Order by:
Smt.Priti Malhotra, President
1. The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that the present complaint is being instituted by Balwinder Singh through his attorney Mr. Gurtej Singh son of Jagmohan Singh who is well conversant with the facts & circumstances of the present complaint. Alleged that since, 01.04.2019, the aforesaid Balwinder Singh, proprietor of the complainant firm is running the business of readymade garments in the name and style of M/s Bru Readymade Garments for the sole purpose of earning his livelihood. For the smooth running of business, the complainant firm had taken a cash credit facility of Rs.5,00,000/- as loan from the opposite party no.2 against the hypothecation of stock of readymade garments lying in the shop/business premises. To safeguard the loan amount provided to the complainant firm, the opposite party no.2 directed the complainant firm to take an insurance policy from the opposite party no.1 in respect of stock lying in the shop/business premises. So, the complainant firm through the opposite party no.2 took an insurance policy namely ‘Bharat Sookshma Udyam Suraksha Policy’ from the opposite party no.1, through Opposite Party No.2, having policy no.OG-24-1225-4056-00000002 for the period 10.09.2022 to 09.09.2023, in the name of the complainant firm covering the risk of stock lying in the shop/business premise of the complainant firm with sum insured Rs.8,00,000/-. Among other things, the policy covered damage caused by storm, cyclone, Typhoon, Tempest, Hurricane, Tornado, Tsunami, Flood and Inundation. Alleged further that in the month of April, 2023, a heavy storm and rain came frequently and on the intervening day of 17.04.2023, due to the said heavy storm and rain, the rain water entered into the shop through roof and resultantly damaged the roof as well as false ceiling of the shop and damaged entire stock of readymade garments lying in insured shop/business premises. On 18.04.2023, the complainant firm informed the opposite parties regarding aforesaid loss & damage and requested them to appoint surveyor. On 01.05.2023, the opposite party no.2 processed the request of complainant firm and generated the claim reference no.OC-24-1203-4056-00000010 and pursuant to the request of complainant firm, on 03.05.2023, the surveyor appointed by the opposite party no.1 visited the insured business premise of the complainant firm for assessment of loss and spot inspection. At that time, the complainant firm supplied all the necessary documents to the said surveyor as demanded by him and gave its assessment report of the loss to the opposite party no.1. Submitted that complainant firm is a verified firm and is also an Income-Tax Payee who file its ITR's every year, so the stock damaged due to seepage of water from roof and inundation can be evaluated through the purchase bills, balance sheet of financial year 2022-23, provisional balance sheet of month of April 2023 of the complainant firm. As per the estimate of the complainant firm, the total stock damaged in the incident amounts more than Rs.9,00,000/-. Submitted further that only the amount of Rs. 8,00,000/- is payable to the complainant by the Opposite Party No.1 being insured amount, so the complainant is claiming the amount of Rs. 8,00,000/- only. However, to the utter surprise of the complainant, the opposite party no.1, vide letter dated 22-07-2023 repudiated the genuine claim of complainant firm on the ground that the loss caused to complainant firm did not fall within the ambit of the policy, having occurred due to leakage of rain water from the roof and not "flood or inundation". After the repudiation of claim, the complainant time and again made several requests to the Opposite Parties for the redressal of its grievances, but the Opposite Parties till date did not pay any heed to the genuine request of the complainant. Hence, this complaint. Vide instant complaint, the complainant has sought the following reliefs:-
a) Opposite Party No.1 may be directed to pay a sum of Rs.8,00,000/- on account of insurance claim alongwith interest thereon @ 9% p.a. from the date of repudiation of claim till the date of realization to Opposite Party No.2 being the financier of the stock.
b) Opposite Party No.2 may be directed to surplus the claim amount to be paid/credited to the complainant after squaring off the outstanding loan amount.
c) Opposite Party No.1 may be directed to pay a sum of Rs.1,00,000/- to the complainant as compensation on account of mental tension, torture, agony, damages, financial loss and to pay Rs.33,000/- as litigation expenses.
d) And any other relief which this Commission may deem fit and proper be granted to the complainant in the interest of justice and equity.
2. Opposite Party No.1 appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the complainant had obtained a 'Bharat Sookshma Udyan Surakhsha Policy' from the Opposite Party No.1, bearing Policy No.OG-24-1225-4056-00000002 w.e.f. 10.09.2022 to 09.09.2023. The said policy is subject to its terms & conditions and exclusions thereof. The complainant alleged that on 17.04.2023 due to the heavy storm and rain, rain water entered in to the shop of the complainant through the shop's roof and resultantly damaged the roof, false ceiling of the shop as well as entire stock of readymade garments. Upon being intimated on dated 01.05.2023 about the alleged incident, Opposite Party No.1 promptly appointed an independent IRDA licensed surveyor i.e. Protech Insurance Surveyor & Loss Assessor, on dated 02.05.2023 to ascertain the admissibility the said claim under the said policy terms and conditions. Consequently, the Surveyor visited the affected location on 03.05.2023 for survey of the alleged incident. The surveyor during the physical inspection observed that:
The insured had kept the stock in big bags, which were opened in our presence and the stock was inspected. The stock was visibly dirty. The stains of water can also be seen on the stocks due to which the colour of garments was found dull and the colours of garment had stained other garments. The garments were not sellable as new.
We vide our mail dated 22.05.2023 asked the insured to furnish the documents supporting his contention that the loss has occurred due to an insured peril.
Till date the insured has not been able to provide any evidence to confirm that the claimed loss was caused by any of the named insured perils.
The loss is claimed by the insured to have been caused due to leakage of rain water from the roof. Firstly, the insured has not provided any evidence to confirm that such a thing had happened. Secondly leakage of rain water from roof is not an insured peril.
Bharat Sookshma Udyam Suraksha Policy is a named peril insurance policy and covers loss to the insured property only if caused by any of the named insured perils and provided that it does not fall under any exclusion.
Since the claimed loss has not been caused by any of the named perils, the insurers cannot be held liable to pay for the loss."
In furtherance to the same, the surveyor sent an email dated 22.05.2023 to the complainant mentioning to kindly provide a policy, in which, the rain water and storm was mentioned in the insured perils. However, insured has not been able to provide any valid policy to prove that the claimed loss was caused by any of the named insured perils given as under ‘Bharat Sookshma Udyam Suraksha policy. The complainant has not submitted any cogent documentary evidence to substantiate the same. Furthermore, leakage of rain water through the roof is not an insured peril under the said policy. Further, the subject policy herein is a named insured peril policy and the operated peril herein allegedly rain is not an insured peril under the Policy. Hence, the indemnification of loss is out of question. So, the claim is categorised and closed as "no claim", however, the concerned surveyor has assessed the extent of loss so as to restrict liability of the answering Opposite Party under the terms and conditions of the subject policy. Averred further that without prejudice to our defense and without admitting any liability, it is submitted that liability of this answering respondent will be restricted to the loss assessed by the independent IRDA licensed surveyor, i.e. INR 2,00,566/-, if the claim is admissible as per terms and conditions of the Policy. The complaint does not showcase any cause of action against Opposite Party No.1; there is no deficiency in service on the part of Opposite Party No.1; the complainant has only made false, frivolous, vague and concocted averments with respect to the claim in question; the complainant has filed the present complaint with ulterior motive of causing wrongful gain to itself and wrongful loss to Opposite Party No.1. In parawise reply, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.
3. Upon service of notice, none appeared on behalf of Opposite Party No.2, hence Opposite Party No.2 was proceeded against exparte.
4. In order to prove the case, counsel for the complainant has placed on record affidavit of Sh.Guretj Singh, Attorney of complainant as Ex.C1 alongwith copies of documents Ex.C2 to Ex.C7.
5. On the other hand, Opposite Party No.1 has placed on record affidavits of Sh.Saurav Khullar, Authorized Representative as Ex.OP1/A and Ex.OP1/B alongwith copies of documents Ex.OP1 to OP11.
6. We have heard the ld. counsel for both the parties and also gone through the record.
7. It is not disputed that complainant firm is running the business of readymade garments in the name and style of M/s Bru Readymade Garments and complainant firm had taken a cash credit facility of Rs.5,00,000/- as loan from the opposite party no.2 against the hypothecation of stock of readymade garments lying in the shop/business premises. Not disputed that to safeguard the loan amount, complainant’ firm, took an insurance policy namely ‘Bharat Sookshma Udyam Suraksha Policy’ from the opposite party no.1 having policy no. OG-24-1225-4056-00000002 for the period 10.09.2022 to 09.09.2023 covering the risk of stock lying in the shop/business premise of the complainant firm for sum insured of Rs. 8,00,000/-. As per record, on the intervening day of 17.04.2023, the rain water entered into the shop of the complainant through roof and damaged stock of readymade garments lying in insured shop/business premises. It is also not disputed that due intimation of said incident was given to Opposite Parties, who appointed a surveyor, who visited the insured business premise of the complainant for assessment of loss and spot inspection and thereafter vide letter dated 22.07.2023, the Opposite Party No.1 repudiated the claim of the complainant declaring it as ‘no claim’ which is now under challenge.
8. The perusal of the record reveals that the Opposite Party declared the claim of the complainant as ‘no claim’ vide letter dated 22.07.2023 on the following grounds:-
“That the preferred claim is in respect of damages to stock of clothes stated to be damaged because of inundation.
That loss has been occurred due to leakage of rain water from the roof & not due to operation of any insured peril, as such subject loss stands outside the scope of policy terms and conditions. Perils covered under fire policy are being reproduced hereunder for your ready reference.
a. Fire, including due to its own fermentation, or natural heating or spontaneous combusion.
b. Explosion/implosion,
c. Lighting,
d. Earthquake, volcanic eruption, or other convulsions of nature
e. Storm, cyclone, typhoon, tempest, hurricane, tornado, tsunami, flood and inundation,
f. Subsidence of the land on which Your premises stand, Landslide, Rockslide,
g. Bush fire, Forest fire, Jungle fire,
h. Impact damage of any kind, i.e., damage caused by impact of, or collision caused by any external physical object (e.g. vehicle, animal, falling trees, aircraft, wall, etc),
i. Missile testing operations
j. Riot, strikes, malicious damages,
k. Acts of terrorism
l. Bursting or overflowing or water tanks, appartus and pipes
m. Leakage from automatic sprikler installations
n. Theft within 7 (seven) days from the occurrence of/and proximately caused by any of the above insured events.
Reportedly, this has duly been communicated to your good self by concern surveyor vide email communication dated 22-May-2023.
In view of the aforesaid observations, the subject claim is not tenable. We are accordingly constrained to repudiate our liability and close your subject claim as a “No Claim” under policy terms and conditions and as per the recommendations of the concerned Surveyor respectively, which please note”
9. The ground taken by Opposite Party No.1 for repudiation of the claim is not genuine and claim of the complainant is liable to be paid by the Opposite Party No.1. For this decision of ours, we are guided by the judgement of Hon’ble National Commission, New Delhi passed in case Bajaj Allianz General Insurance Co. Ltd. Vs Gondamal Hardyal Mal, 2009(4) CPJ 165. Relevant abstract of the said judgment is reproduced as under:-
“5. It is his case that since this was a question of leakage of water from roof, hence, it is not covered under any of the perils covered under the Policy.
6. In support of this contention, Counsel for the petitioner has produced before us the definition of inundation as obtained from the website.
7. After hearing the Counsel for the petitioner and material on record, we find that this Commission had occasion to deal with a similar type of case in the case of M/s. National Insurance Co. Ltd. Vs. Marthi Crystal Salt Co. Ltd. [1986-2002 Consumer 6043 (NS)] and United India Insurance Co. Ltd. Vs. Dipendu Ghosh & Anr. [II (2009) CPJ 311(NC), wherein this Commission has interpreted the word Direct Cause as appears in the terms of the Policy and had recorded as under:-
“Learned Counsel for the respondent brought on record the copy of P. Ramanatha Aiyars The Law Lexicon, Law Dictionary. As per this dictionary, the word direct cause and proximate cause has been defined as under:
Direct Cause - that which sets in motion train of events which brings about result without intervention of any force operating or working actively from new and independent source; or , one without which the injury would not have happened. Norbeck v. Mutual of Omaha Ins. Co., 3 Wash. App 582, 476 p 2d, 546, 547 (Blacks Law Dictionary) (Emphasis supplied)
8. This Commission had also occasion to go into this question again in the case of United India Insurance Co. Ltd. Vs. Imperial Gift House & Anr. I (2007) CPJ 6 (NC), in which it was held that as per Oxford Concise Dictionary, relied upon by the State Commission, the word “Flood” also means, “an outpouring of water…..” and tornado, beside other means, “….. a great down pour of rain…..”. Nothing to the contrary has been shown to challenge the finding recorded by this Commission in the two Judgements (supra), meaning thereby that tornado, will also mean, “a great down pour of rain……...”.
9. It is not disputed, as per facts brought on record, by the Counsel for the petitioner, that on account of rain, the rainwater poured into the godown through the holes from the roof of the godown, thus, inundating or wetting the stock in the godown.
10. In view of the Judgements (supra) in which we have extensively dealt with the meaning of risk covered by the Policy, we are unable to sustain the arguments advanced by the Counsel for the petitioner that the word inundation would invariably associate with the flood, as he understands. As already described above, as per Oxford Concise Dictionary, Flood also means, “…..An outpouring of water…..” Thus, in view of the law settled by this Commission on these points, we see no merit in the arguments advanced by the Counsel for the petitioner.
11. In the aforementioned circumstances, we see no merit in this revision petition. Dismissed.
10. The facts involved in the present complaint are squarely covered by the above judgement. It has been observed that declaring the claim of the complainant as ‘no claim’ on the ground that loss has been occurred due to leakage of rain water from the roof and not due to operation of any insured peril, as per the above judgement is not sustainable.
11. Keeping in view the aforesaid facts and circumstances, we are of the view that the claim of the complainant is to be settled on the basis of unrebutted surveyor report. We have perused the detailed report of surveyor i.e. ‘Protech Insurance Surveyors and Loss Assessors’ (Ex.OP3), who assessed the loss with regard to the damages of stock due to inundation, to the tune of Rs.2,00,566.21 and the said report has not been countered by the complainant by way of any affidavit/document in contrary.
It has been also settled by the Hon’ble Supreme Court of India that the report of the Surveyor cannot be brushed aside without valid reasons. In this context, reference may be made to the judgment of the Hon’ble Supreme Court reported as “Sri Venkateshwara Syndicate v. Oriental Insurance Company Limited, II (2010) CPJ 1 (SC)” in which it was held by the Hon’ble Supreme Court that the report of the Surveyor is to be given due importance and weight. Hon’ble National Commission in case cited as PRADEEP KUMAR SHARMA versus NATIONAL INSURANCE COMPANY, III(2008) CPJ 158 (NC), has been held that “Surveyor Report is an important document and cannot be brushed aside without any compelling evidence to the contrary”. Not only this, Hon’ble National Consumer Disputes Redressal Commission, New Delhi in case National Insurance Company Limited Vs. M/s.Kiran Collector & Boutique 2019 (1) CLT 384 (NC), decided on 24th July, 2018 has held that “General rule is that the surveyors are appointed under the Insurance Act, 1938 and their reports are to be considered for settlement of insurance claims- The reports can not be brushed aside without any cogent reasons.”
In view of the judgements of Hon’ble Supreme Court of India as well as Hon’ble National Commission, New Delhi (supra), the instant complaint is being decided on the basis of unrebutted surveyor report.
12. Vide instant complaint, the complainant has also prayed that Opposite Party No.1 may be directed to pay the claimed amount to Opposite Party No.2 being the financier of the stock and Opposite Party No.2 may be directed to surplus claim amount to be paid/credited to the complainant after squaring off the outstanding loan amount. Hence we order accordingly.
13. In view of the discussion above, we allow the complaint of the complainant in part and Opposite Party No.1 is directed to pay Rs.2,00,566.21 (Rupees Two Lakh Five Hundred Sixty Six and Twenty One Paisa only) to Opposite Party No.2 from which, the complainant’s firm availed the Cash Credit Facility of Rs.5,00,000/- and Opposite Party No.2 is directed to settle/adjust the said amount in the Cash Credit Facility of the complainant next within 30 days from the receipt of said amount from Opposite Party No.1. Further Opposite Party No.1 is directed to pay to the complainant cost of Rs.20,000/-(Rupees Twenty Thousand only) as compensation for rendering deficient service and Rs.10,000/- (Rupees Ten Thousand only) as litigation expenses for burdening unavoidablve litigation. The pending application(s), if any also stands disposed of. The compliance of this order be made by the Opposite Party No.1 within 30 days from the date of receipt of copy of this order. In case, Opposite Parties No.1 & 2 failed to comply with the order within stipulated period as ordered, they (jointly and severally) are burdened with additional cost of Rs.20,000/-(Rupees Twenty Thousand only) to be paid to the complainant for non compliance of the order. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
Announced on Open Commission
