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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member, Dr. B.C. Gupta, Member
M/s. Anjal Garments —Complainant
versus
Oriental Insurance Co. Ltd. & Anr. —Opp.Parties
Consumer Case No.109 of 2007
Decided on 12.2.2016
Counsel for the Parties:
For the Complainant:Ms. Meenakshi Midha, Advocate
For the Opp.Parties:Mr. Vishnu Mehra, Advocate
IMPORTANT POINT
Section 64 UM of Insurance Act cannot stand in way of Insurance Company in establishing that claim was a fraud.
Headnote:Consumer Protection Act, 1986—Section 21—Insurance Act, 1938—Section 64 UM—Insurance—Standard Fire and Special Perils policies—Heavy loss to premises as well as stock due to fire—Claim repudiated by Insurer alleging violation of condition of policy of insurance by complainant by failing to co-operate with Surveyor in providing material information and documents—No expert has been examined by complainant to prove that even in absence of power supply, smouldering could have resulted in producing spark and / or flame in store room—Had spark / flame started from main switch of store room, wooden table and chair would not have remained unaffected— Investigator also found discrepancies in amount which complainant claimed to be payable to certain firms and amount which those firms claimed to be due from complainant—Claim lodged and declaration made by complainant was partly false and fraudulent and they have also used fake documents in order to obtain benefit under the policy—Complaint dismissed. (Paras 15, 16, 23 to 27)
Result: Complaint dismissed.
V.K. Jain, Presiding Member—The complainant firm, which is engaged in the business of manufacturing and exporting home furnishing products at D-18, Sector -17, Kavi Nagar Industrial Area, Ghaziabad obtained two Standard Fire and Special Perils policies from the opposite party, insuring its factory premises, machinery, furniture & fixture, stocks including raw materials, finished, semi-finished goods as well as the goods in process and packing materials, to the extent of Rs.7 Crores. It is alleged by the complainant that in the evening of 21.03.2005, there was a major fire in its factory on account of short circuit, causing heavy loss to the premises as well as the stock lying and machinery installed therein. The intimation of the fire was given to the insurance company on 22.03.2005, estimating the loss at Rs.4 Crores. Later, the complainant lodged a claim seeking reimbursement to the extent of Rs.5,11,08,267/-.
The insurer appointed M/s. Aditi Consultants Pvt. Ltd. to ascertain the cause of fire and asses the loss to the complainant. Loss Prevention Association was also asked to examine the claim lodged by the complainant. Vide letter dated 21.02.2006, the insurer informed the complainant that they were examining the survey report and had also appointed M/s. Royal Associates to investigate the matter.
2. The claim lodged by the complainant came to be repudiated by the insurer vide its letter dated 10.08.2006 alleging violation of condition no.6 of the policy of insurance by the complainant by failing to co-operate with the surveyor in providing material information and documents. Quoting from the report of the surveyor and the investigator, the insurer also alleged breach of condition no.8 of the policy of insurance, by the complainant, taking the stand that the cause of fire was not short circuiting and the said fire was not accidental. It was also claimed that purchase bills were initiated and/or arranged, to exaggerate the stock position and a false declaration in support of the claim were made by the complainant, thereby committing breach of condition no.8 of the insurance policy. Being aggrieved from the repudiation of the claim, the complainant is before this Commission seeking the following reliefs:-
“i. award a sum of Rs.5,11,01,267/- less salvage amount on account of loss caused to the stocks and Rs.17,057/- towards the expenses for disposal of salvage in favour of Complainant and against Respondent;
ii. award interest @ 24% per annum on Rs.5,11,01,267/- and from the date of fire till the date of realization of amount in favour of Complainant and against Respondent.
iii. award additional interest @ 2% per annum under Regulation 9(6) of IRDA on Rs.5,11,01, 267/- from the date of fire till the date of realization of amount in favour of complainant and against Respondent.
iv. award a sum of Rs.7,69,43,910/- on account of loss of business in favour of Complainant and against Respondent;
v. award a sum as this Hon’ble Commission may deem fit on account of loss of goodwill in favour of Complainant and against Respondent;
vi. award a sum as this Hon’ble Commission may deem fit on account of mental agony and harassment in favour of Complainant and against Respondent;
vii. award cost of the present proceedings in favour of the complainant and against Respondent.”
3. The complaint has been resisted by the opposite party reiterating breach of conditions no.6 and 8 of the insurance policy by the complainant. It is alleged in the reply that the complainant failed to produce the entire relevant record before the surveyor M/s. Aditi Consultants Pvt. Ltd. and had lodged a highly exaggerated claim. It is also claimed in the written version of the opposite party that in the intimation given to them the complainant had claimed loss of Rs. 2 Crores but later claimed of more than Rs. 5 Crores was lodged. The opposite party has quoted extensively from the report of the surveyor and the investigator, in order to justify the repudiation
