Order by Shri M.J. Mehta, Judicial Member

1. The complainant has filed the consumer complaint under the provision of the Consumer Protection Act, 1986 to indemnify the loss due to flood and compensation for deficiency in service and unfair trade practice on the part of opponent.

2. The brief facts of the complaint are as under: That the above named complainant is having its registered office at the address C-42, GIDC Estate, Near Fire Station, Odhav, Ahmedabad-382415.The complainant had purchased standard fire and special perils policy from the opponent National Insurance Company limited. being policy no. 301800/11/14/3100000039 for the period of 4.4.2014 to 3.4.2015. As per the aforesaid policy total sum insured was Rs. 1 crore 32 lakhs. Complainant paid the premium of Rs. 28,365 / - to purchase the said policy.

3. The complainant is running proprietorship firm in the name of Equinox Impex at the above mentioned address for his livelihood and to maintain his family. And the opponent National Insurance Co. Ltd. doing a business of insurance and incorporated under the provision of Companies Act 1956.

4. Further it was submitted that during the period of aforesaid insurance policy on 24.07.2014 heavy rain had fallen in Ahmedabad city and due to flood / inundation the rain water entered into the premises of the complainant where the stocks were lying. The copy of the newspaper and photographs are attached herewith the complaint.

5. Further it is submitted that all the stock of dyes was water - soluble. At the time of the incident due to heavy rain there was continuous flow of water for a long period in the said premises and the stock of dyes were sub - merged into water of the flood / inundation. As the stocks of dyes were packed in the bags and as the dyes were water soluble, majority of the stock of the dyes was flushed away as the water easily entered into the bags in which the stock of dyes were packed, and as the dyes are water soluble the flooded water dissolved the dyes and was flushed out with the pressure of water (flood), and due to the said reason stocks were damaged and loss has occurred. As soon as the complainant came to know of loss it was intimated to National Insurance Co Ltd.On 25.07.2014 about the said damages.

6. Thereafter, the complainant had lodged the claim before the National Insurance Company Limited for the said damages. Complainant submits that in The National Insurance Company Ltd had deputed Kirj Consultants, to access the loss due to flood / inundation. Thereafter, an authorized person of Kirj consultants visited at the aforementioned place to assess the loss. The complainant submits that at the initial stage the Surveyor from Kirj Consultants had raised unnecessary objections to avoid the liability of opponent The National Insurance Company Limited. Subsequently after personal discussions with the representatives of the surveyor Kirj Consultants and after giving sufficient clarification with evidence to The National Insurance Company Ltd. and Kirj consultants both were satisfied. The complainant had also issued a letter dated 05.08.2014 to the opponent the National Insurance Co Ltd and Kirj consultants to satisfy the objections and once again provided all the necessary documents to process the claim and the same was receive by both on 08.08.2014. The copy of said letter dated 05.08.2014 is attached here with the complaint.

7. The complainant submits that as per the information provided by the opponent, Kirj consultants had provided their survey report to the opponent insurance company but the opponent, the insurance company till today did not provide the copy of the survey report to the complainant. As per the rule of IRDA it is the duty of the opponent to provide the copy of survey report to the claimant. After many requests the opponent did not provide the copy of survey report but opponent ignored the same, and it thus proves the deficiency in service on the part of the opponent.

8. The complainant further submits that without considering to provide documents the opponent The National Insurance Company Ltd issued the letter dated 16.09.2014 and 17.09.2014 and tried to avoid its liability under the clause no. 8 of policy condition.

9. Complainant further submits that the said policy condition was not provided by the opponent. In the reply of the aforementioned two letters complainant had issued letter dated 23.09.2014 and the same was received by the opponent on 24.09.2014. In the said letter complainant clarified all the queries raised by the opponent and also clearly mentioned that " should you require any further information / clarification, we shall be prompt in complying the same.” After issuing the said letter opponent did not raise any query and thereafter in the reference of the above mentioned letter complainant had issued reminder letter to the opponent on 08.10.2014.

10. Thereafter The National Insurance Co Ltd issued letter dated 10.10.2014 and disallowed the liability. The copy of the letter is attached with the complaint Thereafter, opponent The National Insurance Company Ltd issued two letters dated 02.01.2015, to complainant and repudiated the genuine claim of the complainant. The copy of letter is attached with the complaint.

11. Further it is submitted that first the complainant received letter “L”, and as per the said letter fraud is the only reason to repudiate the claim of the complainant. As per the second letter “L1” there was a vast difference in the value of stock on date of loss and thus there is breach of policy condition no. 8 which essentially do not relate / pertain to the complainant as condition 8 of the Fire Policy issued to the complainant refers to forfeiting the benefits under the policy if claim in any respect is found fraudulent, or fraudulent means to benefit under the policy by will-full act. In this context the complainant submits that they have neither done anything by fraudulent means nor to get the undue illegitimate benefit under the policy. That the complainant has been quite genuine and transparent and has fully cooperated as and when the surveyor or their team member visited the premises and the complainant has always complied with all the required information and documents which were available at the time of the Survey.

12. Complainant submits that condition No. 8 of the Insurance Policy just does not apply to the case of the complainant. The complainant also submits that when an authorized person of Kirj consultants visited the premises to assess the loss/damages, at that time complainant had provided stock statement as on 24.07.2014 which showed the quantity of loss of various types of stock totaling 20,550 kg amounting to Rs. 94,29,300/-. In the said statement complainant had clearly mentioned before signing and affixing seal of his company that "total stock as per book of account and damage stock is tentative which can be conformed after verification" The copy of said note is attached with the complaint.

13. Opponent Insurance Company was repudiating the true and genuine claim of the complainant without considering above mentioned note The complainant submits that without proper investigation arbitrarily The National Insurance Company Ltd repudiated the genuine and legitimate claim and wrongly withheld the complainant's claim. It shows and establishes the unfair trade practice and deficiency in service of The National Insurance Co. Ltd towards the complainant.

14. Further the complaint has written detailed letter dated 4.11.2014 to Grievance cell of The National Insurance and explained the whole situation and the copy was also marked to Policy underwriting office Divisional Office No. 5 of National Insurance, Lal Darwaja, Ahmedabad. In the connection of said later reminder was also sent on 07.01.2015 by the complainant to Grievance cell as well as underwriting office of The National Insurance Co Ltd. But unfortunately the attitude of the Insurance Company was not at all helpful and the opponent was suborned to consider even the genuine claim.

15. On the other hand, Opp. Insurance company has filed their reply at page no.143, The opponent denies all allegations, assertions and contentions as urged by the complainant in the present complaint.

16. The present complaint is false, frivolous, and vexatious and is gross misuse of process of law and further complaint is not acceptable under the law, and required to be dismissed.

17. They have further submitted that complaint has with mala fide and dishonest intention not only concealed the material facts from the Hon'ble Commission but also twisted and disorted the same to suit his convenience and to mislead this commission.

18. The opponent received the claim intimation from the complainant on 25.07.2014 that on account of heavy rainfall on 24.07.2014 in Ahmedabad, there was inundation of water into the premises of the complainant and due to the same they have suffered loss in form of damaged machinery, raw material and finished goods up to tune of Rs. 96,50,000/- approximately. The opponent insurance company upon receiving the claim immediately appointed M/s. Kirj Consultants as Surveyor and Loss Assessors. The copy of the said letter of appointment is attached herewith.

19. During the visit of the surveyor and in the due course of the assessment, the surveyor vide letter dated 31.07.2014 gave his findings and further requested the complainant for submission of necessary documents for processing the claim. Upon receiving the necessary documents and after having deliberations with the insurance company and the complainant, the surveyor issued his final report on 11.09.2014. Copy of the letter dated 31.07.2014 and copy of the final survey report are attached herewith.

20. That in the said final report, the surveyor had assessed that the insured had misrepresented the facts and breached policy condition no. 8 and thus all benefits under this policy shall be forfeited. It is submitted that based on the findings and conclusion of the surveyor in his survey report, the insurance company disallowed the liability under this claim vide letter dated 16.09.2014, 17.09.2014, 10.10.2014 and 02.01.2015.

21. It is pertinent to note that when the complainant was asked to submit the stock statement as on date of loss i.e. 24.07.2014, the complainant had submitted the same in which it was noted that of the value of stock as on 24.07.2014 was Rs. 1,33,50,225 / - out of which there was loss of Rs. 94,29,300/- Furthermore the complainant had given the Purchase Register as well as the Sales Register wherein in the month of July 2014, the figures mentioned were Rs. 4,98,01,484/- and Rs. 4,41,57,622 / After verifying the same with the bank statement of the complainant, it was found by the surveyor that there was a huge variation on value of stock. The same was informed to the complainant by the surveyor vide letter dated 12.08.2014. The copy of the said stock statement, purchase and sales register are attached herewith. The copy of statement of value of stock and copy of the letter dated 12.08.2014 is also attached herewith.

22. When the surveyor asked for the justification of the same from the complainant, the complainant submitted other documents vide letter dated 25.08.2014. As per the said documents the complainant provided other statement of value of stock along with revised Purchase and Sales Register wherein the figures reflected were Rs. 6,53,08,948 /- and Rs. 7,75,87,537 /-. It is also pertinent to note that the value of stock on the said date of loss was revised to Rs. 1,34,83,800 /-. It is further submitted that the complainant in the said letter gave vague and illogical justification with respect to the variations in stock value. The complainant stated that as he was into the business of exporting goods, the entry in the register would be made only after the arrival of bill copy from customs. It is respectfully before the Hon'ble Commission that the justification given are not true and baseless.

23. Further it is submitted that the irrespective of receipt of the custom's copy of the bill, the exporter would always take note of the sales into his register as the goods being an excisable goods, the exporter would have to generate the bill. It is also noteworthy that if the goods are exported or imported the same would not be done without having an order form / slip. Thus the vendor would have been aware about the same beforehand and not in the last moment. Thus it is significant to take into consideration the fact that despite having knowledge of the sales and purchases made by the complainant, the same were not disclosed to the surveyor and thus suppressing the material facts the complainant had tried to defraud the insurance company.

24. Without prejudice to the above assertions made, it is submitted that even if we consider the fact that it takes 7-10 days for the complainant to receive the bill copy, then in the present case the complainant would have received the same before 05.08.2014. Upon receiving the same, the complainant could have very well intimated the surveyor and submitted the necessary documents so as to get his claim processed. This not being the case here would take us to show that the complainant has acted fraudulently and has tried to deceive the insurance company by misrepresenting and suppressing material facts.

25. The complainant submitted that the bags of dye which were lying in the premises got damaged as the dyes were water soluble and the same got mixed with rain water and was washed away. It is submitted that this say of complainant it totally false and incorrect.

26. Further it is submitted that during the visit of the surveyor, the surveyor observed that bags in which the dyes were claimed to be kept were empty. It was further noted by the surveyor that the bags had tornout liner and liner were in cleaned condition. It is also stated by the surveyor that the dissolving of bags having 50-60 kilograms of dye is not possible. It also remains a fact that the dye being soluble dye and in powdered form the same was kept in plastic bags and the same is evident from the photographs. It is thus submitted that if the bags were in sealed condition then it would have not got dissolved in the rain water. As in the present case the bags were empty, it would not be incorrect to say that the bags were in open condition.

27. The claim of the complainant with respect to the loss suffered due to inundation of rain water was based on fraudulent grounds and the surveyor after taking into consideration all the aspects gave his findings in the survey report based on which the claim was repudiated by the opponent Insurance Company. The opponent, therefore submits that there is neither deficiency in service on the part of the opponent insurance company nor it has resorted to unfair trade practice in processing the claim as per the terms and conditions of the policy and as recommended by the duly licensed insurance surveyor who is an independent person and appointed as per the provisions of Section 64UM of the Insurance Act, 1938 and whose report has got statutory value. In these facts of the matter, present complaint is not maintainable under the summary jurisdiction of the Consumer Protection Act, 1986. There is no deficiency in service on part of the insurance company. Further it is also stated that the Hon'ble State Commission has no jurisdiction to try and decide the present complaint and accordingly the complaint deserves to be dismissed.

28. In this matter we have heard Ms. Shivani Rajpurohit for the complainant and Darshil Parikh for the opponent insurance company. The facts of the case are an insurance policy was obtained by the complainant with policy no. 301800/11/14/3100000039 for the period of 04.04.2014 to 03.04.2015, here in the case policy as alleged in the complaint was in existence at the time when incident has taken place.

29. The fact about flood is true and the said incident is also admitted on record and intimation that due to flood the rain water entered in the premises of complainant and the insurance company was intimated in time. Insurance company has appointed surveyor to assess the damages and surveyor has visited the place and reported at page No. 169 to 174. Wherein surveyor has reported that during his visit he found that insured premises was flooded with water during the heavy rains on 24.07.2014 and 25.07.2014. insured claimed damage to the goods purchased from the market lying on the ground floor.

30. Surveyor has calculated the total assessed loss by complainant i.e. 9,49,105/- wherein surveyor came to conclusion that 9,49,105/- Total assessed loss less the salvage (30%), Rs. 2,84,732/- were deducted, thereafter considering under insurance deducted excess Rs. 47,455/- at the rate of 5% should be deducted and Net Assessed Loss is Rs. 1,82,418/-. The assessment report and stock tallied with as per the argument by Ld. Advocate for the complainant side Ms. Shivani Rajpurohit.

31. Incident had taken place on 25.07.2014 and it was a tentative stock on 24.07.2014 as per the page no. 188 wherein which is noted, that whichever the stock is mentioned in the state Bank on the day was a tentative stock and exact stock can be handed over within 15 days as per the provision, which was given within 11 days. Accordingly, to this stock statement damages was to be calculated and assessed however, the surveyor in his report has not considered all these facts when calculating the loss.

32. Further, ld. Advocate for the complainant Ms. Rajpurohit has submitted before me that the surveyor was appointed on 28.07.2014 during these four days there was no availability of electricity they were not able to provide a conclusive exact statement of stock on the day of intimation, but subsequently when situation become normal they have given the exact stock details and the damaged stock so the calculation shall have to be considered by the surveyor accordingly. However, surveyor has not considered and that’ s why the discrepancy is narrated by the surveyor and wherein it is reported.

33. Relying upon the surveyor’s report insurance company came to the conclusion that the stocks was not disclosed and under insurance stock was kept in the premises and that’ s why the fraud is committed with the insurance company because the actual stock of the policy for which it was insured is to be kept by the complainant, however, the tentative stock when as the policy sum insured stock were not and it was excessive.

34. Considering the page no. 116, letter of opponent, Insurance company has repudiated the claim and intimated to the complainant that there was no damage to the building, there was no damage to the machinery, and there is damage to unfinished stock. The loss under stock without prejudice and without admission of liability, it is observed that, it was confirmed by the complainant side that value of total stock on date of loss was Rs.1,33,50,225/- after words it is stated stock was for Rs. 1,34,83,800/- but you have confirmed in bank statement that stock of 30.06.2014 was Rs. 2,20,82,956/- Rs. Both the statement is considered and A. value of stock given by the complainant date of loss is Rs. 1,34,83,800/- whereas stock computed from your papers is B. value of the stock for the day 30.06.2014 as per the bank statement was 2,20,82,956/-, where the stock was purchased july till the date of loss. Total Rs.4,98,01,484/- sale a purchase cost for july sales of 7,18,84,440/-, and Rs. 4,41,57,622/- will deduction of GP 2.68% so Rs. 4,20,30,372/- stock on date of loss was Rs. 2,89,10,243/-. Thus there was vast difference of value at risk of the date of loss after surveyor’s letter, complainant have given statement of purchase and sales statement of July is Rs. 6,53,08,948/- and Rs. 7,75,87,507/- and from this statement it is beyond doubts and confirmed that the complainant have misrepresented facts and breach of policy and condition No.8 which states “ if claim be in any respect fraudulent, or if any false declaration be made for used in support thereof or if any fraudulent means or devised are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefit under this policy shall be forfeited.”

35. In response of this letter complainant explained the circumstances at page no. 118 to the insurance company and submitted that damage of unfinished stock which is lying in the factory premises and the fact is to be considered by insurance company that there had been loss of stock, which is covered under the above said insurance policy.

36. Further it is also submitted that on 28.07.2014 the value of stock of books of accounts which were not posted up-to-the date. That fact is also narrated to the surveyor and his team who had suggested to give the value of stock as per the books of accounts, even though it was not posted up to the date. They suggested that this figure of stock would be tentative one and after up to date posting we may submit the final figure.

37. Further it was also explained by way of letter that certain bills of purchase as well as sales not entered into books of accounts and after entering the same, the true picture of both sales and purchase as well as stock has emerged. In this connection Complainant have submitted and informed to the insurance company that they are in export business, and therefore even after the exporting the goods it takes around 4 to 5 days for shipping bill to come to us from customs Department, only after receipt of shipping bill we can enter the same in purchase and sales ledger in our books accounts.

38. In the instant case it has so happened that after survey team visited our site certain bills of purchase and sales pertaining to the period before the date of damage of stocks, had come and after entering the same in the books of accounts, the figures of both sales and purchase as well as stocks had been arrived at.

39. Complainant submitted all the supporting documents for justifying the actual figures of stocks. Sales and purchase for the month of July, along with the stock value on date of loss, with genuine supporting documents and reason for change in figures.

40. All the supporting documents justifying the change in figures are authentic documents, and can be verified by a third party any time for its authenticity.

41. Complainant submitted that they do not understand why without verification of documents, with negative intention to refuse the claim, opponent had disallowed their claim.

42. Complainant once again provided the actual computation of stock available on the date of loss for which supporting documents have already been provided to the insurance company many times.

a) Value of stock on date of loss :- Rs. 1,34,83,000/-

b) Value of stock on 30.06.2014 as per bank statement: - Rs. 2,20,82,956/-

c) Purchase in the month of July till date of loss: - Rs. 6,53,08,948/-

Total was Rs. 8,73,91,904/-

d) Cos of sales in the month in July (Sales of 7,75,87,537/- after deduction of GP 4.74% Rs. 7,39,08,104/- stock on the date of loss. Rs. 1,34,83,800/-.

43. Thereby insurance company at page no. 184 considering surveyor reports on 10.10.2014 complainant was intimated that the claim is repudiated on the ground that stock on the date of loss was Rs. 1,33,50,225/- as per the statement and thereafter it was stated the stock was Rs. 1,34,83,800/- and thus there is breach of policy condition no. 8 as states “if claim be in any respect fraudulent, or if any false declaration be made for used in support thereof or any fraudulent means or devised are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if any loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefit under this policy shall be forfeited.”

44. Thereby considering the vast difference in figures and thus insured has breached policy condition no. 8 by giving misguiding information as there cannot be vast difference in account. The insurance company stated that thus there is breach of policy condition no. 8 beyond doubt and contents of letter dated 17.09.2014 remain unaltered and we have no option but to disallow the liability under this claim which is intimated. The main thrust of this letter disclosed before me is that the fraudulent practice or any fraudulent behaviour of the complainant in submitting statements which are contradictory between what was initially given and subsequently was committed and thereby according to surveyor report accepted the contention raised by the surveyor the claim cannot be passed as there is breach of condition 8 of the concerned policy and thereby the claim is repudiated and no claim is accepted and disallowed the liability of the claim was intimated.

45. According to our view that the stock was at the place where the incident had taken place and there was loss, it was assessed by the surveyor and there were circumstances as advanced on behalf of the complainant side for that tentative figures was given, are endorse from the state bank, itself suggest that by way of possibility of the difference of figure approximately of Rs. 1,00,000/-.

46. And thereby it is traced out in our mind that there was a difference of Rs. 1,00,000/- stock on ultimate calculation and therefore it does not disclose and satisfy us that it is a pure breach of condition no. 8 of the policy because some up and downs and difference of figures and calculation is possible because with the complainant some transactions were not in the books of account at the time when loss happened and it was submitted before the surveyour and as we have discussed earlier it is minor and probable difference of calculation of State Bank is proper and we also consider that business of the complainant is primarily to export the stocks and therefore the papers were to be cleared by the purchase and sales department and till that the stock possibly remained at the place of the incident.

47. Thereby considering as submitted by both the sides submissions we come to a conclusion this is not a case which comes within the purview for which the claim is repudiated by the insurance company, and is not fully acceptable and that’s why we would like to assess the quantum of assessment which was considered by the surveyor and for the submission here by the ld. Advocate for the complainant.

48. Here Ld. Advocate for the complainant Ms. Rajpurohit has submitted before me that under the policy the sum insured was of Rs. 1,34,83,800/- policy covered the stocks and the remain stocks disclosed were sold out exported and the transaction are intimated for the necessary processing the stamp of the customs and it was accordingly to be sent to the customs and till that the stock was with the complainant and it got damaged in the flood water.

49. As per the submission and situation on the fourth day the water level collected on the premises of the factory was for 1.5 feet and that is why on the day of starting of the rain and collecting of water in the premises was more than that, that is why the damages as claimed by the complainant are to be allowed.

50. Considering the survey report at page no. 169 so the assessor has visited the place and stated that total assessed loss was Rs. 9,41,105/- and calculated on that amount but we came to conclusion that most of it is to be damaged considering the heavy flood water had entered the premises and the stock was lying on the ground floor of the factory.

51. Here in the case we would like to observe that such type of matters where the damages of quantum are required to be adjudicated, a surveyor report is a back bone document for the same adjudication.

52. We are of the view that the surveyors have to prepare their report along with reasons for the such decisions or opinion which become a material to be adjudicated for quantum of the compensation to be awarded to the insured and for that according to our view surveyor’s report is not reflecting how he came to such reported contents. These days surveyor has to prepare his report with the assistance of video recording and prepare a panchnama in presence of two independent panchas who are skilled to give opinion for the damage that has occurred. This will be useful to deliver justice accurately. We feel in absence of a detailed report by the surveyor and such report is to be awaited for the decision of the the damage that actually happened or not or up to what extent it happened and the complainant suffering from such damages, insurance company shall have to require from the surveyor appointed by them for such assessment of damages etc. and frame specific guidelines on how to prepare a survey report.

53. It will help to come to a conclusion and easy decision in such type of insured claims which can be decided well in the interest of justice. Insurance company should direct their surveyor to prepare report with audio and video recordings of the situation of the place, where the damages can be looked into very well and claim may be settled in a just and proper way.

54. Thereby considering the documents and other evidence and submission advanced on behalf of the complainant side, we came to conclusion that amount should be taken as 20,00,000/- Rs. 1,00,000/-salvage value is required to be deducted, 15.85% under insured is also deducted amount, and 5% of the excess which is calculated and total amount of Rs.15,18,000/- is allowable amount according to our calculation of loss and considering the submission on both the sides.

55. Considering the insurance company’s repudiation letter disallowing the claim is not just and proper, we would like to allow the claim as advanced by the complainant but we are not fully agreeing with the loss as submitted by the complainant. We came to conclusion that on the grounds of awarding a lum- sum amount after deductions it comes Rs. 15,18,000/- and that amount is to be awarded with 7% interest from the date of complaint.

FINAL ORDER

i) The Complaint No. 95 of 2015 is partly allowed.

ii) Opponent are directed to pay amount of Rs. 15,18,000/- with 7% interest from the date of filing

the complaint within 60 days and non-compliance of order awarded amount should be paid at 9% interest.

iii) Certified Copy of the judgment is to be provided to the parties free of charge.

56. Pronounced in the open court on 22nd July, 2022.