In the case of National Insurance Company Ltd. v. M/s. Hareshwar Enterprises (P) Ltd. & Ors, the Supreme Court has shed light upon the various aspects of the consumer disputes including Cause of Action, evidentiary value of the Surveyor Report. and Investigation Report. Here are some observations made by the bench of Justices Hemant Gupta and A. S. Bopanna.

Facts of the case

The appellant (insurer) was arrayed as a respondent in the complaint filed before the NCDRC by the insured. The plant and machinery in the factory owned by the insured were charged in favor of Maharashtra State Financial Corporation, while the stock in trade was hypothecated in favour of Thane Jan Sahakari Bank for discharge of loan obtained from them, and they were arrayed as parties to the proceedings. Through the impugned order, the NCDRC allowed the complaint in part and directed the insurer to pay the sum of Rs.79,34,703/- with interest at 12 % per annum, to be apportioned in favour of Maharashtra State Financial Corporation and the Thane Jan Sahakari Bank Limited.

The insurer contended that the proceedings before the NCDRC was not maintainable since the claim was filed beyond limitation. In this regard, the insurer referred to Section 24A of the Consumer Protection Act, 1986 which provides that the limitation to file the complaint is within two years from the date on which the cause of action has arisen. It was contended that the cause of action arose on the date the fire incident happened.

The Bench, after considering the steps taken by the insurer and the insured after the fire incident, held that the cause of action though arose for the first time when the fire incident happened, did not remain static and that fresh cause of action was created subsequently and that the matter kept oscillating. As such, the consideration of the complaint on merits by the NCDRC was justified.

Surveyor Report and Investigation Report

The counsel for the appellant contended that the NCDRC committed an error in relying on the surveyor report as sacrosanct without giving credence to the investigation report and relied on the decision in the case of New India Assurance Company Limited vs. Pradeep Kumar (2009) 7 SCC 787.

On this, the bench held, "In the said decision, it is no doubt held that though the assessment of loss by an approved surveyor is a prerequisite for payment or settlement of the claim, the surveyor report is not the last and final word. It is not that sacrosanct that it cannot be departed from and it is not conclusive. The approved surveyor's report may be the basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured. On the said proposition, we are certain that there can be no quarrel. The surveyor's report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the surveyor's report."

The Bench further held that, "On the proposition of law that the surveyor's report cannot be considered as a sacrosanct document and that if there is any contrary evidence including investigation report, opportunity should be available to produce it as rebuttal material, we concur. However, the issue to be noted is as to whether the surveyor's report in the instant case adverts to the consideration of stock position in an appropriate manner and in that circumstance whether an investigation report which is based on investigation that was started belatedly should take the centre stage. The fact remains that the surveyors report is the basic document which has statutory recognition and can be made the basis if it inspires the confidence of the adjudicating forum and if such forum does not find the need to place reliance on any other material, in the facts and circumstance arising in the case."

The Bench found that in the facts of the case, the surveyor's report was submitted as the natural process and that the conclusion reached therein is more plausible and reliable rather than the investigation report. Hence, the Bench held that the reliance placed on the surveyor's report by the NCDRC without giving credence to the investigation report cannot be faulted.

The Court upheld the Judgment by the NCDRC and only modified the rate of interest from 12% to 9% to be given by the insurer.