Bharatkumar Pandya, Member

The present appeal has been filed by the appellant/complainant against the order dated 15.12.2021 passed by the State Commission whereby State Commission partly allowed the consumer complaint allegedly without considering the important facts of the case. The brief facts of the case are that the appellant obtained a credit limit of Rs.40 lakhs from R-2/State Bank of India. In order to secure this loan amount, R-2 purchased insurance policy in the name of the appellant from R-1 SBI General Insurance Company for the period 05.12.2018 to 04.12.2019. Stocks of hosiery goods of the appellant covering the risk of Rs.54 lakhs was insured for which appellant paid a premium of Rs.13,383/-. On 06.02.2019 proprietor of the appellant company, when he had gone to his native village, came to know that at about 4.00 AM a fire had taken place in the factory premises. Two fire brigades were used to douse the fire. The incident of fire was reported to the PS Meharban. Stock worth Rs.58,74,600/- was lying in the factory premises at the time of incident. Copy of purchase stock report, sale stock report and pending stock report for the period from 01.04.2019 to 05.02.2019 was supplied, along with claim form, to R-1 insurance company. Stock statement was regularly supplied by the appellant to the R-2 bank and from the latest stock statement it was clear that at the time of fire incident, stock was more than the insurance amount i.e. Rs.54 lakhs. A surveyor was appointed by R-1 insurer to assess the loss and all the requisite documents as required by the surveyor were supplied by the appellant. Surveyor also visited the site of incident on a number of occasions. No copy of survey report was supplied to the appellant and finally on 02.05.2019 an amount of Rs.18,61,699/- was transferred to the loan account of the appellant as full and final settlement of the claim. The transferred amount was short of Rs.35,38,301/- as was claimed by the appellant and no reason was provided for transfer of such reduced amount. Appellant wrote a letter to the R-1 objecting on the amount received as claim but no response was received from R-1 insurer.

2. Being aggrieved, appellant filed a complaint before the State Commission, Punjab against respondent no. 1/insurer and respondent no. 2/bank praying for payment of remaining balance amount of Rs.35,38,301/- along with cost of litigation and other expenses. The relevant portion of the order dated 15.12.2021 of the State Commission is reproduced below:

                   13....... On the basis of assessment of surveyor the opposite party No. 1-Insurance Company credited Rs.18,61,699/- into loan account of the complainant out of net assessed loss to Rs. 18,64,489/- and communicated to the complainant vide email dated 27.04.2019, Ex.OP-1/4. However, the complainant vide his letter dated 06.05.2019 and again vide Ex.OP-1/6 received on dated 24.07.2019 requested to pay the balance claim. The opposite party No.1-Insurance Company vide their letter dated 01.08.2019, Ex. OP-1/7 stated "that said claim was surveyed by IRDA licensed surveyor and claim was settled based on survey alongwith physical verification & survey report issued by them." However, vide e-mail dated 22.04.2019, the opposite party directed the complainant to submit Discharge Voucher duly signed and stamped. Neither the copy of the survey report was sent to the complainant nor any assessed amount was mentioned in the said email. Therefore, the plea of the opposite party No. 1/Insurance Company that the complainant has signed the discharge voucher as full and final is not tenable. As per IRDAI guidelines, the opposite party No. 1/Insurance Company was required to send a copy of survey report to the complainant. In the instant case, there is no evidence that even after the assessed amount was credited into the loan account of claimant, the survey report was given to the complainant. The complainant in para 8 of the complaint has stated that no survey report was given to him. The opposite party/ Insurance Company in reply to the said para has stated that the contents of para No. 8 of the complaint are denied for want of knowledge. It is a deficiency on the part of the opposite party No. 1/ Insurance Company to obtain discharge voucher without giving a copy of survey report.

                   14. Now the issue is to decide the amount of claim. As per the record, the surveyor firstly visited the premises itself on 6th February, 2019 i.e. immediately on the day of loss. After subsequent visits to the site on 08.02.2019, 15.02.2019 and 16.02.2019 assessed the net loss to the tune of Rs. 18,24,197/- as Ex.OP-1/2. per final survey report dated 06.04.2019, Subsequently, as per addendum report, the surveyor assessed the loss in three following ways:

                   i) As per Books Verification : Rs. 18,64,489/-

                   ii) As per Physical Verification : Rs. 21,11,259/-

                   iii) As per Insured's Trading A/c : Rs. 45,40,866/-

                   However, the surveyor recommended the lowest out of the above three amounts. Regarding loss per insured trading account the surveyor has stated in his note attached to the survey report that on close scrutiny of the records, the purchases of last two months were found abnormal with purchase to sale ratios badly disturbed and out of trend. Clearly this working, therefore, did not co-relate with physical stock quantified and valued inside the premises.

                   15. The surveyor has not specified any reason to reject the loss calculated as per physical verification wherein the surveyor worked out physical stock valuation amount to Rs.29,40,641/- and after deducting value of safe stock as Rs.5,84,813/-, the cost of damaged stocks worked out as Rs.23,55,828/- and further in the addendum report worked out as Rs. 23,99,328/-. The surveyor has not given any reference of the terms of the policy to deduct 5% on account of storage, damage, dead stock and similar factors and variation. As such, the said deduction is not in order. Therefore, after deducting salvage 2.5% and excess 5% the net loss as per physical verification works to Rs.22,19,379/-. The opposite party- Insurance Company has already paid Rs. 18,61,699/-. Therefore, we are of the view that the complainant is entitled to claim of loss which the surveyor has physically verified. Accordingly, the complainant is entitled to the payment of balance claim of Rs.3,57,680/-

                   16. With regard to the liability of opposite party No.2-Bank, the complainant has not sought any specific relief against opposite party No. 2. Therefore the complaint filed against opposite party No. 2 is required to be dismissed

                   17. In view of the above discussions, the complaint is partly allowed against opposite party No. 1 and dismissed qua opposite party No. 2. The opposite party No. 1 is directed as under:

                   i) to pay Rs.3,57,680/- as balance claim amount along with interest at the rate of 8% per annum from the date of filing of the complaint till realization.

                   ii) to pay Rs.21,000/- as compensation on account of mental agony and harassment as well as litigation expenses.

                   It is made clear that firstly the amount will be paid to the Bank to repay the loan and the balance, if any, be paid to the complainant.

                   18. The opposite parties No. 1 is directed to comply with the order within 45 days from the date of receipt of the certified copy of the order.

                   19. The complaint could not be decided within the statutory period due to heavy pendency of court cases and non-sitting of the Commission due to pandemic of COVID-19."

3. The above order of the State Commission has been challenged by the appellant/complainant by way of first appeal before this Commission. We have heard the learned counsel for the parties and perused the records carefully. Parties have also filed their short synopsis of arguments. Additional written arguments have also been filed on behalf of respondent no. 1 insurance company.

4. Learned counsel appearing on behalf of the appellant reiterated the submissions made before the State Commission. Appellant appeared before the State Commission with a prayer of payment of remaining balance amount of Rs.35,38,301/- to be paid by the respondents. State Commission only partly allowed their complaint and calculated the balance amount to be paid by R-1, considering the loss assessed by the surveyor as per the physical verification instead of considering the stock valuation as mentioned in the books of account of the appellant and as is 'monitored regularly by R-2 through regular stock statements. The present appeal has been preferred, inter alia, on the following substantive grounds:

                   (i) That the State Commission failed to consider that R-1 deliberately did not want to settle the full claim amount and surveyor assessed the loss in three ways and recommended the lowest amount which appeared to be irrelevant and surveyor also did not supply a copy of the report to them despite repeated requests.

                   (ii) That the State Commission failed to consider the fact that loss assessed by the surveyor was much less than the actual loss suffered by them as more stock was lying in the factory premises at the time of incident than the assessed loss.

                   (iii) That the State Commission committed an error in calculating the total loss by assessing the valuation by physical verification thereby totally ignoring the documentary evidence of stock statement.

                   (iv) As per State Commission, the purchase of last two months was found abnormal. R-2 bank was verifying the physical stock every month and therefor there was no reason to submit abnormal stock inventory to the surveyor.

                   (v) The full overdraft facility was utilised at the time of the incident implying the purchase of corresponding availability of stock.

                   (v) State Commission also failed to consider that assessment of physical verification of stock is not possible in case of fire as goods are of combustible nature and can destroy completely when caught fire.

5. During the course of hearing, Ms. Sweta Rani, advocate for the appellant has reiterated the grounds, primarily insisting that when admittedly the books of accounts revealed the stock as on the date of the incident to be 53,33,287/- which, the eligible indemnifiable loss was "assessed" too by the Surveyor at Rs. 45,40,866/-, the State Commission has erred in ignoring such assessment. Further, there is no merit in the surveyor's action of questioning the books of accounts on flimsy ground that the purchases during the last two month were "abnormal, with purchase to sale ratio badly affected, and, out of trend", when there is no supporting evidence to support such conclusion, and therefore also the State Commission has erred in not granting the indemnification to the full extent as claimed. The State Commission has simply relied on and adopted one of the three alternative assessments made by the surveyor without providing any rational evaluation of the merits of the three assessments. Particularly, the State Commission has erroneously, completely and wholly ignored the averments in the complaint that the purchases and sales stock statements are duly supported by the purchase-bills and the regular stock statements submitted to the Bank and therefore the trading account based quantification of loss as made by the Surveyor needed to be adopted by the insurer in preference to other two lower assessments which both were also arbitrary. The surveyor's action of doubting the purchases during last two months is wholly arbitrary and without requisite investigation or examination of the supplier parties, and the corroborative evidence of the Stock-statements submitted to the Bank, the stock valuation statement of the complainant could not have been rejected by the Surveyor and hence the State Commission fell in error in not examining the appellant's challenge to such arbitrary and unsubstantiated action of the Surveyor, and wrongful settlement offered by the insurer on such erroneous assessment of loss.

                   5.1 On the other hand, it is the submission by Mr. Bhambre, Ld. Advocate on behalf of respondent no. 1/SBI General Insurance Company that a surveyor was immediately deputed on receipt of intimation. Surveyor M/s Proclaim Insurance Surveyor and Loss Assessor Pvt. Ltd. conducted a survey and after verifying the facts and circumstances of the fire incident assessed the net loss to the tune of Rs. 18,24,197/- on the basis of physical verification of damaged stocks and considering the value of stocks in the books of accounts. The report of the surveyor was submitted on 06.04.2019. Survey report has specifically observed that the fire broke out due to short circuit and while assessing the net loss, the surveyor, as per terms and conditions of the insurance policy, had deducted the salvage value at 2.5% and 5% excess and further deduction @ 5% towards storage of damaged dead stock. Surveyor also allowed and recommended the reprocessing charges for the stock which got affected by soot/water. However, since there was a calculation error in assessing the net loss, the surveyor submitted an addendum report dated 22.04.2019 reassessing the net loss of Rs. 18,64,489/- as per physical verification of damaged goods as well as book verification. Hence, it cannot be correct to say that assessment made was on the lower side. It is the submission of R-1 insurer that discharge voucher sent by them to the appellant was submitted back which implied that they agreed to the assessment made. Email dated 22.04.2019 was sent to the appellant for submission of KYC documents, canceled cheque and duly signed and stamped discharge voucher. On receiving entire documents including the discharge voucher from the appellant, R-1 transferred the amount of Rs.18,61,699/- after deducting the reinstatement premium amount of Rs.2,790/- out of net assessed loss of Rs. 18,64,489/-. Appellant himself agreed to the assessment made by the surveyor by submitting the discharge voucher and now he has no right to revert back by stating that less amount has been disbursed as full and final settlement. Hence, there was no deficiency on the part of respondent no. 1 and the appeal is liable to the dismissed. State Commission has rightly restricted the claim of the appellant to the assessment made by the Surveyor on the basis of Physical verification as made by the Surveyor and there survives no further reason to interfere with the same. It is the categorical contention that the Surveyor has found the results of trading account to be unreliable for the sound and still surviving and unrebutted reason that, in substance, the purchases during the last two months preceding the incident' are "out of trend" and hence not acceptable, more so, because such quantity and value of stock of Rs. 53,33,287/- is also out of tune with the physically found quantum of stock. Our attention was also drawn to the "Note" forming part of the Survey Report under the heading "affected stock" to point out that most of the affected stock was quantifiable as remnants evidenced the type and nature of the affected stock-item and therefore, the item-wise quantification of loss as arrived at by the Surveyor, when adopted in preference to the doubtful inflated stock in the trading account, need not be and can not be put to any further examination, particularly any strong and contrary evidence brought on record by the appellant either in the complaint or in the present appeal. It is also pointed out that the Surveyor has diligently worked out the quantity and value of "badly affected stock", "semi-burnt" stock, "small quantity of badly affected stock" and "safe stock" after duly physically segregating the respective stocks and with due application of mind. Ld. Counsel. The Survey Report, being a significant piece of evidence, cannot be brushed aside, and hence also no interference is called for. Drawing our attention to page 22-27, more particularly the table of "Purchase-sale ratios/Trend" (pg 22 of written arguments of the insurer), it is contended that as against the average Purchase/sale ratio of 1.33, during the Month of January and February, the ratio is as high as 8.83 and 69.33 which certainly is evidencing the highly inflated purchases shown in the Statements submitted by the insured and therefore rightly rejected by the Surveyor. During these two months, while the purchases are shown far higher than the average purchase, the sales are shown much below the average resulting into artificially inflated stock value which is not only "out of trend", but is also contrary to physically quantified available stock arrived at on the basis of diligent examination of the ramanants. No further evidence to establish the genuineness of such purchases was also filed or relied upon in the complaint. Therefore, well-reasoned order of the State Commission, based on equally well-reasoned Survey report, needs no interference. The Ld. Counsel relied on Shiv Udyog v. SBI general Insurance Company, CC/133/2014, Sikka Papers Ltd. v. National Insurance Company (2009) 7 SCC 177, United India Assurance Company v. Roshanlal Oil Mills (2000) 10 SCC 19 and Ranveer Singh Bagga v. KLM Dutch Airlines (2000) 1 SCC 66 to support the contention that the Survey report is the primary and significant evidence which can neither be lightly brushed aside nor can be put to any forensic examination in the absence of strong contrary evidence brought on record by the insured, and that no deficiency in service can be found against the insurer who has proceeded in settling the claim on the basis of such report. It has also been pointed out there is a mathematical error in the computation of the further amount payable in terms ot the State Commission's order and that the differential amount would be only Rs. 1,19,966/- as against Rs. 3,57,686/-.

6. Respondent no. 2 /State Bank of India also countered the allegations and submitted that no relief against the Bank has been granted by the State Commission, and otherwise also there is no role except the entitlement to receive the claim amount under the agreed Bank Clause of the policy. It is the averment of R-2 that order passed by the State Commission is correct as the same has been passed after going through the facts, documents, evidence and arguments of all the parties. R-2 bank has further admitted that claim amount of Rs.18,61,699/- has been received in the loan account of the appellant.

7. We have carefully considered the material on record and the submissions of the parties. It is seen that the insurer has settled the . claim in terms of the recommendations of the surveyor as per the assessment in the survey report, and thereafter has also complied with the order of the State Commission. In the loss assessment paragraph on page 8 of the report, read with the note attached with the survey report, as against the initial estimated loss intimated by the insured of Rs.53,88,874/- and the final claim as raised at Rs.40,51,113/-, the surveyor has assessed the loss at Rs. 18,24,197/-, which has been offered and paid as settlement by the insurance company. It has been categorical observation of the surveyor in the note attached to the report that "on close scrutiny of the records the purchases of last two months are found abnormal with purchase to sale ratio badly disturbed and out of trend. Clearly, this working-therefore, did not co-relate with physical stock quantified and valued inside the premises. Hence, neither such purchase/ sale/ closing figures nor the above working could be termed as representative of the loss of the stock, in our opinion. Not relied/recommended." In the complaint filed before the State Commission, though the allegation of unreliability and untenability of the final assessment and recommendation of the loss in the survey report and deficiency in the insurer's action in relying on such survey report have been levelled, the categorical and exact evidence-based challenge to the specific objection of the surveyor with regard to the inflated or "out of trend" purchases during the two months preceding the date of incident have not been raised. The insured relied on the alleged stock statements submitted to the Bank. However, even in the complaint the direct evidences of receipt of material from the alleged suppliers during the period of December, 2018 till the date of event, like lorry receipts or contemporaneous stock register, or the contra-account from the suppliers, or the details of entries in the bank accounts evidencing the payments to the suppliers, etc. were not filed along with the complaint. The ratio of Purchase to Sale during the just preceding month is certainly far higher compared to the past trend and there is neither any plausible explanation nor any credible evidence to support such "out of trend" purchases and sales. Had the past trend continued, which have no evidence or explanation to conclude it did not, either the actual purchases would have been far lower or the actual sales would have been far higher. It is incomprehensible, as rightly found by the Surveyor, as to why the insured, in the stock-statements, appears to have accumulated stock when the sales are negligible, particularly so, when the excessive purchases would entail uncalled for interest on loan for making the payments to suppliers. Moreover, on the basis of material on record, and the observations of the Surveyor in the note attached to the survey report and the tables therein on Purchase/Sales ratio, we have no hesitation in holding that no error or arbitrariness or unreasonable can be found in his opinion that the those statements, in light of physical inventory of the remnants, are not reliable, and in the discarding of the Stock summary as provided and the stock statement figures. Equally, we find no merit in the contention on behalf of the appellant that the quantum of loan amount or the stock-statements submitted to the Bank are more reliable evidence to support the claim as raised. The complainant, in the complaint could have produced and was indeed required required to file evidence of genuineness of both the value . and the quantity of purchases, including the evidence of receipt of material at the affected site, and possibly the payments made towards the alleged doubted purchases from the supplier's contra-accounts and Bank Statements so as to successfully and meaningfully challenge the findings of the surveyor. The same has not been done. We therefore find no fault or error in, or reason to interfere, either with the State Commission's Order or with the well-reasoned Survey Report. The respondent insurer is also right in contending and in relying on the decisions of Supreme Court laying down that the Survey Report, being a statutory and technical report of an expert prepared after physical inspection and observation of the affected site and affected stocks, is a primary and significant evidence which cannot lightly be brushed aside, particularly so when neither any arbitrariness nor any unreasonable therein is found and no positive evidence to meaningfully counter the findings therein is made available on record by the insured. The State Commission has granted further compensation on the basis of surveyor's alternate loss assessment figure which was more beneficial to the insured. Thus, we are unable to find any error in the order of the State Commission.

8. Appeal is therefore dismissed.