IMPORTANT POINTS
(1) Competent Authority repudiated the Claim on the ground of the Claim having been grossly inflated by fraudulent means.
(2) Repudiation made by the Insurance Co. cannot be faulted.

ORDER

Dinesh Singh, Presiding Member.—This Complaint has been filed under Section 12(1)(a) read with Section 21(a)(i) of The Consumer Protection Act, 1986, hereinafter referred to as the ‘Act 1986’, for alleged deficiency in service.

The Complainant, Chinar Herbs through its Proprietor, is hereinafter being referred to as the ‘Complainant Firm’.

The Opposite Party No. 1, National Insurance Company Ltd., is hereinafter being referred to as the ‘Insurance Co.’.

The Opposite Party No. 2, Vinod Sharma, Surveyor & Loss Adjusters, is hereinafter being referred to as the ‘Surveyor & Loss Adjusters’.

2. Heard learned Counsel for the Complainant Firm and for the Insurance Co.

No one was present for the Surveyor & Loss Adjusters.

Perused the material on record, including inter alia the Complaint, the Written Version of the Insurance Co., the Rejoinder thereto and the Evidence filed by the Complainant Firm and the Insurance Co.

3. Brief facts of the matter are that the Complainant Firm obtained a Standard Fire and Special Perils Policy, through its Bank, State Bank of Mysore, hereinafter being referred to as the ‘Bank’, from the Insurance Co., for the period 08.06.2010 to 07.06.2011, for its stocks of goods in business. The sum insured was Rs.1,50,00,000/-. On the intervening night of 04.07.2010 / 05.07.2010, a fire took place in its godown. A report was lodged with the Police. The Complainant Firm wrote a letter dated 05.07.2010 to the Bank giving intimation of the fire and requesting that the Insurance Co. be informed accordingly. A letter dated 06.07.2010 was sent by the Bank to the Insurance Co. intimating it of the incident of fire in the Complainant Firm’s godown. The Complainant Firm made a claim of Rs. 1,04,09,852.73p. The Insurance Co. appointed its Surveyor and Loss Adjusters. The Surveyor & Loss Adjusters furnished its Survey Report dated 17.03.2011, in which it assessed the loss at Rs. 12,05,942.00p. (only), and also recommended that the claim of the Complainant Firm be rejected on account of being fraudulent and false. The Insurance Co. repudiated the claim vide its letter dated 16.06.2011. The Complainant Firm filed its Complaint before this Commission on 11.10.2011, claiming a sum of Rs. 1,04,09,852.73p. together with compensation and cost of litigation.

4. It is to note that Investigation and Survey are fundamental in determining the amount to be paid to the insured. As such, an Investigation or Survey cannot be disregarded or dismissed without cogent reasons.

However, having said that, it also goes concomitantly that the basis and rationale recorded in Investigation or Survey should be convincing and pass credence in scrutiny.

5. For ready appreciation, extracts from the Survey Report of 17.03.2011 are reproduced below:

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Conclusion

From the above verification it is concluded that all the suppliers have made abnormal sales to insured during the period of just almost 2 months. All the suppliers have a small turn over but they made same exceptionally high volume sale to the insured without any proper explanation. In the absence of corresponding purchase details, transportation proof, first time dealings with the insured on credit, we conclude that all purchase are thru accommodating bills and not the genuine purchase, except purchase from M/s Ravi Handicrafts.

Regarding purchase from M/s Bharti Traders since there were no dealings in the past, firm is owned by the brother hence it is also treated as not genuine.

5. Our Other Observations About The Loss

1. The insured stated that the entire stocks were meant for export. Insured has submitted two purchase orders from parties from Nepal. The insured confirms that this is new business only for export. However, the premises do not support export idea of the insured. The shed was without cement plaster from inside. The roof was only of CGI sheets.

There was no AC, no sofa set for sitting, and furniture for foreign buyers. It is simply a premises for keeping the export surp