IMPORTANT POINT
Insurance Policy – Fire in Insured Premises – For a surveyor’s report to be declared unacceptable, it is essential that it should be shown to be perverse & arbitrary.

ORDER

This First Appeal under Section 51 of the Consumer Protection Act, 2019 (in short, the ‘Act’) is in challenge to the order dated 21.12.2021 of the State Consumer Disputes Redressal Commission, Haryana, Panchkula (in short, the ‘State Commission’) in Complaint Case No. 638 of 2018 allowing the complaint.

2. The delay of 67 days in the filing of this complaint is condoned for the reasons stated in the application for the condonation of delay in the interest of justice.

3. Briefly put, the relevant facts of the case are that the Respondent/ Complainant had availed a Standard Fire and Special Perils Policy (the ‘Policy’) covering the risk for machinery, stocks and building from the appellant insurance company for the period 23.12.2015 to 22.12.2016. In the intervening night of 29-30.04.2016 a fire broke out in the insured premises allegedly due to a spark from the generator. The Fire Brigade was informed and the fire was controlled after considerable effort. The Appellant/Insurance Company was intimated about the incident on 30.04.2016. The Appellant appointed Royal Associates, Investigating and Detective Agency to investigate the alleged incident of fire and cause of fire. On the basis of evidence gathered, vide report dated 02.08.2016, the investigator opined that the Respondents did not store large quantities of goods in the insured godown since the cotton purchased was distributed to workers in villages to convert it into cotton yarn and cotton to prepare products such as daris (rugs) and shawls which were thereafter sent to showrooms. Hence the question of goods being kept in the godowns did not arise and during the night the godown was kept closed with no guard present. The cause of the fire which was noticed at around 9:00 AM on 30.04.2016 was not known. According to the investigator, there was no electricity connection in the godown and the DG set was also not working on 29.04.2016 on account of it being a holiday. It is also stated that intimation of fire to the fire station was delayed since it was recorded at 11.10 AM. According to the report of the investigator, although the insured had claimed that cotton yarn had got burned in the fire, according to the workers only waste cotton had been destroyed. In view of the contradictory statements, the investigator in his report dated 02.08.2016 stated that it appeared that the loss in the fire was only of waste cotton in small quantity.

4. As per the final report of the Surveyor, Shri Vishal K. Aggarwal, submitted on 9.3.2017 it was stated that no remains of cotton yarn was found on the premises and the loss was of old cotton kept in the affected sheds. Fire marks on the side walls of the affected godown was up to the height of one foot. While remains of cotton waste were found, no yarn was found to have been burnt. The report also stated that in the absence of any purchase bills, stock, manufacturing and its process flow records and transportation details, the exact assessment of loss could not be done.

5. The cause of fire was not established since it was reported to be a spark from the DG set which did not appear to be the case. According to the investigator and the surveyor, since the cotton yarn is stored in a wound manner, it could not have been completely damaged within a few hours. Hence, it was concluded that the loss was not covered under any of the specific perils mentioned in the Policy issued to the insured. It was stated that the insured had submitted a wrong and inflated claim of Rs.56,00,000/- which amounted to misrepresentation and concealment of facts which was a breach of policy conditions. On the basis of the Investigation Report and Final Survey Report of the surveyor, the Appellant repudiated the claim on the grounds that (i) details of account books and purchase bills had been withheld to inflate the loss/damages under the insurance policy; (ii) the cause of fire had not been established since there was no electrical connection in the godown and it bei