1.       The Complainant is a Limited Company engaged in the business of manufacturing and export of pesticide and veterinary products. The Complainant took three Policies from Opposite Party No.1 with the following details: -

          “i.      Policy No.401311/11/09/310000204

                   plant & machinery

                   Sum insured: Rs.1.00 crore

                   Period: 18.08.2009 to 17.08.2010

                   Premium paid: Rs.13,898

          ii.       Policy No.401311/11/09/310000239

                   Stock

                   Sum insured: Rs.1.00 crore

                   Period: 23.11.2009 to 22.11.2010

                   Premium paid: Rs.9927

          iii.      Policy No.401311/11/09/310000292

                   building

                   Sum insured: Rs.70 lakh

                   Period: 28.03.2010 to 27.03.2010

                   Premium paid: Rs.12,197/-”

On 15.06.2010 there was a fire in the factory premises of the Complainant. The incident was reported to the Police and the Insurance Company. By the time the fire brigade could reach the spot, fire spread in the entire building. As the material (pesticides) kept in the factory building was inflammable in nature, the fire was devastating. The fire brigade took 4 hours to control the fire. Officers of the Insurance Company as well as the Surveyor visited the factory premises between 15.06.2010 to 21.06.2010. On 15.06.2010, the Complainant filed a claim for Rs.1,23,91,415/-. The Complainant stated that he supplied the documents demanded by the Surveyor, but they kept on demanding various documents and communicating that the claim could not be settled due to lack of cooperation of the Complainant. The Complainant was made to run from pillar to post for about two years without any reason.  On 05.11.2011 and 09.12.2011, the Complainant lodged a Complaint with IRDA. Thereafter, the Insurance Company informed the Complainant that the claim was pending with them and they were waiting for the reply of the Surveyor. The Complainant issued legal notice dated 28.07.2012 to the Insurance Company demanding claim amount with 9% interest. The Complainant filed an application under Right to Information Act seeking Survey Report and other documents. The Surveyor assessed the net loss at Rs.15,77,928/- under all three Policies. The Surveyor, however, observed that the claim was not payable as the Complainant could not prove the cause of fire.

Though the Surveyor observed that the entire factory suffered damage, he, however, wrongly estimated the net loss to the building at Rs.64,050/-against the claim of Rs.8,00,448/-. The Complainant claimed Rs.28,20,676/- for loss to the plant & machinery. The Surveyor, however, assessed loss at Rs.2,40,900/- on the ground that the Complainant failed to produce any document to substantiate the claim. While assessing the loss to the stock, the Surveyor ignored the claim bills and wrongly assessed the loss at Rs.12,82,978/- against the claim of Rs.90,72,294/-. Alleging deficiency in service on the part of the Opposite Parties, the Complainant filed the present Consumer Complaint with the following prayer:-

“A.    That the respondent is liable to pay the Complainant an amount of Rs.1,26,93,418.00 from the date of loss (i.e. 15.06.2010), till its actual payment/credit at 2% higher than banks prevailing rate of interest as per Insurance Regulatory Authority’s policy holders protection regulation.

B.      That the respondent is liable to pay an amount of Rs.10,00,000/- as mental agony and harassment compensation to the complainant.

C.      That the respondent is also liable to pay cost of litigation to be allowed by this Hon’ble Commission.”

2.       The Complaint was contested by the Opposite Party No.1/Insurance Company by filing written statement. Opposite Party No.1 took preliminary objection that the Complainant was a commercial organization and was involved in commercial activities. It was, therefore, not a Consumer under Section 2 (1) (d) of the Consumer Protection Act, 1986. It was also stated that the Complaint involved complicated questions of facts and law which could not be decided by this Commission in a summary jurisdiction. Further, the Policies were taken by Punjab National Bank which was a necessary Party in this case. The Complaint was liable to be dismissed for non-joinder of necessary Party.

3.       On merits, it was stated that the incident of fire took place on 15.06.2010 and on 15.06.2010 the Insurance Company deputed Mr. Arun Mehta, as Preliminary Surveyor, who submitted his report on 18.06.2010. Mr. Vinod Sharma, Final Surveyor & Loss Assessor repeatedly sought information and documents from the Complainants. The Complainant claimed total loss of machinery while the main machinery had been repaired. The Complainant was asked to submit bills for repair of the machinery and also bills for replacement of the machines. The Complainant claimed for reconstruction of new slabs of all floors, whereas it was found by the Surveyor that the slabs had been repaired instead of any new construction. The Complainant was repeatedly asked to submit bills for repair of the slabs, which the Complainant failed to do. The Complainant also took abnormally long time to submit the claim papers. The Surveyor assessed the loss to the stock on the basis of the bills and other supporting documents provided by the Complainant. The Surveyor recorded in the Final Survey Report that the Complainant committed breach of General Condition No.6 of the Policy by not furnishing the required documents. 

          As per Police Report fire was caused due to blast in the electrical panel. The incident took place at 6.00 am. At that time, the factory was closed. The possibility of electric short circuit was therefore ruled out. The Complainant requested the Insurance Company to reconsider the matter. The Insurance Company showed their bona fides by directing the Surveyor to reconsider the matter in view of the submission of the Complaint. The Surveyor, reconsidered the matter and observed, vide letter dated 31.10.2011, that there was no change in the finding/assessment made in the Survey Report dated 28.03.2011. After receiving the legal notice dated 28.07.2012 from the Complainant, the Insurance Company, vide letter dated 15.11.2012, again requested the Complainant to submit documents in support of the claim, within seven days, which the Complainant failed to do. The Insurance Company repudiated the claim, vide letter dated 10.11.2012. There was no deficiency in service on the part of the Insurance Company and the Complaint deserved to be dismissed.

4.       Heard the Learned Counsel for the Complainant and Opposite Party No.1 and carefully perused the record. Opposite Party No.2 was deleted, vide order dated 20.02.2015.

5.       Learned Counsel for the Complainant submitted that the incident of fire took place on 15.06.2010. The Surveyor submitted the Final Survey Report on 28.03.2011 assessing the loss at Rs.15,77,928/- while the Complainant suffered loss of Rs.1,23,91,415/-. The Surveyor, however, wrongly observed that the fire in the factory was caused due to blast and not due to short circuit. After submission of Final Survey Report, the Insurance Company slept over the matter and neither allowed nor repudiated the claim and the claim was kept pending. Neither the Surveyor nor the Insurance Company disclosed the documents which were not supplied by the Complainant. For loss to the plant and machinery the Complainant claimed Rs.28,20,676/- and enclosed supporting documents. However, the Surveyor wrongly assessed the loss at Rs.2,40,900/-, though in the Audit Report of M/s Ashok Sareen & Associates the value of the machine was shown Rs.28,20,676/-. While assessing the loss to stock, the Surveyor ignored the claim bills and the trading account submitted alongwith the claim. The Surveyor wrongly observed that such a huge stock could not be stored in the factory. The affected factory was the main factory. All the stocks were received there and thereafter transferred to various locations of the company.  

6.       Learned Counsel for Opposite Party No.1 submitted that the Complainant being a commercial organization was involved in commercial activities. It was not a Consumer under Section 2 (1) (d) of the Consumer Protection Act, 1986. It was also stated that the Complaint involved complicated questions of facts and law which could not be decided by this Commission in a summary jurisdiction. It was also stated that Policies were taken by Punjab National Bank, which was a necessary Party in this case. The Complainant had not arrayed Punjab National Bank as an Opposite Party. The Complaint was liable to be dismissed for non-joinder of necessary Party.

          On merits, the Learned Counsel for Opposite Party No.1/Insurance Company submitted that the claim of the Complainant was considered by the Competent Authority in the light of the Survey Report as well as in view of the terms & conditions of the Insurance Policy. The Insurance Company on receipt of intimation of fire, appointed Mr. Arun Mehta to conduct preliminary Survey, who submitted his report dated 18.06.2010. In the meantime, the Insurance Company appointed Mr. Vinod Sharma as Surveyor to conduct final survey. The Surveyor, vide letters dated 19.06.2010, 25.08.2010, 17.01.2011, 19.01.2011 sought information and documents from the Complainant, but the Complainant did not pay any heed to the requests of the Surveyor. The Insurance Company also sent email dated 27.01.2011 and letter dated 09.02.2011 requesting the Complainant to furnish the documents, but in vain. The Surveyor, vide email dated 01.03.2011, again intimated the Complainant that they had claimed total loss to the machinery while the main machinery had been repaired. The Complainant was asked to submit the repair bills as well as purchase bills of the new machines, but the Complainant did not produce any bills in that regard. The Complainant had also claimed for new slabs of all floors whereas during the visit of the Surveyor, it was found by the Surveyor that the slabs had been repaired instead of reconstructing the new slabs. The Surveyor assessed the loss at 12,82,978/- as loss to stock on the basis of the bills and other supporting documents provided by the Complainant. On the basis of physical inspection and the documents available on record, the Surveyor submitted the Final Report dated 28.03.2011 assessing the loss at Rs.15,77,928/-. The Surveyor also observed that the Complainant could not establish the cause of fire. To show their bonafide the Insurance Company, vide letter dated 14.10.2011, requested the Surveyor to reconsider the matter as the Complainant stated that they had submitted all documents to the Surveyors. The Surveyor reconsidered the matter and stated that there was no change in the findings/assessment made in the Final Survey Report dated 28.03.2011. Learned Counsel submitted that instead of submitting the documents, the Complainant sent legal notice dated 28.07.2012 to the Insurance Company, which was replied by them stating that the Complainant was repeatedly requested and also given a registered notice dated 09.03.2012 to cooperate and coordinate with the Surveyor by submitting the required documents. The Insurance Company rightly repudiated the claim of the Complainant in view of the detailed observations made by the Surveyor and the terms & conditions of the Policy.

7.       Facts of the case are that the Complainant took three Insurance Policies from Opposite Party No.1. On 15.06.2010 fire occurred in the factory of the Complainant. The incident was reported to the Police and the Insurance Company. The fire was devastating and spread in the entire building. The fire brigade took 4 hours to control the fire. Officers of the Insurance Company as well as the Surveyor visited the factory premises between 15.06.2010 to 21.06.2010. On 15.06.2010, the Complainant filed a claim for Rs.1,23,91,415/-. As the claim of the Complainant was pending, the Complainant lodged a complaint with IRDA. The Complainant issued legal notice dated 28.07.2012 to the Insurance Company demanding claim amount with 9% interest. The Surveyor assessed the loss at Rs.15,77,928/-. The Surveyor, however, observed that the claim was not payable because there were no authentic documents to substantiate the cause of loss.

8.       Opposite Party No.1/Insurance Company raised objection that the Policy was obtained by the Complainant for commercial purpose. The Complainant was, therefore, not a Consumer. This Commission in Harsolia Motors v National Insurance Company Ltd. [I (2005) CPJ 26 (NC)] held that a contract of insurance is a contract of indemnity and, therefore, there is no question of commercial purpose in obtaining insurance coverage.  Aforesaid view of the National Commission was upheld by Hon’ble Supreme Court, vide judgment dated 13.04.2023 in Civil Appeal No.(S) 53525353 of 2007 and other connected Appeals holding that “the definition of “consumer” under Section 2 (1)(d) of the Consumer Protection Act, 1986 (“CP Act”) includes a commercial entity provided that the goods purchased, or services availed are not linked to any profit generating activity.” In view of the law laid down by Hon’ble Supreme Court in Harsolia Motors (supra), the Complainant is a “Consumer” and the Complaint is maintainable.

9.       The Opposite Party No.1 also challenged the Complaint on the ground that the Complaint involved complicated questions of fact which cannot be decided by the Consumer Forum in summary proceedings.

“It cannot be denied that Fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of the Fora established under the Act. These Fora have been established and conferred with the jurisdiction in addition to the conventional Courts. The principal object sought to be achieved by establishing such Fora is to relieve the conventional Courts of their burden which is ever-increasing with the mounting arrears and whereat the disposal is delayed because of the technicalities. Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved.”

10.     From the facts and circumstances of the case, it is seen that there are no complicated questions of facts and law involved in this case, which cannot be decided by this Commission. Moreover, as held above by Hon’ble Supreme Court, involvement of some questions of fact and law cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved. This Commission is, thus, competent to adjudicate the instant Consumer Complaints.

          Opposite Party No.1 also submitted that the Insurance Policies were taken by Punjab National Bank. The Complainant had not made Punjab National Bank as Opposite Party. The Complaint was not maintainable due to non-joinder of necessary party. After going perusing the record carefully and hearing the Learned Counsel for the Parties, we find that all three Policies are in the name of the Complainant, though taken by Punjab National Bank. As the Insurance Policies are in the name of the Complainant, there is a direct relationship of “Consumer” and “Service Provider” between the Complainant and the Opposite Parties. Punjab National Bank is only a proforma Party and not a necessary Party. Alleged loss is to be proved by the Complainant and the loss is to be indemnified by the Opposite Parties. Punjab National Bank has no role to play. The argument of the Opposite Parties that the Complaint deserved to be dismissed for non-joinder of necessary Party is accordingly rejected.

11.     On merits, there are two issues. First, whether the Insurance Company was justified in repudiating the claim on the ground that the Complainant failed to establish the cause of fire. Secondly, whether the assessment of loss made by the Surveyor was justified.

12.     Regarding cause of fire, in Preliminary Survey Report dated 18.06.2010, the cause of fire is mentioned as follows: -

“CAUSE OF FIRE:

On asking about a probable cause of loss due to fire, Mr. Tarlochan Singh told me that as factory was closed at the time of fire, as it all happened suddenly, so it is not possible to quote nature of loss. However, in my opinion as per electrician of insured, it seems that some electric short circuit might have occurred within cables or components of main hall lying LT distribution control panel. As a result, electric sparks might have originated and after falling on inflammable chemicals etc., fire took place. Then devastating fire engulfed whole section of the air compressor mill hall and caused extensive damages to all three storey lying machinery, building and stocks lying down on floor at ground floor. Moreover, due to high intensity flames of fire, front portion of wall got collapsed and most of remaining portions got badly twisted.

So cause of loss is deemed to be sudden, unforeseen and accidental in nature. Hence, fire claim becomes payable w.r.t. terms and conditions of policy.”

Further DD Report dated 15.06.2010 registered with the Police, reads as follows: -

“…From the said statement it is found that due to sudden electric short circuit, the factory Modern Insecticides met with fire and a loss of Rs.1-2/2 Crores have occurred. The informer has no suspicion upon any one. This incident has occurred due to sudden fire. Copy of report has also given to the informer and one copy has sent to CRO Branch.”

13.     The Surveyor in the Final Survey Report observed that there was no proper explanation from the Insured regarding nature of activities going on in the factory at 6. a.m. As the factory was closed, the Surveyor ruled out the possibility of electric short circuit. The Surveyor had not produced any evidence or expert report that electric short circuit cannot take place in a closed factory. It was also observed that there may be storage of some material/chemicals or there may be some activity due to which there was chemical reaction resulting in blast. The opinion of the Surveyor regarding cause of fire is based on conjectures and surmises. He did not produce any evidence or statement contrary to the version of the Complainant. From the Preliminary Survey Report as well as DD Report, it is clear that the fire occurred due to electric short circuit. In the absence of anything contrary to the statement of the eye witness, it is accepted that the fire occurred due to electric short circuit. Repudiation of the claim by the Insurance Company was not justified and the Complainant is entitled for reimbursement of the loss sustained due to fire in the factory.

14.     Regarding quantum of claim, the Complainant filed a joint claim for Rs.1,23,91,415/- under three Insurance Policies. The Surveyor, however, assessed the net loss at Rs.15,77,928/-.

15.     The Complainant claimed Rs.90,72,294/- towards loss to the stocks. The Surveyor assessed the loss at Rs.12,82,978/-. The Surveyor, vide letter dated 01.03.2011, enquired the Complainant as to why such a huge stock was transferred from Focal Point Plant to the affected plant when the plant was almost non-operational during the current year. The Complainant could not furnish any explanation for the same nor was any supporting evidence produced. Except for mencozeb, all other items were not identifiable as they converted into ash. While quantifying the loss to the stock, the Surveyor observed as follows: -

“Quantification of loss-

Out of claimed items, we could only estimate the quantity of mencozeb. Since other items claimed were converted into ash after burning and the same could not be supported with the proper documentary evidence, we have not considered these items. Other items like silica, China clay etc., though seen by us in burnt condition but not claimed by the Insured. Hence the same were not included in the loss assessment.

VALUATION

          Insured has submitted few purchase bills for the burnt items. We have considered the value of burnt stocks on the basis of intimation to excise department. The rates are inclusive of excise duty since convent benefit reversed by the insured.”

The Surveyor assessed the loss of stock based on the documents submitted by the Complainant in support of their claim. The Insurance Company, vide letter dated 14.10.2011, requested the Surveyor to reconsider the assessment made, which reads as follows: -

“Now the insured is taking up their case very vigorously with us & had written to us that they submitted each & every documents required by you although some of them bit late but before the submission of your final survey report and in support of the same, they had provided us the bunch of papers (632 Nos) comprising of photocopies of all your letters requiring documents/information and also photocopies of their reply letters alongwith claim papers & other supporting documents. The complete bunch is being forwarded to you for your comments and reconsideration. As the insured has threated to go to the court for settlement of their claim. So you are requested to give us your exhaustive reply & comments to justify your stand/recommendations as per your survey report.

Even after submission of final Survey Report dated 28.03.2011, the Insurance Company requested the Surveyor to reconsider the assessment of loss, which shows their bonafides. The Surveyor reconsidered the matter and, vide letter dated 31.10.2011, observed as follows: -

“We are in receipt of your letter dated 14.10.2011, along with certain documents submitted by the Insured to your office. After going through the documents we confirm that there is no change in finding/assessment of above loss, as per our Survey Report dated 28.3.11.”

          From the above, it is clear that the claim of the Complainant was duly considered by the Surveyor. It was only thereafter that the Surveyor assessed the loss to the stock at Rs.12,82,978/-. The Complainant alleged that the Surveyor did not consider the documents submitted by the Complainant. This allegation of the Complainant is belied by the aforesaid letter dated 28.03.2011 of the Insurance whereby they forwarded 632 papers submitted by the Complainant, to the Surveyor. On the basis of these documents, the Surveyor observed that there was no change in the findings/assessment made in the Final Survey Report dated 28.03.2011. We are therefore, not inclined to agree with the allegation of the Complainant that the Surveyor did not consider the documents submitted by them in support of their claim.

16.     The Complainant claimed Rs.8,00,448/- for loss caused to the building. On the other hand, the Surveyor assessed the loss to the building at Rs.64,050/-. The Complainant claimed cost of new slabs of all floors. The Surveyor observed that on physical verification they found that all the floors had been repaired without changing the slabs. The Surveyor also noted that despite repeated requests, the Complainant did not submit the repair bills. The loss to the building was therefore assessed on the basis of estimated repair cost. In this regard, the Surveyor observed as follows: -

“1.    PHYSICAL VERIFICATION OF THE DAMAGES:

We have physically verified the actual damages to the building. Insured claimed with new slabs of all the floors have to be constructed. However, during our subsequent visit to the plant we found that all the floors have been repaired without changing slabs. The Insured did not submit actual repair bills inspite of our asking for the same. Hence we have assessed the loss on the basis of estimated repair accost of damaged building

2.       VALUATION

As mentioned earlier, the Insured did not furnish us the actual expenditure bills though earlier claimed cost of re-construction of various floors/building in their claim bill. In the absence of any supporting documents, we are assessing the loss of the Insured on estimated repair cost.”

          The Surveyor clearly observed that the Complainant made claim for construction of new slabs. On physical verification it was found that all floors were repaired without changing the slabs. The Complainant did not submit the bills for repairs. In absence of any repair bill, the Surveyor assessed the loss on the basis of estimated cost of damaged building. After deducting under Insurance of 41.40%, the Surveyor assessed the net loss to the building at Rs.64,050/-. Surveyor had given valid reasons for arriving at the above figure. We do not find any reason to disagree with the observation of the Surveyor for assessment of loss to the building.

17.     Regarding loss to the plant & machinery, the Complainant claimed Rs.28,20,676/-. The Surveyor assessed the net loss at Rs.2,40,900/-. The Complainant claimed that all machines were totally burnt in the fire. It was found during physical verification that the machinery was repaired and some parts were changed. The Complainant did not submit the repair bills nor produce original purchase bills. It was not possible to identify as to which parts were changed and which were repaired. The Surveyor, therefore, assessed the loss on estimated damage to the machinery. After applying 50% depreciation and salvage value @ 10%, the Surveyor assessed the net loss to the machinery at Rs.2,40,900/-. The Surveyor observed as follows: -

“Insured did not submit any details of plant and machinery, nor submit the original purchase bills/records.

In the absence of above details, we have verified the adequacy from ledger A/c of Plant & Machinery (Enc. M-4) WDV value of machinery i.e. after depreciation on 31.3.10 is Rs.30.33 lacs. Even if we add RBI Inflation to it but after depreciation of approx. 50% value of machinery at Risk will be less than sum Insured of Rs.40 lacs. Hence, there is no under Insurance.”

As the Complainant did not submit the original purchase bills/repair bills in support of claim to the plant and machinery, the Surveyor assessed the loss on estimated damages to the machinery. The Complainant had not produced any evidence to prove that the assessment of loss to the plant & machinery was not correct. We, therefore, accept the assessment of loss to the plant & machinery made by the Surveyor.

18.     In view of the foregoing discussion, we hold that repudiation of the claim made by the Insurance Company was not justified and the Opposite Party/Insurance Company is liable for payment of loss as per the assessment made by the Surveyor. The report submitted by a Surveyor is an important piece of evidence and has to be given due weight, though it is not sacrosanct and can be ignored, provided there is cogent evidence otherwise. The Complainant failed to produce any evidence contrary to the assessment made by the Surveyor. Opposite Party No.1/Insurance Company is directed to pay Rs.15,77,928/- as assessed by the Surveyor with 9% interest from the date of filing the Complaint till payment. Order be complied within 8 weeks from the date of this order, failing which 12% interest shall be payable. Opposite Party No.1 shall also pay Rs.50,000/- as litigation cost to the Complainant. The Complaint stands disposed of in the above terms.