Sri Shyamal Gupta, Member

Aggrieved with the impugned order, whereby the complaint case initiated by the Appellant has been dismissed by the Ld. District Forum, this Appeal is filed by M/s Jhun Jhunwala .Cloth Store.

The complaint case was filed over repudiation of Appellant’s insurance claim by the Respondent Insurance Company. 

On receipt of notice, though the Ld. Advocate for the Respondent appeared through its Ld. Advocate initially, subsequently, he remained absent at the time of hearing.  Therefore, only the Ld. Advocate for the Appellant was heard in the matter.

On a reference to the repudiation letter dated 31-03-2011, it appears that the said claim was rejected alleging that the Appellant did not show any stock loss in respect of the subject fire loss in the audited Balance Sheet for the relevant year.  Accordingly, the Insurer drew the conclusion that due to alleged fire incident, the Appellant did not suffer any material loss and repudiated the instant claim. 

It is, however, found on due scrutiny of the Balance Sheet of the Appellant Company that a sum of Rs. 15,88,484/- was shown as Insurance Claim receivable.  We, thus, find that the instant claim was repudiated on completely baseless ground.

Sad to reflect, the Surveyor failed to discharge his statutory responsibilities in a fair manner and unnecessarily criticized the Appellant.  Scrutiny of available documents on record leaves nothing to imagination that the survey report was prepared in a most biased manner.   To cite a few examples –

It has been observed by the Surveyor in his survey report that owing to non-submission of stock statement, it could not execute the process of calculating the value at risk.  However, it appears that the Appellant did submit break-up details of stock for the relevant period to the Surveyor under cover of its letter dated 29-09-2010.    

The Surveyor, after evaluating the audited Balance Sheet found that the Appellant did not show any stock loss due to fire.  As noted hereinabove, scrutiny of the audited Balance Sheet of the Appellant reveal that, due provision in this regard was made by the Appellant.

By issuing a letter on 03-01-2011 to the Appellant, the Surveyor alleged that the Appellant did not mention the monetary value of stock anywhere.  Said allegation was refuted by the Appellant vide its reply letter dated 08-01-2011 stating that in respect of the stock lying at the godown of the carrier, it provided purchase invoices, wherein the quantitative break up of goods like dhotis, sarees, suiting & shirting along with rates were shown.

It is indeed strange that although the Surveyor in its report admitted that there was visual sign of fire damage to the affected building and incisive inquisition of local people revealed that electrical short circuit triggered the emergence of disastrous fire hazard, and copies of relevant C/N, purchase bill, stock register etc. together with fire report and other relevant documents were available with him, the loss was estimated as NIL.   

Ld. Advocate for the Appellant submitted that as per the letter dated 19-02-2010, it submitted all the requisite documents to the Surveyor vide letter dated 30-03-2010 except Sales Tax Return as Sales Tax was not applicable in respect of texting goods and FRT was not available at that relevant time.  Subsequently, however, the FRT was submitted.

It is alleged by the Ld. Advocate for the Appellant that despite receipt of almost all the relevant documents, the Surveyor kept quiet for six months and suddenly asked for submitting break up details for the periods 01-04-2007, 31-03-2008, 01-04-2008 and 31-03-2009.  Though the same was not relevant, the Appellant duly submitted the same under its letter dated 29-09-2010.

Regarding the allegation of the Respondent that the Appellant did not show any shortage/loss of quantity of stock during the period 31-03-2010, Ld. Advocate for the Appellant asserted that said statement was related to the stock for the month of March, 2010 and had got nothing to do with the stock of insured goods for the month of February, 2010 when the instant accident took place (13/14-02-2010).

On due consideration of the above anomalies in respect of the survey report, we are constrained to observe that the Surveyor created a mess of everything for which we cannot accept the said report. 

IRDA though penciled the dos and don’ts for Surveyors, it is sad to see that such guidelines are mostly adhered in its breaches.  Of import are not the laws but the impunity with which they are violated making a mockery of Regulatory norms and regulations.  This is not acceptable

It appears that the Appellant wrote a letter to the Respondent on 07-04-2011 for re-consideration of its decision to repudiate the subject claim duly clarifying that provision for inventory loss was made in the Balance Sheet.  Yet, the Respondent did not favourably consider the instant claim.

Considering all aspects, we are inclined to allow this Appeal.  The Respondent shall settle the instant claim within 40 days from this day by paying Rs. 15,88,484/- to the Appellant along with simple interest @ 9% p.a. from the date of filing of the complaint case (18-09-2012) till full and final payment is made. The impugned order is hereby set aside.

Let the LCR be returned to the Forum below along with a copy of this order forthwith.