1995 (5) TMI 282 - HC - Indian Laws

Summary

Issues Involved:
1. Necessity of survey by an approved surveyor or loss assessor for claims under Rs. 20,000.
2. Interpretation of Section 64UM of the Insurance Act, 1938.
3. Validity of in-house assessment by insurance companies for claims under Rs. 20,000.
4. Alleged breach of Articles 14, 19(1)(g), and 21 of the Constitution.

Detailed Analysis:

1. Necessity of Survey by an Approved Surveyor or Loss Assessor for Claims Under Rs. 20,000:
The pivotal question was whether a survey by an approved surveyor or loss assessor is necessary for claims under Rs. 20,000. The petitioner, an association of surveyors, argued that all claims, irrespective of their value, must be surveyed by a licensed surveyor or loss assessor. The respondents contended that claims under Rs. 20,000 could be settled by the insurance company itself without reference to approved surveyors or loss assessors.

2. Interpretation of Section 64UM of the Insurance Act, 1938:
Section 64UM was interpreted to determine its applicability to claims below Rs. 20,000. Subsection (2) specifically mandates that claims equal to or exceeding Rs. 20,000 require a report from an approved surveyor or loss assessor. However, the section does not mention claims below Rs. 20,000, indicating that the legislature did not intend for all claims to be surveyed by approved surveyors. Subsection (6) allows insurers to employ any person (not disqualified) for claims under Rs. 20,000 if employing an approved surveyor would be disproportionate to the claim amount.

3. Validity of In-House Assessment by Insurance Companies for Claims Under Rs. 20,000:
The court found no merit in the petitioner's argument that subsection (6) restricts insurers from settling claims under Rs. 20,000 through in-house assessment. Subsection (6) applies only when the insurer decides not to settle the claim by itself. The insurer has the option to settle such claims through its own officers, who are not considered surveyors or loss assessors under subsections 1(D), (2), and (6). Subsection (9) empowers the Controller to direct that claims under Rs. 20,000 be reported upon by an approved surveyor if not already done so.

4. Alleged Breach of Articles 14, 19(1)(g), and 21 of the Constitution:
The petitioner claimed that in-house assessments violated Articles 14, 19(1)(g), and 21 of the Constitution. The court found no infringement of these articles. The policy of settling claims below Rs. 20,000 without a surveyor or loss assessor was deemed not arbitrary or violative of the equality clause. It was noted that this method saves unnecessary expenditure and time, and does not debar approved surveyors from surveying claims of Rs. 20,000 or more, thus not affecting their trade or business.

Conclusion:
The court concluded that the legislature did not intend for all claims to be surveyed by approved surveyors, especially small claims under Rs. 20,000. The in-house assessment by insurance companies for such claims is permissible and does not violate constitutional provisions. The petition was dismissed with no order as to costs.