Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 3163

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Kolla Ranga Rao, Presiding Officer, V.V. Seshubabu, Member
M/s. G. Ravi Readymade Garments – Appellant
Versus
1. The Manager State Bank of Hyderabad – Respondent
C.C.No.11 OF 2017

Advocates:
For the Appellants/Petitioners: P.Rajasripathi Rao
For the Respondents: M.Eshwar Kumar, Suri Sravan Kumar

An insurance claim may be validly repudiated if the insured provides false declarations or fraudulently inflates claims, supported by surveyor reports and inconsistent evidence regarding the incident, as per the express terms and conditions of the insurance contract.

Headnote:(A) Consumer Protection Act, 1986 - S.17(1)(a) - Fire Insurance policy - Claim repudiation on ground of fraudulent declaration and inflated loss - Insured claimed stock value of Rs.40 lakhs - Surveyor assessed value at Rs.6,03,960/- based on previous sales and audited balance sheets - Discrepancies noted in FIR, medical certificates, and presence of owner during incident - Held, material suppression of facts and filing of fraudulent claim warrants forfeiture of benefits under policy terms and conditions. (Paras 8, 12, 13, 14, 15)

Facts of the case:
Complainant operated a ready-made garment shop insured for Rs.30 lakhs. Following a fire incident, the complainant claimed damages of approximately Rs.41.4 lakhs, citing stock worth Rs.40 lakhs. Investigation by IRDA licensed surveyors and forensic agencies revealed significant discrepancies in stock values, the genuineness of the incident, and the complainant's medical documentation. The claim was subsequently repudiated due to suspected fraud and significant inflation of loss.

Findings of Court:
The Commission found the complainant's testimony regarding the incident and injury to be unreliable and unsupported by medical affidavits or fire department records. Documentary evidence from auditors indicated stock value was significantly lower than claimed.

Issues: Whether the complainant suppressed material facts and submitted a fraudulent claim, and whether the repudiation of the insurance claim by the opposite parties was justified.

Ratio Decidendi: Under relevant policy conditions, a claim fraudulent in nature or based on false declarations permits the insurer to forfeit all benefits. When an insured fails to rebut a surveyor's report with reliable evidence and provides inconsistent accounts of the incident, the claim is rightly repudiated.

Result: Complaint dismissed.

Table of Content
1. overview of parties, claims, and the sequence of events leading to the fire insurance dispute. (Para 1 , 2 , 3 , 4 , 5)
2. examination of inconsistencies in evidence, procedural delays, and evidentiary failures regarding the fire accident and subsequent loss. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15)
3. evaluation of surveyor reports and judicial precedents leading to the dismissal of the claim due to fraudulent misrepresentation. (Para 16 , 17)

QUORUM: HON’BLE SRI KOLLA RANGA RAO- PRESIDING OFFICER MEMBER - (JUDICIAL)

HON’BLE SRI V.V.SESHUBABU, MEMBER (JUDICIAL)

THURSDAY, THE 16TH DAY OF APRIL

TWO THOUSAND TWENTY SIX

(PER HON’BLE SRI V.V.SESHUBABU, MEMBER-JUDICIAL)

1. The complaint is filed on 16.01.2017 U/s.17 (1) (a) of Consumer Protection Act, 1986, seeking directions against Opposite Parties 1 to 3 to pay sum assured amount of Rs.30 lakhs with interest @24% P.A. from 26.12.2015 till realization; Rs.15 lakhs towards compensation for causing mental agony; and Rs.1 lakh towards costs.

2. The brief averments of the complaint are that the complainant is the proprietor of M/s. G. Ravi Readymade Garments and doing the business for the last 15 years with the help of his wife for the livelihood; that it had commercial tax license; that purchased insurance policy from the opposite party no.1 for the stocks etc., vide Number 62219342276 for the period from 7.11.2015 to 06.11.2016; that on 26.12.2015 the shop was closed at 9PM and at about 11.30 PM complainant received a phone call from Mr. YLN Goud that his shop was caught fire; that immediately along with wife went to the shop and found it in flames; that he informed the same to the fire station who rushed to the spot and extinguished the flames; were complainant went into the shop and found the total furniture and clothes were burnt and so, he fell sick along with his wife, and were admitted in Novodhaya Hospital, Suryapet; that at the time of incident, the shop was filled with stocks worth Rs.40 lakhs; that after discharge from the Hospital, complainant gave a report to the police Suryapet Town on 03.1.2016 which was registered as FIR Number 6/2016 and police conducted the scene of offence Panchanama on 04.1.2016 at 9 PM; that on 07.1.2016 the Station Fire officer Suryapet issued attendance certificate stating that they received the information at 11.30 PM, arrived to the shop at 11.35 PM and cause for fire was electrical short circuit; that 28.12.2015 fire accident was informed by the complainant to the opposite parties through a letter and a phone call; that they have visited the scene of offence on 28.01.2016 and also appointed AISON Financial Services to collect samples for forensic test; that Mr. MNR Associates, IRDA Licensed surveyor visited the shop on 29.12.2015 for loss assessment, who sent a letter complainant on 24.02.2016 for which a reply was given dt. -.03.2016 by clarifying all doubts; that the opposite party addressed a letter dt.04.04.2016 stating that on 02.04.2016 they received a letter from IRDA Licensed surveyor seeking clarification and on receipt of the same complainant furnished all the documents as sought for.

2(A). The further averments of the complaint are that the opposite parties have appointed IRDA Licensed surveyor and also AISON Financial Services to examine and give report; that received report that the probably stock at the time of incident was only Rs.6,03,960/- but not Rs.40 lakhs as claimed by the complainant and repudiated the claim since it is frivolous in nature and grossly under valued; that the complainant furnished all the bills for the stock worth Rs.36,40,806/- and also sustained loss of furniture to the tune of Rs.5 lakhs, thereby sustained total damages of Rs.41,40,806/- which is evidenced by the photos; hence the complaint.

3. The Brief averments of the written version of opposite party No.1 are that the complaint is not maintainable either on facts or under law; that the complainant is put to strict proo

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2026 Supreme(Online)(SCDRC) 3163

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONKolla Ranga Rao, Presiding Officer, V.V. Seshubabu, MemberM/s. G. Ravi Readymade Garments – AppellantVersus1. The Manager State Bank of Hyderabad – RespondentC.C.No.11 OF 2017

An insurance claim may be validly repudiated if the insured provides false declarations or fraudulently inflates claims, supported by surveyor reports and inconsistent evidence regarding the incident, as per the express terms and conditions of the insurance contract.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Kolla Ranga Rao, Presiding Officer, V.V. Seshubabu, Member
M/s. G. Ravi Readymade Garments – Appellant
Versus
1. The Manager State Bank of Hyderabad – Respondent
C.C.No.11 OF 2017