Insurers must substantiate repudiations with clear evidence, and failure to timely assess claims can lead to liability despite alleged misrepresentation.

ORDER

1. The complainant is engaged in the business of leather industry and manufacturing of footwear. The complaint was filed in the year 2012 and was contested by the opposite party insurance company on several grounds as well as on the basis of several reports that have been brought on record and it is during the pendency of this complaint that on 28.02.2022 the insurance company finally repudiated the same. The complaint had been entertained and the reply of the insurance company was belatedly filed and accepted, thereafter, pleadings were exchanged and the complaint was taken up on 05.10.2023 when the following order was passed:

“Dated : 05 October 2023

ORDER

Heard learned counsel for the Parties. This complaint has been filed with regard to the incident that occurred on 09.04.2007 when it is alleged that a fire engulfed the goods that were stored in a premises of M/s. Durga Leathers but the goods belonged to M/s. Nag Leathers who had taken insurance policy covering the risk from United India Insurance Company, the period whereof was from 22.05.2006 to

21.05.2007. The sum insured was Rs.2,50,00,000/-.

The incident was reported and a spot survey is said to have been conducted by one Mr. Krishna Kumar. The first surveyor appointed by the Insurance Company Mr. S. Anantha Padmanaban submitted an interim report on 19.04.2007. The survey was conducted and the documents according to the complainant were submitted as desired whereafter final survey report was submitted on 28.10.2009.

The second surveyor namely, M/s. N. Velayutham & Co. was appointed who in turn took the services of Mr. S. Balaji, Chartered Accountant and then submitted a report on 30.04.2012, which is described as the final survey report. The report of the chartered accountant is dated 02.06.2011.

It appears that the voluminous documents which are on record have been pending consideration after the filing of this complaint in the year 2012 when after 15 years of the incident, the claim was denied vide repudiation letter/ order dated 28.02.2022, which was passed on the directions issued by this Commission. The said repudiation letter is extracted as herein under:-

“Re: 280000/2021-22 dt. 28/02/2022 Without Prejudice RPAD To, M/s Nag Leathers (P) Ltd

48, Sipcot Industrial Complex Ranipet Pincode:632403 vir_nlpinag@sancharnet.in Dear Sir/s, Re: 1) Policy no: 012104/11/06/11/00000131, Period of Insurance from 22.05 2006 to 21.05.2007, Sum Insured is Rs. 2,50,00,000/-

2) Claim no: 012104/11/07/11/90000002. Date of Loss: 09.04.2007

3) Various correspondences exchanged between you by us and with our Surveyors.

We would inform you that we have deputed Mr.

S.Anandapadmanaban as surveyor to assess the loss and at the instance of your good selves we appointed another surveyor M/s. N Velayutham & Co. and they in turn appointed Mr. M.S. Balaji Chartered Accountant to assess the loss. All the three of them are of the opinion that

1) The quantity claimed for finished leathers as per books had not been established

2) The Insured was claiming for finished leather already sold to NYPL and which does not belong to them

3) The Insured is claiming for WIP and Finished Goods made out the leather sold to NYPL and which belongs to NYPL Hence as per the following policy conditions

1) The Policy shall be voidable in the event of mis-representation, mis-

description or non-disclosure of any material particular.

8) If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under