Back
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Presiding Member and Ram Surat Ram Maurya, Member
M/s Suresh Pharmaceuticals
Pvt. Ltd. – Complainant
versus
M/s Oriental Insurance
Company Limited and Anr. – Opp. Parties
Consumer Case No.324 of 2013
Decided on 1.8.2022
(A) Consumer Protection Act, 1986 – S.21(1)(a)(i)[Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Fire Policy – Repudiation of Claim – Complicated questions of fact – If can be adjudicated by the National Commission - It cannot be denied that Fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice -Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved – Thus National Commission is fully competent to adjudicate this Complaint filed for deficiency in service. [Para 15]
(B) Consumer Protection Act, 1986 – S.21(1)(a)(i)[Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Fire Policy – Repudiation of Claim - Validity of Successive Surveyors - Whether the appointment of second Surveyor was legal - One must take into consideration the necessity of appointment of a second or successive Surveyors and it must be weighed in the context of relevant facts and circumstances, including deficiencies or omissions in the report of the first Surveyor. It is not open to the Insurer under Section 64-UM (2) of the Insurance Act 1938, to appoint successive Surveyors, with a view to obtain a tailor-made report. Appointment of another surveyor must be based on valid reasons bearing on the deficiencies found in the Survey Report and the reasons must be indicated by the insurer.The first Surveyor, vide report dated 02.08.2011, took note of all the documents, records and physically verified the premises before submitting the report. There must be valid grounds for appointment of second Surveyor. Merely on the ground that substantial amount is involved, Opposite Party No.1 cannot depute a second Surveyor. Opposite Party No.1 also failed to adduce any evidence to support its contention that there was defect in the report submitted by the First Surveyor. [Para 18 to 20]
Result: Compliant allowed.
ORDER
The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.
2. The Complainant is a Private Limited Company, with registered office at 37, Vaidyanatha Mudali Street, Chennai and Branch Office at C-175, Hosiery Complex, Phase-II, Noida, U.P. The Complainant is engaged in the business of manufacturing, import export and deals in all kinds of pharmaceuticals, cosmetics, drugs and chemical products etc.
3. The case of the Complainant is that it insured its godown at C-175, Hosiery Complex, Phase II, Noida from Opposite Party No.1 valid from 30.01.2009 to 29.01.2010 for an amount of Rs.4,00,00,000/- by purchasing a Standard Fire and Special Perils Policy No.272102/11/2009/287. The Policy was renewed from 26.02.2010 to 25.02.2011 at an insured amount of Rs.2,00,00,000/-, vide Policy No.272102/11/2010/296. An agreement was executed between the Complainant and Opposite Party No.2 whereby the Complainant was to sell the products to Opposite Party No.2. As per Agreement, the Complainant was liable to take proper and necessary care of goods including its storage, dispatch and provide insurance coverage of goods in stock. The Complainant also deposited Rs.2 crores as security for due performance and observance of terms and conditions of the Agreement.
4. On 03.06.2010, at about 17:45 hours there was a devastating fire in the godown of the Complainant, which destroyed all the goods/stocks kept in the godown, causing loss of approximately Rs.1,90,00,000/-. The Complainant immediately informed the Police, Fire Brigade and Opposite Party No.1. On 07.06.2010, the Insurance Company deputed M/s Sanjay Dwivedi & Associates as Surveyors and Loss Assessors. On 08.08.2010, the Incident Command Officer alongwith the Fire Officers submitted a report wherein it was mentioned that the fire was due to electric short-circuiting and there was loss to the stocks of medicines, furniture, electric fans, machines and building, including statutory documents, stationary etc. The Surveyor, vide letter dated 02.11.2010, asked the Complainant to furnish certain documents. The Complainant, alongwith a letter dated 27.12.2010, provided the documents sought by the Surveyor. The Complainant also provided the account of Suresh Pharmaceuticals Pvt. Ltd. Noida for the year 2008-2009, 2009-2010 and 2010-2011. The Complainant made available the MRP of the products, copies of STNs 2010-2011 and the stock register for the period 01.04.2009 to 31.03.2010 and 01.04.2010 to 03.06.2010, along with itemwise description for relevant period as required by the Surveyor. The Surveyor after physical verification of the premises and receiving all the documents submitted final Survey Report on 02.08.2011, assessing the loss to the tune of Rs.1,48,34,955/-. The Surveyor observed that no policy condition or warranty was breached by the Complainant.
5. After the assessment made by the Surveyor, the Insurance Company appointed a second Surveyor, M/s Aditi Insurance Surveyors & Loss Assessors Pvt. Ltd., without intimation to the Complainant, who sent a letter to the Complainant on 12.11.2012 i.e. after more than a year from the date of the final Survey Report. The Complainant, however, replied to the letter sent by the second Surveyor. The Complainant sought certain information from the Insurance Company under Right to Information Act, 2005. The Insurance Company, vide its letter dated 28.03.2013, repudiated the claim of the Complainant on the ground that there was violation of Condition Nos.1 and 8 and there was no insurable interest of the Complainant. Alleging deficiency in service on the part of the Opposite Parties, the Complainant filed the present Consumer Complaint with the following prayer:—
“(a) hold that the Opposite Party No.1 & 2 have committed deficiency of service under the relevant provisions of the Consumer Protection Act, 1986;
(b) allow the present Complaint by setting aside the repudiation of the insurance claim;
(c) pass an award/de
1. Successive Surveyor - It is not open to the Insurer under Section 64-UM (2) of the Insurance Act 1938, to appoint successive Surveyors, with a view to obtain a tailor-made report.2. Another Survey....
A Consignee Sales Agent has an insurable interest which entitles them to claim for losses under an insurance policy despite not owning the goods directly.
Insurance claims must be assessed justly, with surveyor reports not being conclusive and subject to scrutiny.
IMPORATNT POINT Appointment of Surveyor – Insured can also appoint a Surveyor or loss accessor.
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
The insurer's repudiation of the claim was justified due to the complainant's non-compliance and exaggeration of loss, validated by surveyor reports.
Surveyor – It is mandatory for the Insurer to appoint a surveyor for assessment of loss, exceeding Rs.25000/- under Section 68 UM of Insurance Act, 1938. Bonafide/malafide – The surveyor is an expert....
Appointment of Third Surveyor – right can be exercised for valid reasons or if the report is found to be arbitrary and that Insurance Company must give cogent reasons without which it is not free to ....
Insurance companies cannot avoid liability by citing external compensations, and second surveyors must be appointed with regulatory oversight.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
