1.      Heard Mr. Neeraj Singh, Advocate, for the complainant and Mr. Ravi Bakshi, Advocate, for the opposite party. 

2.      Gulshan Chemicals Limited has filed aforementioned complaint for directing United India Insurance Company Ltd. (the Insurer) to pay (i) insurance claim of Rs.3/- crores, (ii) suitable compensation for not settling the claim even after long time of the loss, for deficiency in service and committing unfair trade practice and (iii) any other relief which may be deemed fit and proper, in the facts and circumstances of the case.

3.      The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-

(a) The complainant (hereinafter referred to as the Insured) was a  company incorporated under Companies, Act, 1956 and engaged in manufacturing, refining and trading of base chemicals and all intermediate and by-products thereof and other ancillary activities. It has its manufacturing unit at A-594-595 and 595-A, RIICO, Industrial Area, Bhiwadi, district Alwar.  

 (b)    United India Insurance Company Ltd. (for short the Insurer) is a public insurance company, engaged in the business of providing different types of insurance services. The Insured obtained Policy No.040600/11/13/12/00000019, i.e. Standard Fire & Special Perils Policy (Declaration Basis), for a sum of Rs.10/- crores, for the period of 01.05.2013 to 30.04.2014, on “Chemical Manufacturing (other), Pharmaceuticals, Toiletry Product” i.e. “stock of all raw material, packing material, power and fuel, lab chemicals, store and spares/ work in progress stock/ finished product stock and stock of sodium sulphite & sodium hydrosulphite”, of manufacturing unit at A-594-595 and 595-A, RIICO, Industrial Area, Bhiwadi, district Alwar.   

(c)     The fire was broke out in the Factory Storage Godown at A-594-595 and 595-A, RIICO, Industrial Area, Bhiwandi, district Alwar, on 06.05.2013 at about 3:00 hours, causing loss of finished stock, stored there. Anil Kumar, a workman of night shift, smelt gas coming out of finished goods godown, which was adjoining to the production hall and connected through a shutter door. He immediately informed Chandra Mishra, Shift Incharge. They went to finished goods godown and found that hot gas and fumes were coming out from some the drums. They immediately broke the window glasses from one side of the godown and informed Fire Service Station, Industrial Area Bhiwadi, from where, the fire tender was sent on the spot. As Sodium Hydrosulphite is inflammable due to water, as such, water spray was not found possible. The workmen of night shift started removing stock from other side and out of total 2858 drums of 100 kg, 921 drums were removed from the godowns and the remaining 1937 drums of 100 kg. were burnt.

(d)  The Insured informed the Insurer on telephone on 06.05.2013 about the incident of fire and the loss. The officers of the Insurer asked to submit insurance claim in writing. Then the Insured submitted insurance claim in writing on 06.05.2013, in which, cause of fire was suspected due to electric short circuit and the loss of Rs.17028635/- was claimed. The Insurer appointed Select Surveyor Pvt. Ltd., on 07.05.2013, for investigation. The representative of Select Surveyor Pvt. Ltd. inspected the godown on 09.05.2013 and 17.05.2013 and submitted his Initial Investigation Report dated 30.05.2013, mentioning that ceiling of godown was in a depleted condition, hence there was possibility of water dropping through it, due to over flow of the tank or due to bursting of water pipe. But as on that day there was neither rain fall, nor on the roof any water tank or water pipe was found, as such, the final opinion was given that occurrence of fire was purely accidental. He confirmed that 1937 drums of 100 kg. of finished Sodium Hydrosulphite were burnt, in the fire. He submitted his Final Investigation Report dated 24.12.2013, in the same terms.

(e)  The Insurer appointed Cunnigham Lindsey International Insurance Surveyor & Loss Associates, Pvt. Ltd., Delhi, on 06.05.2013, for survey and assessment of the loss. The Surveyor inspected the godown on 07.05.2013 and 15.05.2013. The Surveyor submitted Immediate Loss Advice Report dated 09.05.2013 and Final Survey Report dated 12.12.2014, stating that cause of fire was “heat gained by the chemical and self-decomposition” and quantum of loss was assessed to Rs.15891535/-.

(f)      Even after, final report of the Surveyor, the Insurer did not proceed in the matter. Then the Insured gave legal notice dated 03.03.2015, for causing inordinate delay in settlement of the claim. The Insurer, vide undated letter (served on the Insured on 01.07.2015), repudiated the claim on the ground that there were two possibility of the fire i.e. (i) Fire was caused due to water dropped from roof on the finished goods. If that was the reason of fire then it was due to negligence of the Insured. (ii) Fire was triggered by the heat gained by the chemical itself. If that was the reason then it was own fermentation, natural heating or spontaneous combustion. In both the conditions, the loss was not payable. The complaint was filed on 08.07.2015, on the allegations that the Insurer had illegally repudiated the claim and the reasons for fire as mentioned in the investigation report/survey report/repudiation letter were imaginary and improbable,.

4.      The insurer filed its written reply, on 05.02.2016, in which, the facts relating to the insurance policy and fire incident have not been denied. It has been stated that after receipt of the information of the loss, the Insurer appointed Cunnigham Lindsey International Insurance Surveyor & Loss Associates, Pvt. Ltd., Delhi, on 06.05.2013, for survey and assessment of the loss. The Insurer appointed Select Surveyor Pvt. Ltd., on 07.05.2013, for investigation of the incident. Select Surveyor Pvt. Ltd. submitted his Initial Investigation Report dated 30.05.2013 and final report dated 24.12.2013. The Surveyor submitted Immediate Loss Advice on 09.05.2013 and Final Survey Report dated 12.12.2014. After consideration these reports and other materials of the record, the claim was repudiated as the Insurer founds that the fire was either caused due to negligence of the Insured or due to own fermentation, natural heating or spontaneous combustion, falling in general exclusion clause of the policy. There is no deficiency in service on the part of the Insurer.   

5.      The Insured filed his rejoinder reply on 03.08.2016, in which, the facts stated in the complaint were reiterated. The Insured filed various documentary evidence and Affidavit of Evidence of A.K. Jain. The Insurer filed Affidavit of Evidence of Rakesh Kumar, Assistant Manager. Both the parties filed their short synopsis.

6.      I have considered the arguments of the counsel for the parties and examined the record. It is mandatory for the Insurer to appoint a surveyor for assessment of loss, exceeding Rs.25000/- under Section 68 UM of Insurance Act, 1938. Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507 and Khatema Fibres Ltd. Vs. New India Insurance Company Ltd., 2021 SCC OnLine SC 818 held that the report of surveyor has to be given due importance. There should be sufficient ground to disagree with the report of the surveyor. Once it is found that there was no inadequacy in quality, nature and manner of performance of the duties and responsibilities and once it is found that the report is not based on adhocism or arbitrariness then the consumer forum will have no jurisdiction to ignore it.

7.      The surveyor is an expert and its report stands on the footing of expert evidence and has to be corroborated from other evidence on record, in order to examine its correctness and bonafide/ malafide. In the present case, the Insurer appointed Select Surveyor Pvt. Ltd., on 07.05.2013, for investigation of the cause of fire. Select Surveyor Pvt. Ltd. submitted his Initial Investigation Report dated 30.05.2013, mentioning that ceiling of godowns was in depleted condition, hence there was possibility of water dropping through it, due to over overflow of the tank or due to bursting of water pipe. On that day there was neither rain fall, nor on the roof any water tank or water pipe was found, as such, the final opinion was given that occurrence of fire was purely accidental. He confirmed that 1937 drums of 100 kg. each of finished Sodium Hydrosulphite were burnt, in the fire. He submitted his Final Investigation Report dated 24.12.2013, in the same terms. The Insurer, however, relied upon part of these reports and in the repudiation letter has mentioned that the fire was caused due to water dropped from roof on the finished goods, due to negligence of the Insured. There is no evidence on record that in the night of 06.05.2013, there was rain fall, in the locality of the factory premises of the Insured nor there is any evidence that on the roof of the godowns, where, the fire had taken place, there was any water tank or water pipe. The Surveyor also examined this contingency in his report dated 12.12.2014 and held that the finished product was filled into drums from hopper under vacuum. The drums were sealed and packed in Polyethylene liner. Thus fire due to moisture or water drop was completely ruled out. The Insurer has not filed any evidence in this respect, in the complaint. The findings of the Insurer that fire was caused due to water dropped from roof on the finished goods, is based upon conjectures and surmises, ignoring the material evidence on record.

8.      The Insurer gave other reason for repudiation of the claim is that due own fermentation, natural heating or spontaneous combustion of Sodium Hydrosulphite. It was fully proved from the various documents, thoroughly examined by the Investigator and the Surveyor that in the godowns, where fire had occurred,finished Sodium Hydrosulphite was stored in the steel drums of 100 kg. each. On the basis of science literature, the Surveyor noted that Sodium Hydrosulphite has an inherent property of decomposition at 60 degree centigrade. The fire was caused on 06.05.2011 at 3:00 hours. The Surveyor in the Final Survey Report has noted that on the day of the fire, temperature was 46 degree centigrade. The godowns, where Sodium Hydrosulphite was stored in the steel drums, sealed and packed, was RCC roofed, brick built construction, as such, the temperature inside the godowns, during the day might be below 46 degree centigrade. At 3:00 hours, in night, the temperature might be much below 46 degree centigrade. Finding of the Surveyor in his report dated 12.12.2014 that RCC roof and metaled container might have absorbed heat during the day. This heat, in any case, might be below 46 degree centigrade while 60 degree centigrade is decomposition point. As such fire due own fermentation, natural heating or spontaneous combustion of Sodium Hydrosulphite was not possible. Repudiation of the claim is illegal.

9.      The Insured claimed damages of cost of drum for packing, cost of polythene liner, labour for repacking and cost of disposal of burnt materials. These losses were covered in the policy. The Surveyor, while assessing the loss, has illegally ignored these losses.

10.    Regulation 9 of The Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002 directs the Surveyors to submit their Survey Report within 30 days and in any case within 45 days, from the date of his appointment. The Insurer has been directed to make settlement within 30 days of receipt of Surveyor’s report. Regulation 9 (6) provides as follows:

Regulation-9(6). Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within seven days from the date of acceptance of the offer of by the insured. In case of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2 per cent, above the bank rate prevalent at the beginning of the financial year, in which the claim is reviewed by it.

          In view of this statutory provision, the Insured is entitled to interest @ 12% per annum after six months of the loss.

ORDER

  In view of the aforesaid discussions, the complaint is allowed. The opposite party is directed to pay Rs.16860035/- along with interest @12% per annum from 06.01.2014 till the date of payment to the complainant, within two months from the date of delivery of this judgment.