Report of the surveyor forms the basis for settlement of the Insurance claim

In New India Assurance Co. Ltd. vs M/S. Jamia Hamdard, EPABX system installed at the office ofrespondent was insured under Fire & Special Perils Insurance Policy for a sum insured of Rs.15,00,000/-. On 02.10.2004, it was reported that the said EPABX went out of order since 2.10.2004 and was claimed to be total loss. The surveyors inspected the affected machine on 28.10.2004.  A claim for Rs.9,24,000/- was submitted by respondent to the surveyors.  The Service Engineers of the insured machine had confirmed that the damage has taken place to the system cards due to very high voltage due to lightning and the surveyor agreed with the views of the Service Engineers.   In view of the exclusion being applicable, the claim was not within the scope of the policy and was repudiated by letter dated 10.2.2005. The respondent complained before the District Forum which allowed the claim  directed the petitioner to pay to the respondent Rs.15 lacs with compensation of Rs.5,00,000/- for mental agony, harassment and deficiency of service and Rs.20,000/- costs. The appeal of the petitioner was rejected by the State Forum.

The petitioner appeal before the National Forum under several grounds:-

1) No claim can be allowed for more amount than the claim filed with the insurance company. The original claim was for Rs.9,24,000/-, however, the District Forum has allowed the claim for the total sum assured of Rupees 15 lacs and the State Commission has also confirmed the same.

2) Exclusion clause number 7 of the general exclusions of the policy is attracted in the present case as the cards were damaged due to direct impact of electricity high voltage caused by lightning. No other component has been damaged which could have been paid for. 

3) No reasoning has been given for not accepting the report of the surveyor. 

4) The forum below have directed compensation for mental agony and harassment but as per the judgment of Hon'ble Supreme Court in the case of Sikka Papers Limited Vs. National Insurance Company Ltd. & Ors. , it has been decided that no such compensation is payable to any institution.

The NCDRC held that :-

1) Lightning is covered under the policy without any qualifications attached to this  peril. In the General Exclusion Clause No. 7, though the component damaged with fire on account of lightening is also excluded, however, in the present case, there was no fire on account of lightning and therefore the component damaged from lightning is not excluded due to this clause. From the above analysis, it is clear that the damage to the cards is covered under the policy.

2) As per judgment of the Supreme Court in Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited & Anr and  Sikka Papers Limited Vs. National Insurance Company Limited, the report of the surveyor forms the basis for settlement of the Insurance claim unless there are cogent reasons for not accepting the same. Moreover, when the claim submitted before the surveyor was only for rupees 9,24,000/-, there is no basis for granting a compensation of Rupees 15 lakhs under the insurance policy. 

3) AN institution is not entitled to get any compensation for harassment and mental agony as laid down by the Hon'ble Supreme Court in Sikka papers Limited.