Further insurance survey reports may be used for valid reasons; delayed claim settlement can attract compensatory interest on facts.

Section 64-UM of the Insurance Act allows an insurer to obtain a survey report for high-value claims, but the first report is not conclusive and a further survey may be sought where there are valid reasons to doubt its adequacy, accuracy, or completeness. Repeated appointments cannot be made mechanically or to secure a tailor-made report, and cogent reasons must be disclosed for not accepting the earlier assessment. On interest, compensation for delayed settlement depends on the facts, the delay in payment, and the claimant's loss of use of money; the rate must reflect prevailing circumstances and fairness. The interest component was re-computed at 9% per annum from the date of the Chartered Accountant's assessment.

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Issues: (i) Whether an insurer can appoint a second or further surveyor to assess loss before settling an insurance claim under Section 64-UM of the Insurance Act, 1938. (ii) Whether the rate and commencement date of interest awarded on the assessed loss were justified.

Issue (i): Whether an insurer can appoint a second or further surveyor to assess loss before settling an insurance claim under Section 64-UM of the Insurance Act, 1938.

Analysis: Section 64-UM(2) requires the insurer to obtain a survey report for claims above the statutory threshold, but the provision does not make the first report conclusive. The insurer may seek another report where there are valid reasons to doubt the adequacy, accuracy, or completeness of the initial assessment. At the same time, repeated appointments cannot be made mechanically or to obtain a tailor-made report; the insurer must disclose cogent reasons for not accepting the earlier report.

Conclusion: The insurer was entitled to rely on a further assessment, and the Chartered Accountant's report accepted by the Commission was not legally invalid on that ground.

Issue (ii): Whether the rate and commencement date of interest awarded on the assessed loss were justified.

Analysis: Interest in such matters is compensatory and depends on the facts of the case, the delay in payment, and the loss of use of money by the claimant. A flat or excessive rate is not automatic. Once the claim amount was settled, further delay in payment justified an award of interest as compensation, but the appropriate rate had to reflect prevailing circumstances and fairness.

Conclusion: The award of interest was modified to 9% per annum from the date of assessment by the Chartered Accountant.

Final Conclusion: The appeal succeeded only in part, with the assessed loss maintained and the interest component enhanced and re-computed.

Ratio Decidendi: Under Section 64-UM of the Insurance Act, 1938, an insurer may obtain a further survey report for valid reasons, but repeated surveys cannot be used to secure a preferred outcome; interest on delayed settlement is compensatory and must be fixed on the facts of the case.

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