Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.

1. The present Complaint is filed under S.21(a)(1) of the Consumer Protection Act , 1986.

2. The Complainant is a private Limited Company having its industrial unit and establishment at Plot No. M - 55, M.I.D.C., Waluj, Taluka Gangapur, Distt. Aurangabad, Maharashtra. The Complainant deals in the manufacture of plastic woven tape, fabric, bags, tarpaulin, tents, etc. Under the Central Government special scheme for ex - servicemen (SEMFEX - I) State Bank of India, Beed Branch had advanced a loan to their unit. As per the Bank Policy and procedure, depending on the loan advanced and other investments made therein, in the year 1998 the Bank got the Complainant unit insured by the Opposite Party Insurance Company at their Beed Branch Office.

3. The case of the Complainant is that the Policy was renewed and was in force from 22.2.2009 to 21.2.2010 covering the stock in trade for Rs. 60 lakh and Plant and Machinery for Rs. 60 lakh, vide Standard Fire Policy No.161904/11/09/520. On 23.4.2009 at about 10 p.m., a fire broke out. It was a holiday and the unit was closed. The premises and the building was owned and possessed by M/s. Jai Bhavani Packaging Industries, a proprietary firm run by Shri R.S. Nagargoje, Managing Director of the Complainant. During the fire, the Complainant unit was completely burnt. Complainant Company was duly insured with the Opposite Party on the date of the incident. The intimation of loss was given to the Opposite Party. The Complainant raised a claim of Rs. 60 lakh towards Plant and Machinery and Rs. 60 lakh towards Stock in Trade. The Insurance Company deputed Shri Vijaykumar S. Saokar, as Surveyor for assessment of loss. The Surveyor submitted his preliminary report on 28.4.2009 and final report on 11.9.2009. Opposite Party No. 3, after receipt of the final Survey Report, demanded certain original documents and copies of the police records etc. The Branch Office forwarded the claim papers to their Divisional Office, Solapur. The Building Claim of Rs. 5,04,500, covered under a different Policy was paid on 5.1.2010. Since the building loss was within the financial limits of the Divisional Office, the claim was paid and settled. As the fire loss in respect of Plant / Machinery and Stock, exceeded the pecuniary limits of the Divisional Office, Solapur, the claim was recommended and forwarded for approval to the Regional Office, Pune. The loss of the building had been already paid by the Insurance Company on the basis of the same Surveyor's Report. However, the claim with respect to the second head was still under dispute, even after the Surveyor recommended payment for the loss due to fire under both the Policies. The Surveyor, submitted the final report accepting the liability to the tune of Rs. 55,45,000 towards plant and machinery and a sum of Rs. 45,47,697 towards stock.

4. Shri. Rahul Duggal, Opposite Party No.2 was then working as Chief Regional Manager at Pune Regional Office. During a personal meeting, Opposite Party No. 2 demanded 10% of the recommended amount, i.e. Rs. 10,00,000 by way of bribe for the settlement of claim at his level and by altering the amount to bring it within his financial sanction limits. In order to bring the claim within the powers and limits of Opposite Party No. 2, he directed the Surveyor Shri. Vijaykumar S. Saokar to reduce the amount assessed. The Surveyor, under the pressure exercised by the Regional Office, Pune, revised the assessed amount to Rs. 99,53,287, without valid reason. As a consequence, second Survey Report was submitted on 5.3.2010, i.e. almost after