Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member
United India Insurnace Co. Ltd. – Appellant
versus
M/s. Vishesh Creations – Respondent
First Appeal No.591 of 2022
(Against the Order dated 17/03/2022 in Complaint No. 53/2019 of the State Commission Punjab)
Decided on 4.1.2023

Advocates:
Counsel for the Parties:
For the Appellant:Mr. Pradeep Gaur, Advocate
For the Respondent:Mr. Updip Singh, Advocate

IMPORTANT POINT
Approved surveyor’s report - the approved surveyor’s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insure.

Headnote:
Consumer Protection Act, 1986 – S.19 [Consumer Protection Act, 2019 – S.51] – Services – Insurance – Repudiation of Claim – Fire Accident - Final report not a conclusive proof - Approved surveyors report – Flaws in Surveyors report - If Binding - the subsequent final report of investigator dated 28.08.2018 and 22.10.2018 were framed by the investigator without revisiting the insured premises and without any explained reason only to strengthen the repudiation of claim by surveyor/opposite party Insurance Company. As the final report of investigator dated 23.08.2018 was not a conclusive report to evident that ‘origin of fire is from within the machine’ as accepted by the surveyor – Therefore, if there are some flaws in the surveyor’s report, it is not binding upon the insured/insurer – thus, the approved surveyor’s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured – Therefore, it is evident that the surveyor has incorrectly ascertained, by his own admission, a possible cause of the fire which caused damage to the Embroidery machine on account of accidental fire. Appellant has not been able to justify the reasons for excluding the claim under the policy for which the onus lies upon him entirely – Thus, Appeal fails. [Paras 6 to 19]
Result: Appeal dismissed.

ORDER

Subhash Chandra, Presiding Member—This First Appeal has been filed under the Consumer Protection Act, 1986 (in short, the ‘Act’) assailing the order of the State Consumer Dispute Redressal Commission, Punjab, Chandigarh (in short, ‘State Commission’) in order dated 17.03.2022 in complaint no. 53 of 2019 .

2. The brief facts of the case, as stated by the appellant, are that respondent firm who is in the business of embroidery of fabric and dress material had taken a Standard Fire and Special Perils Policy (in short, the ‘Policy’) from the appellant for the period 21.11.2017 to 20.11.2018 in respect of the building for Rs.70,00,000/-, machinery for Rs 1,50,000/- and stock-in-trade for Rs 65,00,000/-. It is averred that due to a fire on 30.06.2018 in the building, the Schiffli Embroidery Machine Model EPOCA-5 was extensively damaged. On discovering the fire, an employee, Subhash Chand, extinguished the fire with fire extinguishers within 30-40 minutes. There was no reason, therefore, to summon the fire brigade but a report was lodged with the police station and the appellant was informed the same day. The police lodged DDR No.030 on 03.07.2018. The appellant appointed J.S. Malhotra, Surveyor & Loss Assessor who inspected the insured premises on 30.06.2018 and 02.07.2018 and prepared a preliminary report dated 10.07.2018. The appellant appointed Supreme Testing Lab & Forensic Evidence Protection Technology Pvt., to prepare a forensic report. The site was inspected again by one Purushottam Sharma and Mrs. Mahua Chakraborty on 13.07.2018 who submitted a final report on 06.08.2018 stating that the fire was due to short circuit in the internal circuits of the machine and that the fire had originated within the machine. The appellant thereafter appointed Rajan Sharda, a Chartered Accountant as surveyor to assess the loss. He visited the location on 09.07.2018 and reported that as per forensic report, the origin of the fire lay within the machine which is excluded as per clause 7 of the Policy. He, therefore, did not recommend any liability. Based on the report of the surveyor, S Rajan Sharda, the claim of the respondent was repudiated by the appellant on 15.10.2018.

3. After some correspondence, the respondent filed a consumer complaint no. 53 of 2019 in the State Commission, Chandigarh claiming compensation with interest. The State Commission, vide order dated 17.03.2022, allowed the complaint and awarded the respondent a sum of Rs 23,94,989/- after deducting Rs 10,000/- and 5% under the excess clause from the sum of Rs 25,31,041/- along with interest at the rate of 6% from the date of repudiation of claim till realization along with Rs 35,000/- as compensation for harassment, mental agony and litigation expenses. This order has been impugned by way of this First Appeal. An application for condonation of delay in filing the appeal under Section 5 of the Limitation Act read with section 51 (1) Proviso (i) of the Act to condone the delay of 116 days in the filing of this appeal has also been filed. The ground for seeking condonation is stated to be consultation between the counsels and preparation of documents. The appellant is before this Commission with the following prayer:—

(i) Call for the record of CC no. 53 of 2019 titled as M/s Vishesh Creations vs United India Insurance Co. Ltd., from the State Commission, Punjab;

(ii) Accept the present appeal and set aside the impugned order dated 17.03.2022 passed by the State Commission, Punjab or in the alternative to further dismiss the complaint of the complainant and to hold that there is no mental agony and harassment on the part of appellant insurance company;

(iii) Allow the cost throughout in favour of the appellant and against the respondent; and

(iv) Pass such other or further order (s) as may be deemed fit and proper is passed in favour of the appellant insurance company and against the respondent in the interest of justice.

4. The appeal has been contested by the re