   show   deference   to   the   report   of   the   surveyor
appointed in terms of section 64UM(2) of the Act.
16. We have carefully considered the rival contentions.
17. As   could   be   deciphered   from   the   grounds   of   appeal   and   the
submissions made at the time of hearing, the grievance of the appellant
1    2000 (10) SCC 19
2     2009 (7) SCC 777
3    2019(6) SCC 36
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is   primarily   with   respect   to   the   quantification   of   the   net   weight   of   the
raw   material   destroyed   in   the   fire   accident.   The   price   of   the   material,
fixed   by   the   Surveyor   at   Rs.15137.35/­   per   MT,   is   not   seriously
disputed.   Though   a   dispute   is   raised   with   regard   to   the   salvage   value,
the   contention   relating   to   the   same   is   very   weak   and   feeble   and   hence
we would not get into the same.  
18. Insofar as the quantification of the weight of raw material damaged
in   the   fire   is   concerned,   the   Surveyor   had,   in   fact,   worked   out   the
quantity, as seen from paragraph 9.7 of his Report, both on the basis of
the   appellants’   stock   records   and   also   on   the   basis   of   volumetric
analysis of the area involved.  
19. After extensively analyzing what is reflected in the stock records of
the   appellant,   the   Surveyor   came   to   the   conclusion   that   there   were
discrepancies   which   could   not   be   reconciled.   It   is   recorded   by   the
Surveyor   in   paragraph   9.8.2   of   the   Report   that   the   appellant   initially
submitted   one   set   of   documents,   which   reflected   a   huge   quantity   of
imported waste paper both for general use and for newsprint. Therefore,
the Surveyors requested the appellant to submit documents in support
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of   reversal   of   CENVAT,   on   the   damaged   quantity   of   waste   paper.
Immediately   the   appellant   submitted   a   revised   claim   bill   along   with   a
fresh   set   of   documents.   In   fact   imported   waste   paper   for   newsprint   is
exempt from payment of customs duty subject to submission of end use
certificate.   In   the   revised   set   of   documents,   the   quantity   of   closing
stocks   of   imported   waste   paper   meant   for   newsprint   was   substantially
increased. The Surveyor also found in paragraph 9.8.7.7 of their Report
that there was a huge difference between the overall quantity of burnt/
damaged stock of waste paper arrived at on the basis of the initial set of
records and the overall quantity of burnt/damaged stock of waste paper
arrived   at   on   the   basis   of   the   revised   set   of   records.   Therefore,   the
Surveyor   decided  to   adopt   volumetric   analysis  method   rather   than   rely
upon the stock records of the insured.
20. We fail to understand how the Surveyors could be found fault with,
for   rejecting   the   stock   records   of   the   insured,   especially   in   the   light   of
the circumstances narrated above. When the insured produced 2 sets of
records   and   the   quantum   of   material   destroyed   by   fire   arrived   on   the
basis of these records showed huge discrepancies, the Surveyor had no
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alternative   except   to   reject   these   records   and   proceed   on   volumetric
analysis. In any  case, as rightly  pointed  out by the  learned counsel  for
the   respondent,   the   appellant   themselves   have   admitted   to   Shri   Kapil
Vaish, who went for spot inspection when the fire was still raging, that
the appellant had not conducted physical verification of its raw material
stock   in   the   recent   past   and   that   the   consumption   was   recorded   on
estimated yield basis. In their own letter dated 5.12.2007, the appellant
had   conceded   that   stock   taking   was   done   on   the   basis   of   receipts   and
consumptions   as   well   as   physical   verification   on   volumetric   basis.   The
following   extract   from   the   appellant’s   letter   dated   5.12.2007   would
clinch   the   issue   in   this   regard;   “the   estimates   for   stocks   and   burnt
quantities   may   not   be   appearing   close   to   stock   inventory   maintained   in
the   books,   since   the   estimates   prepared   for   burnt   material   was   not   on
weighment   basis   but   on   volumetric   basis”.   Therefore,   we   find   that   the
refusal of the Surveyor to go by the stock records of the appellant, but to
adopt   volumetric   analysis,   was   fully   justified   and   no   exception   can   be
taken to the same.
21. On the method of volumetric analysis adopted by the Surveyor, the
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first grievance of the appellant is that the physical measurement of the
stockyard was 27 mtrs. X 100 mtrs. = 2700 sq. mtrs.  But the Surveyor
took the measurement as given by Shri Kapil Vaish,  namely,  27 mtrs. X
55   mtrs.   =   1485   sq.   mtrs.,   despite   finding   in   para   4.7   of   the   Survey
Report that the actual measurement was 22.5 mtrs. X 105 mtrs. = 2362
sq. mtrs. Such a drastic reduction in the total measurement of the area
of the open stock yard, according to the appellant, led to the quantum of
the material burnt/damaged getting substantially reduced.
22. But it is seen from paragraph 9.4 and 9.5 of the Surveyors’ Report
that there were actually three different measurements available with the
Surveyor, with a huge variation between one another. The Status Report
dated   16.11.2007   filed   by   Shri   Kapil   Vaish,   about   which   the   appellant
did   not   have   any   serious   grievance,   recorded   clearly   as   follows   “it   was
estimated that the fire had affected waste paper bales lying in the area of
27   mtrs.   X   55   mtrs.   =   1485   sq.   mtrs.   in   the   open   compound.”   The
appellant   claimed   in   their   letter   dated   13.12.2007   addressed   to   the
Surveyor   that   the   total   affected  area  was   27   mtrs.  X  100  mtrs.  =   2700
sq. mtrs. These two documents,  namely,  the Status Report of Shri Kapil
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Vaish and the measurement given by the appellant in their letter dated
13.12.2007 were in contrast to the measurement given by the  Tehsildar,
Khatima,   relied   upon   by   the   appellant   themselves,   according   to   which
the measurement was 90 mtrs. X 23 mtrs. = 2070 mtrs.
23. Faced   with   three   different   measurements   as   aforesaid,   the
Surveyor reconciled the same by holding that despite the measurement
of   the   open   stockyard   being   22.5   mtrs.   X   105   mtrs.   =   2362   mtrs.,   the
area affected by fire could only be 1485 sq. mtrs. This is for the reason
that   during   their   visit   to   the   site,   the   damaged/burnt   bales   as   well   as
loose waste papers were found spread over an area of 22.5 mtrs. X 105
mtrs.   and   the   insured   was   carrying   out   salvaging/segregation   in   the
said   area   after   the   extinction   of   the   fire.   In   other   words,   what   was
witnessed   by   Shri   Kapil   Vaish   personally   on   16.11.2007   was   that   the
fire was confined to an area of 1485 sq.mtrs, but what was seen by the
Tehsildar   and   the   Surveyor   was   of   a   larger   area   where   the   salvage
operation   was   going   on.   Therefore,   the   Surveyor   chose   to   go   by   the
measurement   of  the   area  mentioned   in   the  Status   Report   of  Shri  Kapil
Vaish, who had the benefit of witnessing what was happening when fire
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fighting   was   still   in   progress.   In   such   circumstances,   we   find   nothing
wrong   in   the   Surveyor   taking   the   measurement   of   the   area   of   the
stockyard  affected   by   fire,   as  27  mtrs.  X   55   mtrs.  =  1485  sq.  mtrs.  for
the purpose of volumetric analysis.
24. At   this   stage   it   will   be   useful   to   extract   the   table   given   by   the
Surveyor   in   paragraph   9.9.2   of   his   Report,   where   detailed   calculations
are   provided   as   to   how   the   net   weight   of   waste   paper   burnt/damaged
during the incident  was arrived at:
1. Total area considered for storage bales 
in open Sq Mtr       1485
2. Less: 20% are considered for gaps/open
spaces   while   storing   bales   and   other
open space for movement etc. Sq Mtrs         297
3. Total   affected   area,   considered   for
storage (1­2) Sq Mtr       1188
4. Average   area   per   bale,  as   considered   by
us Sq Mtr       2.007
5. Therefore no. of bales stored in one layer
of local area (1188 divided by 2.007) Nos.         592
6. Total nos of bales in the affected stacks,
considering 5 bales in height (592 x 5) Nos       2960
7. Av weight per bale as considered by us. Kgs         900
8. Therefore, total weight of bales stored in
affected area/volume (2960 x 900) Kgs 2664000
9. Less:   15%   of   above   bales   /   weight
considered   as   shifted   /   save   during   fire
fighting Kgs    399600
10. New weight of waste paper bales burnt/
damaged during the incident (8­9) Kgs 2264400
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25. An   objection   was   raised   by   Ms.   Meenakshi   Arora,   learned   senior
counsel for the appellant about 20% reduction made by the Surveyor in
the   measurement   of   the   area.   Such   a   reduction   was   made   by   the
Surveyor,   on   the   ground   that   gaps/space   was   required   for   the
movement   of   men   and   material.   It   is   her   contention   that   when
admittedly the appellant was using forklifts to move and store material,
there was no question of leaving any vacant space.
26. But we do not agree. The allowance of some space within the open
stockyard, for the purpose of movement of men and material is logical. It
is   not   possible   for   us   to   accept   that   the   whole   space   in   the   stockyard
was   completely   stacked   by   material   without   any   space   for   movement.
Without providing adequate gaps and spaces within the open courtyard,
it would not have been possible for the appellant to remove the material
for the purpose of processing, even if forklifts were used. Therefore, the
objection to the provision for open space/gaps is unfounded.
27. The next crucial objection of the appellant is to the adoption of the
overall   weight   per   bale   at   900   kgs.   According   to   the   appellant,   the
Surveyors   themselves   calculated   the   average   weight   per   bale   in
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Annexure   A­3   to   their   report   as   988.889   kgs.   and   that,   therefore,   this
could not have been reduced to 900 kgs. per bale.
28. But   the   appellant   has   to   blame   themselves   for   this.   In   the
calculation   sheet   annexed   to   the   letter   dated   13.12.2007   addressed   to
the Surveyor, the appellant themselves estimated the average weight per
bale to be 900 kgs.  What is arrived at by the Surveyor, in Annexure A­3
to   their   Report   is   based   only   upon   the   sizes   of   different   types   of   bales
and the areas occupied by different types of bales. Annexure A­3 to the
Surveyors’  Report  arrives at  the average  weight  per   bale by   multiplying
the size of the bales by the area occupied. There was no reason for the
Surveyor to be more royal than the king by adopting the average weight
per bale on the basis of paper calculations, when the party himself has
provided the average weight to be 900 kgs. per bale.
29. Thus,   we   find   that   all   the   objections   of   the   appellant   to   the
Surveyors’   Report   are   wholly   unsustainable   and   the   National
Commission   rightly   rejected   those   objections.   As   a   matter   of   fact   we
have   taken   pains   to   go   into   elaborate   factual   details,   as   this   is   a   first
appeal under Section 23 of the Consumer Protection Act, 1986.
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30. As correctly pointed out by the National Commission, the appellant
was   not   entitled   to   succeed   unless   they   were   able   to   establish   any
deficiency   in   service   on   the   part   of   the   Insurance   Company.   The
expression   deficiency   is   defined   in   Section   2(1)(g)   of   the   Consumer
Protection Act, 1986, as follows:
“ 2(1)(g) deficiency” means any fault, imperfection, shortcoming
or   inadequacy   in   the   quality,   nature   and   manner   of
performance   which   is   required   to   be   maintained   by   or   under
any law for the time being in force or has been undertaken to
be   performed   by   a   person   in   pursuance   of   a   contract   or
otherwise in relation to any service”
31. This   is   not   a   case   where   the   Insurance   Company   has   repudiated
the claim of the appellant arbitrarily or on unjustifiable grounds. This is
a case where the claim of the appellant has been admitted, to the extent
of   the   loss   as   assessed   by   the   Surveyor.   In   cases   of   this   nature   the
jurisdiction   of   the   special   forum   constituted   under   the   Consumer
Protection Act, 1986 is limited. Perhaps if the appellant had gone to the
civil   court,   they   could   have   even   summoned   the   Surveyor   and   cross
examined   him   on   every   minute   detail.   But   in   a   complaint   before   the
Consumer   Forum,   a   consumer   cannot   succeed   unless   he   establishes
deficiency in service on the part of the service provider.
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32. It is true that even   any inadequacy in the quality, nature and
manner   of  performance   which   is   required   to  be   maintained   by  or
under   any   law   or   which   has   been   undertaken   to   be   performed
pursuant to a contract , will fall within the definition of the expression
‘deficiency’ .   But   to   come   within   the   said   parameter,   the   appellant
should   be   able   to   establish   (i)   either   that   the   Surveyor   did   not   comply
with   the   code   of   conduct   in   respect   of   his   duties,   responsibilities   and
other   professional   requirements   as   specified   by   the   regulations   made
under the Act, in terms of Section 64UM(1A) of the Insurance Act, 1938,
as it stood then; or   (ii)   that the insurer acted arbitrarily in rejecting the
whole   or   a   part   of   the   Surveyor’s   Report   in   exercise   of   the   discretion
available   under   the   Proviso   to   section   64UM(2)   of   the   Insurance   Act,
1938.  
33. Section 64UM (2) of the Insurance Act, 1938, before its amendment
by Act 5 of 2015, mandated that no claim equal to or exceeding a sum of
rupees twenty  thousand only  shall be admitted for  payment unless the
insurer   had   obtained   a   report   from   an   approved   surveyor   or   loss
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assessor. 4
 This provision read as follows:
“ (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”):
34. But the Proviso to sub­section (2) of section 64UM also recognized
the right of the insurer to pay any amount different from the amount as
assessed   by   the   approved   surveyor   or   loss   assessor.   The   proviso   reads
as follows:
   “ 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. ”
  35. This is why  the law is settled that the surveyor’s report is not the
last and final word. It has been held by this Court in several decisions,
that   the   surveyor’s   report   is   not   so   sacrosanct   as   to   be   incapable   of
4   After   amendment   through   Act   5   of   2015,   what   was   sub­section   (2)   earlier,   has   become   sub­section   (4)   with   the
modification
   that the words “twenty thousand rupees” have been substituted by the words “amount specified in the Regulations by the
  Authority”.
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being   departed   from.   A   useful   reference   can   be   made   in   this   regard   to
the  decision  of this  court in   New   India   Assurance  Company  Limited
vs.  Pradeep Kumar 5
.
36. The Insurance Act, 1938 even while assigning an important role for
the   surveyor,   casts   an   obligation   on   him   under   sub­section   (1A)   of
section   64UM 6
    to   comply   with   the   code   of   conduct   in   respect   of   his
duties, responsibilities and other professional requirements as specified
by the regulations made under the Act. This provision reads as follows:
“ (1A) Every surveyor and loss assessor shall comply with the
code of conduct in respect of their duties, responsibilities and
other   professional   requirements   as   may   be   specified   by   the
regulations made by the Authority.”
37. Two   things   flow   out   of   the   above   discussion,   They   are   (i)   that   the
surveyor is governed by a code of conduct, the breach of which may give
raise to an 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 that if so done,
there could be an allegation of deficiency in service. 
5     (2009) 7 SCC 787
6   Now sub-section (2) of section 64 UM after amendment under Act 5 of 2015
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38. A   Consumer   Forum   which   is   primarily   concerned   with   an
allegation of deficiency in service cannot subject the surveyor’s report to
forensic examination of its anatomy, just as a civil court could do.   Once
it   is   found   that   there   was   no   inadequacy   in   the   quality,   nature
and   manner   of   performance   of   the   duties   and   responsibilities   of
the   surveyor,   in   a   manner   prescribed   by   the   Regulations   as   to
their   code   of   conduct   and   once   it   is   found   that   the   report   is   not
based   on   adhocism   or   vitiated   by   arbitrariness,   then   the
jurisdiction of the Consumer Forum to go further would stop.
39. In   the   light   of   the   above   we   are   of   the   considered   view   that   the
Judgment of the National Commission does not call for any interference.
Hence the appeal is dismissed. No costs.   
… ..…………....................J.
      (Hemant Gupta)
.…..………......................J.
(V. Ramasubramanian)
NEW DELHI
SEPTEMBER  28, 2021
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