1.      Heard Mr. Akhil Dave, Advocate, for the complainant and Ms. Suman Bagga, Advocate, for the opposite party.

2.      Modern Gaur Gums Pvt. Ltd. (the Insured) has filed above complaint, for directing HDFC ERGO General Insurance Company Limited to pay (i) Rs.22187115/- with interest @18% per annum as insurance claim, (ii) Rs.5/- lacs as compensation for mental agony, (iii) Rs.100000/- as litigation cost and (iv) any other relief which is deemed fit and proper in the facts and circumstances of the case.

3.      The facts as stated in the complaint and emerged from the documents attached with it are as follows:- 

(a)     The Insured was a private limited company, registered under Indian Companies Act, 1956 and engaged in business of manufacture and sale of Guar Splits, Guar Gum Power, Guar Churi and Guar Korma. The Insured had two manufacturing units at 52, Backside, New Anaj Mandi, Bhiwani, in same compound. The complainant used to purchase guar from market or from farmers. Thereafter, it processed to manufacture Churi, Korma (cattle feed), Guar gum. The Guar gum was further processed to produce Guar powder. These products were sold either in local market or to various other places in Haryana, Rajasthan and Gujarat according to its demand.

(b)     HDFC ERGO General Insurance Company Limited (the opposite party) (the insurer) was a private insurance company and engaged in the business of providing insurance services. The Insured obtained Standard Fire and Special Peril (Material Damage) Policy No.EMD0005390000100 from the Insurer for the period of 12.03.2010 to 11.03.2011, for sum insured of Rs.4.5/- crores. Risk location was “Backside of Anaj Mandi, Bhiwani, Haryana”.

(c)     On 16.07.2010 around 5:00 hours, Mukesh Kumar, a labourer noticed smoke emanating from rear side of the factory of the Insured, who immediately informed Raj Ratan Gupta, brother of the director, who was sleeping at factory premises. Raj Ratan Gupta went in rear side of the factory and tried to roll up the shutter but fire had become severe as such shutter could not be opened. He then informed Fire Service Station about the fire incident and also called of Police Help No.101 on telephone. He also informed his brother Anuj Gupta, the director. From several Fire Service Stations, eight fire tenders were deputed on the spot, which could douse the fire up to 14:15 hours on that day.

(d)     The complainant informed the Insurer about fire incident on telephone on 16.07.2010. The Insurer appointed Cunningham Lindsey International Pvt. Ltd., New Delhi. One Mr. Suresh Kumar, from the office of the surveyor inspected the factory premises on 17.07.2010, 18.07.2010 and 19.07.2010 and took photographs and some papers from the Insured. The surveyor, then wrote a letter dated 21.07.2010 to the Insured asking various papers and information (total 24 in number). In this letter, the surveyor acknowledged receiving of 12 papers. The Insured submitted some of the required papers (pages-62-63 of the complaint), in the office of the surveyor in New Delhi. During discussions, the Insured informed that there was some safe stock at another location, situated at a distance of 9 KM from factory premises. The surveyor asked for verification of safe stock of other location for preparation of its inventory. According to the Insured, fire had taken place due to electric short circuit. The surveyor engaged an Investigator for investigating into cause of fire. However, the Investigator, after obtaining forensic report of electrical wire, cable, switch board etc. reported that fire due to electric short circuit was not proved.

(e) The surveyor again visited the factory premises of the Insured on 28.07.2010 and prepared Joint Inspection Memo. During this visit, entire fire/water affected stock were filled up in jute bags and kept in unit & shed. Clause-6 of Joint Inspection Memo recites that “as reported by Insured, 43 bags of Guar gum powder of weight 3819.66 K.G. (which was not affected by gamaxine powder) is in semi saved condition and needs re-processing to save the material” and Mr. Anuj Gupta was advised to re-process it and inform the surveyor for verification. When, the surveyor asked for inspection of other location, at village Bapoda, situated at a distance of 9 KM from factory premises, where stock was stored then the Insured avoided and did not permit inspection of other location at village Bapoda. The surveyor again gave an email dated 29.07.2010, to segregate the aforementioned material and dry it for its weight. In presence of the surveyor, weight of affected materials were taken on 06.08.2010 at Shree Shyam Dharam Kanta, Loharu road, Bhiwani, which were as 6290 kg Guar, 6425 kg. Guar powder, 6320 kg Guar gum and 10360 kg. Guar gum.

(f)      The Insured provided some papers on 14.09.2010 and some papers on 20.09.2010. The surveyor, vide letter dated 02.11.2010 again demanded (i) Profit & loss account since 01.04.2010 to 16.07.2010. (ii) Bank stock statement from March, 2009 to June 2010. (iii) Bank statement from 01.01.2010 to 16.07.2010. (iv) Building layout, showing fire affected area and (v) claim form. The Insured demanded format of claim form, which was supplied to him. Then he submitted claim form on 21.12.2010. The surveyor submitted Final Survey Report dated 16.02.2011, stating that cause of loss was accidental. The Insured has violated General Condition Nos. 1 and 8. He was not permitted to verify and make inventory of safe stock stored at other location at village Bapoda. From the sale invoice, without verification of stock, it was not possible to believe that the sale invoices relate entire stock stored at that location. From last years, the Insured was manufacturing, churi/Korma and Guar dall. Same stock of Guar gum was brought forward from 2007-08 as such it was declared as dead stock. As per weighing slip dated 06.08.2010, loss of stock was assesses to Rs.1018798/-. After deduction of amount under excess clause, net loss of Rs.1008798/-      

(g)     After the Final Survey Report, the papers were examined by the competent authority of the Insurer, who by letter dated 04.03.2011, repudiated the claim on the ground that by not permitting to verify the stock at other location at village Bapoda, the Insured has violated General Condition No.1, 6 and 8 of the Policy. The Insured made a representation before Principal Grievance Cell on 19.04.2011 but nothing was done. The Insured sought for a copy of Final Survey Report by an application under the provisions of Right to Information Act, 2005, which was not provided. Then this complaint was filed on 15.06.2011, alleging deficiency in service.

4.      The opposite party filed its written reply on 15.03.2012, in which, the material facts have not been denied. It has been stated that as soon as information of fire incident at the factory premises of the Insured was received, the Insurer appointed Cunningham Lindsey International Pvt. Ltd., New Delhi (a licenced surveyor) for survey and assessment of loss. The surveyor inspected the factory premises on 17.07.2010, 18.07.2010 and 19.07.2010 and took photographs and some papers from the Insured. The surveyor, vide letter dated 21.07.2010, demanded from the Insured various other papers and information (total 24 in number), acknowledging receipt of 12 papers, in which, at Serial No.-14-Details of stock lying at other locations with valuation thereof, in the above format with supporting document was also mentioned. The Insured submitted some of the required papers, in the office of the surveyor in New Delhi. During discussions, the Insured informed that there was some safe stock at another location at village Bapoda, situated at a distance of 9 KM from factory premises. The surveyor requested to arrange for verification of stock at other location, which was avoided by the Insured and ultimately he informed that entire stock at village Bapoda was sold. By not permitting the surveyor to verify the stock at village Bapoda, the Insured has violated General Condition No.1, 6 and 8 of the Policy as such the claim was repudiated. Instead of cooperating with the surveyor, in assessment of loss, the Insured gave a legal notice to create undue pressure which was duly replied on 03.11.2010 and his attention was drawn towards relevant General Terms and Condition Nos.1, 6 and 8. There was no deficiency in service on the part of the Insurer. The Insured has not come with clean hand, before this Commission.

5.      The Insured filed Rejoinder Reply on 11.07.2012. The Insured filed Affidavit of Evidence of Anuj Gupta and various documentary evidence. The Insurer filed Affidavit of Evidence of Shyama Charan Vats, the claim manager. Both the parties filed their written synopsis.

6.      The claim was repudiated on the ground that the Insured has violated General Terms and Conditions Nos.1, 6 and 8 of the Policy, which are quoted below:-

1.      This Policy shall be voidable in the event of misrepresentation, mis-description or non-discloser of any material particular.

6.(i).- On the happening of any loss or damage, the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage or such further time as the Company may in writing allow in that behalf, deliver to the company.

(a) A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items or property damaged or destroyed and of the amount of loss or damage thereto respectively having regard to their value at the time of the loss or damage not including profit of any kind.

 (b) The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal forma of the truth of the claim and of any matters connected therewith.

No claim under this policy shall be payable unless the terms of this condition have been complied with.

8.      If the claim be in any respect fraudulent, or in any false declaration be made or used by the Insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefits under this policy shall be forfeited. 

7.      The counsel for the complainant submitted that General Terms and Condition of the policy was not supplied to the Insured along with Insurance Policy as such these Terms and Conditions will not be applicable upon the Insured. It is well settled that the Terms and Conditions, which were not supplied along with Policy, cannot be read against the Insured. The Insured provided all the evidence i.e. books of records, vouchers, invoices, bills etc. to the surveyor. These documents were examined by the surveyor as mentioned in the Survey Report dated 16.02.2011. The Insurer in written reply could not point out any specific document, which was withheld by the Insured. Part of stock worth Rs.1.82/- crores was stored at village Bapoda, which was 9 km away from Bhiwani. Said godown was not insured under the policy as such stock of Bapoda was sold without any permission of the surveyor. Later on, as demanded all the sale invoices were produced before the surveyor. There was no concealment of fact. The stock was agriculture produce. The stock which was burnt, had become total ash. Other stock at the factory premises was wetted in water poured by fires tenders. After wetting in the month of July, decomposition was started rapidly and insect were germinated in it. The surveyor delayed in preparation of inventory. In any case, no inventory of burnt stock could be prepared. In such circumstances, the loss had to be determined on the basis of Books of Account, Stock Statement maintained by the bank, bills of purchase invoices of sale, purchase and sale registers, etc. The surveyor has illegally assessed the loss on the basis of stock damaged with water only. The Insurer appointed Cunningham Lindsey International Pvt. Ltd., New Delhi (a licenced surveyor) for survey and assessment of loss but survey was done by one Mr. Suresh Kumar. There was nothing to prove that Mr. Suresh Kumar was a licenced surveyor as such no reliance can be placed upon his report.      

8.      We have considered the arguments of the counsel for the parties and examined the record. The proposition of law is that if exclusion clauses were not part of policy and were not supplied to the Insured then it would not be read against him. This proposition of law will have no application in respect of General Terms and Conditions, which was relevant for determination of the claim. In the claim based upon fire incident under Standard Fire and Special Peril Policy, various evidence/stock is burnt as such principle of uberrima fides (utmost good faith) will have to be strict application. If the claim is based upon concealment of material fact or misrepresentation or exaggerated, then Insurer will be entitled to repudiate the whole claim under general principle of uberrima fides as no body encourage such a practice. As such the arguments raised by the Insured in this respect is not liable to be accepted.

9.      Although storage at village Bapoda was not insured location, in the present policy but the Insured was enjoying one Cash Credit Facility from HDFC Bank. The Insured submitted Statement of Stock as supplied to the bank in the month of June, 2010, showing total stock of Rs.42736574/-. All other documents submitted by the Insured included the stocks of factory premises and stock at village Bapoda. These papers were made basis of the claim. According to the Insured, out of this total stock, stock worth Rs.1.82/- crores was stored at village Bapoda. The Insured did not maintain separate Stock Registers of the factory premises and stock at village Bapoda. In the absence of any documentary evidence relating to separate stock, it was necessary for the surveyor to verify the quantity of stock stored at village Bapoda. The surveyor asked for inspection of stock at village Bapoda at the earliest stage, when the Insured came to his office in New Delhi, in July, 2010 for submitting documents. If the stock of village Bapoda were sold without verification then certainly it raises a doubt in respect of bonafide of the Insured. Without physical verification of stock at village Bapoda, quantity of stock at that place cannot be finally determined. Whether the version of the Insured was correct or not has to be verified by the surveyor for assessment of loss. This was concealment of material fact and the claim was rightly repudiated invoking General Conditions. There is no illegality in it.  

10.    So far as the arguments that the survey report was not prepared by a licensed surveyor is concerned, this argument is not liable to be accepted. If the surveyor has taken help of his staff for local inspection, making inventory and a photographer for taking photograph then only on its basis it cannot be said that survey report was invalid. In view of aforesaid discussions, we do not find any illegality in the repudiation of the claim of the complainant.   

                                                  O R D E R

In view of the aforesaid discussion, the complaint is dismissed.