PER MR SUBHASH CHANDRA

1.     This First Appeal under section 19 of the Consumer Protection Act, 1986 (in short, the ‘Act’) challenges order dated 02.01.2018 of the State Consumer Disputes Redressal Commission, Pandri, Raipur, Chattisgarh (in short, the ‘State Commission’) in Complaint No. 38 of 2017 partly allowing the complaint and seeks the setting aside of this order.

2.     The relevant facts as stated by the appellant/complainant are that it is a proprietorship concern engaged in the business of sale, purchase and stocking of used bardana (jute bags) operating from a rented godown and had availed a Standard Fire and Special Perils Policy (in short, ‘the Policy’) from the respondent/opposite party for the risk coverage from Fire Solids which are moderately or slightly combustible for a sum of Rs 51,00,000/- for the period 20.05.2015 to 19.05.2016. A fire broke out in the godown on 13.11.2015 around 09.30 am which was doused by the Fire Brigade from Municipal Corporation, Rajnandgaon and Bhilai Steel Plant after over 6 hours. The respondent which was informed telephonically appointed a surveyor to assess the loss. An FIR was lodged with the local police on 23.11.2015 and written intimation given to the respondent the same day. M/s Cunningham Lindsey International Insurance Surveyors and Loss Assessors Pvt. Ltd. were appointed Surveyors by the respondent. A claim for Rs 52,53,000/- was preferred by the appellant and after exchange of correspondence regarding information sought by the Surveyors, the respondent vide letter dated 30.12.2016 conveyed that the claim was not acceptable except for settlement on non-standard basis for Rs 4,14,424/- which was questioned by the appellant in writing on 10.01.2017. However, the respondent repudiated the claim vide letter dated 11.01.2017 on the grounds of non-furnishing of documents. Thereafter, vide letter dated 09.03.2017 the respondent wrote to the appellant attempting to coerce the appellant to accept the settlement of the claim for Rs 4,14,424/- which was not agreed to. The appellant is before us praying to:  

(i)      direct the opposite parties to indemnify complainant’s loss of the insured items to the extent of Rs 52,53,000/- which also includes amount of Rs 57,228/- paid to Municipal Corporation, Rajnandgaon and Rs 49,885/- to Bhilai Iron Steel for using Fire Brigade vehicles to control the fire on 13.11.2015.

(ii)     direct the opposite parties to pay interest @18% p.a. on the above amount from the date of submission of claim form to the date of actual payment.

(iii)    direct the opposite parties to pay compensation amount of Rs 15,00,000/- towards mental, physical and financial loss.

(iv)    saddle cost of litigation expenses, lawyer’s fees amounting to Rs 50,000/-on the opposite parties for instituting the instant complaint and approaching before this Hon’ble Commission.

(v)     grant any other relief which this Hon’ble Commission deems and just under the circumstances of the case and in the interest of justice.

3.     The appellant has challenged the repudiation of its claim before the State Commission which, on contest, upheld the complaint partly, and is before us assailing the impugned order on the grounds that (i) the State Commission erred in not appreciating that all information including the trading and profit & loss account statements which indicated the amount of the loss suffered had not been considered; (ii) the impugned order erroneously relied upon the version of the respondent that the proof of loss had not been submitted whereas all details mentioned in the trading and profit & loss account including details of sales and purchase had been made available to the Surveyors; (iii) the impugned order relies upon the report of the Surveyors which did not discuss the loss; (iv) the State Commission erred in holding the Surveyor’s Report to the final verdict and did not consider that the sum insured of the stocks was Rs 51,00,000/- and overlooked the fact that the total stocking area of the godown measured 1400 sq ft and in November 2015 the godown was completely stocked due to the upcoming festive season; and (v) the State Commission relied upon the Survey Report which was not based on the guidelines of the insurance policy and overlooked the evidence and instead passed its order on the basis of presumption. 

4.     The finding of the State Commission is that:

34.     The Surveyor’s Report is a reliable document and the complainant has not filed any document to prove that the Surveyors report is doubtful, therefore, the Survey’s Report is dependable and reliable for assessment of loss and according to the Surveyor’s Report the complainant is only entitled for the amount, which was assessed by the Surveyor i.e. Rs 8,72,515/-.

The impugned order of the State Commission reads as below:

“(i)     The OPs will pay a sum of Rs 8,72,515/- to the complainant within 45 days from the date of this order.

(ii)     The OPs will pay interest @ 9% p.a. on the above amount of Rs 8,72,515/- from the date of filing of the complaint i.e. 29.05.2017 till realization.

(iii)    The OPs will also pay a sum of Rs 10,000/- towards cost of litigation to the complainant.”

5.     We have heard the rival contentions of the learned counsel for the parties and carefully considered the material on record.

6.     The facts of the case with regard to the availment of the Policy and the accidental nature of the fire are not disputed by the parties. The respondent has assessed the quantum of the claim preferred on the basis of the report of the Surveyor appointed by it who, in turn, has quantified the loss on the basis of the documents made available on the basis of a volumetric assessment of loss. It is the appellant’s case that the claim has not been considered on the basis of the documents provided to the Surveyors and that the State Commission erred in accepting the contentions of the respondent relying on the Surveyor’s Report.  

7.     Learned counsel for the appellant submitted that the Surveyor did not discuss the actual loss on the insured premises. It was contended that the stock insured was for Rs 51,00,000/-and that all the proof had been submitted to the Surveyor which was not considered. It was also contended that the stocking area available was 1400 sq ft and the godown was fully stocked which fact had not been considered by the Surveyor and the State Commission. Counsel for the appellant relied upon this Commission’s judgment in New India Assurance Co. Ltd. vs. Shiv Khanna,  FA No. 153 of 2001 decided on 12.02.2004 to argue that a full and final settlement, if protested within a reasonable period, could be re-opened. He also relied upon judgment of this Commission in National Insurance Co. Ltd. Vs. Giriraj Proteins, in RP No. 2303 of 2012 dated 03.09.2012, IV (2012) CPJ 151 (NC) to contend that the report of the surveyor is not the last and final word and can be ignored if it is perverse, arbitrary or based on inferences and surmises. He also relied upon this Commission’s judgment in Oriental Insurance Co. Ltd. & Ors. Vs. Government Tool Room and Training Centre, FA No. 383 of 2005 dated 17.05.2007, I (2008) CPJ 267 (NC) that the mere execution of a discharge voucher and acceptance of an insurance claim cannot estop the insured from making a further claim.

8.     Per contra, it was contended by the respondent that the appellant could not be considered to be a ‘consumer’ under the Act as it was running a sole proprietorship firm whose dominant purpose was manufacturing for a commercial purpose. Reliance was placed on the Hon’ble Supreme Court’s judgment in Shrikant G. Mantri Vs. Punjab National Bank, Civil Appeal No. 11397 of 2016 decided on 22.02.2022 and this Commission in Anand Mundra vs. Shelter Makers (I) Pvt. Ltd., ­­­­­­­­­­­­­­­­­­­­­FA no. 464 of 2015 dated 23.12.2021 MANU/CF/0503/2021. It was contended that trading account of the appellant for the period 01.04.2015 to 13.11.2015 proved that he was working for commercial gain. The claim was also stated to be false and bogus in that the claim of Rs 52,53,000/- was filed whereas the sum insured was Rs 51,00,000/- and the same was not substantiated through documentary evidence. There were also discrepancies in the FIR regarding the value of goods. It was averred that the report of a surveyor had been held as per settled proposition of law to be sacrosanct and had to be given due weightage. Respondent contended that the preliminary survey by the assessor/surveyor, Hitesh Chitalia, on 14.11.2022 recorded that the exact extent of affected stock could not be determined and needed to be ascertained during detailed survey. The detailed assessment by Surveyors in presence of the appellant on two occasions on 25.11.2015 and 27.11.2015 indicated a loss of Rs 8,28,889/- after adjustment. However, appellant failed to provide documents sought as per Condition 6 of the Policy including purchase and sale invoices, stock registers of gunny bags and inward challan and lorry receipts apart from the Fire Brigade’s report, despite repeated reminders. The respondent therefore offered to settle the claim for Rs 4,14,424/- on 30.12.2016 and reminders dated 11.01.2017 and 09.03.2017. Respondent contends that it acted as per standard guidelines of the IRDA for settlement of the claim.

9.     From the rival contentions of the parties and the material on record it is evident that the moot issue in the case is the valuation of the loss. It is the appellant’s case that based upon the sum insured and the trading and profit and loss account statements, the claim be settled. On the other hand, the respondent has contended that the appellant failed to provide other documents sought such as invoices and inward/lorry receipts to establish the quantum of loss and hence the claim could not be settled. The impugned order, however, after considering the evidences held the appellant entitled to a relief of Rs 8,72,515/- with 9% interest and litigation costs. 

10.   Based on the foregoing, it is evident that the order of the State Commission has held the appellant to be a ‘consumer’ based on the law laid down by this Commission in M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd. & Ors.        2005 (1) CPR 1 (NC) which held that “… taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose”. We find no reason to disagree with this finding. The respondent has not brought any evidence on record to establish that the appellant was engaged in ‘commercial’ activity and was not engaged in the business for earning his livelihood and hence, in terms of the law laid down by the Hon’ble Supreme Court in Laxmi Engineering Works vs P S G Industrial Institute - (1995) 3 SCC 583 this contention cannot be sustained. The reliance of the respondent on Anand Mundra (supra) is misplaced and is of no avail to his case.

11.    As regards the contention of the appellant that the impugned order erred in relying upon the Surveyor’s Report and that the said report was itself based on an improper assessment of documents provided by the appellant, the Hon’ble Supreme Court has laid down in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd. & Anr., in CA No. 4487 of 2004 dated 24.08.2009 (2009) 8 SCC 507 that the appointment of a surveyor is a mandatory requirement under the provisions of Section 64 UM of the Insurance Act, 1938. It has also been laid down in New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787 that the report of the surveyor is not so sacrosanct that it cannot be disregarded in case it is perverse or arbitrary. While the appellant has averred that the Surveyor’s Report did not consider the material it provided to the Surveyor, it has not established that it was arbitrary and perverse. The fact that information was sought by the surveyor from the appellant on several occasions has also not been denied. The mere fact that the sum insured for the stock was for Rs 51,00,000/- by itself cannot be the basis for a claim of Rs 52,53,000/- to be allowed. The appellant was under obligation to provide the documents sought by the Surveyor in order to establish the quantum of loss. It is not the case of the appellant that it had provided all the requisite documents and that the report was arbitrary in view of the same not being considered. The only ground taken by the appellant for appeal is that it had provided details of the trading and profit and loss accounts to the surveyor. He is silent with regard to the other documents sought. The impugned order of the State Commission is reasoned and detailed in holding the appellant to be a ‘consumer’ under the provisions of the Act while arriving at the finding that the Surveyor’s Report was not perverse or arbitrary. 

12.    For the foregoing reasons, the appeal is found to be without merits and is liable to fail. The First Appeal is accordingly dismissed. There shall be no order as to costs. Pending IAs, if any, stand disposed of with this order.