NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Deepa Sharma, Presiding Member
M/s. Herbal India Phytochem – Complainant
versus
M/s. United India Insurance Co. Ltd. and Ors. – Opp. Parties
Consumer Case No.57 of 2014
Decided on 29.4.2021

IMPORTANT POINT
“Since loss to plant and machinery and building and fire fighting expenses have not been disputed by the Insurance Company, thus the repudiation of claim is illegal and amounts to deficiency in service.”

Headnote:

Consumer Protection Act, 1986 – Sections 21 and 2(1)(g) : [Consumer Protection Act, 2019 – Sections 58 and 2(11)] – Fire – Loss of plant, machinery and stock – Repudiation of claim – Legality of – An accidental fire took place in factory premises of complainant – Claim was repudiated on ground that complainant had failed to provide relevant documents to arrest the surveyor in reaching to the conclusion regarding quantity of stock which had burnt in fire – As per materials on record it cannot be said that the complainant had failed to send the samples as directed by Insurance Company – Documents on record clearly prove that the complainant had fully co-operated with the surveyor and provided all the documents as and when demanded – Surveyor in his report has accepted that the quantity of the stock lost by complainant is about 5133 kg. – Plea of Insurance Company that the stock lost in fire was CS 20% has no merit – Insurance Company also has failed to prove that any fraud had been played or misrepresentation had been made by the complainant – Insurance Company has arbitrarily rejected the claim for no valid reason which amounts gross deficiency in service – A sum of Rs. 3,30,21,189/- along with interest @ 9% p.a. awarded – Further direction issued.

Held: It is not a disputed fact that the concentration of the CS can be reduced to any level by diluting it. There is also no doubt that the water cannons were used for extinguishing the fire and it took 1½ hour to douse the fire completely. The only logical conclusion is that by the use of water cannons the CS which was lying in the factory of the Complainant got diluted. There is no dispute that the samples were collected from the site which were analysed and the concentration was found to be CS 20%. The calculation of loss of 5133 kgs of stock was done by the surveyor on the basis of price value of CS concentration of 20% which is unjustified. If the CS 20% was stored in the factory at the time of fire then naturally after use of the water cannons by the fire brigade for dousing the fire, its concentration should have been lower than 20%. The argument of the Insurance Company that the stock lost in fire was CS 20% has no merit.

From the above, it is apparent that the Insurance Company has failed to prove that any fraud had been played or misrepresentation had been made by the Complainant.

I, therefore, hold that the repudiation of the claim especially when the loss to the plant and machinery and the building and the firefighting expenses have not been disputed by the Insurance Company, is an illegal act on the part of the Insurance Company and amounts to deficiency in service.

Learned Counsel for the Insurance Company has also taken the objection that the Complainant although is a firm, has not filed the registration certificate of the firm. With the permission of the court, the Complainant has placed on record copy of the registration certificate of the Complainant firm and therefore, this argument has no validity.

The surveyor in his report has calculated the loss of plant and machinery @ Rs.11,36,616/- the building as Rs.2,60,972/- and the firefighting expenses as Rs.46,000/-. The surveyor has in his report recorded the quantity of stock which was lost in fire as 5133kg. He has calculated the loss towards this amount of stock @ Rs.26,51,933/- assuming that the stock was of CS 20%. From the above discussion, it is clear that the stock could not be that of CS 20% and had to be more than that. There is nothing on record to doubt the testimony of the Complainant that the stored stock was of CS 60%. It is apparent that the Insurance Company did not even approve the amount claimed towards plant and machinery and building and firefighting expenses and stock which was duly assessed and approved by surveyor in his report. The Insurance Company has arbitrarily rejected the entire claim for no valid reason. It amounts to gross deficiency in service. The Complainant succeeds for the reasons discussed above. The Complaint is allowed.

Directions:

I award a sum of Rs.3,30,21,189/- (Rupees Three Crore Thirty Lakhs Twenty One Thousand One Hundred and Eighty Nine only) along with interest @ 9% p.a. from the date of repudiation of the claim till its payment as compensation. I also award litigation costs of Rs.25,000/- to the Complainant. (Paras 17 to 22)

Result: Complaint Allowed.