1. As far as possible salvage value should be deducted from the loss amount and net claim amount paid to insured.

2. If circumstances so require insurer may after consultation dispose of salvage through surveyor who is required to observe best practices of business for realizing maximum value for the salvage. Such salvage disposal will be without prejudice to the rights of the insurer as regards admissibility of the claim.

3. Salvage disposal can be undertaken through or by inviting offers. However, companies may take the help of reputed auctioneers or organizations specialized in such activity.

4. Wherever absolutely necessary the salvage can be collected and disposed off in lots periodically.

5. Whatever be the mode of disposal of salvage, the value realized should not be less than the expected value of salvage indicated in the survey report.

6. The prime consideration before incurring expenditure in disposal of salvage should be that the cost of disposing should be economical to the company vis a vis the realizable value of salvage.

7. Where salvage is to be disposed off by the insurer the following procedure is to be observed.

7.1 Salvage of estimated value upto Rs. 5,000/- other than motor vehicles may be disposed off by negotiations with local salvage buyers. In respect of motor vehicles the limits for disposal of salvage by negotiation will be as under:

a) Scooters/Motor cycles/3 wheelers Rs. 5000
b) Light Motor Vehicles Rs. 15,000
c) Heavy Commercial Vehicles – Rs. 25,000

7.2 Salvage exceeding the above limits but upto an amount of Rs. 50,000 except in case of total loss of 2 wheelers shall be disposed of by inviting offers from prospective buyers by issuing sale notices to all the salvage buyers. At least 3 offers must be received to process the sale. The offers shall be received in writing before date to be specified in advance.

7.3 In case of total loss of 2 wheelers and others where the expected value of salvage is exceeding Rs. 50,000/- but upto Rs. 2 lacs shall be disposed by inserting a sale notice in one widely circulated daily newspaper at the centre where the salvage is available for inspection. The cost of disposing the salvage by means of advertisement should not be beyond 40% of the salvage expected. If it is found that it exceeds 40% then the procedure indicated under 7.2 may be adopted.

7.4 For all salvage where the expected value exceeds Rs. 2 lacs the concerned DO will place a sale notice in more than one newspaper as may be necessary and which is most likely to be read by the prospective buyers of the salvage to be disposed off.

8. The sale notices inserted in the press should, inter alia, contain the following particulars:

8.1 A brief description of the items(s) offered for sale, indicating the approximate quantity and condition thereof, as also the location where the same can be inspected by prior arrangement with

8.2 The item(s) offered for sale must be strictly on an ‘as is where is basis with all faults’.

8.3 Offers will be received in sealed covers indicating brief particulars of the offer on top by the concerned in-charge of Divisional Office/Department accompanied by Earnest Money Deposit remitted by a Bank Draft/Pay Order (buy not by cheque) drawn in favor of the Company for an amount not less than 10% of the offer value so as to reach not later than… (Date to be specified).

8.4 Offer received without the requisite Earnest Money Deposit by Bank Draft/Pay Order will not be considered and will stand automatically rejected.

8.5 The Earnest Money Deposit will not attract any interest.

8.6 The right to reject any or all of the offers received, without assigning any reason whatsoever, is to be reserved by the Company.

8.7 From the date of receipt of acceptance of the offer, the successful offerer must deposit, within fifteen days, the balance of the amount offered (90% or installments as agreed upon) and arrange immediate removal of the goods (the whole or part lots as agreed upon) at his own expense, failing which revocation of the acceptance of his offer and forfeiture of the Earnest Money Deposit should be communicated in writing to the offerer concerned.

8.8 In the case of Motor Insurance claims, if the vehicles involved are under ‘Superdari’ the fact should be mentioned.


The following procedure is to be strictly observed by the Offices concerned in dealing with offers for the purchase of salvage received through Press Advertisements.

9.1* A ‘Salvage Committee’ concerning of five or three members is to be constituted by HO (with the concurrence of General Manager, HO, Technical Department) for each Regional Office. A similar Committee is to be constituted by each Regional Office for each of its Divisional Offices. Offers must be opened by at least three members of the Salvage Committee where the Committee consists of five members or by two members where the Committee consists of three members on the specified date and at the time and place specified for the opening of the offers as indicated in the Press Advertisements inviting offers.

9.2 No fresh offer is to be accepted in respect of any particular salvage after the last date for submission of offers as advertised.

9.3 All offers for the purchase of salvage must be opened not later than the second working day subsequent to the last date specified for the submission of offers, as advertised in the Press.

9.4 Before opening the covers members of the Committee shall ensure that the offers were sealed.

9.5 On opening the sealed covers the offer letters will be signed by all members of the Committee.

9.6 A Note should be prepared immediately giving full details of all offers received and noting the decision taken either for acceptance of an offer or rejection of all the offers received.

9.7 The highest offer found reasonable will be accepted. If not negotiations can be held only with the highest offerer for a reasonable amount. The recommendation will then be sent to the Competent Authority for approval.

9.8 Professional integrity and secrecy should be maintained while receiving offers.

9.9 If for any reason the committee suspects cartelisation by the buyers or foul play in the form of very low offers than indicated by the surveyor in his report then the committee can reject the offers and choose the best method of disposal in the best interests of the company.

* To fail in line with FSO


10.1 As soon as an offer is accepted and approved by the Competent Authority the concerned Office should write to the offerer immediately advising them of the acceptance of the offer, and showing therein the name of the offerer, the amount offered, the terms of payment and lifting of the salvage etc.

10.2 The balance of 90% or installments as agreed upon, of the accepted offer must be deposited by the offerer by a Bank Draft or Pay Order in favor of the Company within fifteen days form the date of receipt of acceptance of the offer and the successful offerer must thereafter arrange at his own cost, for immediate removal of the entire salvage or in parts/lots as may have been agreed upon. Sales tax, wherever applicable shall be borne by the successful offerer.

10.3 It should, however, be borne in mind that, in case the successful offerer fails/refuses to deposit the full amount as offered by him within the stipulated period or no response whatsoever is received from him within fifteen days from the date of communication of the acceptances of his offer, the Earnest Money deposited by him will stand forfeited and the offerer submitting the second highest offer will be permitted to lift the salvage after depositing the full amount offered by him or installments as may be agreed upon, within fifteen days from the date of communication of the acceptance of his offer, provided the difference between the highest offer and the second highest offer is not more than 15% of the highest offer and is not less than the expected value of the salvage indicated in the SPR.

10.4 Since the realizable value of perishable commodities viz. Potatoes, fish, fruits or similar stuff or other items deteriorates very fast, disposal of the salvage should be undertaken on priority basis, for and on behalf of the concerned parties without waiting for the liability to be established. However, the provision of the disposal of salvage guidelines should be followed.


The CMD/HO ‘Salvage Committee‘ shall be empowered to exercise discretionary power to vary the procedure outlined herein.

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