Case Note & Summary
The appellant, M/s Super Label Mfg. Co., a registered partnership firm engaged in printing high technology labels, imported sophisticated printing machinery including 'Aquaflex' from Canada and 'GallusArsoma' from Switzerland. They secured a 'Standard Fire and Special Perils' Policy from the respondent, New India Assurance Company Limited, for a total cover of Rs. 3,35,30,000/- valid from 15.05.2003 to 30.08.2004. On 28.02.2004, a fire mishap occurred in the factory at about 7.50 AM, damaging and destroying portions of the factory including plant and machinery, building, raw material, and finished products. The appellant invoked the policy and filed a claim for Rs. 3,02,75,000/-. They also informed M/s Loss Prevention Association of India Ltd. and requested an investigation. The insurance company appointed a surveyor, M/s Prabha Associates, Mumbai, to assess the loss. The surveyor conducted several inspections and, at the surveyor's instance, the appellant called for an engineer from the manufacturers. The surveyor submitted a report assessing the loss at a lower amount. The insurance company repudiated the claim based on the surveyor's report. The appellant challenged the repudiation before the State Consumer Disputes Redressal Commission, which dismissed the complaint. The appellant then appealed to the National Consumer Disputes Redressal Commission, which also dismissed the appeal. The appellant then appealed to the Supreme Court. The Supreme Court held that the surveyor's report is not binding on the insured and the insurer cannot repudiate the claim solely based on the surveyor's assessment without independent grounds. The Court allowed the appeal, set aside the orders of the lower forums, and directed the insurance company to reconsider the claim afresh in accordance with law.
Headnote
A) Insurance Law - Fire Insurance - Surveyor's Report - Binding Nature - The surveyor's report is not binding on the insured; the insurer must independently assess the claim and cannot repudiate solely based on the surveyor's assessment - Standard Fire and Special Perils Policy - Held that the insurer must consider the claim on its own merits and not merely adopt the surveyor's findings (Paras 1-10).
Issue of Consideration
Whether the insurance company can repudiate a claim solely based on the surveyor's report without independent assessment, and whether the surveyor's report is binding on the insured.
Final Decision
The Supreme Court allowed the appeal, set aside the orders of the State Commission and National Commission, and directed the insurance company to reconsider the claim afresh in accordance with law, without being influenced by the surveyor's report alone.
Law Points
- Surveyor's report is not binding on the insured
- Insurance claim cannot be repudiated solely based on surveyor's assessment
- Standard Fire and Special Perils Policy
- Duty of insurer to consider claim independently
