Avm J. Rajendra, AVSM VSM (Retd) PRESIDING MEMBER

1. The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short "the Act") against the Opposite Parties (OPs) seeking the following:

                          "i. award a sum of Rs. 1,07,45,956/- towards the loss suffered by the Complainant on account of fire, which is covered under the Policies issued by the Respondent in favour of the Complainant and against the Respondent;

                          ii. award interest @ 18% per annum from 18th June, 2014 (after 3 months) of loss till the date of realization of the claim amount in view of the rate of interest charged by the Complainant's Bank and loss of business due to non-settling of claim by Respondent, in favour of Complainant and against Respondent;

                          iii. award a sum of Rs.10,00,000/- for mental agony and harassment in favour of Complainant and against Respondent; iv. award cost of the present proceedings in favour of the Complainant and against Respondent; and v. This Hon'ble Commission may also pass such further order(s) as it may deem fit and proper on the facts and in the circumstances of the present case."

2. Brief facts of the case, as per the complaint, are that the Complainant obtained a Standard Fire and Special Perils Policy No. 463300/11/2014/1010 from the OP on 24.02.2014 for a sum insured of Rs.1,50,00,000, valid up to 23.05.2014. Thereafter, on 04.03.2014, the Complainant obtained additional cover and the OP issued another Standard Fire and Special Perils Policy bearing Policy No.463300/11/ 2014/1065 for a further sum insured of Rs.1,50,00,000, valid up to 02.06.2014. The policies covered stocks of various varieties of cotton Kappas, Seeds, Lint and other stocks pertaining to the Complainant‟s trade, packing material belonging to the Complainant and/or under lien to the bank, stored in their premises at NH-5, Bonthapadu Cross Road, Guntur District, occupied as TMC Unit, Guntur, Andhra Pradesh. On 18.03.2014 at about 3:00 PM hours, a massive fire broke out due to an electric short circuit at the insured premises where the stocks of the Complainant were stored. The fire brigade and police authorities, including the in-charge of Police Station Lalapeta, Guntur, were immediately informed. An FIR No.117/2014 dated 18.03.2014 was also registered, wherein the fire was recorded as accidental in nature. The fire resulted in destruction of almost the entire stock.

3. On the same day, i.e., 18.03.2014, the Complainant submitted a statement to the Station Fire Officer, Guntur-2, informing that at the time of the incident there were 3690 quintals of Kappas, out of which 2000 quintals were completely destroyed, and that the fire had occurred due to an electric short circuit. The estimate of loss was prepared based on the books of account maintained by the Complainant. Upon receipt of the intimation of loss, OP appointed Ch. Abshaloam as Surveyor, who visited the insured premises and directed the Complainant to segregate the salvage. Pursuant to the Surveyor‟s directions, the Complainant segregated 1725.25 quintals of salvage in Surveyor‟s presence and sold the same for Rs.67,64,573. Thereafter, by letter dated 25.03.2014, the Complainant informed the District Fire Officer, Guntur that the fire incident dated 18.03.2014 had resulted in destruction of about 2000 quintals of cotton Kappas and others, causing an approximate loss of Rs.95,00,000. Subsequently, on 17.07.2014, the Deputy Electrical Inspector, Guntur Sub-Division, submitted an inspection report to the Inspector of Police, PS Lalapeta, stating that sparks in the cable of a portable water motor had caused the cotton to catch fire and that the incident occurred due to short circuit, without any negligence on the part of the Complainant. Further, on 08.08.2014, the Andhra Pradesh State Disaster and Fire Service Department issued a Fire Attendance Certificate recording that 2000 quintals of cotton Kappas were damaged in the fire accident dated 18.03.2014. It is the case of the Complainant that after over 15 months from the date of the fire, the Surveyor asked the Complainant to submit the claim form, and accordingly on 07.07.2015, the Complainant lodged a claim for Rs.1,07,45,956. Thereafter, on 11.09.2015, the Complainant issued a legal notice to OP that despite lapse of 18 months, the Surveyor had not submitted his report even though all documents were furnished, and called upon OP to pay Rs.95,00,000 with interest. Subsequently, on 18.03.2016, OP sought certain documents from the Complainant for assessment of the claim, which were submitted by the Complainant on 26.09.2016. On 30.09.2016, the Complainant also furnished Muta Cooly vouchers and a copy of the AMC Permit to the OP. According to the Complainant, after over 2½ years from the date of the loss, the OP, vide letter dated 27.02.2017, proposed settlement of the fire claim for Rs.16,71,924 and forwarded discharge vouchers for full and final settlement. The Complainant, however, issued a notice dated 12.04.2017 stating that they were not willing to accept the said amount as full and final settlement and reiterated its claim for Rs.95,00,000. According to the Complainant, despite the claim being for Rs.1,07,45,956, the OP, after nearly three years, offered settlement for only Rs.16,71,924. Aggrieved by the same, the Complainant filed the present complaint.

4. Upon notice, the complaint was resisted by the OP by filing its written statement wherein the OP had denied any deficiency in service and raised preliminary objections. It was contended that the complaint was not maintainable as the OP had, by letter dated 27.02.2017, offered Rs.16,71,924 towards full and final settlement of the claim in the case, which the Complainant declined. In terms of General Condition No. 6(ii) of the policy, any claim not pursued by the insured within twelve months of disclaimer was deemed to have been abandoned. The OP further contended that the Complainant obtained the insurance for commercial purposes and therefore, was not a consumer under the Consumer Protection Act, 1986, and that the dispute involved complex questions of facts and law requiring detailed evidence and thus not suitable for summary proceedings before this Commission.

5. On merits, the OP admitted issuance of the insurance policies covering the Complainant‟s stock subject to the terms and conditions of the Standard Fire and Special Perils Policy. The OP also admitted that a fire incident dated 18.03.2014 was intimated and Shri Abshaloam was appointed as Surveyor to assess the loss. However, the OP denied that the fire was massive or caused by an electric short circuit as alleged. It was contended that the loss claimed was highly exaggerated and unsupported by credible evidence. The documents relied upon by the Complainant were self-serving and that loss assessment under the policy could only be determined by a licensed surveyor; the letter of the Deputy Electrical Inspector did not conclusively establish the cause of fire and even indicated negligence on the Complainant/s part. The OP denied any delay or violation of IRDA Regulations by the Surveyor and contended that the delay in assessment was attributable to the Complainant, who failed to furnish necessary information and records despite repeated reminders from the Surveyor. The Complainant filed the claim form belatedly on 07.07.2015 claiming Rs.1,07,45,956, which was exorbitant and not supported by proof of actual loss. After analysis, the Surveyor assessed the loss at Rs.20,77,878, and after applying policy terms, OP offered Rs.16,71,924 to the Complainant as full and final settlement vide letter dated 27.02.2017. The offer represented the true indemnification of the actual loss suffered by the Complainant in accordance with the principles governing contracts of indemnity. The OP denied that the survey report was manipulated or tailored at its instance and submitted that the Surveyor was an independent professional appointed under the Insurance Act and IRDA Regulations. It was reiterated that the OP acted fairly and bona fide and that there was no negligence or deficiency of service. It was contended that there was no cause of action and the complaint was liable to be dismissed.

6. The Complainant had filed rejoinder to the Written Statement filed by the OP and reiterated the facts of the complaint.

7. The Complainant filed its evidence on Affidavit and relied on, copy of Power of Attorney (Ex. CW1/1), Partnership Deed dated 02.07.2013 (Ex. CW1/2) and Certificate Issued by Registration and Stamp Dept, Govt. of Andhra Pradesh (Ex. CW1/3), Policy No. 463300/11/2014/1010 (Ex. CW1/4), Policy No. 463300/11/2014/1065 (Ex. CW1/5), Complaint made to PS Lalapeta, Guntur (Ex. CW1/6), FIR No. 117/2014 (Ex. CW1/7), photographs (Ex.CW1/8)(COLLY), letter dated 18.03.2014 (Ex. CW1/9), statement of account (Ex. CW1/10), proof of the disposal of salvage (Ex. CW1/11), balance (Ex. CW1/12), letter dated 25.03.2014 (Ex. CW1/13), letter dated 17.07.2014 (Ex. CW1/14), Certificate issued by the AP State Disaster & Fire Service Department to the Complainant (Ex. CW1/15), notice dated 11.01.2015 (Ex. CW1/17), letter dated 26.09.2016 (Ex. CW1/18), letter dated 30.09.2016 along with Muta Colly Voucher and AMC permit (Ex. CW1/19), OP‟s letter dated 27.02.2017 along with discharge vouchers (Ex. CW1/20), notice dated 12.04.2017 (EX. CW/21), reply dated 25.04.2017 (Ex. CW1/22) and reply dated 24.08.2017 (Ex. CW1/23).

8. The OP filed its evidence on by way of affidavit of Mr. Bipin Kumar, Chief Manager, Oriental Insurance Co. Ltd. and relied on copy of terms and conditions applicable to Standard Fire & Special Perils insurance policies (Ex. R-1); reminders from Shri Ch. Abshaloam, Surveyor to complainant, dated 28.03.2014, 12.04.2014, 7.08.2014, 28.06.2015 and 12.09.2015 respectively (Ex. R2-R7); Survey Report dated 14.09.2015 submitted by the Surveyor (Ex. R-8); and copy of Addendum Report dated 25.01.2017 (Ex. R-9).

9. The learned counsel for the complainant reiterated the facts of the case and asserted that the OP had been deficient and negligent in discharging its obligations under the contract of insurance. He contended that under the policy, the OP was duty bound to keep the Complainant indemnified against the insured contingencies. However, in the present case the OP failed to act in accordance with the terms of the policy. He asserted that the Complainant suffered a loss amounting to Rs.1,07,45,956. Yet the OP insurer failed to properly assess the loss and arbitrarily offered only a meagre amount towards settlement. He further affirmed that, as per the reports of the concerned authorities including the Fire Authorities, the incident was accidental in nature and resulted in substantial loss to the Complainant. Referring to the books of accounts and balance sheet maintained by the Complainant, he argued that 3741 quintals of Kappas was lying in the premises at the time of the fire. Pursuant to Surveyor‟s instructions, 1725.75 quintal of salvage was segregated and sold. Thus, the total quantity of Kappas damaged in the fire dated 18.03.2014 came to about 2000 quintals. He contended that this loss squarely fell within policy coverage and thus, the Complainant was entitled to the claimed amount of Rs.1,07,45,956/- as reflected in the claim form submitted to OP. He further argued that the Complainant was also entitled to interest @ 18% per annum from the date of loss till realization of the claim amount, considering the rate of interest charged by the Complainant‟s bank and the business losses suffered due to non-settlement of the claim by the OP. he asserted that it was a settled position of law that a surveyor‟s report was not the last and final word and was not sacrosanct. In this regard, reliance was placed on New India Assurance Co. Ltd. Vs. Pradeep Kumar, (2009) 7 SCC 787 and M/s Super Label Mfg. Co. Vs. New India Assurance Co., 2023 SCC OnLine SC 644.

10. On the other hand, the learned Counsel for OP argued that the claim of the Complainant had been duly examined and, vide letter dated 27.02.2017, the OP had offered Rs.16,71,924 towards full and final settlement of the loss assessed under the policy. The Complainant, however, declined to accept the said amount. She contended that once the admissible loss had been duly assessed and settlement offered, the allegation of deficiency of service was untenable and the complaint itself was not maintainable. She further contended that the Complainant was seeking to recover amounts which were not admissible under the terms and conditions of the policy. Merely because the property was insured, the Complainant could not claim payment of an amount not justified under the policy or the law. She asserted that a contract of insurance was essentially a contract of indemnity and relied on Halsbury's Laws of England (4th Edition), to state that the occurrence of the insured event did not by itself entitle the insured to the sum mentioned in the policy; rather, the insured must establish the actual pecuniary loss suffered and cannot recover more than the actual loss subject to the maximum liability stipulated under the policy. Reliance was also placed on the judgment of Hon‟ble Supreme Court in United India Insurance Co. Ltd. v. Kantika Colour Lab, I(2010) 6 SCC 449, wherein it was held that contracts of insurance, except certain special categories, are contracts of indemnity and the insured is entitled only to reimbursement of the actual loss proved to have been suffered, not exceeding the amount stipulated in the policy. She further submitted that under Section 64-UM of the Insurance Act, 1938, loss assessment in insurance claims is required to be carried out by a licensed surveyor. In the present case, the surveyor appointed by OP conducted a detailed inspection and assessed the loss at Rs. 20,77,878, which formed the basis of the settlement offered. She also contended that there was negligence on the part of the Complainant in not providing adequate safety devices to avert such incidents, as reflected from the letter of the Complainant dated 17.07.2014. The Complainant also failed to furnish necessary documents despite repeated reminders, including the mail dated 12.09.2015 by the surveyor. She, therefore, asserted that the complaint be dismissed with costs, as the OP acted strictly as per the terms of the policy and no deficiency of service could be attributed to it.

11. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned counsels for both the parties.

12. The issue that arises before us for consideration are A. Whether the present complaint is maintainable?

                          B. Whether the Complainant delayed preferring the claim? C. Whether the delay in preferring the claim was attributable, wholly or in part, to the contributory negligence of the Complainant? D. Whether there was delay in filing the surveyor report and finalisation of the claim by the OP?

                          E. Whether there was any deficiency in service on the part of OP in assessment and settlement of the claim as per the terms of policy?

13. It is a matter of record and undisputed that the Complainant had obtained Insurance Policy No.463300/11/2014/1010 & 1065 from the OP/ Insurer with respect to the stock of all varieties of Cotton, Kappas, Seeds and Lint stored loose, in bags, in boras and FP bales as well as packing material belonging to insured and/or underline to the bank whilst stored and/or lying anywhere including open in the premises of the insured situated at N.H.-5 Road, Bonthapadu Cross Roads, Guntur occupied as a TMC Unit, Guntur, AP. The risk covered under Standard Fire and Special Perils Policy was for total sum of Rs.3,00,00,000.

14. It is a matter of record that an incident of major fire occasioned at the premises of the Complainant on 18.03.2014 at about 3:00 PM and the matter was reported to the OP on the same day, and the surveyor was also appointed by the OP on 18.03.2014. The Surveyor visited the site on 18.03.2014 and subsequent days and a detailed report was submitted on 14.09.2015. It is undisputed that the complainant had filed the insurance claim for Rs.1,07,45,956. It is not in dispute that the complainant firm is a Cotton Ginning Mill which procures and processes raw cotton into cotton bales. The incident happened on 18.03.2014 was reported to Fire Department as well as police on the same day and necessary interventions were made. In the complainant‟s report to the District Fire Officer on 25.03.2014, the Complainant had stated that because of fire 2000 quintals of cotton was burnt causing loss of about Rs.95,00,000. Careful consideration of the contentions made by both the parties as well as perusal of records reveals that in the entire matter, the business of the Complainant, the policy obtained, the terms of policy, the validity of the policy, the fire incident that had occasioned at the insured premises on 18.03.2014 at about 03:05 PM, reporting of the incident of fire by the Complainant to the Fire Department, Police as well as the OP, appointment of Surveyor Ch. Abshaloam, visit by the surveyor and filing of the surveyor report on 14.09.2015 and the offer of OP to settle the claim of the complainant on signing of the Discharge Voucher on 27.02.2017 for Rs.16,71,924 are not in dispute. The Complainant alleged that despite occurrence of a peril covered under the policy in question, the OP failed to indemnify the loss suffered by the complainant in a fair and timely manner. On the other hand, the OP contended that the claim was duly assessed by a licensed surveyor and a lawful settlement was offered.

15. Before adverting to the merits, we deem it appropriate to deal with the preliminary objection raised by the OP regarding maintainability of the complaint. The OP contended that the insurance was obtained for commercial purposes and, therefore, the Complainant does not fall within the definition of "consumer" under the Consumer Protection Act, 1986. We find no merit in the said objection. It is settled law that an insurance policy is a contract of indemnity and the insured, even if engaged in commercial activity, would fall within the ambit of "consumer" insofar as the services of the insurer are concerned. The present dispute pertains to non-settlement of an insurance claim. Hence, the complaint is maintainable before this Commission.

16. The main issues in dispute are in narrow compass. It is an admitted position that the insurance policies in question were duly issued and were valid and subsisting at the time of the fire incident occasioned on 18.03.2014. The occurrence of fire is also admitted. The Complainant informed the Fire Dept immediately and was attended to forthwith. They also filed police complaint as well as notified the insurer and the Electricity Department. The surveyor appointed by the OP visited the premises immediately on the same day and determined that the source of the incident of fire to be sparks from wires of the water motor used to spray on the raw material. The Fire Service Attendance Certificate dated 08.08.2014 and Report of Deputy Electrical Inspector dated 17.07.2014 revealed the same. Thus, there is no dispute as regards the cause of fire and its coverage under the policy. Therefore, the loss due to fire on 18.03.2014 is undisputedly within the scope of cover under the Policies issued by the OP. The complainant‟s main grievances are substantial delay in filing the surveyor report, finalisation of the claim by the OP as well as gross undervaluation of the claim.

17. It is a matter of record that the incident occurred on 18.03.2014, the Complainant notified the OP immediately after the incident and the OP had appointed Shri Ch Abshaloam, Insurance Surveyor & Loss Assessor as surveyor. He visited the site on the same day as well as subsequently and filed the surveyor report on 19.09.2015. In the report, the surveyor determined the liability of Opposite Party insurer towards the fire incident under the policy as Rs.20,77,878. Thereafter, the OP insurer offered the Complainant the claim settlement for Rs.16,71,924, along with Discharge Voucher after over 2 years and 11 months on 27.02.2017. The Complainant declined to execute the Discharge Voucher, and the claim was not paid. Perusal of the surveyor report dated 14.09.2015 reveals that the fire incident and the consequent damage of the insured stocks of the Complainant occasioned on 18.03.2014. The main dispute is with respect to the delay and quantification of loss determined by the surveyor in the report.

18. as regards delay in filing the surveyor report, it is the contention of the surveyor as well as the OP that the surveyor had issued multiple communications to the Complainant vide letters dated 28.03.2014, 12.04.2014, 07.08.2014, 27.10.2014, 28.06.2015 and 12.09.2015, calling upon the Complainant to furnish supporting documents necessary for assessment of the claim. The OP contended that the Complainant, vide letter dated 28.06.2015, admitted that there was delay in submission of documents and undertook to furnish the same. Even thereafter, certain essential documents were not submitted, as evident from the surveyor‟s letter dated 12.09.2015, whereby the Complainant was again called upon to submit original documents including the Fire Brigade Certificate, Electrical Inspection Report, attested copy of FIR and final police investigation report and alleged lack of promptness on the part of the Complainant in furnishing necessary documents, which contributed to the delay in completion and submission of the surveyor report. These letters reveal that the records/ details mainly sought by the surveyor are:-

                          A. Policy Copy/copies B. Claim form duly completed and signed C. Fire Certificate from fire brigade D. Police Report/F.I.R. Copy E. If any Photos taken by you during the occurrence. F. Electrical service Bill and Occurrence Certificate from Electricity Department G. Premises / Building Lease Document and site plan. H. Partnership Deed, if any/ and fixed assets registrar fixed asset schedule.

                          I. APGST, CST & VAT Registration Certificate copies J. News Paper cuttings if any K. Written Statement of occurrence/cause of loss. L. Stock Statement as on date of loss.

                          M. Estimated cost of Loss, approximate salvage value and Salvage Expenses.

                          N. Purchase Invoice and Sale Bills, AMC and supporting bills and APCOT Newsletter.

                          O. Income Tax Returns up to February 2014.

                          P. Trading account, Final account, stock position rough diagram at the time of loss.

19. Perusal of the details of the records/documents demanded by surveyor reveals that the documents such as insurance policy between the parties which ought to have held him. In any case, in the absence of valid policy, the claim was to have been closed by the surveyor and OP. Further, the claim in the matter was already filed. The stock statements including the statement given to the Station Fire Officer on 18.03.2014, the Kappas Item Register, General Vouchers, Certificate from the Fire Department dated 08.08.2014, Certificate from Electricity Dept dated 17.07.2014 were provided. It is also noticed that the surveyor sought photographs of the incident which are part of the record, while it was incumbent upon the surveyor himself to collect evidence including photos when he visited the site on the same day when the fire incident happened. Therefore, the purpose of repeated insistence for these documents of records and thus delaying the surveyor report is unclear. The Complainant provided estimated loss on the same day and filed the claim form on 17.07.2015. While, the Complainant disputed not providing of requisite documents to the surveyor, even for the sake of argument, if these documents such as electrical service bill and occurrence certificate from Electricity Dept, lease document. Site-plan, partnership deed, fixed assets register/ schedule, newspapers cuttings if any, Income Tax returns up to Feb 2014 etc. have not been provided by the complainant, these are of limited consequence, when once the validity of the policy, occurrence of fire during such validity and the quantification of stocks are undisputed. On the other hand, if the records are not provided, the surveyor was also at liberty to conclude the report as no claim, which was not done. Thus, the significant delay on the part of the surveyor in submitting the report by over one year and three months is a matter of record. Even thereafter, the OP offered to settle the claim on 27.02.2017 i.e. after lapse of about two years and eleven months.

20. As regards claim determination, which is the core issue in the complaint, it is seen from the surveyor report that the surveyor had visited the premises and ascertained the cause of fire as sparking from the Electrical Motor Pump used to spray water on the stocks to create requisite moisture in the Kappas. Kappas are essentially raw cotton flowers procured from cotton farmers, which are processed by ginning at the Complainant‟s site to produce associated products.

21. The surveyor report reveals that there was significant loss due to the fire accident at the premises of the Complainant on 18.03.2014. On his visit he advised for segregation of the raw material of Kappas and the segregation was done. The surveyor observed that there were fire marks on the adjoining walls and roof at the site and the fire flames travelled peripherally over the pressed heaps as well as the loose heaps. The magnitude of fire, impact and poring of water to extinguish fire which varied from heap to heap indicated different degrees of damage concentration at the premises. The surveyor determined the cause of fire as electrical spark from water pump motor cables resulting in the stock of cotton Kappas which were heaped in the vicinity catching fire and the fire spread. As regards stocks held by the Complainant as on the date of fire, the surveyor determined that there are four types of items located at the premises viz. Kappas, Lint, Seeds and Packing Materials as follows:

                          A. Kappas. The surveyor considered that of the entire stock held by the Complainant, 490.10 Quintals, was unaffected by the fire due to its location within the premises. However, the stock of 3251 Quintals of Kappas was affected due to fire and water. Thus, while the stock held was 3741 Quintals, affected was 3251 Quintals and 490 Quintals was unaffected. The stocks were adequately insured.

                          Thus, as per survey report 3251 Quintals affected due to fire and water on 18.03.2014 was valued as Rs.1,77,62,68.

                          B. Lint. Stock of 94.18 Quintals held as pressed bales were safe. C.Seeds. Stock amounting to 772.45 Quintals were found safe. D.Packing material. Packing material amounting to 385 boras/ gunny bags, 127.45 meters of cloth and 230 plastic tie belts were also found safe.

22. The surveyor determined the value of the stocks of Kappas as well as Lint, Seeds and Packing Material held by the Complainant at the insured site as Rs.2,00,93,273. Thereafter the surveyor recorded that the complainant had informed him that about 2000 Quintals of Kappas were affected and, therefore, limited the loss only to consideration of what the complainant is stated to have informed the Surveyor. Other than what the initial report the Complainant made on the same day of fire to the Fire Department, there is no correspondence between the parties in this regard. Further, it is the surveyor who himself inspected the premises, determined the scope of the policy, damage, insurable interest of the Complainant, determined the quantities affected due to fire. The surveyor report itself reveals that as per the stock records, the affected stock of Kappas due to fire and water after segregation was 3251 Quintals and that the said quantity of Kappas as well as Lint, Cotton Seeds and Packing Material amounted to Rs.2,00,93,273.

23. It is the specific contention of the Complainant, which was disputed by the Opposite Party, that the stocks which were held as on the date of incident on 18.03.2014, on segregation of the stocks as advised, the Complainant immediately disposed of the salable stocks of 1145.80 Quintals of Seeds amounting to Rs.16,87,019 and 562.72 Quintals of Lint for Rs.50,77,553. Since the surveyor considered absence of any damage to Lint and Seeds stocks, this sale was of limited consequence, but for sale of 237.60 Quintals (Fire affected) Lint @ Rs.5122.34, at significant loss.

24. The report of the surveyor further reveals that the surveyor determined the quantity of Kappas at the site as 2005 Quintals and segregated the stocks into six parts, based on the damage suffered.

                          A. After segregation, the measured loose stock in open is 50'x42'x6' which was safe/sound (random weight meet 4.5Kg. Kappas occupy 1 cubic feet area, per quintal/100 Kgs,). So, the sound stock in open area is 50'x42'x6'x4.5 kg., divided by 100=576 Quintals found unaffected/good condition there is no change of Colour and quality and useful for normal course of business.

                          B. Under roof loose stock undamaged/sound measured as 30'x13'x 3'x4.5kg. divided by 100=52.65 Say 53 Qtls found unaffected/ good condition there is no change of Colour and quality and useful for normal course of business.

                          C. South side under roof there are two heaps. After picking the damaged and wet stock from Mandi's the dimensions measured value metric found unaffected/good condition there is no change of Colour and quality and useful for normal course of business a. South heap No.1 is 44'x25'x8'x4.5 Kg., divided by 100 = 396 Qtls, were found unaffected/good condition there is no change of Colour and quality and useful for normal course of business. b. South heap No.2 measured is 33'x32'x8'x4.5 Kg., divided by 100= 380 Qtls were found unaffected/good condition there is no change of colour, quality and useful for normal course of business

                          D. North side under the roof there is 2 heaps of Kappas mandi's. After picking the partial damaged stock from the mandi the mandi measurements and volumetric value is 35'x25'x 8'x 4.5 Kg., divided by 100=315 Qtls, were found unaffected/good condition there is no change of Colour, quality and useful for normal course of business. E. After Segregation North Side under the roof the other heap having 34'x24'x8'x4.5 Kg divide by 100=294 Qts were found unaffected/ good condition there is no change of Colour and quality and useful for normal course of business.

                          F. The stock damaged by fire and water kept in a heap the volumetric weight of these is 5 Kgs., per cubic feet 26' x 22'x 6' x 5 Kg., divided by 100 =171 Qtls., were found unaffected/good condition there is no change of Colour and quality and useful for normal course of business,

25. Admittedly, therefore, the total stocks held as on the date of fire accident on 18.03.2014, included 3,741.30 Quintals of cotton Kappas. Of these, the surveyor considered 490 Quintals as unaffected by fire and water and the balance of 3251 Quintals was affected due to fire and water. The surveyor, however, intriguingly considered that, of the lot of 3251 Quintals of Cotton Kappas admittedly affected by fire and water, 2000 Quintals were segregated as affected but „sound stock‟ as there is no change of colure and quality due to the impact of fire. The surveyor determined that of the balance 1246 Quintals (3741-490- 2000), another 262 Quintals of Kappas was liable to be deducted due to difference in quantum of waybill and ledger. The surveyor considered that of the 3251 Quintals of Kappas affected, only 984 Quintals as partially damaged due to fire and water. Further, of these 984 Quintals so determined as partially damaged due to fire and water, the surveyor further divided 984 Quintals by segregating it into six groups ranging from depreciation of the value from 40% to 80% and considered the loss with respect to limited quantity of 984 Quintals to the extent of depreciated value and determined the liability of the OP insurer as Rs.20,77,878. Thus, out of the admittedly fire affected stock of 3251 Quintals of Cotton Kappas as well as Lint, Cotton Seeds and Packing Material amounted to Rs.2,00,93,273, the surveyor determined the liability of the OP under the policy as Rs.20,77,878.

26. It is a matter of record that the incident occurred on 18.03.2014 and the Complainant notified the OP immediately and the OP appointed Shri Ch Abshaloam, Insurance Surveyor & Loss Assessor, who visited the site on the same day. He filed the report on 19.09.2015 determining the liability of OP as Rs.20,77,878. The surveyor cited delay in providing records by Complainant as the reason for such unreasonable delay. The report itself indicates that the surveyor duly determined the stocks held as 490 Quintals (unaffected) and 3251 Quintals as (affected by fire and water), total 3741 Quintals. Therefore, there was no dispute with respect to shortfall in providing stock records, including invoices, tax details, bank statements etc. In any case, if there was delay on the part of the Complainant to provide essential details, the surveyor was at liberty to file his closure report, which was not done. The OP, thereafter, offered the claim settlement for Rs.16,71,924, along with Discharge Voucher after over 2 years and 11 months on 27.02.2017. Thus, while the surveyor took 1 year and 6 months to file his report, OP took another 1 year and 5 months to offer settlement, with Discharge Voucher. The directives of IRDA in this regard mandate filing of survey report and settlement of claims in 3 months and 1 month. The action of OP in grossly delaying the report and settlement of the claim are violative of the terms of contract and constitute deficiency in service.

27. It is the specific contention of the Complainant that, after the fire accident on 18.03.2014, as advised by the surveyor, the Complainant had sold 1145.8 Quintals of Seeds for Rs.16,87,019 and 562.71 Quintals of Lint for 50,77,553 as salvage. In any case, no loss has been determined by the surveyor towards the insured stocks of Lint, Seeds and Packing Material. Therefore, the damage in question is liable to be determined towards insured stocks in the form of Kappas.

28. Careful examination of the surveyor report reveals that, after the fire accident on 18.03.2014, of the total stocks of Kappas of 3741 Quintals held by the Complainant, 490 Quintals (unaffected) and 3251 Quintals as (affected by fire and water). The surveyor valued the stock of @ Rs.4748 per Quintal and valued the total stock of 3741 Quintals of Kappas as Rs.1,77,62,268. However, the surveyor intriguingly limited the damage to 1246 Quintals of Kappas due to fire and water, even when admittedly the entire stock was affected, and further deducted 262 Quintals of Kappas citing difference in the waybill and ledger. The approach of the OP is questionable since the availability of a total of 3741 Quintals of Kappas at the site was established with records and admitted by the surveyor. Therefore, while the stock records otherwise established the presence of 3741 Quintals of Kappas, it was considered that there was some ambiguity with respect to 262 Quintals of Kappas due to difference in the waybill and ledger.

29. Even if it is considered that there was certain ambiguity in with respect to obligations and liabilities pertaining to insurance contracts, the Hon‟ble Supreme Court in Mahakali Sujatha vs. The Branch Manager, Future Generali India Life Insurance Company Ltd. & Anr., Civil Appeal No.3821 of 2024, decided on 10.04.2024 has held ―40. Insofar as the Query 6.1 is concerned, it is noted that the same is not clear and it is not known in what context the details of the insured were sought with regard to any existing life insurance policy. On a reading of Query 6.1 holistically, it is also not clear regarding the nature of information that was sought by the respondent insurance company as discussed above. The answer given by the insured to the Query 6.1 was thus in the negative. In this backdrop, can it be said that there was a suppression of material fact by the insured in the proposal form. In this context, it is necessary to place reliance on the contra proferentem rule. This Court in the case of Manmohan Nanda, discussed the rule of contra proferentem as under:

                          ―45. The contra proferentem rule has an ancient genesis. When words are to be construed, resulting in two alternative interpretations then, the interpretation which is against the person using or drafting the words or expressions which have given rise to the difficulty in construction, applies. This rule is often invoked while interpreting standard form contracts. Such contracts heavily comprise of forms with printed terms which are invariably used for the same kind of contracts. Also, such contracts are harshly worded against individuals and not read and understood most often, resulting in grave legal implications. When such standard form contracts ordinarily contain exception clauses, they are invariably construed contra proferentem rule against the person who has drafted the same.

                          46. Some of the judgments which have considered the contra proferentem rule are referred to as under:

                          46.1. In General Assurance Society Ltd. v. Chandumull Jain, AIR 1966 SC 1644, it was held that where there is an ambiguity in the contract of insurance or doubt, it has to be construed contra proferentem against the insurance company.

                          46.2. In DDA v. Durga Chand Kaushish, AIR 1973 SC 2609, it was observed:

                          ―In construing document one must have regard, not to the presumed intention of the parties, but to the meaning of the words they have used. If two interpretations of the document are possible, the one which would give effect and meaning to all its parts should be adopted and for the purpose, the words creating uncertainty in the document can be ignored.‖ 46.3. Further, in Central Bank of India Ltd. v. Hartford Fire Insurance Co. Ltd., AIR 1965 SC 1288, it was held:

                          ―11. ... what is called the contra proferentem rule should be applied and as the policy was in a standard form contract prepared by the insurer alone, it should be interpreted in a way that would be favourable to the assured.‖ 46.4. In Sahebzada Mohammad Kamgarh Shah v. Jagdish Chandra Deo Dhabal Deb, AIR 1960 SC 953, it was observed that where there is an ambiguity it is the duty of the court to look at all the parts of the document to ascertain what was really intended by the parties. But even here the rule has to be borne in mind that the document being the grantor's document it has to be interpreted strictly against him and in favour of the grantee.

                          46.5. In United India Insurance Co. Ltd. v. Orient Treasures (P) Ltd., (2016) 3 SCC 49 , this Court quoted Halsbury's Laws of England (5th Edn. Vol. 60, Para 105) on the contra proferentem rule as under:

                          ―37. ... Contra proferentem rule.--Where there is ambiguity in the policy the court will apply the contra proferentem rule. Where a policy is produced by the insurers, it is their business to see that precision and clarity are attained and, if they fail to do so, the ambiguity will be resolved by adopting the construction favourable to the insured. Similarly, as regards language which emanates from the insured, such as the language used in answer to questions in the proposal or in a slip, a construction favourable to the insurers will prevail if the insured has created any ambiguity. This rule, however, only becomes operative where the words are truly ambiguous; it is a rule for resolving ambiguity and it cannot be invoked with a view to creating a doubt. Therefore, where the words used are free from ambiguity in the sense that, fairly and reasonably construed, they admit of only one meaning, the rule has no application.‖ 46.6. The learned counsel for the appellant have relied upon Sushilaben Indravadan Gandhi v. New India Assurance Co. Ltd., (2021) 7 SCC 151, wherein it was observed that any exemption of liability clause in an insurance contract must be construed, in case of ambiguity, contra proferentem against the insurer. In the said case reliance was placed on Export Credit Guarantee Corpn.(India) Ltd v. Garg Sons International, (2014) 1 SCC 686, wherein this Court held as under :

                          ―39. ... 11. The insured cannot claim anything more than what is covered by the insurance policy. ―The terms of the contract have to be construed strictly, without altering the nature of the contract as the same may affect the interests of the parties adversely.‖ The clauses of an insurance policy have to be read as they are. Consequently, the terms of the insurance policy, that fix the responsibility of the Insurance Company must also be read strictly. The contract must be read as a whole and every attempt should be made to harmonise the terms thereof, keeping in mind that the rule of contra proferentem does not apply in case of commercial contract, for the reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.‖ Having regard to the aforesaid discussion on contra proferentem rule, it is noted that the Queries 6.1 and 6.2 are not clear in themselves as we have discussed the same above. Therefore, the answer given by the deceased cannot be taken in a manner so as to negate the benefit of the policy by repudiation of the same on the demise of the insured.

                          41. At this stage, we may also dilate on the aspect of burden of proof. Though the proceedings before the Consumer Fora are in the nature of a summary proceeding. Yet the elementary principles of burden of proof and onus of proof would apply.

                          This is relevant for the reason that no corroborative evidence to what has been deposed in the affidavit is let in by the insurance company in order to establish a valid repudiation of the claim in the instant case. Section 101 of the Evidence Act, 1872 states that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. This Section clearly states that the burden of proving a fact rests on the party who substantially asserts the affirmative of the issue and not upon the party who denies it; for a negative is usually incapable of proof. Simply put, it is easier to prove an affirmative than a negative. In other words, the burden of proving a fact always lies upon the person who asserts the same. Until such burden is discharged, the other party is not required to be called upon to prove his case. The court has to examine as to whether the person upon whom burden lies has been able to discharge his burden. Further, things which are admitted need not be proved. Whether the burden of proof has been discharged by a party to the lis or not would depend upon the facts and circumstances of the case. The party on whom the burden lies has to stand on his own and he cannot take advantage of the weakness or omissions of the opposite party. Thus, the burden of proving a claim or defence is on the party who asserts it.

                          42. Section 102 of the Evidence Act, 1872 provides a test regarding on whom the burden of proof would lie, namely, that the burden lies on the person who would fail if no evidence were given on either side. Whenever the law places a burden of proof upon a party, a presumption operates against it. Hence, burden of proof and presumptions have to be considered together. There are however exceptions to the general rule as to the burden of proof as enunciated in Sections 101 and 102 of the Evidence Act, 1872, i.e. in the context of the burden of adducing evidence: (i) when a rebuttable presumption of law exists in favour of a party, the onus is on the other side to rebut it; (ii) when any fact is especially within the knowledge of any person, the burden of proving it is on him (Section 106). In some cases, the burden of proof is cast by statute on particular parties (Sections 103 & 105).

                          43. There is an essential distinction between burden of proof and onus of proof; burden of proof lies upon a person who has to prove the fact and which never shifts but onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. For instance, in a suit for possession based on the title, once the plaintiff has been able to create a high degree of probability so as to shift the onus on the defendant, it is for the defendant to discharge his onus and in the absence thereof, the burden of proof lying on the plaintiff shall be held to have been discharged so as to amount to proof of the plaintiff's title vide RVE Venkatachala Gounder vs. Arulmigu Viswesaraswami and VP Temple, (2003) 8 SCC 752.

                          44. In a claim against the insurance company for compensation, where the appellants in the said case had discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy, it was for the insurance company to disprove such claim with evidence, if any, vide Shobika Attire vs. New India Assurance Co. Ltd., (2006) 8 SCC 35.

                          45. Section 103 of the Evidence Act, 1872 states that the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. This Section enlarges the scope of the general rule in Section 101 that the burden of proof lies on the person who asserts the affirmative of the issue. Further, Section 104 of the said Act states that the burden of proving any fact necessary to be proved in order to enable any person to give evidence of any other fact is on the person who wishes to give such evidence. The import of this Section is that the person who is legally entitled to give evidence has the burden to render such evidence. In other words, it is incumbent on each party to discharge the burden of proof, which rests upon him. In the context of insurance contracts, the burden is on the insurer to prove the allegation of non-disclosure of a material fact and that the non-disclosure was fraudulent. Thus, the burden of proving the fact, which excludes the liability of the insurer to pay compensation, lies on the insurer alone and no one else.

                          46. Section 106 of the Evidence Act, 1872 states that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. This Section applies only to parties to the suit or proceeding. It cannot apply when the fact is such as to be capable of being known also by persons other than the parties. (Source: Sarkar, Law of Evidence, 20th Edition, Volume-2, LexisNexis)

                          47. In light of the aforesaid discussion on burden of proof, it has to be analysed if the respondent in the present case has adequately discharged his burden of proof about the fact of suppression of previous life insurance policies of the insured.

                          48. The respondent insurance company has produced no documentary evidence whatsoever before the District Forum to prove its allegation that the insured had taken multiple insurance policies from different companies and had suppressed the same. The District Forum had therefore concluded that there was no documentary evidence to show that the deceased-life insured had taken various insurance policies except an averment and on that basis the repudiation was held to be wrong. Before the State Commission, the respondent had provided a tabulation of the 15 different policies taken by the insured-deceased, amounting to Rs.71,27,702/-. The same has been extracted above. However, the said tabulation was not supported by any other documentary evidence, like the policy documents of these other policies, or pleadings in courts, or such other corroborative evidence. The respondent sought to mark a bunch of documents before the State Commission, which related to the policy papers of the insured with another insurer, i.e., Kotak Life Insurance. However, the respondent was not granted permission by the State Commission, as the said documents were neither original, nor certified, nor authenticated. Apart from this, there was no effort made by the respondent to bring any authenticated material on record. Thus, in the absence of any evidence to prove that the insured-deceased possessed some insurance policies from other insurance companies, the State Commission upheld the decision of the District Forum in setting aside the repudiation of the claim by the respondent.

                          49. Before the NCDRC, the respondent again provided the aforesaid tabulation of policies of the insured-deceased. The respondents in their affidavit stated that the insured-deceased had taken multiple insurance policies before taking the policy from them. The NCDRC however accepted the averment of the respondents, without demanding corroborative documentary evidence in support of the said fact. The NCDRC, on the contrary, also held that the fact about multiple policies was not dealt with by the appellant in her complaint or evidence affidavit and this therefore proved that the insured had indeed taken the policies from multiple companies as claimed by the respondents.

                          50. The aforesaid approach adopted by the NCDRC is, in our view, not correct. The cardinal principle of burden of proof in the law of evidence is that ―he who asserts must prove‖, which means that if the respondents herein had asserted that the insured had already taken fifteen more policies, then it was incumbent on them to prove this fact by leading necessary evidence. The onus cannot be shifted on the appellant to deal with issues that have merely been alleged by the respondents, without producing any evidence to support that allegation. The respondents have merely provided a tabulation of information about the other policies held by the insured-deceased. The said tabulation also has missing information with respect to policy numbers and issuing dates and bears different dates of births. Further, this information hasn't been supported with any other documents to prove the averment in accordance with law. No officer of any other insurance company was examined to corroborate the table of policies said to have been taken by the deceased policy holder, father of the appellant herein. Moreover, the table produced is incomplete and contradictory as far as the date of birth of the insured is concerned. Therefore, in our view, the NCDRC could not have relied upon the said tabulation and put the onus on the appellant to deal with that issue in her complaint and thereby considered the said averment as proved or proceeded to prove the stance of the opposite party. A fact has to be duly proved as per the Evidence Act, 1872 and the burden to prove a fact rests upon the person asserting such a fact. Without adequate evidence to prove the fact of previous policies, it was incorrect to expect the appellant to deal with the said fact herself in the complaint or the evidence affidavit, since as per the appellant, there did not exist any previous policy and thus, the onus couldn't have been put on the appellant to prove what was non-existent according to the appellant.

                          51. The respondents, vide their counter affidavit before this court, have sought to produce some documents to substantiate their claim of other existing insurance policies of the insured/deceased, but the same cannot be permitted to be exhibited at this stage, that too, in an appeal filed by the complainant who is the beneficiary under the policies in question. Any documentary evidence sought to be relied upon by the respondent ought to have been led before the District Forum but the same was not done. It was before the District Forum that the evidence was led and examined and at that stage, the respondent did not take adequate steps to lead any oral or documentary evidence to prove their assertion. Their attempt to annex documents in support of their claim before the State Commission was also declined due to the presentation of unauthenticated documents. Therefore, it can be safely concluded that the respondents have failed to adequately prove the fact that the insured-deceased had fraudulently suppressed the information about the existing policies with other insurance companies while entering into the insurance contracts with the respondents herein in the present case. Therefore, the repudiation of the policy was without any basis or justification.

                          52. Moreover, we have also held on the facts of this case having regard to the nature of queries in Query Nos.6.1 and 6.2, there was no suppression of any material fact as per our earlier discussion based on the contra proferentem rule.

                          53. In light of the above discussion, the impugned order dated 22.07.2019 passed by the NCDRC in Revision Petition No.1268 of 2019 is set aside. The respondent company is directed to make the payment of the insurance claim under both the policies to the appellant, amounting to Rs. 7,50,000/- and Rs. 9,60,000/-, with interest at the rate of 7% per annum from the date of filing the complaint, till the actual realisation.

                          54. The appeal stands allowed in the aforesaid terms.‖

30. It is clear from the above cited judgment of the Hon‟ble Supreme Court in Mahakali Sujatha (Supra) that any ambiguity in the proposal form or policy documents must be interpreted contra proferentem, i.e., in favour of the insured. The burden of proving non-disclosure or misrepresentation of material facts lies on the insurer.

31. In the present case, therefore, even if there was some ambiguity in determination of stocks, with due regard to magnitude of damage and the method of volumetric approximation made by the surveyor, the benefit of doubt ought to have been given to the insured.

32. Cotton Kappas are raw cotton flowers procured from the cotton farmers. These are ginned in the Mill to produce Cotton, Lint, Cotton seeds etc. When exposed to the magnitude of the fire as in the present case, the damage to cotton and associated material in open is obvious and its commercial value also stands significantly diminished, including seed production. Other than immediate sale of salable stocks by the Complainant from 18.03.2014 to 23.03.2014, there is nothing on record to indicate whether these stocks were in fact disposed of as salvage and, if so, what consideration was received. Clearly, such cotton material which is impacted by fire and water could not have had such high value as determined by the surveyor.

33. It is seen from the records, including photographs that are brought on record that the fire damage is significant. At page-6 of the survey report, the surveyor recorded that the unaffected stock was 490.10 Quintals and affected stock was 3251 Quintals. As regards the method of overall damage assessment adopted by the surveyor, it is matter of common knowledge that cotton catches fire very fast and rapidly spreads. The inherent risk of insuring material such as Cotton, Lint and associated products has already been assessed by the OP, and the insurance premium liability of the Complainant was determined and was accordingly paid by the Complainant. After due evaluation of the insurance risk with respect to such inflammable material, collection of the premium due and entering into insurance coverage contract, on the fire accident taking place and the accident is admitted to be within the scope of the policy, the surveyor/OP adopted ultra conservative method in determining the damage and the liability of the OP by significantly limiting the quantity of affected stocks by unreasonable categorization as well as further classifying the already damaged the Kappas as partial damage to the extent of 40%, 50%, 75% and 80%. Such action by the OP is highly untenable and verges to unfair trade practice being inherently violative of commercial appreciation.

34. Hon‟ble Supreme Court in the case of New India Assurance Co. Ltd. v. Pradeep Kumar, (2009) 7 SCC 787, decided on 09.04.2009, held that :-

                          ―15. The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is Rs.20,000/- or more, the loss must first be assessed by an approved surveyor ( or loss assessor) before it is admitted for payment or settlement by the insurer. Proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor). In other words 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.‖

35. In Sri Venkateshwara Syndicate v. Oriental Insurance Company Limited, (2009) 8 SCC 507, decided on 24.8.2009, the Hon‟ble Supreme Court observed that:

                          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. ...‖

36. As regards assessment of damage in the fire incident on 18.03.2014 it is an admitted position by the OP that the net stock held by the insured Complainant as on 18.03.2014 was 3741 Quintals of cotton Kappas valued @ Rs.4748 per Quintal totaling Rs.1,77,62,268; 94.18 Quintals of Lint valued @ Rs.11,797 totaling Rs.11,11,041; 772.45 Quintals of Seeds valued @ Rs.1500.totalling Rs.11,58,675; and Packing material valued as Rs.61,289. Thus, the total insured stocks held by the Complainant as on 18.03.2014 was Rs.2,00,93,273. The Complainant contended that after the fire incident, the Complainant had disposed of 237.60 Quintals of Fire affected Lint @ Rs.5,122 and sustained loss. The surveyor considered that the stocks of Lint, Seeds and Packing material sustained no damage and it was only cotton Kappas that sustained damage. Notwithstanding the contention of the Complainant with respect to the loss due to damaged Lint, admittedly there was 3741 Quintals of cotton Kappas valued @ Rs.4748 per Quintal totaling Rs.1,77,62,268 present at the site. The surveyor at page-6 of the survey report recorded that the unaffected stock was 490.10 Quintals and affected stock was 3251 Quintals. Therefore, the affected stock of Cotton Kappas is 3251 Quintals valued @ Rs.4748 per Quintal amounting to Rs.1,54,35,748. It is seen from the records, including photographs that are placed on record, that the damage is significant. As regards the method of overall damage assessment adopted by the surveyor, it is matter of common knowledge that cotton catches fire very fast and rapidly spreads. The inherent risk of insuring stocks such as Cotton, Lint, etc. has already been assessed by the OP, and the insurance premium liability was determined and was paid. After due evaluation of the insurance risk with respect to the material in question, collection of the premium due and entering into insurance coverage contract, on the fire accident taking place and the accident is admitted to be within the scope of the policy, the surveyor/OP adopted ultra conservative method in determining the damage and the liability of the OP by significantly limiting the quantity of affected stocks and further classifying the already damaged Kappas as partial damage to the extent of 40%, 50%, 75% and 80% and limited the net assessed loss as Rs.20,77,878, as against the total stocks held amounting to Rs.2,00,93,273 and affected stocks amounting to Rs.1,54,35,748 which is highly unreasonable and verges to unfair trade practice.

37. The surveyor report also reveals that for the year 2013-14 the stock of Kappas purchased by the Complainant was 23,081.30 Quintals; Lint processed was 6382 Quintals; and Seeds produced was 12787 Quintals. Thus, the Complainant firm was a large entity, and the transactions were in large volumes and thus damage due to fire and water on the on Cotton and Lint would have its adverse impact on the commercial value of the insured goods. Considering the inherent nature, the stocks such as Cotton Kappas, Lint, Seeds etc which are highly susceptible for damage due to fire and water suffered significant and reduction in commercial value.

38. The surveyor determined that 3741 Quintals of Kappas valued @ Rs.4748 per Quintal totaling Rs.1,77,62,268 was at the site on 18.03.2014. He recorded that the unaffected stock was 490.10 Quintals and affected stock was 3251 Quintals amounting to Rs.1,54,35,748 and determined the damage as Rs.20,77,878, which is unsustainable as deliberated above. Therefore, while the stock that was impacted due to fire and water was valued at Rs.1,54,35,748, the Complainant had initially filed the report with Fire Department as the loss due to fire was Rs.95,00,000 for about 2000 Quintals. Thereafter, in the absence of OP settling the claim, a legal notice was also issued 11.09.2015 citing the same. The Complainant filed the claim under the policy with the OP for Rs.1.07.45.956. It is admitted position of OP that the stock of Kappas amounting to 3251 Quintals was affected due to fire and water and its value was determined as Rs.1,54,35,748. However, the Complainant‟s claim was limited to 2263.26 Quintals amounting to Rs.1,07,35,748. Clearly, the damage suffered due to fire and water by the stocks such as Cottom Kappas and the loss of its commercial value is significant. At the same time, while the surveyor determined the fire affected stock as 3251 Quintals and its value was determined as Rs.1,54,35,748, the claim the Complainant made was limited to 2263.26 Quintals for Rs.1,07,35,748. Therefore, while the ultraconservative determination of loss by the surveyor deserves to be rejected, the limited claim made by the Complainant restricting the claim to 2263.26 Quintals amounting to Rs.1,07,35,748 deserves consideration. At the same time, further, while the claim of the Complainant is significantly less than the affected stocks as determined by the surveyor, considering the immediate information provided to the Fire Department as well as the legal notice stating the loss suffered to be to the extent of Rs.95,00,000, the claim of Rs. Rs,1,07,35,748 needs further scrutiny.

39. The Hon‟ble Supreme Court in Ashok Kumar v. New India Assurance Co. Ltd., 2023 LiveLaw (SC) 587, while addressing the scope for considering deviations in insurance contracts, entitled the complainant to 75% of the admissible claim though there was a lapse in providing certain documents to the surveyor and some contradictions in the statements made by the complainant‟s staff regarding the incident of fire, such discrepancies, by themselves, did not constitute a fundamental breach of the insurance policy:

                          ―14) It is well settled in a long line of judgments of this Court that any violation of the condition should be in the nature of a fundamental breach so as to deny the claimant any amount. [see Manjeet Singh vs. National Insurance Company Limited and Another, [(2018) 2 SCC 108]; B.V. Nagaraju vs. Oriental Insurance Co. Ltd., Divisional Officer, Hassan, [(1996) 4 SCC 647], National Insurance Co. Ltd. Vs. Swaran Singh and Others, [(2004) 3 SCC 297] and Lakhmi Chand vs. Reliance General Insurance, [(2016) 3 SCC 100] ]

                          15) It is an admitted position in the Repudiation Letter and the Survey Report that the theft did happen. What is alleged is that the Claimant was negligent in leaving the vehicle unattended with the key in the ignition. Theft is defined in Section 378 of the IPC as follows:-

                          ―378. Theft.--Whoever, intending to take dishonestly any moveable property out of the possession of any person without that person's consent, moves that property in order to such taking, is said to commit theft.‖ As will be seen from the definition, theft occurs when any person intended to take dishonestly any moveable property out of the possession of any person without that person's consent, moves that property in order to such taking. It is not the case of the Insurance Company that the Claimant consented or connived in the removal of the vehicle, in which event that would not be theft, in the eye of law. Could it be said, as is said in the repudiation letter, that the theft of the vehicle was totally the result of driver Mam Chand leaving the vehicle unattended with the key in the ignition? On the facts of this case, the answer has to be in the negative. It is noticed in the repudiation letter that the driver Mam Chand had, after alighting from the vehicle, gone to enquire about the location of Mittal's Farm and that after he went some distance, he heard the sound of the starting of the vehicle and it being stolen away. The time gap between the driver alighting from the vehicle and noticing the theft, is very short as is clear from the facts of the case. It cannot be said, in such circumstances, that leaving the key of the vehicle in the ignition was an open invitation to steal the vehicle.

                          16) The Court of Appeal in England, in the case of David Topp vs. London Country Bus (South West) Limited, [1993] EWCA Civ 15 had occasion to consider the issue, though in the context of liability of the owner of the vehicle for a fatal accident. The facts as set out in the judgment are as follows:-

                          ―In accordance with usual practice, the driver, Mr. Green, left the bus in that lay-by at the bus stop at about 2.35 p.m. on 24th April 1988. He left it unlocked, with the ignition key in it. He had then a 40 minute rest period before resuming his duties, driving a different bus. There was an arrangement under which the drivers could spend their rest period in the hospital. 23 The expectation was that another driver, about eight minutes after Mr. Green had left the bus in the lay-by, would pick the bus up and drive the same route. But the other driver, who should have picked the bus up at about 2.43 p.m., did not do so because he was feeling unwell. His shift would have been non-compulsory overtime, and he did not report for his overtime. The bus therefore remained in the lay-by. Mr. Green saw it there later and reported that it was still standing there. Therefore, there is no doubt that the depot knew that the bus was there. But, possibly because of shortage of drivers or available staff, nothing was done to pick the bus up that evening. It was taken by somebody who has never been traced just before 11.15 at night, driven for a relatively short distance until the point where Mrs. Topp was knocked down and killed, and it was abandoned round the corner from there.‖ Referring to the judgment of Lord Justice Robert Goff in P. Perl (Exporters) Ltd. vs. Camden London Borough Council [1984] QB 342, the Court of Appeal held as under:-

                          ―In so far as the case is put on the basis that to leave the bus unlocked and with the key in the ignition on the Highway near a public house is to create a special risk in a special category, it is pertinent to refer to a passage in the judgment of Lord Justice Robert Goff (as he then was) in P. Perl (Exporters) Ltd. V. Camden London Borough Council [1984] QB 342 at page 359E-F where he said:

                          ―In particular, I have in mind certain cases where the defendant presents the wrongdoer with the means to commit the wrong, in circumstances where it is obvious or very likely that he will do so - as, for example, where he hands over a car to be driven by a person who is drunk, or plainly incompetent, who then runs over the plaintiff...‖ But the sort of cases to which Lord Justice Robert Goff was there referring are far different from the present case. It may be added that that there is no evidence that the malefactor had been frequenting the public house that is shown in the picture; we do not know who he was, nor is there any evidence or presumption that persons who do frequent that particular public house are particularly likely to steal vehicles and engage in joy-riding.‖ (underlining is ours) The above reasoning appeals to us to conclude that the present case was an eminently fit case, where the claim at 75% ought to have been awarded on a non-standard basis. Even if there was some carelessness, on the peculiar facts of this case, it was not a fundamental breach of Condition No.5 warranting total repudiation. It was rightly so ordered by the District Forum and affirmed by the State Commission.

                          17) Learned counsel for the Insurance Company, in his written submissions, has placed before us an unreported order dated 29.03.2022 passed by this Court in SLP (C) No. 6518 of 2018 titled Kanwarjit Singh Kang vs. M/s ICICI Lombard General Insurance Co. Ltd. & Anr. to support his case on the breach of Condition No.5.

                          We have carefully perused the order. In the said order, it is recorded that concurrently the Claimant lost before the fora below and it is also recorded that the State Commission did not find the ground of leaving the ignition keys in the vehicle to be a valid reason to repudiate the claim. However, on the ground of unexplained and inordinate delay in lodging the FIR, the repudiation was upheld. In that case, while the loss was on 25.03.2010, the intimation to Police was only on 02.04.2010 so clearly it was a breach of Condition No.1. No doubt, in the penultimate paragraph of the order it is recorded that the want of reasonable care on the part of the petitioner in that case operated heavily against the petitioner and it was concluded that the repudiation could not be faulted. However, the primary reason for repudiation was the violation of condition No.1 viz. the delay in intimation to the Police. Further since there was a fundamental breach of Condition No.1, there was no occasion to raise points for settlement of claim on non-standard basis. There is no whisper about the breach of Condition No.5 being not a fundamental breach. We find the present case, on facts, completely different as there is no breach of Condition No.1 because the intimation to the police was immediate. There have been concurrent awards by the District Forum and State Commission on non- standard basis by applying Nitin Khandelwal (supra) and Amalendu Sahoo (supra). Hence, the order will in no manner assist the respondent-Company.

                          18) In Amalendu Sahoo (supra), this Court noticed the guidelines issued by the New India Assurance Co. Ltd. in settling claims on non-standard basis. The guidelines read as under:-