IMPORTANT POINTS
(1) Primacy of Audited Books over Volumetric Analysis – Audited books of accounts maintained in the normal course of business are the “best evidence” for determining stock value at the time of a loss. A surveyor is not justified in using “volumetric analysis” to disregard these books unless there is clear evidence of fraud or “fudging.” Hypothetical assessments cannot override documented financial records and tax filings (VAT returns).
(2) Scope of Second Appeal – A Second Appeal to the National Commission is not a “third look” at the facts. Under Section 51(2), it is maintainable only if it involves a substantial question of law. The Commission reiterated that concurrent findings by the District and State Commissions regarding the “quantum of loss” are factual determinations and do not qualify as substantial questions of law.

ORDER :

Second Appeal (SA) has been filed with delay of 22 days as per the calculations made by the Registry. An IA No. 14250 of 2025 has been filed seeking condonation of delay. The Delay in filing the SA is condoned after considering the reasons stated therein and case is taken up on merits.

2. Heard counsel for the Appellant.

3. Challenge is to the order dated 26.09.2025 of the State Commission vide which first appeal filed by the Appellant herein was dismissed and order of the District Commission was upheld. Earlier, the District Commission vide its order dated 24.08.2022 allowed the complaint with direction to the Opposite Party-Insurance Company to pay the complainant a sum of Rs.26,56,500/- towards loss along with interest, compensation and litigation cost etc.

4. Against the claim made for Rs.26,56,000/-, the Insurance Company, based on the report of the surveyor, approved the claim of Rs.5,85,000/- only and the same was challenged before the District Commission.

5. The main issue involved in the present case is about the quantum of Hoss. The incident of fire and consequent loss is not in question. In fact, the State Commission has observed that fire incident was so severe that even one fireman also lost his life due to suffocation while extinguishing the fire. The insured presented all his books of accounts. The surveyor assessed the loss based on volumetric analysis coming to a finding that quantum of lost stock could not have been possibly stored in the godown which caught fire going by volumetric analysis, no the withstanding that books of accounts showed othen/vise. Surveyor or the Insurance Company have not disputed the veracity of the books of accounts which have been maintained in the normal course of business by the insured and has been audited by the Chartered Accountant.

6. Section 51(2) envisage Second Appeal to the National Commission if it involves substantial question of law. What constitute substantial question of law and how it differs even from the mere question of law has been elaborated by the Hon’ble Supreme Court in Chandrabhan (deceased) Through Legal Representatives and Others Vs. Saraswati and Others (2022) 20 SCO 199.

7. Further, Section 51(3) envisage that such substantial question of law shall be listed in the memorandum of appeal. The appellant in his memorandum of appeal has listed the following substantial question of law:—

A. Whether the Respondent can be treated as a consumer within the meaning of the term under Section 2(7) of the Consumer Protection Act, 2019?

B. Whether the Hon’ble State Commission and DCDRC overlooked the settled legal principle that a Surveyor’s Report cannot be disregarded without there being any cogent contrary evidence to do so?

C. Whether the Hon’ble State Commission and DCDRC erred in awarding Rs.26,56,500 based upon fire report and news-paper cuttings and in the absence of any credible evidence indicating such quantum of loss?

D. Whether the Hon’ble State Commission and DCDRC erred in awarding the amounts beyond pleadings?

E. Whether the Hon’ble State Commission failed to appreciate that the burden of proving the actual quantum of loss rested solely upon the Respondent/Complainant, and that such burden was never discharged in the present case?

F. Whether the Hon’ble State Commission and the Ld. District Commission have overlooked the law laid down in Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers (2020) 2 SCC 265?

G. Whether the Hon’ble State Commission and the Ld. District Commission overlooked the law laid down by the Hon’ble Supreme Court in Khatema Fibres Ltd. Vs. New India Assurance Co. Ltd. (2023) 15 SCC 327 and by this Hon’ble Commission in Champalal Verma Vs. Oriental Insurance Co. Ltd. (2008) CPJ 93 and HC Saxena Vs. New India Assurance Co. Ltd. (2012) CPJ 420 (NC).

H. Whether the Hon’ble State Commission and the Ld. District Commission overlooked the law laid down in SGS India Ltd. Vs. Dolphin International Limited (