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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
A.P. Sahi, President and Bharatkumar Pandya, Member
Kashifa Khan – Complainant
versus
DGM, M/s. Oriental Insurance
Co. Ltd. – Opp. Parties
Consumer Complaint No. 2506 of 2018
Decided on 3.2.2025
Consumer Protection Act, 1986 – Section 21(a)(i) – [Consumer Protection Act, 2019 – Section 58(1)(a)(i)] – Services – Insurance – repudiation – the parameters adopted by the surveyor are not based on scientific data or other evidence, but are arbitrary and as such appear to be too conservative and to be having palpable logical flaws which has resulted in loss assessed at only Rs.49.19 lakhs as against claim of Rs. 179 lakhs. Firstly, there is no basis for grossing up in the shoe-uppers at 75% and in the garments at 35%. Similarly, there is no sound basis given by surveyor for grossing up at 35% with regard to garment ashes and similarly for the assumption of weight of 333 gms. per garment. While surveyor’s findings and actions, being statutory and in the nature of expert opinion, cannot be scrutinised minutely, still apparent and palpable under-assessment has to be judicially scrutinised qua the soundness of methodology and parameters. When the surveyor has adopted the average rate of invoices for arriving at the valuation, the quantity getting transported cannot also be wholly ignored, though at the same time, the basis of “physical evidence of loss” cannot also be questioned – Thus, grossing up ratio for garments at 15% would serve the rationality and judiciousness in quantifying the loss. Taking this as basis, the 1784 pairs of shoe uppers when grossed up by 50% would give the gross assessed loss of 3568 pairs, rounded off to 4000 pairs of shoe uppers in place of 2379 pairs. With regard to loss of garments, applying the grossing up ratio of 15% would give the number of lost/damaged garments at 5705, rounded off to 5800 Keeping the other parameters/details intact, the assessed gross adjusted loss would work out to Rs. 41,18,150 for policy no. 415 and to Rs. 54,57,800 for policy No 114, totaling to Rs.95,75,950 – On facts, the complaint is partly allowed. The repudiation is set aside. [Paras 15 to 20].
Result: Petition allowed.
ORDER
Bharat Kumar Pandya, Member—The present complaint has been filed by Complainant, partner of M/s Bottega Indiana, a partnership firm dealing in export of leather, soles, leather uppers, shoes, etc. to Kuwait through CHA Safewater Lines Pvt. Ltd. Complainant used to get the goods manufactured from other factories after receipt of orders. Complainant has been doing the export business since 2016 and the firm has a showroom cum warehouse at B-34, Sector-64, Noida, U.P. All Marine Insurance Policies for consignments despatched were taken from the opposite party insurance company and the coverage was always based on “All Risk” and “Warehouse to Warehouse”.
The brief facts of the present case are as under:
2. Complainant received order for leather shoes, boot uppers and ladies readymade garments from Kuwait from January to April 2017. Order of leather shoes and boot uppers was further given to M/s Usha Kiraninduszes, Noida for 3900 pairs and 3500 pairs of uppers. 1900 pairs were already in their stock M/s Usha Kiran gave delivery of these items in April 2017. Ladies garments were taken from M/s RD Enterprises in June 2017. Buyer wanted delivery in Nov. 2017. Buyer visited from Kuwait for inspection and asked for some changes. Changes were made in their own showroom. Dry cleaning of garments was done at M/s RD Enterprises. Buyer demanded socks and JR sole cleaning solo solvent. Invoice was issued on 9.11.2017 vide No. KBCM001/002.
3. On 9.11.2017, Complainant dispatched two invoices for an amount totaling to Rs.1,93,98,641 to Kuwait. The consignment consisted of leather shoe uppers, in socks, solvent and ladies readymade garments duly packed in 216 cartons. A proper declaration (page 37) showing the contents and nature of dispatches, which also included solvent material, was given to the OP insurer, who issued a policy by endorsing all materials including solvent on the policy document (page 41). Consignment was packed and was despatched and was sent through DBC Logistics vide GR No. 529 in truck No. UP-22T-2462 and was covered with tripal. On 9.11.2017 at 9.30 PM truck loaded with consignments was despatched from B-34, Sector-64, Noida. There was extreme smog and poor visibility resulting in the truck meeting with an accident around 30 kms. beyond Agra on Agra-Gwalior-Mumbai NH-3 at about 4.30 AM. After accident fire broke out in truck, goods also got burnt in fire. Fire spread sharply as highly flammable material like 40 litres solvent was also being carried in truck. The truck driver called up Police and also arranged call to the Fire brigade, which reached the spot approximately in one hour. All efforts to douse the fire proved futile and the fire engulfed the truck and completely gutted the consignment and turned it into ashes Complainant got to know about the incident around 7 AM and they informed the executive of the OP insurer immediately about accident of truck near Agra and damages to goods. The claim was registered by the OP insurer and they appointed M/s A.K. Jain Associates for spot survey. Mr. A.K. Jain, the spot surveyor visited the accident site at 5.00 PM on 10.11.2017 along with the Complainant and he submitted his status report to the OP insurer. The observation made by the Spot Surveyor is as under.
Observations
We visited the site of accident alongwith Mr. Mohd. Fahd husband of Mrs. Kashifa Khan Proprietor of the insured firm M/s Bottega Indiana, Noida. We reached the site at 5:00 PM which was situated at a distance of 30 Kms. from Agra on NH3-Agra- Mumbai highway just 4 Kms. before police station Sanya (Agra Distt.). The subject truck was found in as it is condition. The truck was badly damaged in the fire. The rear tyres were burnt and complete cabin and engine was burnt. The cartoons containing footwear and garments were completely burnt and there was total loss of the consignment. The burnt and charred pieces of garments and shoe uppers were visible in the burnt debris. As informed by the driver Shake
Surveyor’s – While surveyor’s findings and actions, being statutory and in the nature of expert opinion, cannot be scrutinised minutely, still apparent and palpable under-assessment has to be judicia....
(1) Surveyor Report – Surveyor Report is an important piece of evidence and it has to be given due weight, though it is not sacrosanct and it can be displaced by leading a cogent evidence.
Insurance claims must be substantiated by sufficient evidence; the insurer’s assessment is valid if conducted thoroughly.
Assessment - In absence of details relating to stage of production of items, the Surveyor was justified in considering the semi-finished cost rate at 50% of finished cost rate on an average of 50% co....
Insurance claims must be supported by credible evidence; exaggerated or fabricated claims can lead to repudiation.
(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.
Insurers must indemnify losses covered by policy terms regardless of bailee situations, reaffirming the principle of indemnity in insurance contracts.
Commercial entities are consumers under the Consumer Protection Act, and the credibility of surveyor assessments is upheld unless disproven.
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