1.      Heard Mr. Devmani Bansal, Advocate, for the appellant and Mr. Vishnu Mehra, Advocate, for the respondent.

2.      M/s. Chokhi Dhani Resorts Pvt. Ltd. (the complainant) has filed above appeal, from the order of State Consumer Disputes Redressal Commission, Rajasthan at Jaipur, dated 20.10.2014, passed in CC/36/2009, dismissing the complaint.

3.      The respondent has filed IA/15771/2018, for filing additional document and IA/15772/2018, for condonation of delay in filing the additional document. Additional document sought to be filed is the copy of Risk Inspection Report dated 25.03.2009, in the present matter. IA/15771/2018 and IA/15772/2018 are allowed. Delay in filing the application is condoned and additional document i.e. copy of Risk Inspection Report dated 25.03.2009 is taken on record.

4.      M/s. Chokhi Dhani Resorts Pvt. Ltd. (the appellant) filed CC/36/2009, for directing ICICI Lombard General Insurance Company Limited (the respondent) to pay (i) Rs.6821509 with interest @18% per annum as insurance claim, (ii) Rs.119125/- as cost of availing re-insurance, (iii) Rs.5/- lacs as compensation for mental agony, (iv) Rs.35000/- as litigation cost and (v) any other relief which is deemed fit and proper in the facts and circumstances of the case.

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

(a)     The complainant was a private limited company, registered under Indian Companies Act, 1956 and engaged in hotel business. The complainant was a leading group, well known for its hospitality and maintaining the traditional Rajasthani ethics and was a chain of Five Star Resort/Hotel, categorised by Tourism Department, Government of India. The complainant built a resort/hotel in an area of 20 acre land at village Chokhi Dhani at the triangle of Delhi-Agra-Jaipur Road, 12 Miles Stones, Unit 1 & 2 Tonk Road, Jaipur, started in 1990. Entrance of Resort is from main Tonk road Jaipur. Well laid landscaped garden leads to a specious reception building-Kotri. The Resort had 100 air conditioned rooms (including 8 rooms, generally known as Havelis), equipped with all modern amenities. The rooms and Havelis were built up in typical Rajasthani Architecture and style to create Rajasthani rustic ambience. It had four conference halls. It had two sections, namely Chokhi Dhani Resort and Chokhi Dhani Village. Various agricultural tools and antique village carts were displayed in suitable corners. Chokhi Dhani had various restaurants and one bar and facilities Spa/Gym, Swimming pool, Health club etc.

(b)     ICICI Lombard General Insurance Company Limited (the respondent) (the insurer) was a private insurance company and engaged in the business of providing insurance services. The complainant obtained Corporate Cover Policy No.4019/0002437 from the Insurer for the period of 09.10.2008 to 08.10.2009, for insurance coverage of Rs.18/- crores, which was a renewal policy.

(c)     On 12.12.2008 around 21:30 hours, fire took place towards lobby and reception side of the resort probably due to electric short circuit. It soon took devastating nature. The staff of the complainant, immediately, informed the nearest Fire Service Station and local Police Station on telephone about the fire incident, from where two fire tenders were deputed on the spot, which could douse the fire up to 1:00 hours on 13.12.2008.

(d)     The complainant informed the Insurer about fire incident on telephone on 12.12.2008. The Insurer appointed Cunningham Lindsey International Pvt. Ltd., Jaipur, as the surveyor, who inspected the Resort on 12.12.2008 and took photographs. He submitted Preliminary Survey Report dated 19.12.2008. The complainant submitted his insurance claim for Rs.6191975/- on 28.02.2009. In support of the claim, the complainant submitted all the required papers, report of architect for renovation and information to the surveyor. The surveyor submitted Final Survey Report dated 27.03.2009, stating that the Insured had provided false information and misrepresented the facts about construction and occupation of the premises and the liability of Insurer would not attached.

(e) The Insurer also appointed K.D. Kohli and Company Pvt. Ltd., New Delhi, for survey and assessment of loss on 20.03.2009. The surveyor inspected the Resort on 21.03.2009 along with other officers of the Insurer and submitted his Risk Inspection Report dated 25.03.2009, in which, he confirmed that reception building-Kotri with its furniture and fixer were completely gutted. He also found that main reason for complete gutting of reception building-Kotri with its furniture and fixer was the kutcha class of construction (the thatched roof), which collapsed after fire in the reception area. Thereafter, the Insurer repudiated the claim of the complainant vide letter dated 30.03.2009, on the ground that although the construction was kutcha construction with thatched roof but it was shown as construction class-1 in the proposal form and such the policy had become void.

(f)      The complainant protested the repudiation letter dated 30.03.2009 through its letter dated 08.04.2009 and 11.04.2009 and stated that entire construction was class-1 construction i.e. bricks masonry wall, RCC roof or asbestos sheet on steel structure. In order to give Rajasthani village look, thatches were put on the roof. There was no basis to hold that the construction as kutcha. The complainant demanded for supply of Proposal Form for the insurance and Survey Report. After renovation of the construction, the complainant obtained Policy No.330105/11/0911/00000012 from New India Insurance Company Limited, afresh, for the period of 10.04.2009 to 09.04.2010, paying a sum of Rs.119125/- as premium. 

(g)     The Insurer called for a fresh report from K.D. Kohli and Company Pvt. Ltd., New Delhi, who resurveyed the Resort on 04.05.2009 and submitted his report dated 26.05.2009, in same terms. Then the representation of the complainant was rejected vide letter dated 03.06.2009. The complainant then gave a legal notice dated 02.07.2009 but no reply was given. Then this complaint was filed on 12.08.2009, alleging deficiency in service.

6.      The opposite party filed its written reply on 06.04.2010, in which, the material facts have not been denied. It has been stated that the proposal form for obtaining Corporate Cover Policy No.4019/0002437 was signed by Subhash Vaswani, the Managing Director. In the Proposal Form, the premises detail was mentioned as “1^st class construction”. Tariff Advisory Committee’s Regulation defines “Kutcha construction” means a building having walls and/or roofs of wooden planks, thatched leaves, grass, bamboo, plastic cloth asphalt, canvass, tarpaulin or the like. The contract of insurance is a contract of ‘utmost good faith’, which requires discloser of all material facts. Thatched roof and wall was a material fact as it enhanced the exposer to risk of fire many times. Non-discloser of it makes the policy as voidable at the option of the Insurer. The policy coverage were Rs.6/- crore on building, above the plinth level, Rs.10/- lacs for plinth and foundation, Rs.4.9/- crores for the furniture, fixer and decoration and Rs.3.57/- lacs on cash in safe. As soon as the Insurer received the information of fire incident, it   appointed Cunningham Lindsey International Pvt. Ltd., Jaipur, as the surveyor, who inspected the Resort on 12.12.2008 and took photographs. He submitted Preliminary Survey Report dated 19.12.2008 and Final Survey Report dated 27.03.2009, stating that the Insured had provided false information and misrepresented about nature of construction and the liability of Insurer would not attached. The Insurer also appointed K.D. Kohli and Company Pvt. Ltd., New Delhi, for survey on 20.03.2009. The surveyor inspected the Resort on 21.03.2009 along with other officers of the Insurer and submitted his Risk Inspection Report dated 25.03.2009. Both the surveyors found that a wedding was being celebrated at the Resort on the date of incident. Suddenly a fire cracker flew and fell on thatched roof of reception hall and lobby. Due to which dry thatched roof started burning. Burned thatched roof fell in reception hall and burned furniture and fixer etc. within 30 minutes. After receiving survey reports, the entire materials were considered by the competent authority, who repudiated the claim vide letter dated 30.03.2009, on the ground although the construction was 2^nd class construction with thatched roof but it was shown as construction class-1 in the proposal form and such the policy had become void. It has been denied that the fire was caused due to electric short circuit. There was no deficiency in service, in repudiating the claim. Preliminary objections that the complainant was doing commercial activities and was not a consumer and the complaint raises complicated issues of fact, which required voluminous evidence and cross examination of the witnesses to prove it, as such it could not be adjudicated in the summary proceedings, are also raised.

7.      State Commission, after hearing the parties, by impugned order dated 20.10.2014, held that as the first surveyor did not assess the loss as such appointment of second surveyor was valid, who assessed the loss also. Both the surveyor in their report found that roof of reception lobby was covered with thatched grass, on which, burning cracker fell and thatched roof immediately caught fires and burned. Burned thatched roof fell in reception hall and burned furniture and fixer etc. Thatched roof cannot be “1^st class construction”. The policy vitiated due to concealment of material facts. Repudiation letter did not suffer from any illegality. On these finding the complaint was dismissed. Hence this appeal has been filed.

8.      The counsel for the appellant submitted that Tariff Advisory Committee’s Regulation defines Kutcha construction as “Building having walls and/or roofs of wooden planks, thatched leaves and or grass/hay of any kind bamboo/plastic/cloth/asphalt cloth/canvas/ tarpaulin and the like. In the present case, reception lobby was covered with asbestos sheets on steel frame and the walls were burn brick masonry. In order to create Rajasthani rustic ambience, the roofs were covered with thatched leaves. Such a construction cannot be termed as “kutcha construction”. There was no misrepresentation of nature of the construction in Proposal Form. Repudiation letter illegally held that the construction as “kutcha construction”.On receiving information of the fire incident, the Insurer appointed Cunningham Lindsey International Pvt. Ltd., Jaipur, as the surveyor, who inspected the Resort on 12.12.2008 and took photographs. He submitted Preliminary Survey Report dated 19.12.2008. The appellant submitted his insurance claim for Rs.6191975/- on 28.02.2009, before him. In support of the claim, the appellant submitted all the required papers, report of architect for renovation and information as required by the surveyor. The appellant did not receive copy of survey report. In the meantime, without any reason, the Insurer appointed a second surveyor, namely K.D. Kohli and Company Pvt. Ltd., New Delhi, for survey on 20.03.2009. The surveyor inspected the Resort on 21.03.2009 along with other officers of the Insurer and submitted his Risk Inspection Report dated 25.03.2009. This report was also not supplied to the appellant. Appointment of second surveyor, without assigning any reason was not permissible as held by Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507. The Insurer repudiated the claim vide letter dated 30.03.2009 holding that the construction of the appellant was “kutcha construction”. State Commission has also committed same mistake.

9.      We have considered the arguments of the counsel for the parties and examined the record. Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507 and New India Assurance Company Ltd. Vs. Sri Buchiyyamma Rice Mill, (2020) 12 SCC 105, held that Section 64 UM of Insurance Act, 1935 did not impose any restriction for appointment of second surveyor. However, for appointment of second surveyor some reason is required to be given. In the present case, the respondent could not give any reason for appointment of second surveyor. As such reports of second surveyor, namely K.D. Kohli and Company Pvt. Ltd., New Delhi, dated 25.03.2009 and 26.05.2009 have to be ignored. However, it does not affect the merit of the case as Final Survey Report dated 27.03.2009 was submitted by first surveyor, which was considered in the repudiation letter.

10.    The Insurer appointed Cunningham Lindsey International Pvt. Ltd., Jaipur, as the surveyor, who inspected the Resort on 12.12.2008 and took photographs. He submitted Preliminary Survey Report dated 19.12.2008 and Final Survey Report dated 27.03.2009. In Final Survey Report, he noted Construction and Occupation as follows:

“Area of reception lobby is about 1980 sq.ft. Construction and Occupation was Class-II as roof laid in the form of asbestos sheets supported in steel struss/bars and further thatches upon the asbestos sheet”

Circumstances of loss was mentioned as follows:

“On 12^th December, 2008 at about 21:45 hours, while wedding celebration was going on nearby Insured premises, suddenly a fire cracker fell upon the roof of the reception lobby and as thatches laid upon the roof they caught fire immediately and within 20-30 minutes, entire reception lobby got burnt.” 

11.    In the Proposal Form, nature of construction was mentioned as “1^st class”, which means burn bricks masonry wall and RCC roof. In the present case, admittedly the roof of reception lobby, where the fire incident took place was covered with asbestos sheets on steel frame. It was again covered with thatched dry leaves, enhancing the exposer to risk of fire many times. This was concealment of material fact in the Proposal Form, in as much as the construction of reception lobby was a 2^nd class construction and not 1^st class. Supreme Court in Oriental Insurance Company Limited Vs. Mahendra Construction, 2019 SCC OnLine SC 541, held that suppression of material fact in proposal form, vitiates the insurance policy. As such the repudiation letter dated 30.03.2009 and order of State Commission dated 20.10.2014 do not suffer from any illegality. The appeal has no merit and it is liable to be dismissed.

                                                  O R D E R

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