BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE DR. SADHNA SHANKER, MEMBER

For the Appellant                Ms Shaswati Parhi, Proxy Counsel with

                                       Authority Letter   

For the Respondent             Mr Rajesh Kumar Yadav and Mr Saurav Deep

                                       Advocates

ORDER

PER SUBHASH CHANDRA

1.      This First Appeal has been filed under section 19 of the Consumer Protection Act, 1986 (in short, “the Act”) in challenge to order dated 05. 11.2019 of the Rajasthan State Consumer Dispute Redressal Commission, Jaipur (in short, “the State Commission”) in Consumer Complaint No. 37 of 2018 allowing the complaint.

2.      We have heard the Learned Council for both the parties and produced the material on the record carefully.

3.      The relevant facts of the case, in brief, are that the respondent's commercial vehicle insured with the appellant met with an accident and a claim for total loss was filed with the appellant. A Spot Surveyor was appointed and a survey report obtained. An FIR was lodged by the respondent after five days of the accident. The insurance company referred the matter for forensic investigation to Truth Labs Foundation which, after investigation, submitted a report stating that the loss suffered on account of fire in the vehicle not accidental or due to any electrical short circuit but had been initiated extraneously and parts and portions of the truck were set on fire separately since no dents or external marks were visible on the truck to suggest that it had fallen abruptly into a ditch as was being claimed. It was also opined that the respondent's stance that the conductor of the truck was asleep at the time of the accident was suspicious since it was not possible for a person to sleep through such an accident. Based on the forensic investigation and expert opinion therein, appellant repudiated the respondent's claim on the ground that the claim was based on false statements and omitted important information which amounted to violation of Condition No. 8 of the Policy mandating the insured to truthfully state the facts of his claim and therefore there was no complete disclosure in the matter. This repudiation was challenged before the State Commission alleging deficiency in service by the appellant for not settling its claim of Rs The State Commission allowed the complaint on contest and directed the appellant herein to pay the claim amount of Rs 20,50,000/- along with interest @ 9% from the date of filing of complaint and Rs 50,000/- as cost of proceedings within one month failing which with 9% interest from the date of order. This order is impugned before us.

4.      It is the case of the appellant that the claim was based on falsehood and incomplete disclosure since the investigation conducted by it indicated that the purported accident was actually staged in order to claim the amount under insurance and therefore there was a clear violation of Condition No. 8 of the Policy. It was argued that the respondent had not discharged the onus of proving that the fire was caused by the accident. The statement of Sunil, the conductor who was reportedly in the truck at the time of the accident, had not been brought on record. The respondent had also not been able to prove the incident of accident with medical evidence since it was suspicious that a truck which met with an accident serious enough to set the vehicle ablaze, did not result in even minor injuries to the passengers in the truck. The contention that the conductor was asleep and was woken up after the truck was on fire was also improbable. The respondent had also failed to produce any work order for which he was on his way from his normal location to Saujat village as claimed. It was contended that the vehicle did not bear any external marks to indicate an accident of the nature which would result in a fire such as dents or bumps and therefore the State Commission had erred in allowing the complaint to be allowed by ignoring the forensic report that was relied upon by the appellant. Reliance was placed on the judgment of the Hon’ble Supreme Court in National Insurance Company Limited Vs. Hareshwar Enterprises (P) Ltd. and Ors., which had held that “the surveyor's report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the surveyor's report”. It was contended that the respondent had not relied on any evidence to prove that it was the accident which caused the fire but merely made statements without corroborating his case. It was also stated that the complaint was registered with the police after a five-day delay. The respondent is alleged to have violated the conditions of the insurance Policy in respect of the truck especially Condition No. 8 which states that any claim with the insurance company must be preceded by the policy holder fully complying with all the terms and conditions in the Policy by providing truthful information and non-compliance or misrepresentation may invalidate the company's liability. Reliance was placed on the Hon’ble Supreme Court's judgment in BHL Industries Vs. Export Credit Guarantee Corporation Ltd., (2015) 9 SCC 414 wherein it was held that an insurance policy has to be strictly construed and has to be read as a whole and nothing should be added or subtracted from it. Appellant contended that the respondent approached the State Commission with unclean hands and that, as held by the Hon’ble Supreme Court in Dalip Singh Vs. State of UP, 2010 2 SCC 114 any litigant who misrepresents facts and takes the shelter of falsehood has unclean hands and such litigants should not be entitled to any relief, interim or final. It was therefore prayed that the appeal be allowed and the impugned order set aside.

5.      Per contra, it was submitted by the respondent that he was the owner of a Tata LPS 4018 truck registered no. RJ 32 GA 9554 which was insured with the appellant for the period 12.02.2017 to 11.02.2018.The policy specifically covered accidental fire. According to the respondent, on the intervening night of 31.03.2017 and 01.04.2017 the vehicle while manoeuvring to avoid an incoming vehicle from the opposite side fell into a ditch and thereafter caught fire. A claim raised by the respondent with the appellant was disallowed after various rounds of communications.
It was contended that the report of the Spot Surveyor appointed by the appellant was not shared with him. It was also submitted that the matter was reported to the police who made a General Diary entry after a PCR call was made to the Police. The Fire Department's certificate regarding the incident had also been filed before the State Commission. The report of the forensic surveyor was stated to be not a valid document as the report was biased in its conclusion. In sum, it was stated that an immediate PCR call and Fire Brigade intimation at the spot of the accident was an admitted fact and the forensic survey after one and a half months of the incident was also admitted by which time the truck had already been towed away from the place of the accident. It was argued that signs of the fire were present at the site of the incident. Admittedly the driver's cabin had also been burnt and the engine located beneath the driver's cabin was also burnt. As per the forensic surveyor's report no presence of any suspicious ignitable substances had been found. Therefore, it was contended that the State Commission had rightly arrived at its conclusion and directed the payment of the IDV along with interest and litigation cost vide the impugned order which should be upheld.

6.      From the foregoing, it is evident that the fact of the accident is in dispute since the appellant contends that it was a staged event and the fire to the truck had been set through extraneous means. It has relied upon the report of its forensic expert to repudiate the claim on the basis of such a report. On the contrary, the respondent would have us believe that the accident which was reported to the police and the fire department was the cause of the fire and that the forensic report was biased in concluding that the event was staged since the forensic expert had been appointed nearly one and a half months after the incident by when the vehicle had been towed away and therefore such a report should not be relied upon.

7.      In the instant case, the appellant insurance company has relied upon the report of a forensic expert to repudiate the claim of total damage to the insured vehicle. As per settled law, any claim of insurance under Section 64UM of the Insurance Act, 1938 is mandatorily required to be surveyed by an authorized surveyor of the IRDA to be appointed by the insurance company. Section 64 UM reads as under:

"64- UM(2) - 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 twenty thousand rupees 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 (Amendment) Act, 1968, 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 assessors):

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.

(3) The Authority may, at any time, in respect of any claim of the nature referred to in sub-section (2), 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 reasonable time and the cost of, or incidental to, such report shall be borne by the insurer.”

The surveyor and/or the insurance company is permitted to also obtain expert opinion or have the matter investigated in order to ascertain the true facts of a claim preferred before it as per Section 64 UM of the Insurance Act, 1938. The appointment of M/s Truth Labs as a forensic expert in the instant case cannot therefore be held to be incorrect.

8.      As laid down by the Hon’ble Supreme Court in Sri Venkateswara Syndicate vs Oriental Insurance Co. Ltd. & Anr., Civil Appeal No. 4487 of 2004 decided on 24 August, 2009 any claim in excess of Rs.20,000/- under Section 64 UM of the Insurance Act, 1938 is to be surveyed and reported by an authorised surveyor. While the report of a surveyor has to be given due consideration, it has been held as under:

22.   The assessment of loss, claim settlement and relevance of survey report depends on various factors. Whenever a loss is reported by the insured, a loss adjuster, popularly known as loss surveyor, is deputed who assess the loss and issues report known as surveyor report which forms the basis for consideration or otherwise of the claim. Surveyors are appointed under the statutory provisions and they are the link between the insurer and the insured when the question of settlement of loss or damage arises. The report of the surveyor could become the basis for settlement of a claim by the insurer in respect of the loss suffered by the insured. There is no disputing the fact that the Surveyor/Surveyors are appointed by the insurance company under the provisions of Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them. We also add, that, under this Section the insurance company cannot go on appointing Surveyors one after another so as to get a tailor made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reason for not accepting the report. Scheme of Section 64-UM particularly, of sub-sections (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor.

[Emphasis supplied]

9.      However, it has also been laid down by the Hon’ble Supreme Court in New India Assurance Co. Ltd. Vs. Pradeep Kumar, (2009) 7 SCC 787,that a report of a surveyor is not the last and final word or so sacrosanct that it cannot be departed from provided the report is established to be arbitrary or perverse. The Apex court had held as under:

15.     ………………although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.

10.    The Hon’ble Supreme Court has also laid down in Suraj Mal Ram Niwas Oil Mills (P) Ltd., vs United India Insurance Co. Ltd., (2010) 10 SCC 567  that the terms of a contract have to be read as agreed upon between the parties and that an insurance policy represents a contract of insurance between the signing parties.  It has been held that:

Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer.  Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties”.

[ Emphasis added ]

11.    The respondent has relied upon the information to the PCR and the Fire Department as well as the scope of the Policy which covered loss due to fire to contend that the accident occurred. It has also contended that the forensic report itself indicated absence of any ignitable substance to substantiate the claim of his deliberately setting fire to the truck. No evidence of the persons in the vehicle at the time of the accident has been brought on record nor any medical records of treatment which were logical in case of an accident of such magnitude. The moot issue in the instant case is not whether the incident occurred but whether it was an accident that was covered under the terms of the Policy. The appellant has established through forensic evidence that the incident leading to damage due to fire to the insured truck was due not on account of an accidental occurrence in view of the vehicle not having any evidence of external damage. It has also contended that it had been denied the opportunity to investigate the incident in view of the delay in intimation to the police and the vehicle having been towed away from the site of the purported accident.

12.    From the foregoing, it is manifest that the respondent has not been able to establish with cogent evidence that the loss to his truck was due to a fire resulting from an accident. On the contrary, the appellant has, through an expert opinion on record, argued that the incident was contrived and staged. In view of the discussion above, we are inclined to allow the appeal. The impugned order of the State Commission is set aside. There shall be no order as to costs. Pending IAs stand disposed with this order.