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Upholding a district forum order, the Maharashtra State Consumer Disputes Redressal Commission recently dismissed an appeal filed by an insurance firm. The commission ruled against the Oriental Insurance Company after it appointed a second surveyor to assess damages incurred by a textile concern.

Aggrieved by an order passed by the South Mumbai District Consumer Disputes Redressal Forum on May 21, 2010, the insurance company had filed an appeal in the state commission. However, since the first surveyor assessed the loss at Rs 18.56 lakh and the Oriental Insurance Company paid the textile company only Rs 8.14 lakh– as assessed by the second surveyor – the commission observed that the insurance company had clearly violated guidelines of the Insurance Regulatory Development Authority (IRDA).

Upholding a district forum order, the commission ordered the insurance firm to pay the textile company, an additional amount of Rs 10.41 lakh along with interest of 9% per annum on Rs 18.56 lakh from June 2007 till January 2010. Further, the insurance company was also directed to pay an interest of 9% on Rs 10.41 lakh, from January 2010 till the realization of the entire amount. The textile company was also given Rs 15,000 towards the cost of litigation.

Citing the IRDA guidelines the commission observed, “The insurance company either has to settle the claim or repudiate it on receipt of the survey report. There is no provision to appoint a second surveyor. We are of the view that after the first survey has been done the second survey could not be permitted in law.”

Binal Textiles is a partnership firm in the business of purchasing yarn and making fabrics. The company stored yarn fabric manufactured in a gala at Bhiwandi. They had taken the standard fire and special perils policy and paid a premium of Rs 6,199. The total sum assured under the policy was Rs 25 lakh.

On August 15, 2006, due to a fire, Binal Textiles suffered severe losses. The company submitted its claim to the insurance company, which appointed K L Ashar as a surveyor to assess the loss. Ashar made a spot survey and put the amount at Rs 18.5 lakh and submitted his report to the insurance company.

However, the firm subsequently appointed another surveyor – Sai Shraddha Associates – who pegged the loss at Rs 8.14 lakh. The insurance company offered this amount as settlement to Binal Textiles. The textile company then filed a consumer complaint in the South Mumbai District Consumer Disputes Redressal Forum on December 17, 2007. By filing its written statement, the insurance company took the stand that the first surveyor had not verified all the documents. Therefore, the insurance firm had appointed a second surveyor, who thoroughly verified the documents and submitted the verification report to the extent of Rs 8.14 lakh.

At this point, the insurance company offered to pay the said amount, but the complainant had not accepted the same, which is why he filed a consumer complaint, claiming the amount as assessed by the first surveyor.

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June 2024