PER MR SUBHASH CHANDRA, MEMBER

1.      This complaint under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) has been filed by the complainant company involved in manufacturing of printing chemicals and industrial solvents in its factory in RIICO Industrial Area, Khuskhera, District Alwar, Rajasthan seeking the settlement of claim filed in respect of a fire accident claim with the opposite party with compensation alleging deficiency in service.

2.     The facts of the case, as stated by the complainant, are that it had availed insurance from opposite party no. 1 through international broker M/s Almondz. At the time of renewal, opposite party no. 1 approached the complainant to get the Standard Fire and Special Perils Policy (in short, the ‘policy’) directly from them. As the complainant’s bankers were opposite party 4 and due to their pressure, the complainant states that it obtained 2 insurance policies, one covering plant and machinery, furniture/fixtures/fittings, stocks and other items for Rs 3.32 crores and  the second covering buildings, plinth and foundation for Rs 300,00,002/- dated 04.05.2013 for its factory at Gi-682 & H-697, RIICO Industrial Area, Khuskhera, District Alwar, Rajasthan 301707. The factory at G1-682, Industrial Area, Khuskhera, District Alwar, Rajasthan 301707 was on rent from the complainant’s associate, Vaanix Laboratories. The Complainant submits that the insurance was done without pre-survey inspection or seeking of any details. However, during the course of stock audit by opposite party no. 3 during July, 2013 the complainant was required to obtain additional insurance of stock and accordingly the sum insured was enhanced by Rs 2,00,00,000/- in addition to the stock of Rs 2,40,00,000/- covered in the existing policy by way of an endorsement for the period 20.08.2013 to 03.05.2014 enhancing the stock insured to Rs 4.40 crores. The complainant submits that opposite party nos. 1 & 2 were informed that the complainant had its warehouse in back-to-back premises with a single entrance, one Excise Number, common electricity connection and one safety major since only one industrial premises had been allotted by RIICO to M/s Vaanix Laboratories from whom the complainant had taken the premises on rent.

3.      On 26.02.2014 factory caught fire due to the collusion of a commercial vehicle with an electric pole about 50 meters away from the factory due to which the transmission wire fell inside the factory resulting in massive fire in petrochemical tanks. The fire resulted in electric failure, burning of electric cables, electrical and printing equipments, building, furniture, fixtures, glass fixtures and huge loss of stored petroleum solvents and specialized products stored in the warehouse. The fire fighting equipment and facilities on the premises under the Factories Act, 1948 helped contain some damage but the stock was destroyed. The Fire Brigade and the local Police were informed and the incident was widely reported in local newspapers on 27.02.2014. The complainant approached opposite party no. 1 on 26.02.2014 with claim nos. 110576 and 110689. Opposite party no.1 appointed opposite party no. 3, M/s Mehta and Padamsey Pvt. Ltd, International Loss Adjusters, New Delhi as Surveyors and Assessors who visited the premises on 27.02.2014 and sought documents and information on 28.02.2014 which was supplied on 21.03.2014 and 27.03.2014. In addition the surveyor sought information on 25.03.2014 which was provided on 27.03.2014. Opposite party no. 4 was appraised of the developments on 11.04.2014. Despite all details being provided, the complainant contends that opposite party no. 1 to 3 have held that the insurance was undervalued despite enhancement of the policy covering stock on 11.09.2013 as per advice of opposite party no. 1. It is submitted that though opposite party no.1 had assured that the bifurcation of the policy into two would not affect the right of claim since previously there was a single policy with a single premium. However, opposite party 1 & 2 are now treating the premises as separate units whereas the warehouse is common. Opposite party nos. 1 to 3 have also taken the stand that the loss was due to electrical short circuit which was not covered under the fire insurance policy. The complainant contends that it was wrong to consider that there was any short circuit, since the loss was due to a huge fire involving explosions and resultant damages. Despite all information and documents being provided, opposite party no. 3 /Surveyors demanded more documents on 17.04.2014 and it was conveyed on 21.04.2014 that these had been already been provided. The claim of the complainant was not accepted on the ground that (i) the entire loss was not due to the fire as a big part of the loss was due to short circuit which was not covered under the insurance and (ii) the insurance was undervalued. It is stated by the complainant that despite several follow ups and efforts the claim was not settled and on 03.06.2014 opposite party no. 3 added a machinery valued at Rs 2,50,00,000/- to the claim when this machine was not on the premises as it was imported and was with the Customs Bonded Warehouse from where it was released in April 2014 after the fire incident. The complainant protested to opposite party no. 1 on 06.06.2014 that the assessment the surveyor (opposite party no. 3) was arbitrary and not on the basis of documents provided which was contested by the Surveyors. The complainant has contested the assessment of the Surveyors/opposite party no. 3 that the damage was due to short circuit since the breakage of transmission wire had caused the fire and as a consequence there was a short circuit. The complainant contends that opposite party no. 3 has sanctioned the claim partially accepting the loss incurred due to fire and not due to short circuit. It is also stated that the company has faced a huge financial crunch and was likely to become a Non Performing Asset (NPA) as a consequence. The complainant has approached this Commission with the following prayer:

a.       Pass the final order in favour of the complaint company and against the opposite party no. 1 to 4 thereby directing the opposite party no. 1 to 4 to liquidate complaint companies claim amounting to Rs 3,78,43,671/- as on 31.09.2015;

b.       The opposite party no. 1 to 4 be also directed to pay interest pendent lite and future at the rate of 15.25%  calculated on monthly rests w.e.f. February 2014;

c.       Pay a sum of Rs 10.4 crore towards punitive compensation for inconvenience, hardship caused, financial loss, credibility loss and opportunity cost;

d.       pass such further or other order as this Hon’ble Commission may deem fit and proper in the circumstances of the case and thus render justice.

4.      The complaint was resisted by the opposite party by way of a written version. Denying the complaint, it was contended that the complainant was not a ‘consumer’ under the Act and therefore there was no issue of deficiency in service. It was argued that it was settled law that repudiation of a claim based on a bona fide decision in the light of an assessment of loss by an independent surveyor appointed under section 64UM of the Insurance Act, 1938 as per terms and conditions of an insurance policy cannot constitute ‘deficiency in service’. The opposite party contends that there has been an ‘accord and satisfaction’ of the claim and a discharge voucher was executed voluntarily by the complainant. Therefore, the complainant now questions the discharge voucher as per settled law. It is contended that in view of the summary procedure of this Commission, complex and disputed questions of law cannot be adjudicated. It is contended that a policy of insurance has to be construed as it is and cannot be rewritten. It is also contended that the onus of proving loss by leading evidence lies on the complainant which cannot be utilized for gratuitous gain. It is also stated that the complaint is bad for mis-joinder of parties in arraying opposite party no. 2 when he is an officer of opposite party no. 2. On merits, it is contended that the complainant did not intend to get a single policy for two different premises with separate addresses and did not raise this issue even though the policy was issued in May 2013. It is stated that the fire was restricted to the naptha stored in one of the 3 tanks on the insured’s premises which resulted in explosion and consequential damage, as also brought out in the Surveyor’s final report. The complainant also delayed providing documents as demanded by the Surveyors for verification and assessment of loss. It is contended that the opposite parties have acted as per the terms of coverage and terms and conditions of the policy in conjunction with the Surveyor’s report and that under insurance was a fait accompli. According to the opposite parties 1 and 2, policy no. 1003595 covered stocks for Rs 1,15,00,000/- at G-1-682 and for Rs 1,25,00,000/- at H-697,  RIICO industrial Area, Bhiwari, Alwar respectively. It is denied that the policy was issued without pre-survey or seeking details or that opposite party did any internal audit of the complainant. It is contended that based on claim form, letter heads and supplier invoices there were two separate addresses from where the complainant was operating and it has been correctly interpreted accordingly by the opposite parties. The damage to electronic items due to fire is denied since it was due to short circuit and electricity surge and that the opposite parties had settled the claim for these items under the Portable Electronic Equipment Policy No 998881. The assessment of loss is based upon 4 visits to site and examination of various documents including stock statement dated 06.03.2014 which included the Xennia Ceramic Tile Printer machine subsequently stated by the complainant to have been with the Customs Warehouse. It is finally contended that the concerns of the complainants were duly shared with the surveyors and a final assessment arrived at. The discharge voucher was not forced and was voluntarily signed. Therefore, the complaint needs to be dismissed. 

5.      Parties led their evidences and filed written reply and rejoinder. I have heard the learned counsel for the complainant. The opposite parties nos.1, 2, 4 and 5 remained unrepresented despite notice and opposite party no. 1 did not appear even after a final opportunity to appear and argue his case on 14.12.2022. He was accordingly placed ex parte and the matter finally heard. I have carefully considered the material on record.

6.      From the record, it is evident that the Surveyors have concluded that the ‘Occurrence and Cause’ of the loss was as under:

As stated by the insured and as per our inquiries on 26/02/2014 at about 12.25 PM a truck vide no. HR 65 C 2685 had been collided with high tension wire just outside insured’s premises. Due to this, 11 KV HT wire collided with each other and high current transferred to control panel and there was a sudden surge in voltage incomplete electric cable circuit of insured premises that led to explosion in one of the 3 underground storage tanks and as a result of it the chemical Naptha stored in the tank caught fire.

The argument of the complainant is that the cause of the fire was the accidental collision of the vehicle with the HT pole which triggered the sequence of events that led to fire in the storage tanks of chemicals stored on the factory premises and to the short circuit which damaged the electronic items. It is alleged that the Surveyors have acted arbitrarily despite full cooperation with them. On the contrary, the opposite parties have argued that though the damage to the stocks was due to the accidental collision of the truck with the HT pole, the damage was not to the extent claimed as per stock position and insurance cover and that the damage to electronic items had been covered under a Portable Electronic Equipment Policy and accordingly settled. It is also argued that the complainant has not disclosed that he had accepted compensation in full and final settlement voluntarily and therefore was now not a consumer under the Act and hence this complaint was not maintainable. 

7.      Based on the record it is evident that the fire incident occurred on 26.02.2014. Following the process of the loss assessment by the Surveyors and the admittance of the claim in part, the complainant had issued a legal notice to the opposite party on 05.09.2014 which was replied on 18.09.2014. Significantly, three Discharge Vouchers were executed by the complainant 26.08.2014 for Rs 36,73,849/-, 1,52,714/- and Rs 23,740/- respectively on 26.08.2014. The present complaint was filed on 15.10.2015. The complaint does not make any mention of these. No letter of protest in accepting the discharge voucher has been filed or relied upon by the complainants. Therefore, the documents having been executed as per ‘accord and satisfaction’ cannot be doubted.

8.      A report of a surveyor under section 64 UM is an essential requirement for settling claims exceeding Rs.20,000/-. A report of the surveyor though essential has been held by the Hon’ble Supreme Court in The New India Assurance Co. Ltd., vs Pradeep Kumar – 2009 (4 ) CPJ 46  to be not sacrosanct which cannot be departed from. Although the complainant has claimed that the Surveyor/opposite party no. 3 acted arbitrarily, he has not formally requested for a change in the surveyor. The Hon’ble Supreme Court has held in United India Insurance Co. Ltd., vs Antique Art Exports Pvt. Ltd., - Civil Appeal no. 3284 of 2019 that the in case a claim is settled through a full and final settlement and a discharge voucher is signed without protest, the settlement is one of accord and settlement and therefore the insured’s right to agitating the claim does not subsist thereafter. It has also been held by this Commission in MJRJ Medichem Surgical vs National Insurance Company Ltd., - I (2015) CPJ 681 (NC) that once the claim is settled without protest, and the complainant has accepted the amount unconditionally, the privity of contract or relationship of consumer and service provider between the parties comes to an end and the insured ceases to be a “consumer” under the Act. In the instant case, the complainant has not denied that it signed the discharge vouchers. It is his case that the discharge vouchers were signed under duress as his business was under financial stress following the losses in the fire. There is no evidence filed in support of the discharge voucher having been signed under duress or protest. These documents were signed as per the record on 26.08.2014. The complainant approached this Commission on 15.10.2015, i.e. after nearly 14 months. If the settlement of the claim was indeed accepted by the complainant under duress, he should have immediately protested the same to the opposite party. However, no document to this effect has been filed. Therefore, the complaint is liable to be dismissed in terms of MJRJ Medichem Surgical (supra).

9.     In view of the foregoing, I do not find merit in the contentions of the complainant. The complaint is accordingly disallowed with no order as to costs.