For the Appellant                 Mr Anshul Kumar, Advocate with Authority

                                        Letter (Through VC)

For the Respondent              Mr Bipin K Dwivedi, Advocate with Mr Ankit

                                        Aakash, Advocate       

ORDER

PER MR SUBHASH CHANDRA

1.     This Appeal under Section 17 of the Consumer Protection Act, 1986 (in short, the ‘Act’) is directed against the order dated 22.03.2018 of the State Consumer Dispute Redressal Commission, Delhi (in short, ‘State Commission’) in Complaint Case No. 331 of 2001.

2.     Briefly stated, the relevant facts of the case are that the respondent had preferred a claim for damage of insured goods due to heavy rain on 20.07.2000 under a Fire Insurance Policy “C” issued by the appellant on 31.01.2000 (in short, the ‘Policy’) which was repudiated as a “No Claim” on the ground that the respondent failed to comply with directions to provide documents to the Surveyor, M/s Rajeev Puri & Associates, to enable assessment of the loss. The repudiation was challenged by the appellant by a consumer complaint before the State Commission which came to be disposed vide order dated 05.03.2009 directing the appellant insurance company to pay Rs 10,61,466/- to the complainant towards loss of goods along with compensation of Rs 1,00,000/-. On appeal by the insurance company, this Commission remanded the matter to the State Commission vide orders dated 29.05.2014 after holding the State Commission competent to assess the loss with directions to decide the matter through a speaking order after providing the parties the opportunity of being heard. The State Commission has passed the impugned order after opportunity to the parties to file affidavits of evidence and written arguments and hearing the parties. Appellant has approached this Commission in appeal praying to set aside the order dated 22. 03.2018 and allow the appeal with costs with any other order(s) deemed necessary.

3.     The complaint was disposed of on contest by the State Commission vide the impugned order wherein it was held that:

9.       A careful perusal of the letter of repudiation shows that the OP has simply alleged that the complainant failed to submit required documents. Name of the document or its nature is not stated in the letter of repudiation. There is no mention of the allegation of not taking reasonable care of the goods. Likewise, letter of repudiation does not disclose the alleged grievance of the OP regarding non-segregation of affected goods from the fresh stock. Be that as it may, complainant vide its letter dated 12.09.2000 sent 11 documents (mentioned above). OP or its surveyor thereafter did not demand any particular document.

10.     Complainant also furnished to the surveyor a detailed valuation of damaged goods. The same Is exhibited as Ex. CW-1 while dictating this judgment. The said list shows a net loss of Rs 10,68,161/-. Surveyor in its report dated 22.02.2001 admitted having received the said list from the complainant. The only grievance of the surveyor was that the stocks were kept in heap form. It required segregation. Labour was not available. In any case it is not the case of the surveyor that the loss actually suffered was lesser than the amount claimed. For the reasons given above, OP is directed to pay to the complainant an amount of Rs 10,61,466/- along with interest at 8% p.a. from the date of repudiation i.e., w.e.f. 20.03.2001 till date, Rs 50,000 towards harassment, inconvenience, mental agony and frustration. Complaint is accordingly disposed of.

[Emphasis supplied]

4.     Aggrieved by this order, the appellant is before us. We have heard the Learned Counsel for both the parties and perused the record carefully.

5.      On behalf of the appellant it was contended that the State Commission had passed a non-speaking and cryptic order as no reasoning had been provided and that no assessment report or expert opinion as required under section 64UM of the Insurance Act 1938 or under the Evidence Act had either been obtained or considered while allowing the complaint. It is contended that the State Commission did not consider any documentary or oral evidence to arrive at its finding that the loss of Rs 10,61,466/- was due to heavy rain. It is also contended that the Surveyor’s letter dated 11.10.2001 and letters by the appellant requesting the respondent to segregate the affected stock as per the list provided was not complied with. It is averred that despite the Surveyor request in clear terms to segregate the affected stocks in order to comply with the formalities to finalize the report not being done, the loss could not be assessed. According to the appellant, the Surveyor vide letter dated 18.08.2000 had requested the insured to provide documents for processing the claim which was not done. Therefore, the affected stocks could not be assessed as per the list provided and due to non-cooperation by the insured, the Surveyor closed the case as a “no claim” without assessing the loss. The compensation of Rs 50,000/- awarded for mental agony is contended to be non-applicable in view of the judgement of the Hon’ble Supreme Court in Sikka Papers Vs National Insurance Co. in Civil Appeal 3527 of 2009 dated 29.05.2009 which held that ”a company/juristic entity not being a person would not be entitled to loss for mental agony”. Reliance was also placed on the Hon’ble Supreme Court’s judgement in Deokar Exports Pvt. Ltd. Vs. New India Assurance Co. Ltd., Appeal No. 5103 of 2002 decided on 23.09.2008 wherein it was laid down that “in a contract of insurance rights and obligations are strictly governed by the policy of insurance. No exception or relaxation can be made on the ground of equity”. It is the case of the appellant that there was no deficiency in service on its part and that it had repudiated the claim based upon the terms and conditions of the policy.

6.      On behalf of the Respondent it was argued that the appeal was without merits and deserved to be dismissed. It was contended that there was no dispute regarding the existence of the Policy and the fact that on 19/20.07.2000 there was heavy rain (which was certified by the Regional Metrology Centre, Government of India and is not disputed by the Insurance Company in the Survey Report) and that despite best efforts and care rainwater entered the insured premises and damaged the insured goods. Intimation of loss was provided on 20.07.2000 to the appellant by respondent and a Surveyor (M/s Rajeev Puri & Associates) was appointed on 21.07.2000 to assess the loss. It was admitted in the Survey Report that stock register and list of affected goods was provided on 01.08.2000. Receipt of various documents relating to stocks and valuation and shifting of the godown was acknowledged by the Surveyor vide letters dated 12.09.2000 and 11.10.2000. The Surveyor’s letter dated 18.12.2000 denying receipt of documents and repudiation of claim vide letter dated 20.03.2001 is alleged by respondent to be deficiency in service and an unfair trade practice and the repudiation itself to be arbitrary and unjust. According to the respondent detailed valuation of stock for Rs 89,92,827/- had been provided along with details of goods worth 10,61,466/- damaged along with the balance of fresh stock. Reliance was placed on the following judgments:

(i)     Veena Devi Vs National Insurance Co. Ltd., II (2012)CPJ 466 NC)

(ii)    New India Assurance Co. Ltd. Vs Pradeep Kumar, Supreme Court of India IV 2009 CPJ 46 (SC)

(iii)    Mono Industries Vs New India Assurance Co. Ltd., II (2008) CPJ 125 (NC)

(iv)   Om Prakash Vs Reliance General Insurance, Supreme Court of India CA 15611/2017

It was averred that when the petitioner (insured) had provided all material to assess the loss, lack of cooperation by the petitioner was a perfunctory ground for rejection of a claim of insurance. It was also averred that the Surveyor’s report was not the final word binding the insurer and the insured.

7.      From the foregoing it is manifest that the State Commission has on remand of the case by this Commission considered the matter afresh after due opportunity to the parties and has passed an order that is reasoned and sets out the grounds for reaching its conclusions. The contention of the appellant that impugned order does not provide any reasons for arriving at its conclusions cannot be sustained in view of the factual position. From the Surveyor’s report it is evident that there is no dispute with regard to the cause of the loss i.e., inundation by rainwater occasioned by heavy rainfall on 19-20.07.2000. The Surveyor’s report also mentions that various documents pertaining to the stock damaged stocks and valuations had been provided by the insured to it. The letter of repudiation, however, sets out the lack of providing documents to the surveyor as the reason for treating the claim as a “no claim”. The State Commission’s order has provided its grounds for arriving at the finding that the letter of repudiation on this ground was not justifiable and has therefore proceeded to consider the loss under the policy as per the valuation submitted by the insured in the insurance claim. The appellant has taken the plea that the claim has not been considered in terms of Section 64 UM of the Insurance Act, 1938 as an expert’s opinion had not been obtained. This Section reads as under:

64UM. Licensing of surveyors and loss assessors

(1) Save as otherwise provided in this section, no person shall act as a surveyor or loss assessor in respect of general insurance business after the expiry of a period of one year from the commencement of the Insurance Laws (Amendment) Act, 2015, unless he (a) possesses such academic qualifications as may be specified by the regulations made under this Act; and (b) is a member of a professional body of surveyors and loss assessors, namely, the Indian Institute of Insurance Surveyors and Loss Assessors: Provided that in the case of a firm or company, all the partners or directors or other persons, who may be called upon to make a survey or assess a loss reported, as the case may be, shall fulfil the requirements of clauses (a) and (b).

(2) Every surveyor and loss assessor shall comply with the code of conduct in respect of his duties, responsibilities and other professional requirements, as may be specified by the regulations made under the Act.

(3) Notwithstanding anything contained in the foregoing provisions, a class or class of persons acting as a licensed surveyor or loss assessor prior to the commencement of the Insurance Laws (Amendment) Act, 2015 shall continue to act as such for such period as may be specified by the regulations made under this Act: Provided that the surveyor or loss assessor shall, within the period as may be notified by the Authority, satisfy the requirements of clause (a) and clause (b) of subsection (1), failing which, the surveyor or loss assessor shall be automatically disqualified to act as a surveyor or loss assessor.

(4) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding an amount specified in the regulations by the Authority in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance Laws (Amendment) Act, 2015, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as "approved surveyor or loss assessor"):Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.

(5) The Authority may, at any time, in respect of any claim of the nature referred to in sub-section (4), call for an independent report from any other approved surveyor or loss assessor specified by him and such surveyor or loss assessor shall furnish such report to the Authority within such time as may be specified by the Authority or if no time limit has been specified by him within a reasonable time and the cost of, or incidental to, such report shall be borne by the insurer.

(6) The Authority may, on receipt of a report referred to in sub-section (5), issue such directions as it may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions: Provided that where the Authority issues a direction for settling a claim at a figure lower than that at which it has already been settled, the insurer shall be deemed to comply with such direction if he satisfies the Authority that all reasonable steps, with due regard to the question whether the expenditure involved is not disproportionate to the amount required to be recovered, have been taken with due dispatch by him: Provided further that no direction for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the Authority is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured: Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal, to which he would have been subject but for the provisions of this sub-section.

(7) No insurer shall, after the expiry of a period of one year from the commencement of the Insurance Laws (Amendment) Act, 2015 pay to any person any fee or remuneration for surveying, verifying or reporting on a claim of loss under a policy of insurance unless the person making such survey, verification or report is an approved surveyor or loss assessor.

(8) Where, in the case of a claim of less than the amount specified in sub-section (4) in value on any policy of insurance it is not practicable for an insurer to employ an approved surveyor or loss assessor without incurring expenses disproportionate to the amount of the claim, the insurer may employ any other person (not being a person disqualified for the time being for being employed as a surveyor or loss assessor) for surveying such loss and may pay such reasonable fee or remuneration to the person so employed as he may think fit.

(9) The Authority may in respect of any claim of value of less than the amount specified in sub-section (4) on an insurance policy, if the claim has not been or is not proposed to be reported upon by a surveyor or loss assessor, direct that such claim shall be reported upon by an approved surveyor or loss assessor and where the Authority makes such direction, the provisions of sub-sections (5) and (6) shall apply in respect of such claim.

(10) Where, in relation to any class of claims, the Authority is satisfied that it is customary to entrust the work of survey or loss assessment to any person other than a licensed surveyor or loss assessor, or it is not practicable to make any survey or loss assessment, it may, by an order, exempt such class of claims from the operation of this section.

From the above, it is evident that there is no requirement under Section 64 UM for the appointment of an expert. The State Commission cannot be faulted in not requiring that the same be done. Also, proceedings under the Act are summary in nature and are not in derogation of any other Act. The contention of the appellant that the provisions of the Evidence Act have not been considered by the State Commission do not warrant consideration.

8.      In view of the foregoing discussion, we do not find any reason to disturb the finding of deficiency in service by the State Commission in the impugned order. However, we find merit in the appellant’s submissions in so far as they relate to the award of compensation of Rs 50,000/- for mental agony as awarded by the State Commission in light of the settled law in Sikka Papers (supra). The award of compensation for mental agony etc. is found to be unsustainable and deserves to be set aside. The award of interest @ 8% p.a. is considered to be on the higher side in view of the fact that this is indemnification of loss of goods and does not involve individual liabilities.

9.      For the reasons stated above, in the facts and circumstances of the case, the appeal is partly allowed and disposed of with the following directions:

(i)     Appellant/OP is directed to pay the respondent/complainant Rs 10,61,466/- towards settlement of the claim on account of indemnification for loss with interest @ 6% p.a. simple interest from 20.03.2001, the date of repudiation of the claim within 8 weeks of this order, failing which the same shall be paid with interest @ 8 % p.a. till the date of realization;

(ii)    the cost of Rs 50,000/- imposed for mental agony and harassment is set aside;

(iii)    Parties shall bear their own costs.

10.    Pending IAs, if any, also stand disposed of with this order.