1.       The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.

2.       The Complainant is a Firm engaged in manufacturing, trading, and export of readymade garments of various types and sizes in accordance of local as well as overseas buyers. The Complainant obtained Standard Fire & Special Perils Policy No. OG-10-1001-4001-00001950 for the period starting form 27.10.2009 to 26.10.2010 from the Opposite Party No. 1/ Insurance Company insuring Plant & Machinery, FFF and Stock for a total sum insured of Rs.2,05,00,000/-.

3.       The case of the Complainant is that on 10.05.2010 at about 11.20 pm, fire broke out in the premises of the Complainant. On 11.05.2010, the Complainant intimated the Insurance Company about the incident and the loss suffered due to fire. The Insurance Company deputed Puri Crawford & Associates India Pvt. Ltd. as Surveyor for survey and assessment of loss. The Surveyor visited the insured’s premises on 11^th 12^th & 13^th May, 2010. The Surveyor, vide letter dated 13.05.2010, requested the Complainant to provide various documents/ information listed in the said communication, for verification and assessment of the loss.  On 09.06.2010, the Complainant sent information sought by Opposite Party No. 2 Surveyor by email. The Complainant also replied to the questionnaire sent by the Surveyor. Forensic test was also conducted by the forensic expert Dr. R.K Tiwari and the report was forwarded to the Surveyor. It was confirmed that on the day the accident took place, temperature was approx. 47 degree centigrade and on the day of last test, it was 32 degree centigrade. The Surveyor, vide email dated 27.08.2010, sought additional information. On 30.09.2010, the Complainant submitted details sought by the Surveyor. The Surveyor, vide email dated 13.10.2010, sent a revised format to the Complainant with regard to analyzing and finalizing the cost of the material affected in the fire. The Complainant, in reply to the mail dated 13.10.2010, sent detailed break-up of the items destroyed in the fire and the stock summary of fire damage. The Surveyor, vide e-mail dated 11.12.2010, sent final assessment of loss suffered by the Complainant and sought consent of the Complainant to forward the same to the Insurance Company. The Complainant, however, requested the Surveyor to review the figures and peruse them as per data duly authenticated by the Chartered Accountant and Bankers provided to the Surveyor. The Surveyor sent a settlement proposal and offered Rs.62 Lakhs to the Complainant, which was not accepted. According to the Complainant, they suffered a loss of more than Rs.2.05 Crores. The Complainant stated that they had total stocks worth Rs.3,27,92,503.20/- at the time of fire in the factory premises on 10.05.2010. The Complainant, vide its e-mail dated 21.12.2010, informed Opposite Party No.1 that the estimate of loss by the Surveyor was unsatisfactory, despite full cooperation given by the Complainant and requested Opposite Party No. 1 to direct the Surveyor to look into the matter correctly. Opposite Party No. 1, vide letter dated 25.12.2010, requested the Complainant to give its consent on the assessment of loss as discussed in the meeting dated 01.12.2010 in the office of Opposite Party No. 2 Surveyor within seven days from the receipt of the letter to enable the Surveyor to release the Survey Report, otherwise, they will have no option other than to issue an independent report. Later, the Surveyor started to pressurize the Complainant to settle the claim at Rs.22 Lakhs without any basis. Aggrieved by the non-settlement of the claim by the Opposite Parties, the Complainant filed present Consumer Complaint with the following prayer:-

“a) direct the Respondents to pay the sum of Rs.2.05 crore towards the insurance claim with interest on the amount from the  date of fire i.e. 10.05.2010 till 11.01.2011 @ 12% p.a. which comes to a total amount of Rs.2,21,04,000 (Two Crore Twenty one Lakh four thousand only).

b) direct the Respondents to pay Rs.1.50 lakh towards mental torture and suffering the Complainant had to suffer in pursuing the claim

c) Rs.50,000/- towards litigation charges may also be paid to Complainant by the Respondents; and

d) Pass any other order or orders as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.”

4.       The Complaint was resisted by the Opposite Parties by filing Reply. Opposite Party No. 1 took a preliminarily objection that the Complaint involved complicated questions of fact and law, which required elaborate and detailed evidence. The case cannot be tried and adjudicated in a summary jurisdiction contemplated under the Consumer Protection Act, 1986.  It was stated that the dispute relates to commercial transaction which was beyond the purview of Consumer Protection Act, 1986. The Complainant also did not come within the purview of the definition of “Consumer” under the Consumer Protection Act, 1986.

5.       On merits, Opposite Party No. 1 submitted that the Complainant failed to cooperate and provide evidence in support of their claim. In the final Survey Report dated 09.03.2011, the Surveyor had given statement of sale, purchase and inventory position as on 31.03.2010. The Surveyor was unable to understand the manner in which the insured had worked out their closing stock in Excel Sheets. There was no elaboration or explanation of the material movement claimed by the Complainant. It was reported by the Surveyor that the Complainant provided documents and information in piecemeal manner and over a considerable period of time. In view of the limited and inadequate information/documents submitted by the Insured Complainant, the claim could not be substantiated on account of completely burnt stock, on the basis of the Books of Account. According to the Surveyor, there was no uniform pattern of fire having occurred in the premises and the fire was concentrated in specific area near the reception within the premises. The fire which lasted for about less than three hours with limited intake of oxygen and in the absence of openings in the premises could not have caused such an extensive damage as claimed by the Insured. It was submitted that the entire working of the Complainant firm was not as per rules and standards laid down for the working of Proprietorship Firm. A perusal of the Survey Report and the conduct of the officials of the Complainant firm establish this fact beyond doubt. It was also submitted that movement of stocks from premises of the Complainant to their processors was not corroborated with any official document. Most of the orders of the Complainants and its execution were on verbal understanding based on past relations between them. However, no official documents were maintained by them for such processing of the stocks. The Surveyor was left with no other option but to work out the Complainant/Insured's loss on the basis of physical verification carried out at their premises and relying on certain percentage of the account of completely burnt stock. After verification of Plant & Machinery, FFF and Stocks, the Surveyor worked out the loss and assets of the Insured at Rs.21,86,356/-. If at all the Opposite Party Insurance Company was to be held liable under the claim in question, the liability of the insurers was limited to Rs.21,86,356/- as assessed by the Surveyor.

6.       Heard the Counsel for the Complainant and Opposite Party No.1 and carefully perused the records. None appeared on behalf of Opposite Party No.2. Learned Counsel for the Complainants stated that the assessment of loss made by the Opposite Parties is imaginary and fictitious. Furniture, fitting and plant & machinery and stocks were duly proved by the copy of stock statement submitted to the Banker for the month of April, 2010 and the stock summary after fire on 30.10.2010. As per forensic expert report, the fire was extensive and the loss suffered by the Complainant was substantiated and proved by the stock register, balance sheet and other documents on record.

7.       Learned Counsel for the Opposite Party No. 1 submitted that the insured goods were hypothecated with Dhanalakshmi Bank Ltd. The Bank was, thus, a necessary party to the Complaint. The Complainant had not impleaded the Bank as a Party. The Complaint is, therefore, liable to be dismissed for non-joinder of necessary Party. Learned Counsel further submitted that the Complaint involves complicated questions of facts and law which required elaborated evidence and cannot be adjudicated in summary jurisdiction of the Consumer Commission. It was further submitted that the disputed transaction was commercial in nature. The Complainant was, thus, not a Consumer under Section 2 (1) (d) of the Consumer Protection Act, 1986.

8.       Learned Counsel for Opposite Party No.1 also submitted that despite repeated requests of the Surveyor, the Complainant failed to provide requisite information. The Complainant had not substantiated the claim by providing any supporting evidence/documents. The Surveyor had to work out the loss on the basis of physical verification carried out at their premises and relying on certain percentage of the account of completely burnt stock. The amount of loss assessed by the Surveyor was offered to the Complainant, which they refused to accept. There was, thus, no deficiency in service on the part of Opposite Party No.1.

9.       Facts of the case are that the Complainant took Standard Fire and Special Perils Policy No.OG-10-1001-4001-00001950, valid from 27.10.2009 to 26.10.2010 for an amount of Rs.2.05 crores from Opposite Party No. 1. On 10.05.2010, at around 11.20 pm fire broke out in the premises of the Complainant due to electric short circuit causing extensive damage to the building, stocks, furniture, fitting & fixtures and plant & machinery. On 11.05.2011, the Complainant informed Opposite Party No. 1 regarding the loss due to fire. Opposite Party No. 1 Insurance Company appointed M/s Puri Crawford & Associates India Pvt. Ltd. as Surveyor for assessment of loss. The Surveyor visited the place of incident on 11.05.2010, 12.05.2010 and 13.05.2010. The Surveyor, vide Report dated 09.03.2011, assessed the loss at Rs.21,86,356/-

9.       The Surveyor examined the insured's claim, verified the records/documents and worked out the loss after making adjustment for the following:

“Plant & Machinery

• Most of the Plant & Machinery was purchased old/second hand.

• The valuation of plant & machinery has been worked out based on the available plant & machinery installed at the site as on the date of loss.

• The Insured has submitted their claim on their self-estimation after confirming from the market.

• Deduction of 25% has been made on account of self-estimation & on account of plant & machinery being old/second hand.

• Depreciation has been adjusted @50%.

• Salvage was taken based on quotation of highest amount obtained by the Insured on lump sum basis, which in our opinion is reasonable subject to actual realization of the same based on the document submitted by the Insured for salvage disposal.

• Underinsurance was Nil.

FFF

• Part of FFF was old/second hand

• The valuation of FFF has been worked out based on the available FFF installed at the site as on the date of loss.

• The Insured has submitted their claim on their self estimation after confirming from the market.

• Deduction of 25% has been made on account of self estimation of the FFF and part of the FFF being second hand.

• Depreciation has been adjusted @ 50%.

• Salvage was taken at lump sum basis, which in our opinion is reasonable subject to actual realization of the same based on the document submitted by the Insured for salvage disposal.

• Underinsurance was Nil."

STOCKS

• The valuation of stocks has been worked out on the basis of the total value of saved stock and damaged stock as per physical Inventory plus the percentage allowed on account of completely burnt stock.

• The claim has been considered based on the identifiable damaged stock physically verified by us.

• Looking at the type of fire and the Identification of some further stocks In the burnt debris, identified as those of the fabric and garments, we have allowed 100% on the value of identifiable damaged stock, which could be possibly damaged in such a fire based on the nature & extent of fire at the affected site.

• Dead stock has been considered 2.5%.

• Salvage was taken as per the highest salvage quotation provided by the Insured for the same.

• Under insurance, if any.

• Excess as per policy terms and conditions.”

          Regarding valuation, the Surveyor reported as under:-

“ PLANT AND MACHINERY

Most of the Plant and Machinery was saved since just a few days prior to the fire, the insured had shifted most of the machinery to their new premises at Faridabad. The value of the remaining Plant and Machinery was quite less as compared to the sum insured on the same. The Surveyors had not gone into details of valuation of the same and have accepted the insured to be fully insured on Plant and Machinery.

FFF

STOCKS

On the basis of above, the Surveyor summarized the assessment of loss as follows:

11.     So far as the question of maintainability is concerned, we find that no complicated facts are involved as alleged by the Opposite Party. This Commission is very well within its jurisdiction to decide the present Consumer Complaint. 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. In the instant case the dispute relates to the Insurance, which is a contract of indemnity. In view of law laid down, the Complainant is a “Consumer” and the Complaint is maintainable.

12.     Regarding quantum of loss, the Complainant alleged that the Surveyor had offered an amount of Rs.62 lakhs, which was not acceptable to them. The Complainant has not produced any evidence to substantiate that the Surveyor or the Opposite Party offered an amount of Rs.62 lakhs to the Complainant. In this regard, email dated 13^th December, 2010 of the Opposite Party to the Complainant is relevant, which reads thus: -

“We refer to your email and confirm that there is no mistake in the calculated figures and is in accordance with the documents of physical verification provided to us by you.

Further, during our joint meeting with you on 01-01-2010 which was also participated by your Bankers and the insurers, you had expressed your willingness to settle the claim at Rs.62 lakhs (the limit of finance availed by you from your bankers). Therefore, the working of your loss amount forwarded by us to you is not 10% of the 2.07 crore (initial claim amount) as quoted by you for which no justification/substantiation has been provided by you.

In regard to the method by which the figures in the excel sheet have been derived are self-explanatory and are based on the physical verification unaffected/affected stocks in your premises immediately after the loss. You are requested to carefully go through the working forwarded to you by us and compare the same with the list of identifiable unaffected/affected stocks prepared and provided to us by you which was accepted by us to be true after physical verification at your premises.”

13.     From the above, it is clear that the Opposite Party had not offered an amount of Rs.62 lakhs to the Complainant rather the Opposite Party stated that no justification/substantiation had been provided by the Complainant for claim amount of Rs.62 lakhs. The Complainant had not produced any evidence to show that the Opposite Party offered an amount of Rs.62 lakhs. In the final Survey Report the loss assessed by the Surveyor was Rs.21,86,356/-. Surveyor has given detail reasons for assessment of loss. The Complainant has not produced any evidence to show that the assessment of loss made by the Surveyor was not correct. Moreover, 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. In the present case, the Complainant did not lead any evidence disproving the report submitted by the Surveyor. In the absence of any evidence to the contrary, the report submitted by the Surveyor of the Insurance Company is to be accepted. Hon’ble Supreme Court in the case of Khatema Fibres Ltd. vs New India Assurance Company Ltd., 2021 SCCOnline SC 818 held as follows:-

“38.A Consumer Forum which is primarily concerned with an allegation of deficiency in service cannot subject the surveyor’s report to forensic examination of its anatomy, just as civil court could do. Once it is found that there was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the surveyor, in a manner prescribed by the Regulations as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop.”

14.     In view of aforesaid discussions, the Complaint is partly allowed. We direct the Opposite Party Insurance Company to pay an amount of Rs.21,86,356/- as assessed by the Surveyor with an interest @ of 9% p.a. from the date of filing of this Complaint till its realization. The order be complied within eight weeks failing which the Complainant shall be entitled to an interest of 12% p.a. from the date of default till realization. However, the Opposite Party No. 1 in compliance to the order dated 06.02.2019, has already paid the principal amount of Rs.21,86,356. The only direction that remains to be complied with is with respect to the interest amount.