IMPORTANT POINT
Contract of insurance is a contract made in utmost good faith.

S.K. Naik, Member—Shri Satya Narayan Sharma, the complainant before the District Consumer Disputes Redressal Forum, Sri Ganganagar, Rajasthan (‘District Forum’ for short), by filing this revision petition, seeks to challenge the order dated 14th of December, 2005 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (State Commission’ for short). Earlier, his complaint alleging unjustified repudiation of his claim by the respondent/opposite party/United India Insurance Company Ltd. (‘Insurance Company’ for short) had been allowed by the District Forum and a direction had been issued to the respondent/opposite party/Insurance Company to pay the entire sum of Rs. 2,68,000 as claimed by the petitioner complainant, after deducting Rs. 10,000 as per the insurance policy clause, and in addition also pay a sum of Rs. 5,000 towards mental agony and cost of the complaint. This relief, however, has been watered down to a lump sum compensation of Rs.50,000 by the State Commission vide the impugned order on the basis of an appeal that was preferred by the respondent/opposite party/ Insurance Company before the State Commission. The petitioner/complainant, therefore is aggrieved and has filed this revision petition seeking the restoration of the District Forum order.

2. We have heard the learned counsel for the parties. We have also carefully gone through the order of the District Forum and that of the State Commission and have perused the records of the case.

3. The petitioner/complainant is in the business of manufacturing registers/copybooks, etc. He had obtained two insurance policies, one for a sum of Rs.3,00,000 for the raw material kept in his shop, and the other for a sum of Rs.90,000 to cover the risk to his machinery used for the manufacturing of the copies, etc. During the currency of the policies, a fire broke out in his shop during the night intervening 5th-6th of November, 2002, resulting in the damage to the raw material stored in his shop and the machinery. A report with regard to the incident of fire had been lodged with the local police on 6th of November, 2002. The respondent/opposite party/Insurance Company too had been informed about the incident. The had appointed a surveyor, who assessed the loss at Rs. 20,000. The petitioner complainant, however, had lodged his claim amounting to Rs. 2,68,000 and obviously the same was not honoured. The petitioner complainant thereafter sent a notice whereupon the respondent/opposite party/Insurance Company offered him to pay a sum of Rs. 20,100 if he was willing to settle the claim.

4. Finding it to be a gross injustice, the petitioner/complainant approached the District Forum seeking a claim of Rs. 2,68,000 with 18 per cent interest with effect from the date of incident i.e. 6th of November 2002. In addition, he prayed for a compensation of Rs. 2,00,000 and cost of litigation assessed at Rs. 5,500. The District Forum, on consideration of the evidence adduced by the parties, did not accept the report of the surveyor as the assessment of loss had been made at a very low side and further discarded the contention of the respondent/opposite party/Insurance Company that the small size of the shop measuring 7 x 8 x 10 feet could not hold huge stock of raw material worth Rs. 2,68,000 since they had themselves given a policy for the raw material worth Rs. 3,00,000. The District Forum on these grounds accepted the complaint had passed an order allowing the full amount of claim i.e. Rs.2,68,000, after deducting Rs. 10,000 as per the policy clause, and further gave a compensation of Rs. 5,000 on the ground of mental agony and cost.

5. The State Commission had dealt with these aspects in great detail. While analyzing the report of the surveyor it has not agreed with the contention of the surveyor that the bills of M/s Ajay General Store for having sold the articles worth Rs.1,99,500 were fictitious as the surveyor had failed to find out the correct position from M/s A