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2025 Supreme(Online)(SCDRC) 1241
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Ms. Kumkum Rani, CJ, Mr. C.M. Singh, J
M/s M.K. Menthol Industries – Appellant
Versus
The New India Assurance Co. Ltd. – Respondent
SC/5/CC/25/2017
For the Appellants/Petitioners: Ms. Anupama Gautam
For the Respondents: Smt. Anjali Gusain
Insurers must honor claims if the insured did not cause the loss, regardless of surveyor's flawed assessments and misreporting.
Headnote:(A) Consumer Protection Act, 1986 - Sections relevant to consumer disputes and insurance claims - Misrepresentation of facts leading to claim repudiation. (Paras 1, 25, 24)
(B) Insurance Policy - Coverage under Standard Fire and Special Perils Policy - Assessment of loss and validity of surveyor's report. (Paras 10, 20, 18)
(C) Deficiency in service - Insurance claim not evaluated in accordance with policy terms and conditions leading to injustice to the insured. (Paras 21, 22, 25)
Facts of the case:
The complainant, a partnership firm, filed a complaint against an insurance company for repudiation of a claim of Rs. 97,31,000/- after a fire incident. The complainant asserted the fire occurred within policy coverage but was denied reimbursement based on a flawed surveyor's report and misinformation.
Issues: Whether the repudiation was justified based on timings of loss reporting and the adequacy of the surveyor's assessment.
Ratio Decidendi: The court found the repudiation unjustified, emphasizing the mandated fairness in the insurer's evaluation processes and asserting the necessity for the insurance company's liability to cover the loss if the insured did not cause the fire.
Result: Complaint allowed; the opposite party is directed to pay Rs. 56,65,071/- with interest and costs within a month.
| Table of Content |
|---|
| 1. insurance policy coverage and fire incident. (Para 2 , 4) |
| 2. evidence and surveyor's report analysis. (Para 6 , 8 , 20 , 21) |
| 3. claims and jurisdictional issues. (Para 10 , 12 , 14) |
| 4. legal standards for insurer liability. (Para 16 , 19) |
| 5. ruling in favor of claimant for damages. (Para 24 , 25) |
ORDER
(Per: Ms. Kumkum Rani, President):
This complaint has been submitted on behalf of the complainant – M/s M.K. Menthol Industries against the opposite party – The Divisional Manager, The New India Assurance Co. Ltd. directing that the opposite party to quash the repudiation letter and to make good the amount of Rs. 97,31,000/- to the complainant alongwith compensation of Rs. 2 Lac towards mental pain and agony, Rs. 55,000/- for litigation expenses and Rs. 7,500/- towards costs of notice.
2. According to the complaint, it is stated that the complainant had purchased a Standard Fire and Special Perils Policy from the opposite party in respect of Plant, Machinery and machineries and Stock being maintained in the unit of the complainant for Rs. 2,10,00,000/- by way of policy number 34060511150100000062 and the above policy was effective from 19.06.2015 to 18.06.2016. Unfortunately, a fire broke in the unit of the complainant about 6:00 p.m. on 20.12.2015 (Sunday) and at that time, the unit was closed; with the help of Fire Tenders, the fire could be extinguished by 10:20p.m. on 20.12.2015 leaving the complainant into a huge loss. The complainant immediately informed about the loss on 20.12.2015 and statement was also recorded. The fire having broke at about 6:00p.m. on 20.12.2015 at the unit of the complainant and was duly informed to the opposite party and at no point of time, the time of fire breaking is mentioned as 7:30p.m. A survey was also conducted by the opposite party through Surveyor S.K. Agarwal & Co. and as and when he demanded which ever documents these were made available to him as per the availability of these from time to time. The Surveyor has also finally prepared the survey report on 07.10.2016 and despite having an access to the documents demanded by him, he has assessed loss beyond truth and also has recommended repudiation of claim against his duty. Vide its letter dated 06.12.2016 the opposite party has also cyclostyled the recommendation of the Surveyor Sh. S.K. Agarwal and communicated the repudiation of the claim of the complainant. It is further stated that unfortunately before the fire breaking struck the complainant, the complainant’s manager Sh. Vivek Verma lost important documents including the Stock Register and Purchase vouchers of the complainant on 03.12.2015 while he was coming back from factory unit in question to his residence and subsequently when the fire incident took place and these documents were sought by opposite party’s Surveyor, he was apprised of this fact. It is further stated that the Surveyor is only to report the situation at the spot and has no any right to give his opinion, but opposite party’s surveyor has transgressed into the field which is not his forte and has opined absurdly leading to the recommendations of repudiation. The Surveyor has not only assumed certain things but has also made baseless and erroneous observation for the reasons best known to him and few of these are as such that the time of fire breaking is duly mentioned as about 6:00p.m. on 20.12.2015on the claim intimation, but the Surveyor has mentioned at as 7.00 – 7.30 p.m. on the claim intimation form which is against the document. The Surveyor has completely ignored that the claimant tried to save the lab room from fire which itself shows the bonafides to save his unit and not destroy as has been attempted to be shown by the Surveyor. It is also further stated that the Surveyor has mindlessly held that the remains of the plastic containers were not visible while the photographs considered by the Surveyor himself shows that the floor was ripped off and the tiles were also burnt as such it could not
