Consumer forum primarily concerned with allegation of deficiency in service, cannot subject surveyor's report to forensic examination: Supreme Court [Read Judgment]

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The Supreme Court on Tuesday held that 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.

A division bench of Justice Hemant Gupta and Justice V Ramasubramanian noted,
"if the appellant had gone to the civil court, they could have even summoned the Surveyor and cross examined him on every minute detail."

The petition had been filed by the complainant challenging the order of the National Consumer Dispute Redressal Commission confining the compensation payable to them, only to the extent of the assessment as made by the final Surveyor.

The Complainant had taken the “Standard Fire and Social Perils” policy for the period from May 7, 2007, to May 6, 2008, for a sum of Rs.42,40,00,000/­. Whereas, when the policy was in force, a fire broke out in the factory premises of the complainant on November 15, 2007.

In furtherance to this, the Complainant raised a claim of Rs. 13,00,00,000/- estimating the quantity of waste paper destroyed by fire at 8500 MT. The surveyor appointed by the insurance company estimated the loss suffered by the complainant on account of the fire incident to be worth Rs. 2,86,17,942/-.

Counsel appearing for the Complainant submitted that 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. which was gross injustice to the appellant in the matter of assessment of the quantum of loss.

Whereas the counsel appearing for the respondents submitted that 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.

However, after going through the Judgments in several cases the bench noted,

"(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."

The bench upheld the decision of the National Commission while stating, "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."

Case Title: Khatema Fibres Ltd. Vs. New India Assurance Company Ltd. & Anr.