1.      Heard Ms. Meenakshi Midha, Advocate, for the appellant. 

2.      Above appeal has been filed against the order of Odisha State Consumer Disputes Redressal Commission, Cuttack, dated 27.12.2022, allowing Consumer Complaint No.89 of 2003, with cost of Rs.one lac and directing the appellant to pay insurance claim of Rs.1417496/- and Rs.100000/- as compensation for mental agony, with  interest @12% per annum from 17.11.1999, till the date of payment.

3.      The office has reported delay of 149 days in filing the appeal. The appellant has filed IA/8601/2023, for condoning the delay, in which, it has been stated that certified copy of the order dated 27.12.2022 was received on 03.01.2023. Thereafter, time was taken for obtaining sanction of appropriate authority for filing the appeal, drafting of the appeal, signing by authorised signatory and filing it, on 04.07.2023. Subject to objection of the respondents, delay in filing the appeal is condoned and the argument in the appeal was heard for admission.

4.      M/s. Jagannath Polymers Private Limited and another (respondents-1 and 2) filed CC/89/2003, for directing the appellant and respondents-3 and 4 to pay (i) Rs.3829000/- with interest payable by the bank, towards their insurance claim; (ii) interest of the loan taken by the complainants from State Bank of India and other financial institutions, accrued due to non-settlement of their claim; (iii) Rs.600000/- as compensation for loss of business, mental agony, harassment and costs of litigation; and (iv) any other relief which is deemed fit and proper in the facts and circumstances of the case.

5.      The complainants stated that M/s. Jagannath Polymers Private Limited was a company, registered under the Companies Act, 1956 and Manoj Kumar Subudhi was its Managing Director. The complainants established its factory at IDCO Shed No.TS-3/A-36, 37, 48 & 49, Phase-III, New Industrial Estate, Mouza Gopinathpur, Jagatpur, for manufacture of high density polythene, poly propylene, un-laminated and laminated sacks, fabrics and cut length, in the year 1995. With the financial assistance of State Bank of India i.e. ‘term loan’ of Rs.1356244/- and ‘cash credit facility’ of Rs.800000/-, the complainants installed machinery and started production in the year 1996. Their factory was registered as ‘small scale industry’ with District Industry Centre, Cuttack. The complainants took Fire Policy No.153104/3100136/98-99, for the period of 02.11.1998 to 01.11.1999, for a sum insured of Rs.8427000/- (i.e. Rs.1500000/- for building, Rs.3800000/- for machinery & accessory, Rs.2600000/- for stocks and stock in process, Rs.323000/- for furniture fixture & fitting and Rs.204000/- for transformer) and Burglary & House Breaking Policy No.153104/7500082/98-99, for the period of 02.11.1998 to 01.11.1999, for a sum insured of Rs.6927000/-, for plant & machinery, transformer, electrical installation, stock, stock-in-process, finished goods, from National Insurance Company Limited. The complainants also took two insurance policies from Oriental Insurance Company Limited, for the period of 16.04.1999 to 15.04.2000 of the above properties. On 28.10.1999, super cyclone hit 10 coastal districts of Orissa, including Cuttack, with wind speed of 260 km per hours, followed by torrential rain for more than 36 hours, which was declared as worst cyclone of the century. Entire infrastructure of electricity of whole district of Cuttack was disrupted due to uprooting the poles, towers and trees. Due to heavy wind pressure, ACC sheets of the roof of the factory of the complainants were blown off, causing damage to the building, plant and machinery also. Due to torrential rain for more than 36 hours, the factory premises and godowns were flooded, due to which, raw materials, finished materials, plant & machinery, building, electrical fittings etc. were damaged/rusted as water logging remained for several days. The security persons left the factory premises in order to save their life. Taking advantage of total black out and no security, the miscreants stole various finish goods. Complainant-2 informed National Insurance Company Limited on 29.10.1999 and Oriental Insurance Company Limited on 31.10.1999 about the loss. Complainant-2 informed Central Excise and Custom Department, Cuttack on 01.11.1999 about the damages caused to stocks. When complainant-2 and staff could visit the factory premises and came to know about theft, then FIR was lodged on 02.11.1999 at police station, Jagatpur, which was registered as FIR No.117. National Insurance Company appointed A.K. Govil & Associates, Cuttack, as the surveyor, who visited the factory premises on 04.11.1999, 09.11.1999 and 17.11.1999 took photographs and prepared inventories. As required, the complainants submitted claim statement along with list of the damaged property/goods on 11.11.1999. The Insurers supplied claim form on 17.11.1999, which was duly filled up and given to the surveyor. The surveyor, vide letter dated 19.11.1999, demanded six papers, which were supplied. The surveyor submitted Preliminary Survey Report dated 22.11.1999, confirming extensive damage due to super cyclone and torrential rain. The surveyor, vide letter dated 24.11.1999, demanded 7 papers, vide letter dated 10.07.2000, demanded 4 papers, vide letter dated 16.11.2000, demanded six papers, vide letter dated 01.01.2001, demanded six papers, vide letter dated 20.02.2001, demanded 3 papers, which were supplied time to time. The surveyor again visited the factory on 19.05.2001, 26.05.2001 and 14.09.2001. Time to time, the surveyor used to write letters demanding either those papers, which had been supplied or new papers. The surveyor submitted Final Survey Report dated 30.04.2002. Oriental Insurance Company Limited appointed P.K. Das Patnaik, Surveyor & Loss Assessor, as the surveyor, who visited the factory premises on 11.12.1999 and vide letter dated 17.12.1999, asked for various papers, which were supplied to him. Later on Branch Managers of both the Insurer asked complainant-2 to submit joint claim, which was also given on 17.11.1999. The complainants wrote a letter dated 28.06.2002 to Oriental Insurance Company Limited, to settle the claim, but did not receive any response. Then the complaint was filed.       

6.      The appellants filed written version and contested the complaint. The appellants stated that as soon as they were intimated about the loss, they appointed Mr. B.K. Patnaik, as preliminary surveyor, who submitted his Preliminary Survey Report dated 22.11.1999. The appellants appointed A.K. Govil & Associates, Cuttack, as the surveyor. In spite of repeated reminders of the surveyor, dated 19.11.1999, 24.11.1999, 10.07.2000, 16.11.2000, 01.01.2001 and 20.02.2001, the complainants did not supply requisite documents to him for assessment of loss. The complainants supplied some documents on 08.01.2000, 28.09.2000, 02.02.2001, 31.03.2001 and last bunch of documents on 17.08.2001. Due to inordinate delay on the part of the complainants in supplying required documents, the claim was closed on 31.03.2000. In Final Survey Report dated 30.04.2002, the surveyor noticed that the complainants had submitted fabricated estimates/bills of Kalimata Plastic Machinery Manufacturer, 53, Basantalal Saha Road, Culcutta-700053, relating of repair of the machinery, although no such manufacturer was found in existence on above address. The surveyor assessed the loss of Rs.205821/-, which was subject to Terms and Condition of the policy. The complainants based their claim on fabricated documents as such, their claim is liable to be repudiated under Condition-8 of Fire Insurance Policy. Their claim under Burglary & House Breaking Policy falls under exclusion clause-IV-A and was not payable. It has been denied that the Branch Manager of the appellant, had ever asked the complainants to submit joint claim of both the Insurer. The complaint raises complicated issue of facts, which cannot be adjudicated in exercise of summary jurisdiction. There is misjoinder of the parties. The complainants are not consumer as the policies were obtained for commercial purposes. There was no deficiency in service on their part. The complaint has no merit and liable to be dismissed.

          The opposite parties-1 and 2 filed their separate written version.

7.      State Commission, after hearing the parties, by the impugned order dated 27.12.2022, held that the objection of opposite parties-1 and 2 that the Fire Policy did not cover the additional perils, like flood cyclone etc. was not correct. Exclusion clause-IV(a) of Burglary & House Breaking Policies is not attracted in the facts of the case. The local police after investigation, found that theft of finished product of Rs.220000/- had been committed in the factory premises of the complainants. Mr. S.K. Das, the partner of A.K. Govil & Associates, filed his Affidavit of Evidence and stated that he had gone to Culcutta on 16.07.2001 but could not find Kalimata Plastic Machinery Manufacturer, 53, Basantalal Saha Road, Culcutta-700053, on the said address and local peoples informed that there was no such person. He also wrote a registered letter on the said address which was returned with postal remark “not known”. Neither Mr. S.K. Das nor opposite parties-3 and 4 had produced any such letter as such allegation of Mr. S.K. Das that he had visited Caulcutta on 16.07.2001, was not liable to be believed. Mr. S.K. Das could not give any explanation for applying underinsurance of 61.07% on the building, 80.5% on plant and machinery and 75.43% on finished goods. Damages to factory shed, buildings, plant & machinery was confirmed in the Preliminary Survey Report of Mr. B.K. Pattnaik, which were confirmed in Final Survey Report dated 30.04.2002. The complaint was not barred by limitation. On these findings State Commission awarded consolidated amount of Rs.1200000/- for damage to factory shed, plant & machinery, Rs.220000/- for theft of finished goods and Rs.100000/- as compensation for harassment, holding the opposite parties as jointly and severally liable. Hence this appeal has been filed by opposite parties-3 and 4.    

8.      I have considered the arguments of the appellant and examined the record. The appellant, in paragraph-19 of its written version, has stated that the complainants had not co-operated with the Insurer/the surveyor in assessment of loss as such his claim was closed on 31.03.2000. The complainants intimated the loss on 31.10.1999. Mr. B.K. Patnaik, in Preliminary Survey Report confirmed the incident and loss. A.K. Govil & Associates, in Final Survey Report 30.04.2002, has mentioned that he had estimated the liability in preliminary report dated 22.11.1999. He received first bunch of papers from the Insured on 08.01.2000. This statement is contrary to the letter dated 19.11.1999 (Annexure-A-3), in which, the surveyor had admitted that he had received claim and some documents on 17.11.1999. From this, it is proved that the complainants had handed over papers on 17.11.1999 and 08.01.2000. Thereafter, the surveyor wrote letter dated 01.07.2000, for more papers. Closing the claim on 31.03.2000, ignoring the preliminary report dated 22.11.1999, estimating the liability and that the surveyor was still in process of survey, was arbitrary and highhanded action of the appellant. The appellant did not communicate this decision of closing claim to the complainants or even to the surveyor, with instruction to stop survey. As such no reliance can be placed on it nor on its basis it can be argued that the complaint was time barred. From very beginning the appellant was hostile and in spite of interim estimate, they did not pay and closed the claim.

9.      Under Condition-8 of the General Condition of the Fire Policy, the claim can be repudiated if it is found to be fraudulent and based fabricated papers. The surveyor held in Final Survey Report dated 30.04.2002 found that the complainants had produced fabricated bills relating repair of the machinery as existence of Kalimata Plastic Machinery Manufacturer on the given address was not found. In order to prove Final Survey Report dated 30.04.2002, Mr. S.K. Das, the partner of A.K. Govil & Associates, filed his Affidavit of Evidence before State Commission and stated that he had gone to Culcutta on 16.07.2001 but could not find Kalimata Plastic Machinery Manufacturer, 53, Basantalal Saha Road, Culcutta-700053, on the said address and local peoples informed that there was no such person. He also wrote a registered letter on the said address which was returned with postal remark “not known”. Neither Mr. S.K. Das nor the appellant produced any such letter as such State Commission disbelieved the allegation of Mr. S.K. Das that he had visited Caulcutta on 16.07.2001 and did not find existence of Kalimata Plastic Machinery Manufacturer on the said address. If the registered letter contained any endorsement of Postal Department as “not known”, then it was an independent corroborative evidence. If this material evidence has not been produced by the appellant, then State Commission has rightly drawn adverse inference as per Illustration (g) of Section 114 of Evidence Act, 1872 as held by Supreme Court in Standard Chartered Bank Vs. Andhra Bank Financial Services Limited, (2006) 6 SCC 94. Condition-8 of the General Condition of the Fire Policy is not attracted in the present case. Supreme Court in New India Assurance Company Limited Vs. Pradeep Kumar, (2009) 7 SCC 787, Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507 and National Insurance Company Limited Vs. Hareshwar Enterprises (p) Limited, 2021 SCC OnLine SC 628, held that the surveyor report is not a sacrosanct.

10.    Supreme Court in Sikka Papers Limited Vs. National Insurance Company (2009 7 SCC 777 and I.C. Sharma Vs. The Oriental Insurance Company Limited, (2018) 2 SCC 76, held that underinsurance occurs when the amount of insurance is less than full value of the property insured. Question arises as to how full value of the property insured will be determined? For example a car was purchased for Rs.200000/-, five years ago from the date of insurance then on the date of insurance or on date of loss, what will be its correct/full value. The correct value of the car on the date of insurance or loss will be purchase price minus depreciation and not current value of same model car on the date of insurance or loss as held by Supreme Court in Dharmendra Kumar Goel Vs. Oriental Insurance Company Limited, (2008) 8 SCC 279, Sumit Kumar Saha Vs. Reliance General Insurance Company (2019) 16 SCC 370 and Delhi High Court in Oriental Insurance Company Ltd. Vs. ACE Footmark Pvt. Ltd., 2021 SCC OnLine Del 2477. Same principle will apply in the building also.

11.    The building was constructed in the year 1995. Plant and machinery were purchased in the year 1996. Policy was obtained on 02.11.1998 and loss occurred on 29.10.1999. The building was insured for Rs.1500000/- and the claim was for Rs.300003/-. The surveyor, in Final Survey Report dated 30.04.2002, has taken price index of the building, material and labour charges as in the year 2002 and determined its valuation as Rs.3853220/-. While correct value had to be determined on the price index of 1995 minus depreciation. Machinery were purchased in the year 1996 and insured for a sum of Rs.3800000/-. The claim was for Rs.1307258/-. In Annexure-II of the survey report, the value of the machinery purchased in the year 1999 were also included for determination of underinsurance and the value was assessed to Rs19488377/-, while these machinery were neither in existence on the date of policy nor insured. The machinery, which were not insured, could not be taken into consideration for determining underinsurance. Stock and Stock in process was insured for Rs.2600000/-. The claim for semi-finished goods (damaged) was for Rs.778515/- (under Fire Policy) and for finished product (stolen) was for Rs.217400/- (under Theft & Burglary Insurance Policy). The survey report does not indicate that on what basis, its valuation has been determined. Thus underinsurance assessed by the surveyor is arbitrary. 

12.    The surveyor did not find that the claim under Theft & Burglary Insurance Policy fell under Exclusion Clause-IV(a) of Burglary & House Breaking Policy. There is nothing on record that Exclusion clauses were ever supplied to the Insured. Even in this appeal only Burglary & House Breaking Policy Schedule has been filed which does not contain any exclusion clause. State Commission has awarded Rs.220000/- only for the stock. As State Commission has awarded claim for Building, Plant & Machinery for Rs.1200000/- as against the claim of Rs.1607258/-, I do not propose to reduce the claim for the stock, on the ground that the claim in this respect was within exclusion clause as the claim of Rs.778515/- for semi-finished good (damaged) under Fire Policy remained unconsidered and ignored by State Commission.

ORDER

In view of aforesaid discussions, the appeal is dismissed.