Particulars of all other insurance, if any
The insured shall also at all times at his own expense produce, procure and give to the company all such further particulars, plans, specification books, vouchers, invoices, and duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability or the amount of liability of the company as may be reasonable required by or on behalf of the company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith. No claim under this policy shall be payable unless the terms of this condition have been complied with.”
It would thus be seen that the complainant was required (i) to intimate the insurer forthwith and (ii) to submit the claim within fifteen days of the loss or damage or within such further time as the insurer might allow in this regard.
4. It is an undisputed position that the intimation of the loss was given to the insurer for the first time by way of a letter delivered on 05.8.2013, though the said letter was dated 03.8.2013. I am in agreement with the learned counsel for the complainant that since 3.8.2013 and 4.8.2013 were Saturday and Sunday respectively, the intimation at least by way of this letter could not have been given prior to 05.8.2013. However, there is no evidence or even an averment of the complainant having tried to intimate its loss to the insurer prior to 3.8.2013. The complainant did not intimate its loss to the Toll Free No. (1800-102-1111, 1800-22-1111) of the insurer available in the policy itself at any point of time, nor did the complainant intimate the loss to the insurer by way of an email despite email ID (claims@sbigeneral.in) of the insurer being available in the policy itself.
5. Though, it was submitted by the learned counsel for the complainant that the damage came to be noticed by the complainant only on 3.8.2013, the said contention being beyond the averments made in the complaint and the intimation sent to the insurer on 5.8.2013 cannot be accepted and appears to be only an afterthought. No-where it is specifically alleged in the consumer complaint that the damage to the sugar kept in godown No.1 happened had come to the notice of the complainant only on 3.8.2013. Rather, the complainant has alleged as stated herein below in para 5(iv) of the complaint:
“5(iv) Due to heavy rain fall and flood in District of Nayagarh during the period from 23.7.2013 to 02.8.2013, the asbestos roof of the factory of the petitioner got heavily damaged and also the rain water flowing from the hill side entered into the factory premises and sugar godown. It may be submitted here that the godown No.1 where the lost stock of levy sugar was stored is located on the foot of the hill as confirmed in para(a) of the verification clause of the survey report dated 11.2.2014. As a result huge quantity of sugar, machinery and tools of the factory with stock of other consumables were heavy damaged and washed out with the rain / flood water.”
6. The intimation given by the complainant to the insurer on 5.8.2013 to the extent it is relevant reads as under:
“…. We would like to bring to your kind notice that due to heavy rain fall and flood in the district of Nayagarh last about ten days, the asbestos roof of the factory got damaged and also the rain water flowing from the mountain side entered into the factory premises and sugar godown. As a result huge quantity of sugar kept inside the godown, machinery and tools of the factory with stock of other consumables have been severely damaged and washed out.”
7. Thus, despite clause 6 of the insurance policy, extracted hereinabove requiring the complainant to give immediate intimation of the loss / damage to the insurer, the complainant did not even claim in its letter dated 3.8.2013 which was the first document addressed to the insurer in respect of the damage, that the loss / damage having been come to its knowledge only on 3.8.2013, it could not have intimated the same at an early date.
8. This is not the case of the complainant that the sugar factory was lying locked or deserted and no employee was post there at the time damage took place. Therefore, it is otherwise difficult to accept that the loss / damage to the sugar did not come to the knowledge of the complainant prior to 3.8.2013. It is quite possible that the complainant may not have been in a position to gauze the extent of the loss before 3.8.2013 but it cannot be accepted that it was not aware of any loss / damage to the sugar despite heavy rains lasting about ten days, the asbestos roof having got damaged and rain water having flown from the hill side entering factory premises and sugar godown. When there is such a heavy downpour for days together and even the water coming from the hills enters the godown where sugar is stored in a huge quantity, the natural reaction of the employees would be to rush to the godown, take whatever protective measures they can to minimise the loss and inform the management. Though, it is vaguely alleged in the letter dated 17.2.2014 written by the complainant to the insurer, after repudiation of the claim, that after taking stock of the situation on 2.8.2013, after subsistence of rain, they had tried to inform the local office on 3.8.2013, it was not alleged even in the said letter that the complainant was wholly unaware of any loss or damage to the sugar prior to 2.8.2013. In fact, the loss was not intimated to the insurer even on 2.8.2013. In these circumstances, I have no hesitation in holding that the complainant breach of Clause 6 of the General Conditions of the insurance policy by not giving immediate notice of the loss / damage to the insurer.
9. In M/s. Sonell Clocks & Gifts Ltd. Vs. The New India Assurance Co. Ltd. Civil Appeal No. 1217-12018 of 2017 decided on 21.8.2018, the intimation of the loss was given to the insurer after a gap of three months and 25 days. The claim having not been paid, the complainant / appellant approached this Commission by way of a consumer complaint. The complaint was opposed primarily on the grounds that the complainant had not given immediately information of the loss to the insurer nor had it lodged a claim with the requisite particulars within the time stipulated in the policy. The appellant / complainant relied upon the decision of the Hon’ble Supreme Court in Galada Power and Telecommunication Ltd. Vs. United India Insurance Co. Ltd. & Anr. (2016) 14 SCC 161. It was also contended before the Hon’ble Supreme Court that the insurer had waived its right to reject the claim on the aforesaid grounds by appointing a surveyor to assess the loss. Rejecting the compliant, the Hon’ble Supreme Court, inter-alia held as under:
“15. The Commission considered the pleadings of the parties and including condition No.6 of the Insurance Policy, the repudiation letter dated 18th February, 2005 and the Surveyor’s Report which had recommended that the loss as such is not payable as per the Policy. The Commission then went on to distinguish the decision in Galada Power and Telecommunciation’s case, (supra)
16. In the said case, the issue of waiver was decided on the facts of that case as is evinced from the dictum in paragraphs 18-20 of the said decision.
17. In the present case, it is common ground that the letter of repudiation dated 18th February, 2005 elucidates that the claim of the appellant was rejected on the ground that neither the intimation of the loss had been given to it immediately after the loss nor were the requisite particulars of the loss conveyed within stipulated period and there was breach of terms and conditions of Clause 6 of the general conditions of the policy. Additionally, the surveyor report predicates that it was very difficult to estimate the damages for the reasons mentioned therein and that the claim of the appellant was not payable on account of breach of Clause 6 of the general conditions of the policy. That recommendation commended to the respondent. It has been so incorporated in the letter of repudiation dated 18.2.2005.
20. To put it differently, Galada’s case (supra) was not a case which considered repudiation based on a premise or a reason similar to condition No.6 of the present policy and a specific plea taken by the insurer in that behalf in the repudiation letter itself.
21. We, therefore, agree with the respondent that the dictum in Galada’s case (supra) is in the context of the facts of that case and does not lay down that on the appointment of a surveyor, per se, the insurer is estopped from raising a plea of violation of the condition warranting a repudiation of the claim. The factum of waiver has to be gathered from the totality of the obtaining circumstances.
27. The appellant has also placed reliance on the decision in Om Prakash Vs. Reliance General Insurance and Anr., to contend that the genuine claim of the appellant ought not to be rejected on technical ground, keeping in mind that the Consuemr Protection Act is a beneficial legislation warranting liberal construction. That contention cannot be taken forward at the instance of the appellant who has failed to fulfil the threshold stipulation contained in Clause 6 of the general conditions of the policy and for which reason must suffer the consequence. It is not a technical matter but sine qua non for a valid claim to be pursued by the insured, as agreed upon between the parties.
28. In view of the above, we uphold the conclusion of the Commission that the respondent (insurer) had not waived the condition relating to delay stipulated in Clause 6 of the general conditions of the policy, by appointing a surveyor. Accordingly, these appeals must fail.”
10. In the present case, there is a delay of ore than twelve days in intimating the loss / damage to the insurer. There is no satisfactory explanation for the said delay and the delay in intimating the loss was one of the express grounds on which the claim was repudiated by the insurer. Therefore, I hold that in view of the complainant having committed breach of a mandatory term of the General Conditions of the insurance policy, the insurer was entitled to repudiate the claim on this ground alone.
11. In the survey report dated 11.02.2014, the surveyor inter-alia stated as under:
“We had contacted the Insured on 07.8.2013, and planned to visit their plant and Panipoila but we were asked not to visit as there was some agitation going on by the sugar cane growers in front of the mill and nobody was allowed to enter the mill. We had cancelled our visit and were in constant touch with the Insured. Since there was considerable delay in carrying out the survey, we…….”
It would thus be seen that the surveyors who were instructed by the insurer on 6.8.2013, contacted the complainant on the very next day, since they planned to visit the plant but the complainant asked them not to visit the plant. The surveyors were dissuaded from visiting the plant on the excuse that there was some agitation by sugar cane farmers in front of the mill and nobody was allowed to enter the mill. According to the insurer by delaying the inspection by the surveyors, the complainant committed breach of condition No.7 of the insurance policy. In its letter dated 17.2.2014 to the insurer, the complainant inter-alia stated that the opportunity of visit on 7.8.2013 or on the following dates was not possible due to blockade of factory gates by the agitating farmers. The immediate inspection of the factory by the surveyors was of extreme importance, to make a fair and accurate assessment of the damage, at a time when the evidence of the alleged damage would be still available at the site. If the inspection of the affected site by the surveyors is delayed, there is a reasonable apprehension of the evidence which would be available soon after the damage being removed, tempered or manipulated. The inspection after a time gap of about three weeks may not enable the surveyors to make a fair and accurate assessment of the damage, if the vital evidence is removed, tempered or destroyed in the meanwhile. Though, there is no direct evidence of the complainant having actually tempered, removed or destroyed evidence from the affected site, the likelihood of such destruction, removal or tampering would be real and not imaginary if the insured is unable to give a satisfactory explanation for delaying the inspection by the surveyors. Even if the farmers were agitating at the factory of the complainant, they were not likely to block the entry of the surveyors since their grievance was against the company management and not against the surveyors. Had the complainant not dissuaded the surveyors from visiting the factory and had the surveyors on reaching the factory been prevented by the agitating farmers from entering its gate, it could have been possible for the surveyors to take police assistance in order to enter the factory, for the purpose of inspection and assessment. Even if they were unable to obtain the police assistance of entering the factory despite police assistance, it would not have been possible for the insurer to apprehend that the complainant had deliberately delayed the inspection so that it could remove, destroy or tamper with the evidence in the meanwhile. Though, it was contended by the learned counsel for the complainant that the surveyors could have gone to the factory even without contacting the complainant, I find no merit in the submission since the inspection and assessment at the site would not have been possible without assistance from the representatives / employees of the complainant. Therefore, I have no hesitation in holding that the complainant had committed breach of condition No.7 of the General Conditions of the insurance policy by dissuading the surveyors from inspecting the factory prior to 27.8.2013.
12. This is also the case of the insurer that the sugar kept in the godown where the water had allegedly entered was not fit for consumption and this had been admitted by the appellant in its letter dated 18.6.2013 sent to the concerned Collector. I have perused the letter dated 18.6.2013 sent by the complainant to the Collector-cum-District Magistrate, Nayagarh just a few days before the alleged damage. In para (iii) of the said letter it was specifically stated by the complainant itself that the levy sugar as demanded for the sugar season 2011-12 was available with them but might not as per the prescribed standard for consumption under PDS, which the complainant had already conveyed to the Authorities. Even in an earlier letter dated 03.5.2013, the complainant had informed Odisha State Civil Supplies Corporation Ltd., that due to storage of sugar for a long time in their godown quality of the sugar did not meet the PDS standards of sugar requirement. It is thus evident that the sugar which allegedly got damaged / dissolved due to rains and rainy water having entered the godown was substandard and not fit for human consumption.
The learned counsel for the complainant stated that the sugar, which had been kept in the affected godown could be rendered fit for human consumption by refining the same in the factory of the complainant. This however, was strongly contested by the learned counsel for the insurer, who placed on record a letter dated 11.7.2013 sent by the Government of Odisha, Food Supplies and Consumer Welfare Department to the Collector, Nayagarh, directing inter-alia as under:
“Under no circumstances, the NSCL shall be allowed to deliver the levy sugar due for the year 2011-12 after reprocessing of the stock in the sugar season 2013-14. The old stock of sugar cannot be used under PDS as the same may not be fit for human consumption.”
It would thus be seen that the sugar, which is alleged to have been stored in the affected godown could not have become fit for human consumption even if it was to be reprocessed in the sugar season 2013-14. Despite the said sugar being unfit for human consumption, the complainant claimed cost price of the said sugar from the insurer.
13. Clause 8 of the General Conditions of the policy reads as under:
“8. If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefits under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefits under this policy shall be forfeited.”
14. In the claim submitted to the insurer, the complainant did not even disclose that the said stock of sugar might not be fit for human consumption and required reprocessing. By claiming cost price of the production of the sugar, the complainant tried to defraud the insurer and committed breach of General Condition No.8 of the insurance policy by submitting a fraudulent claim. The claim was at least partly fraudulent, since the complainant claimed the cost of the production of sugar fit for human consumption, instead of claiming market price, if any, of the sugar, which had already become unfit for human consumption. On this ground also, the insurer was entitled to repudiate the claim.
15. For the reasons stated hereinabove, I hold that the repudiation of the claim was justified on the above referred three grounds alone. I therefore, need not examine the other grounds taken in the written version filed by the opposite party to contest the complaint. These grounds inter-alia include that the asbestos sheets of the godown had got damaged prior to the rains and therefore, the loss if any, to the complainant was because of its own negligence, in not replacing / repairing the said sheets in time. The complaint is accordingly dismissed, with no order as to costs.
