Anil Dev Singh, J.
(1) The pivotal questions involved in this writ petition are whether under section 64UM of the Insurance Act, 1938 ( for short 'the Act') any survey by an approved surveyor or loss assessor is necessary in respect of a claim of less than Rs.20,000.00 and whether or not such a claim can be settled by the Insurance company itself without the intervention of an approved surveyor or loss assessor.
(2) The petitioner, an association of surveyors, represented by Mr.Dalip Wangu, a licensed surveyor has filed this petition. According to the petitioner, a claim of loss by an insured on the insurance company has First to be surveyed or assessed by a licensed surveyor or loss assessor, irrespective of the fact whether the claim is above or below Rs.20,000.00. The immediate provocation for filing this writ petition is provided by the statement of the Chairman-cum-Managing Director of the thi
(3) The petition is opposed by the respondents on the grounds, inter alia, that the petitioner society not being a citizen is not entitled to complain of the alleged breach of Articles 19(1)(g) and 21 of the Constitution. Moreover, it is pleaded that claims which are less than Rs.20,000.00 in value can be settled by the insurance company itself without reference to the approved assessors or surveyors as the provision of Section 64UM of the Act do not bar in house assessments or settlements of claims in such cases. It is denied that Articles 14, 19(1)(g) and 21 of the Constitution have been infringed by settlement of such claims.
(4) The determination of questions involved in the writ petition depend on the interpretation of section 64UM. The; Section was added by Insurance (Amendment) Act,1968 (for short Amendment Act), which was brought into effect on January 1, 1969.
(5) Section 64UM is a long section having ten sub sections. Sub section (1) (A) deals with licensing of surveyors and loss assessors. It requires a license for a person to act as a surveyor or loss assessor. This sub section provides as follows:
'Save as otherwise provided in this section, no person shall act as a surveyor or loss'assessor in respect of general insurance business after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968. unless he holds a valid license issued to him by the Controller. thereforee according to this provision no person after the expiry of one year from the coming into force of the Insurance Amendment Act,1968 can act as a surveyor or loss assessor unless he holds a valid license issued to him by the Controller.
UNDER Sub-section 1(B) every person who intends to act as a surveyor or loss assessor after the time specified in clause 1 is required to make an application for grant of a license. The application is required to be made within such time, in such form, in such manner and on payment of such fee not exceeding Rs.250.00 as may be prescribed. Sub-section 1(C) fixes, the duration of the license and makes provision for renewal thereof.
(6) Sub Section (1)(D) lays down the requisite qualifications which an applicant must fulfill for the grant of a license to act as a surveyor or loss assessor. At this stage it will be convenient to set out the said provision, which reads as under:-
'(1)(D).No license to act as a surveyor or loss assessor shall be issued unless -
I)the applicant, where he is a individual, satisfies the Controller that he -
A)has been in practice as a surveyor or loss assessor on the 26th day of October, 1968, or
B)holds a degree of a recognized University in any branch of engineering, or
C)is a fellow or associate member of the Institute of Chartered Accountants of India or the Institute of Cost and Works Accountants of India, or
D)possesses actual qualifications or holds a degree or diploma of any recognized University or institute in relation to insurance, or
E)holds a diploma in insurance granted or recognized by the Government, or
F)possesses such other technical qualification as may be prescribed, and
G)does not suffer from any of the disqualifications mentioned in sub section (4) of Section 42;
II)the applicant, where he is a company or firm, satisfies the Controller that all his directors or partners, as the case may be, possess one or more of the qualifications specified in clause (i) and none of such directors or partners suffer from any of the disqualifications specified mentioned in sub section (4) of.Section 42.'
(7) Sub section (2) reads as follows:
'(2)No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968 shall, unless otherwise directed by the Controller, be admitted for payment or settled by. the insurer unless he has obtained a report on the loss that has occurred, from a person who holds a license issued under this section to act as a surveyor or loss assessor (hereafter referred to as 'approved surveyor or loss assessor'):
PROVIDED that nothing in this sub- section shall be demand to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor'.
(8) Thus sub section (2) provides that a claim equal to or over Rs.20,000.00 will not be admitted for payment or settled by the insurer unless a report is obtained from an approved surveyor and loss assessor. An approved surveyor or loss assessor for the purpose of the section means a person who holds a license issued under this Section to act as a surveyor and loss assessor. However the report of the surveyor or loss assessor is not binding on the insurer.
(9) Sub section (3) authorises the Controller to call for an independent report in respect of any claim of Rs.20,000.00 or above from any other approved surveyor and loss assessor. Sub section (4) empowers the Controller to issue directions as he may consider necessary with regard to the settlement of a claim including any direction to settle a claim at a figure less than or more than that at which it is proposed to settle the claim or it was settled and the insurance company will be bound to comply with such directions.
(10) Sub section (5) is in the nature of a direction to the insurer and provides that after the expiry of the period of one year from the commencement of the Amendment Act no fee shall be paid to any person for surveying or verifying or reporting on a claim of loss under a policy of insurance unless the person making such survey, verification is an , surveyor or loss assessor.
(11) Sub section (6) provides as follows:
'(6) Where, in the case of a claim of less than twenty thousand rupees in value on any policy of insurance it is not practicable for an insurer to employ an approved surveyor or loss assessor without incurring expenses disproportionate to the amount of the claim, the insurer may employ any other person (not being a person disqualified for the time being for being employed as a surveyor or kiss assessor) for surveying such loss and may pay such reasonable fee or remuneration to the person so employed as he may think fit'.
(12) Reading of the above sub section shows that where the claim is less than Rs.20,000.00 in value and the insurer does not want to employ an approved surveyor or loss assessor on the ground that the expenses for obtaining the report from an approved surveyor and loss assessor would be disproportionate to the amount of the claim, the insurer can employ any other person for surveying such loss but the said person should not be disqualified for being employed as surveyor and loss assessor. This provision also permits the insurer to pay a reasonable fee to the person so employed as he may think Fit.
(13) The next provision which has a bearing on the point in question is sub section (9) which reads as under:-'.lsl
'(9). THE Controller may in respect of any claim of value of less than twenty thousand rupees on an insurance policy, if the claim has not been or is not proposed to be reported upon by a surveyor or loss assessor, direct that such claim shall be reported upon by an approved surveyor or loss assessor and where the Controller makes such direction, the provisions of sub-section (3) and (4) shall apply in respect of such claim'.
(14) As is manifest from above, the Controller is empowered to seek a report from an approved surveyor or loss assessor in regard to a claim of the value of less than twenty thousand rupees on an insurance policy, if the claim is not reported upon or is not proposed to be reported upon by a surveyor or loss assessor.
(15) Sub section (10) is in the nature of an exception to sub section (2). It provides as follows:
'WHERE,in relation to any class of claims the Central Government is satisfied that it is customary to entrust the work of survey or loss assessment to any person other than a licensed surveyor or loss assessor, or it is not practicable to make any survey or loss assessment, it may, by an order published in the Official Gazette, exempt such class of claims from the operation of this section.
(16) In exercise of the powers conferred under Section 64UM (10) the Central Government has exempted certain class of claims mentioned in the schedule from the operation of the said section.
(17) From a careful study of the scheme of the said section of the Act it appears that any person who wants to act as a surveyor or loss assessor for surveying, verifying or reporting upon a claim of loss Under a policy of insurance after expiry of one year from the commencement of the Amendment Act is required to obtain a license from the Controller of Insurance. Under this section claims have been divided into two categories, one equal to Rs.20,000.00 or above and the other below Rs.20,000.00. In regard to a claim of Rs.20,000.00 and above sub section (2) thereof specifically provides that no claim will be settled unless it is reported by an approved surveyor or loss assessor. It is significant that this sub section docs not mention claims below Rs.20,000.00. It appears that the legislature did not require that all claims should be surveyed by an approved surveyor and loss assessor. In case the intention of the legislature had been otherwise sub section (2) would have made no distinction between a claim of Rs.20,000.00 and above and a claim below Rs.20,000.00. Rather it would have applied to all claims irrespective of their values.
(18) MR.BHATTACHARYA, learned counsel for the petitioner vehemently contended that sub section (6) imposes the kind of restriction as is being imposed by sub section (2) with the only difference that while under sub section (2) a claim of Rs.20,000.00 and above cannot be settled unless a report is obtained from an approved surveyor or loss assessor, under sub section (6) a claim of less than Rs.20,000.00 can be settled only on being reported upon by a surveyor or a loss assessor who is not disqualified from being employed as such. According to the learned counsel sub section (6) clearly shows that the insurer has no power to settle even a claim below Rs.20,000.00 by itself, without the same being reported upon by a qualified assessor or valuer.
(19) I have considered the submission of the learned counsel for the petitioner that sub section (6) of Section 64UM of the Act does not permit an insurance company to settle a claim of the value of less than Rs.20,000.00 by assessment of the case by its own staff, but I Find no merit in it. Sub section (6) comes into play only when the insurer decides not to settle the claim of less than Rs.20,000.00 in value by itself. In such an eventuality it can employ the services of a person other than an approved surveyor or loss assessor provided that person is not disqualified for being employed as a surveyor or loss assessor. Sub section 6 in no manner restricts the right of the insurer to settle the claim by itself through its own officers. These officers cannot be considered to be acting as Surveyors or loss assessors as contemplated by sub sections 1(D), (2) and (6) of Section 64UM. Actually Sub section (9) serves as a key to the interpretation of sub section (6) and helps in discerning its real import. As already seen, it empowers the Controller to direct a claim of loss, under a policy of insurance, to be reported upon by an approved surveyor or loss assessor in case where the claim has not been or is not proposed to be reported upon by a surveyor or loss assessor. In other words where the insurer chooses not to have the claim below Rs.20,000.00 reported upon by any surveyor or loss assessor, whether approved or the one contemplated by sub section (6), the Controller has been endowed with power to get the claim reported upon by an approved surveyor or loss assessor. Thus sub section 6 clearly indicates that subject to the powers of the Controller to direct that the claim be reported by an approved surveyor or loss assessor, the insurer has an option to have or not to have a claim below Rs.20,000.00 surveyed from a surveyor or loss assessor. In house assessment by the staff in such a case is thereforee clearly permissible.
(20) From a conspectus of the various sub sections of Section 64UM it is patent that it was not the intention of the legislature to require all claims to be surveyed by an approved surveyor irrespective of their values. In case of a small claim, it may be counter productive to seek report from an approved surveyor or person who is not disqualified from being employed as surveyor or loss assessor. Settlement of small claims by the insurer without the intervention of surveyors or loss assessors, cuts down the costs, the procedures and consequently the time.
(21) A look at the objects and reasons of the Amendment Act will also help in understanding the background in which the amendment was brought about and the mischief it intended to obviate. The objects and reasons of the Amendment Act in so far as they are relevant to the issue in question read as follows: 'With a view to' promoting the development of general insurance business on sound lines and to eliminate undesirable practies in the business, this Bill provides for more effective supervision and control over insurers. The main provisions are:-
'A)to i) ***********
J)Requirement that all claims above a certain limit should be surveyed by approved surveyors'.
(22) It is, thereforee, apparent that the requirement to have a claim of loss to be reported upon by an approved surveyor was intended to be restricted to a claim which is above a certain limit. Requiring small claims also to be settled by surveyors and loss assessors will not be keeping in with the object and intendment of the Amendment Act. In January,1994 'the Committee on Reforms in the Insurance Sector' set up by the Government of India, Ministry of Finance, Department of Economic Affairs, Insurance Division made certain recommendations to streamline the system. In this report it was noticed that the surveyors were being engaged to investigate claims below Rs.20,000.00 apparently as a measure of abundant caution leading to increased costs and delays. The report also noticed that the limit of Rs.20,000.00 and upward of which every claim was required to be subject to survey by the professional surveyors was prescribed 25 years ago. It was recommended that this limit should be raised to. Rs. 1 lac by suitably amending the law.
(23) The learned Attorney General submitted that the report of the Committee on reforms in the insurance sector should be treated as of a persuasive value in the construction of the enactment. In this regard while placing reliance on 'Statutory Interpretations' by F.A.R. Bennion, (second edition), he invited my attention to the following observations of the learned author: .1s1
'THE court may treat as of persuasive authority in the construction of an enactment the view of an official committee reporting on the meaning of the enactment.
COMMENT
WHERE a Royal Commission, departmental committee or other official body makes a study of a sector of legislation and reports on its meaning, the court may treat this as providing authoritative guidance.
EXAMPLE236.1 The report of the Royal Commission on Criminal Procedure contained on account of how the power of arrest conferred by the Criminal Law Act 1967 s2(4) and similar enactments should be exercised. The court, of appeal held that this account reflected the proper basis for the exercise of the power of arrest and could be relied on as authoritative.'
(24) He also cited the decision of the Court of Appeal in Mohammed Holgate v. Duke 1984 1 Q.B. 209 wherein it was held:
'SPEAKING for myself, I do not doubt that Parliament has left it to the courts to give guidance and, if it. thinks right, to impose fetters on this particular power and its exercise, and thereforee that it is within the proper jurisdiction of the court to do so. But where the power is exercised for a particular purpose, as that recorded in the Royal Commission's report, and has for a long period been so exercised without apparently any question or challenge until the instant case, I do not myself think that it would be right for the courts, at any rale below the level of the house of Lords, to say that it is being wrongly exercised and by inference has always been wrongly exercised.' .ls2
(25) Thus, it would appear that where an official or institutional committee on making an in depth study of a legislation reports about the views it holds on the meaning thereof, this can be taken into consideration by the court while interpretating the same.
(26) But even without the aid of the report, I am of the opinion that a claim of loss below Rs.20,000.00 can be settled by an insurer without the same being, reported upon by a surveyor or loss assessor. I am,howcver, inclined to agree with the learned counsel for the petitioner that where the insurer decides to seek report from a person other than approved surveyor or loss assessor under sub section ( 6) of Section 64UM that person should fulfill the qualifications as laid down in sub section 1(D) of Section 64UM.
(27) The learned Attorney General submitted that it was not necessary to go into this aspect of the mailer as the third respondent had given an undertaking to the effect that in regard to the claims of less than Rs.20,000.00 it will employ its own officials to settle the same for which no fee would be paid to them or it will employ only approved surveyors thereforee. Despite this undertaking it will be necessary to lake a view on this aspect of the matter as the undertaking is only by the third respondent and not by remaining insurance companies.the respondents 2 and 4 to 6.
(28) Sub section ( 6) contemplates that a person from whom a report is sought should not be a person disqualified from being employed as surveyor or loss assessor. Disqualification does not merely mean disqualification as provided by Section 42(4) of the Act, which deals with licencing of insurance agents for the purpose of soliciting and procuring insurance business. It is sub section 1 (D) of Section 64UM which prescribes qualification in clauses (a) to (g) thereof, which a person must possess for acquiring the license to act as a surveyor or loss assessor, including the requirement laid down in Section 42(4). If a person docs not fulfill the requisite qualification laid down in clauses (a) to (g) of sub section 1 (D) of Section 64UM he has to be considered disqualified for being employed as surveyor or loss assessor. This sub section cannot be intended to arm the insurer with the power to have the claims surveyed by persons of its choice who do not even fulfilll the requisite qualifications. In case of in house assessment of loss in regard to a claim below Rs.20,000.00, the position is different as firstly sub section (6) of Section 64UM docs not apply and secondly by virtue of long experience the concerned officials of insurers acquire requisite expertise for the purpose of assessing the loss but the same cannot be true in the case of persons who arc not in their employment. thereforee in so far as in house assessment is concerned Section 64UM docs not place any restriction on the settlement of the claims where the value of the claim is less than Rs.20,000.00.
(29) Lastly turning to the challenge of the petitioner based on Articles 14,19(l)(g) and 21 of the Constitution I find it to be equally without force.It is not shown by the petitioner as to how Articles 14, 19(1 )(g) and 21 of the Constitution are infringed by in house assessment of claims which are below Rs.20,000.00. The policy to have such claims settled by an insurer itself without seeking a report from a surveyor or assessor cannot be said to be arbitrary or vocative of Article 14. Settlement of claims below Rs. 20,000.00 by the insurer without intervention of surveyor or loss assessor saves, as already noticed, unnecessary expenditure and lime. Thus the settlement of such claims by this method is not arbitrary or vocative of the equality clause. Approved surveyors or loss assessors are not debarred from surveying the claims of the value of Rs. 20,000.00 or more. Accordingly, they arc not debarred from carrying on their trade or business as approved surveyors or loss assessors.
(30) In view of the above discussion, the petitioner is not entitled to any relief. The writ petition is,therefore, dismissed but with no order as to costs.