IMPORTANT POINTS
(1) Constructive approach - A constructive approach, not one that is based on assumptions and surmises with an intention to negate the claim by categorizing it fraudulent is desirable.
(2) Industry Approach - It was open to the opposite party/ insurance company to have verified the stock position and the stocking policy of the insured at the stage of approving the policy rather than hold that the stock position was far in excess compared to the industry standard.

ORDER

This complaint under the Consumer Protection Act, 1986 (in short, the ‘Act’) has been filed seeking the enhancement of a fire insurance claim filed with the opposite party with compensation alleging deficiency in service. The complainant is a family partnership firm engaged in the business of sale of readymade garments which had obtained a Merchant’s Cover and Insurance Policy (in short, the ‘Policy’) from the opposite party for Rs 5.22 crores under different coverage for his premises which was completely damaged in a fire on 18.12.2013.

2. The facts of the case, as per the complainant, are that he had a Rs 2 crore hypo (loan) limit for his showroom from Nasik Merchant Co-Operative Multi Schedule Bank which in turn had obtained an insurance policy with the opposite party since 2011. The policy on renewal was valid from 28.05.2013 to 27.05.2014 for an assured sum of Rs 5.22 crores. The shop had 4 floors with the kids section and office on the ground floor, saree section on mezzanine, boys and ladies wear on first floor, menswear on second floor, stores and DG set on the third and water tanks, air cooling system etc., on the terrace. It is stated that on 18.12.2013 night, around 11.30 pm, a fire was reported in the shop premises and the fire brigade reached by 11.45 pm. After nearly 20 hours of fire-fighting, the fire was controlled by 6 pm on 19.12.2013 by approximately 90 fire tenders. There was extensive damage to the building and stocks including fixtures and fittings, computers, CCTV and DVR. A FIR no. 13/13 was registered with the Police on 19.12.2013 and as per panchnama loss was estimated at Rs 8.75 crores. The Maharashtra State Electricity Board (MSEB) opined the probable cause of the fire to be an electrical short circuit. The complainant submitted a claim for an estimated loss of Rs 6,62,36,272/- under various heads.

3. Opposite party appointed M/s Kamal Biyani Associates as Surveyor who inspected the premises on 19th and 20.12.2013 when the fire was still smoldering and 2 fire tenders were summoned to extinguish it. The Surveyor’s initial loss assessment was for Rs 1,60,93,556.11. The ‘Immediate Loss Advice Report’ of the Surveyor dated 23.12.2013 stated that “… It is suspected that the fire might have occurred due to short circuit in the electrical panels near the front shutter”. The Preliminary Survey Report submitted by the Surveyor on 04.02.2014 stated that the fire had travelled throughout the entire building causing damage to plaster, ceiling, floor etc and therefore advised that an opinion of an RCC consultant be obtained. Extensive damage to fixtures and fittings and stocks were also noted and a reserve of Rs 4 crores was recommended for insurers. The opposite party/surveyor commissioned M/s Truth Labs, Hyderabad to investigate the matter which, however, came up with the finding that “… the role of management in stage managing the act of fire cannot be ruled out”. The complainant contends that the repudiation of the policy was based on the report of M/s Truth Lab which is a private lab and did not have any in house facilities for testing and had outsourced the tests to Lucid Laboratories Pvt. Ltd. And, therefore, the repudiation of claim based on the Surveyor’s report is incorrect. The complainant contests that the tests by Lucid Labs were done in January and February 2014 and only the second samples showed presence of hydrocarbons and therefore the veracity of the samples is suspect. It is the complainant’s case that though power had been switched off at night, an incidence of voltage fluctuation had been noticed by other shops in the vicinity and therefore the cause of fire being short circuit was not incorrect. The Surveyor’s report is also challenged on grounds of the finding that there was no sign of transmission of fire from the ground floor to the higher floors, since the staircases had no walls being on RCC pillars. The absence of adequate quantity of burnt material of wooden shelves and stocks