Sudhir Kumar Jain, Member
Briefly stated relevant facts of the case are that the complainant for the purpose of securing its stock of vehicle spare parts stored and kept at two warehouses situated at Delhi and Panipat, had taken a floater Standard Fire & Special Perils Policy since the year 2011 from opposite party no.l. The complainant for indemnification of any unforeseen perils and losses had been paying hefty amounts towards premium each year under the said policy. The stock kept in the premises of the complainant was hypothecated with Standard Chartered Bank which was duly informed to the Insurer. The complainant was never provided with the terms and conditions of the "Standard Fire and Special Perils Policy" obtained by the complainant. A devastating fire took place on 12.10.2013 at around 11:30 pm in the Panipat office/warehouse of the complainant on account of short circuit which caused huge loss to the stock and building of the warehouse and office. The documents maintained by the complainant and kept at the office cum warehouse were also burnt in the fire incident.
1.1 The complainant on 13.10.2013 informed the opposite party no 1/Oriental Insurance Company Limited about the fire incident. Subsequently FIR bearing NCR No. 621/2013 was lodged on 15.10.2013 with the Police Station Chandni Bagh, District Panipat, Haryana. The complainant submitted a claim form on 14.10.2013 whereby claimed Rs.6,97,37,720/- towards the loss of stock of spare parts stored by the complainant. The opposite parties 1 & 2 after receipt of claim form appointed M/s Atul Kapur and Company, Fore, LOP, Miscellaneous & Marine Surveyors/ the opposite party no 3 to assess the loss suffered by the complainant in the fire incident happened on 12.10.2013. The opposite party no 3 vide letter dated 28.11.2013 requested the complainant to submit requisite documents which were submitted by the complainant. The opposite party no 3 vide email dated 27.02.2014 acknowledged the receipt of documents/information from the complainant and also informed that the documents were under consideration. The complainant was also requested to provide copies of the purchase bills of the claimed items duly co-related with the claim bills and was informed that any other requirements, if any, would be intimated only after examination of the documents and receipt of the purchase bills from the complainant.
1.2 The Standard Chartered Bank vide letter dated 6.03.2014 informed opposite parties no. 1 & 2 that they maintained the account of the complainant as the complainant had availed a Channel Finance facility with the bank. The Standard Chartered Bank also informed that the account of the complainant has been classified as Non-Performing Asset and a sum of Rs.65,713,482.12 was outstanding in the account of the complainant. The opposite party no 3 vide email dated 12.03.2014 sent to opposite parties no. 1 & 2 whereby informed that they had received some documents from the insured and that the insurer was advised to keep the insurance claim estimated at a provisional reserve of Rs.600 lakhs subject to further verification. The opposite party no 3 as such vide email dated 12.03.2014 had prima facie made an estimate of Rs.600 lakhs which was the approximate value of the insurance claim made by the complainant.
1.3 The complainant sent another email dated 21.03.2014 to opposite parties no 1 & 2 wherein stated that all the documents had been submitted to opposite party no.3 but the claim was still pending for clearance and requested the opposite party no3 to provide the actual status of the insurance claim. The opposite parties no 1 & 2 did not settle the claim of the complainant and the opposite party also did not submit the Survey Report. The complainant sent another email dated 3.07.2014 to opposite parties no 1 & 2 requesting for a meeting to understand the basis of calculation of the claim. The opposite party no.3 on 28.07.2014 sent an email to the complainant demanding more documents/evidence in support of the claim. The complainant vide email dated 10.12.2014 again requested opposite parties no 1 & 2 to advise on the current status of the claim as more than a year had lapsed and nothing was heard from opposite parties no 1 & 2. The opposite parties no. 1 & 2 was informed that the complainant had lost its business after the fire incident.
1.4 The opposite party no 3 on 1.04.2015 i.e. after almost two years of the fire incident submitted its report assessing a total net loss of Rs.48,83,696/-subject to the remarks mentioned in the survey report. The complainant on 29.12.2015 received the copy of the survey report dated 1.04.2015 through an email. The opposite party no.3 in report had given remarks that the insurer i.e. the opposite parties no 2 & 3 may consider the claim of the complainant as "No Claim". The opposite party no.3 after deductions assessed the total loss at Rs.51,40,732/- against the total claim of Rs.6,97,37,720/- submitted by the complainant and after deduction of 5% against policy excess clause assessed the net loss at Rs.48,83,696/-. The opposite parties no 1 & 2 vide letter dated 3.01.2016 repudiated the insurance claim of the complainant wherein stated the opposite parties no 1 & 2 after examination and verification of the documents filed by the complainant concluded that the claim lodged by the complainant was not admissible and payable. The complainant sent a legal notice dated 10.04.2017 to the opposite parties calling upon them to jointly and severally pay a sum of Rs.6,97,37,720/- along with interest at the rate of 18% per annum from the date of lodging of the insurance claim, i.e., 14.10.2013 to the date of realization within a period of 15 days from the date of receipt of the legal notice besides claiming Rs.50,00,000/- towards compensation for mental agony and harassment. The opposite party no.3 sent a reply dated 4.05.2017 to the legal notice dated 10.04.2017 and again demanded documents/evidence in support of the claim submitted by the complainant. The complainant also received a reply dated 12.05.2017 on behalf of the opposite parties no. 1 & 2 to the legal notice dated 10.04.2017 wherein stated that some evidence provided by the complainant to the surveyor with respect to stock kept in the premises of the complainant at the time of the fire incident was not reliable. The complainant being aggrieved filed present consumer complaint titled as M/s Swarna Motors V The Oriental Insurance Company Limited & others bearing no 3067/2017 under section 21 of the Consumer Protection Act, 1986 (hereinafter referred to as "the Act") before this Commission. The complainant prayed as under:-
a) allow the consumer complaint and direct the Opposite Parties jointly and severally to refund to the Complainant a sum of Rs.6,97,37,720/- along with interest @ 18% per annum to the complainant from the date of lodging of the insurance claim i.e. 14.10.2013 to the date of realization;
b) direct the opposite parties to jointly and severally pay a sum Rs.50,00,000/- towards compensation and damages for mental harassment and agony on account illegal withholding of the amount paid by the Complainant to the opposite parties;
c) direct the opposite parties to jointly and severally pay a sum of Rs.2,00,000/- to the complainant towards legal costs;
d) pass any other order or orders as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the present case.
2. The opposite parties no 1 & 2 filed written statement to contest the claim of the complainant. The opposite parties no 1 & 2 in preliminary objections stated that the complainant is not a legal entity and as such is not maintainable in law. The complainant is not a 'consumer' as the insurance policy in question was procured to cover and protect commercial interests and purposes. The opposite parties no 1 & 2 after receipt of intimation about the alleged loss acted with due diligence and immediately deputed a surveyor to carry out a survey and assess the loss. The insured claim after a thorough and meticulous examination of the related documents and the terms and conditions governing the insurance policy in question was not admissible under the policy and the grounds for inadmissibility were duly stipulated in the letter of repudiation which was promptly communicated to the complainant. The opposite parties have discharged their obligations under the policy with complete transparency and in accordance with established procedures. There was no deficiency in service on the part of the opposite parties either in the processing of the claim or in arriving at the final decision regarding repudiation.
2.1 The opposite parties no 1 & 2 on reply on merits denied pleas taken by the complainant in the complaint. The complainant did not supply the requisite documents and information as demanded by the opposite party no 3 to assess the loss and to prepare the Survey Report. The coverage under the insurance policy was obtained for commercial purposes. There was no deficiency in service or unfair trade practice on the part of the opposite parties no 1 & 2. The complainant intimated about the fire incident to the opposite parties no 1 & 2. There was no unreasonable and unjustified delay on the part of the opposite parties no 1 & 2 in taking final decision regarding insurance claim of the complainant. The opposite party no 3 was justified in considering only stock which was physically seem to be damaged as the complainant did not provide any acceptable evidence of the claimed quantity of stock. The complainant offered a salvage value of 6-7 lakhs. The opposite party has rightly advised to treat the claim as "no claim". The complainant did not provide adequate documents in support of its claim of Rs. 6,97,37,720/-. The business of the complainant was not shut down due to lack of funds and capital as a result of loss suffered in the fire incident dated 12.10.2013 and the repudiation of the insurance claim. The complaint is liable to be dismissed.
3. The opposite party no 3 filed its reply and denied pleas taken by the complainant in the complaint. The opposite party no 3 stated that the opposite party no. 3 is an Insurance Regulatory and Development Authority of India (IRDA) approved surveyor and was appointed by opposite parties no. 1 and 2 under Section 64 UM of the Insurance Act for the purpose of assessing the loss based on the documents and evidence submitted by the insured i.e. the complainant. The opposite party did not have any financial liability towards the complainant. The opposite party no 3 assessed the loss on the basis of information and documents provided by the complainant. The opposite party no 3 had given ample opportunity to the complainant to establish quantum of claimed loss as evident from survey report. The role of opposite party no. 3 was strictly limited to conducting an independent professional assessment and submitting a comprehensive report to the insurance company for their consideration and decision. The opposite party no. 3 is not liable to make any payment to the insured/the complainant under the policy as the obligation rests exclusively with the opposite parties no 1 & 2. The survey report prepared by opposite party no. 3 has duly incorporated and assessed the loss based on the available information and documents provided by the complainant. The opposite party no 3 as the assessed loss was substantially lower than the quantum claimed by the complainant afforded several opportunities to the complainant to establish and substantiate the balance quantum of loss as claimed. The opposite party no 3 discussed the loss assessment with the complainant on multiple occasions and specifically highlighted the disparities between claim and the supporting evidence. The complainant despite repeated communications and considerable time being afforded has failed to respond. The opposite party no. 3 had no option but to conclude the survey report based on the available material on record. The repudiation of claim by the opposite parties no 1 & 2 was entirely internal decision based on their assessment. The Survey Report prepared by the opposite party no 3 was not arbitrary and reasons for conclusion in the Survey Report were comprehensively articulated in the survey report. The assessment was conducted in accordance with established professional standards and in complete conformity with the terms and conditions of the insurance policy. The assessment conducted by opposite party no. 3 was fair, reasonable, and in accordance with professional standards and the requirements of the Insurance Act.
4. The complainant filed rejoinders wherein reiterated the facts of the complaint.
5. The complainant tendered affidavit of it proprietor Sunil Kapoor in evidence. The opposite parties no 1 & 2 tendered affidavit of Vipin Kumar, Chief Manager in evidence.
6. This Commission vide order dated 09.11.2023 directed the opposite party no 1 to pay Rs. 6,97,00,000/- to the complainant towards the loss suffered by the complainant on account of the fire along with interest @ 9% pa from the date of filing the complaint till realization within eight weeks from the date of the order besides awarding litigation costs of Rs. 50,000/-. The opposite party being aggrieved by the order dated 09.11.2023 filed Civil Appeal bearing no 4191 of 2024 titled as The Oriental Insurance Co. Ltd. V M/s Swarna Motors & others before the Supreme Court. The Supreme Court vide order dated 15.03.2024 observed that this Commission has committed an error in straight away allowing the claim/complaint without getting the loss verified through any identified agency or rather accepting the surveyor's report submitted in April, 2015. The order dated 09.11.2023 was accordingly set aside and the matter was remitted back to this Commission for a fresh decision after affording opportunity to the opposite party no 1 to get a fresh surveyor's report or any other material if placed before the Commission. It was further ordered to pay Rs. 48,83,696/- to the complainant as the loss assessed by the opposite party no 3 along with interest @ 6% per annum from the date of the complaint till date of payment.
6.1 This Commission vide order dated 06.05.2024 in pursuance of order dated 15.03.2024 passed by the Supreme Court directed the opposite party no 1 to obtain fresh report relating to the quantum of the damages from the surveyor. Accordingly the opposite party no 1 appointed Ram Gopal Verma, Insurance Surveyors & Loss Assessors to investigate and assess the loss due to fire at plot no 387-388, Sector-25, Part-II, Near Mohan Motors, Panipat and said surveyor submitted the Report dated 27.06.2024. The Report dated 27.06.2024 was pertaining to SFSP Policy bearing no 271601/11/2014/204 stated to valid for the period from 21.09.2013 to 20.09.2014 and the complainant was the insured. The stock of commercial vehicles spare parts (Eicher) stored or kept at warehouse was the coverage.
6.2 The Surveyor with regard to claim bill/excel sheet noted that the complainant being insured had claimed bill amounting to Rs. 6,57,56,438/-. It was reported that the complainant did not provide any invoice no/page no of purchase bill to correlate the purchase bills with the claimed items. The surveyor reported that the complainant could not substantiate the claimed quantity. The claim bill of Rs. 6,57,56,438/- has been made hypothetically without any base or supporting documents. The Surveyor with regard to purchase bills (Invoice cum Dispatch Note) noted that the complainant has not provided stock register in which the quantity purchased/particulars have been entered and reported that mere purchase bills cannot be basis for insurance claim in the absence of the stock register. The Surveyor further reported that claim of closing stock of Rs. 6,97,37,720/- could not be verified in absence of stock register, purchase register and sales register. The Surveyor in final observation reported that as per investigation, the loss has been correctly assessed to Rs. 48'83,696/- by the opposite party no 3 on basis of physical verification. The Surveyor in final conclusion reported as under:-
In our considered opinion, the claim is admissible under the insurance policy issued to the insured (Swarna Motors) in view of our final observations in para 10.1 of our final survey report to the extent of Rs. 48,83,696/- as assessed by the surveyor Mr. Atul Kapoor. The loss claimed by insured (Swarna Motors) is exaggerated and is not substantiated to the extent of Rs. 6,57,56,438.00. The claim bill/excel sheet provided by insured is perverse and arbitrary. We cannot ignore the surveyor report of Mr. Atul Kapoor who has assessed the loss on the basis of physical verification of damaged stock as well as documents verified by him. The surveyor's report is reasonable and is not arbitrary.
7. We have heard Mr. Akarsh Pandey, Advocate authorized by Mr. Arush Khanna, Advocate for the complainant and Mr. Abhishek K. Gola & Ms. Anchal Bansal, Advocates for the opposite parties no 1 &2. We have also perused relevant record. The opposite parties no 2 & 3 were ordered to be proceeded ex-parte vide order dated 05.06.2023.
8. The counsels for the complainant in course of oral arguments stated that the complainant has secured Standard Fire and Special Peril Policy with insured sum of Rs. 7,37,00,000/- from the opposite party no 1 and paid premium of Rs. 72963/- and Rs. 9018/- as service tax. A fire was caused on 12.10.2013 due to short circuit and stock, building, warehouse and the office of the complainant got burnt. The complainant also informed about the fire to the opposite parties no 1 & 2 on 13.10.2013. The complainant submitted claim of Rs.6,97,37,720/- towards the loss caused in fire incident. The complainant also hypothecated the goods to Standard Chartered Bank and loan account of the complainant has already become Non-Performing Assets. The opposite party no 3 was appointed as surveyor to assess the loss and verify claim of the complainant. The complainant has also submitted requisite documents to the opposite party no 3 as and when demanded. The opposite party no 3 submitted survey report wherein assessed net loss at Rs. 48,83,696/-. The complainant was supplied with survey report dated 01.04.2015 through email on 29.12.2015. The respondents no 1 & 2 have repudiated entire insurance claim of the complainant. The complainant also sent a legal notice which was replied by the opposite party no 1.
8.1 The counsel for the claimant in above factual background argued that the complainant, a proprietorship concern was a consumer as per the Act and has availed services of the opposite parties no 1 & 2 by procuring Standard Fire and Special Perils Policy and by paying requisite premium along with tax. It was also argued that the opposite parties also violated Regulation 13 (2) of the Insurance Regulatory and Development Authority of India (Insurance Surveyors and Loss Assessors Regulations, 2015 by delaying the claim of the complainant beyond 30 days. It was further argued that the complainant informed the opposite parties no 1 & 2 on 13.10.2013 about the fire incident happened on 12.10.2013 and the opposite party no 3 was appointed as surveyor who submitted the survey report dated 01.04.2015, the copy of which was supplied to the complainant on 29.12.2015 through email which was in gross violation of Regulation 13 (2). The counsel for the claimant relied on Khatema Fibers V New India Assurance Company Limited & another, 2021 SCC OnLine 818. It was further argued that opposite parties no 1 & 2 caused substantial delay in repudiation insurance claim of the complainant which amount to deficiency in service and reliance was placed on decision of this Commission delivered in Madan Lal Gupta V Divisional Manager, National Insurance Company Limited, 2017 SCC OnLine NCDRC 610. It was also argued that the opposite parties have repudiated entire claim of the complainant despite assessment of loss at Rs. 48,83,696/- by the opposite party no 3. The counsel for the claimant vehemently argued that opposite parties no 1 & 2 by accepting survey report submitted by the respondent no 3 has committed gross deficiency in service. The counsel also attacked the Survey Report dated 01.04.2015 and stated the complainant has supplied requisite documents to the surveyor i.e. the opposite party no 3. The counsel for the complainant relied on Gurmel Singh V Branch Manager, National Insurance Company Limited, 2022 SCC OnLine 666.
8.2 The counsel for the complainant in oral argument as well as in written argument the opposite party no 1 did not consider claim of the complainant on unreasonable grounds even on basis of fresh survey report. It was argued that Survey Report dated 01.04.2015 and subsequent survey report have failed to present a true and complete picture of losses suffered by the complainant and the fresh survey report did not contain no fresh or independent assessment which was mere repetition of earlier survey report dated 01.04.2015. The counsel for the complainant relied upon various documents as detailed in written synopsis dated 28.9.2025.
9. The counsels for the opposite parties no 1 & 2 argued that there was no deficiency in service on the part of the opposite parties no 1 & 2 in repudiating insurance claim of the complainant. The complainant as per specific terms and conditions of the policy was obligated to provide requisite documents for proper assessment of loss and insurance claim but the complainant did not provide requisite documents despite repeated requests and demands. It was argued that the complainant based its claim on an Excel sheet without adequate supporting documents. The opposite party no 1 appointed the opposite party no 3 the surveyor who assessed the loss at Rs.48,83,696/- citing the complainant's failure to produce essential records such as stock registers, ledgers, and VAT returns. The claim was repudiated on 03.01.2016 on grounds of exaggerated and unverifiable loss in breach of policy conditions.
9.1 It was further argued that in pursuance of the liberty granted by the Supreme Court, another survey report dated 27.06.2024 was submitted by surveyor Ram Gopal Verma and said report corroborated the findings of the opposite party no 3 and further established that the complainant had not only failed to furnish key statutory records required under Condition 6 of the policy but had also submitted arbitrary and inflated claims in violation of Condition 8 which prohibits fraudulent claims. The counsel for the opposite parties no 1 & 2 further argued that fresh survey report highlighted several discrepancies in claim of the complainant and the surveyor concluded that the insured had deliberately inflated the claim by relying on unsupported data and past-year documents and the surveyor assessed the admissible loss at Rs.48,83,696.
9.2 The counsel for the opposite parties emphasizes that under the doctrine of utmost good faith and as per the binding precedent laid down by the Supreme Court in Khatema Fibres Ltd. V New India Assurance Co. Ltd., the insured is obligated to provide necessary documentation to substantiate claims, failing which repudiation is justified. The Supreme Court in that case also affirmed the evidentiary value of surveyor reports unless found arbitrary and held that exaggerated or misrepresented claims vitiate the principle of good faith. It was further argued that the complainant neither maintained nor produced the necessary documentation and submitted a highly inflated claim without basis. The counsel ultimately argued that the complaint be dismissed in light of the consistent findings in both survey reports and applicable legal principles in its entirety and already paid admissible amount of Rs.48,83,696/- be treated as full and final settlement of the claim. The complainant be burdened with the costs of litigation for raising a fraudulent and unsubstantiated claim.
10. We shall now refer the factual position appearing or reflecting from the record. It is reflecting from record that the complainant secured a Standard Fire & Special Perils Policy bearing no 27160/11/2014/204 dated 20.09.2013 for stock of commercial vehicles spare parts stored and kept at warehouse situated at Delhi and Panipat from opposite party no.l and policy was valid from 21.09.2013 to 20.09.2014 with assured sum of Rs. 7,37,00,000/-. The complainant paid Rs. 72,963 as premium and Rs. 9018 as tax. The stock kept in the premises of the complainant was hypothecated with Standard Chartered Bank. A fire was caused on 12.10.2013 at around 11:30 pm in the office/warehouse situated at Panipat. The complainant on 13.10.2013 informed the opposite party no 1 about the fire incident. The complainant also submitted a claim form on 14.10.2013 claiming Rs.6,97,37,720/- and thereafter the opposite parties 1 & 2 appointed the opposite party no 3 to assess the loss. The complainant vide letter dated 28.11.2013 was asked by the opposite party no 3 to submit requisite documents. The opposite party no 3 vide email dated 27.02.2014 requested the complainant to provide copies of the purchase bills of the claimed items which can be co-related with the claim bills. The opposite party no 3 vide email dated 12.03.2014 advised the opposite parties no. 1 & 2 to keep the estimated provisional reserve of Rs.600 lakhs subject to further verification. The opposite party no.3 vide email dated 28.06.2014 asked the complainant to submit further documents/evidences in support of the claim. 10.1 The opposite party no 3 submitted Survey Report dated 01.04.2015 wherein assessed total net loss of Rs.48,83,696/-. The opposite party no 3 in Survey Report dated 01.04.2015 reported that the complainant did not maintain any stock register, inward outward register etc. for the items stated to be lying in the affected warehouse and also did not furnish trading account on date of loss. The opposite party no 3 in the Survey Report dated 01.04.2015 further noted that claimed items/quantities were not based on any acceptable stock records/stock registers and excel sheet maintained in another office of the complainant situated at Delhi was also noticed with several disparities. It was also reported that the claimant was unable to provide any acceptable evidence to establish presence of and damage to the claimed items/quantities. The opposite party no 3 in nutshell in Survey Report dated 01.04.2015 mentioned that the complainant despite several opportunities and communications through email did not provide requisite documents/information for assessing the claimed loss. The complainant was supplied with copy of Survey Report dated 01.04.2015 on 29.12.2015 through email.
10.2 The opposite parties no 1 & 2 vide letter dated 3.01.2016 repudiated the insurance claim of the complainant. The relevant portion of the repudiation letter dated 03.01.2016 reads as under:
Re: Claim No. 271601/11/2014/000003 under Fire Policy No. 271601/11/2014/204
Insured: M/s Swarna Motors, Date of Loss 12/10/2013.
With regard to the above, please be informed that the claim lodged was duly surveyed and thereafter the report of the surveyor and all other documents and papers pertaining to the claim lodged were duly and carefully examined and processed at our end with due application of mind and in good faith whereafter the office has come to the conclusion that the claim lodged is not admissible and payable to following reasons:-
That as per terms and conditions of the policy No. 271601/11/2014/204 issued to you, you were under contractual obligation to provide, produce, procure and give to the company all such documents, books, vouchers, invoices & proofs with respect to the claim and any matter touching the liability or the amount of liability of the Company as may be reasonably required by or on behalf of the Company, which is a condition precedent to any liability under the policy, but on the contrary you have failed to establish & provide necessary evidences / proofs asked by the surveyor & the Insurance Company, despite our having asked for the same for numerous times & opportunity afforded in this regard besides the surveyor has found the claim lodged to be grossly exaggerated one.
We may, therefore inform you that the claim lodged by you has not been found to be admissible and payable for gross breach of terms & conditions of the insurance policy issued to you and is accordingly repudiated. "
The complainant also filed a RTI to the opposite parties no 1 & 2 whereby asked to supply certified copies of the entire claim file, copies of interim/preliminary and final survey report and copies of claim notes.
10.3 This Commission vide order dated 09.11.2023 allowed the complaint primarily observing that the complainant had made available documents relating to the separate stock and inventory list for the warehouses situated at Delhi and Panipat, balance sheets, VAT returns along with income tax returns and a certificate by M/s Eicher Trucks and Buses giving the actual value of purchase by the complainant besides other documents. The opposite party no 1 being aggrieved by the order dated 09.11.2023 filed Civil Appeal bearing no 4191 of 2024 titled as The Oriental Insurance Co. Ltd. V M/s Swarna Motors & others before the Supreme Court. The Supreme Court vide order dated 15.03.2024 set aside the order dated 09.11.2023 and observed that this Commission while straight away allowing the claim/complaint without getting the loss verified through any identified agency or rather accepting the surveyor's report submitted in April, 2015 has committed an error. The Supreme Court has remitted the matter back to this Commission for a fresh decision after affording opportunity to the opposite party no 1 to get a fresh surveyor's report or any other material if placed before the Commission. The opposite party no 1 appointed Ram Gopal Verma, Insurance Surveyors & Loss Assessors to investigate and assess the loss due to fire at plot no 387-388, Sector-25, Part-II, Near Mohan Motors, Panipat and said surveyor in Report dated 27.06.2024 with regard to claim bill/excel sheet noted that the complainant did not provide any invoice no/page no of purchase bill to correlate the purchase bills with the claimed items and the complainant could not substantiate the claimed quantity. The Surveyor in final observation reported that as per investigation, the loss has been correctly assessed to Rs. 48'83,696/- by the opposite party no 3 on basis of physical verification. 11. We shall now analyse the legal provisions pertaining to the Survey Report. Regulation 13 (2) of IRDAI as referred by the complainant mandated that a surveyor or loss assessor whether appointed by the insurer or insured has to submit report to the insurer as expeditiously as possible but not later than 30 days of his appointment with a copy of the report to the insured. Clause 9(5) of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002 as referred by the complainant provides that the insurer after receipt of the survey report or additional survey report shall offer settlement of the claim of the insured within 30 days. This clause mandated the insurer either to accept or reject claim of the insured within 30 days from the receipt of the survey report and this proposition was also observed by this Commission in Madan Lal Gupta V Divisional Manager, National Insurance Company Limited which was also cited by the counsel for the claimant. The respective counsels for the claimant and the opposite parties no 1 & 2 relied on decision of the Supreme Court delivered in Khatema Fibres Limited V New India Assurance Company Limited. The Supreme Court in this case referred section 64 UM(2) of the Insurance Act, 1938 which mandated that no claim equal to or exceeding a sum of rupees twenty thousand only shall be admitted for payment unless the insurer had obtained a report from an approved surveyor or loss assessor. The Supreme Court also referred proviso to sub section (2) of section 64 UM which recognised the right of the insurer to pay any amount different from the amount as assessed by the approved surveyor or loss assessor. The Supreme Court also observed that the Insurance Act, 1938 while assigning an important role for the surveyor, cast an obligation on him under subsection (1A) of section 64 UM to comply with the code of conduct in respect of the duties, responsibilities and other professional requirements as specified by the Regulations under the Act. The Supreme Court while observing that the law is settled the surveyor's report is not the last and final word and is not so sacrosanct as to be incapable of being departed from also referred New India Assurance Company Limited V Pradeep Kumar, (2009) 7 SCC 787. The Supreme Court after referring New India Assurance Company Limited V Pradeep Kumar in New India Assurance Company Limited V M/S. Mudit Roadways, (2024) 3 SCC 193 again observed that the surveyor's report cannot be considered a sacred document and contrary evidence, including an investigation report, is subject to rebuttal. The Supreme Court in Khatema Fibers Limited V New India Assurance Company Limited & others also observed as under:-
32. It is true that even any adequacy in the quality, nature and manner of performance which is required to be maintained by or under any law of which has been undertaken to be performed pursuant to a contract, will fall within the definition of the expression 'deficiency'. But to come within the said parameter, the Appellant should be able to establish (i) either that the Surveyor did not comply with the code of conduct in respect of his duties, responsibilities and other professional requirements as specified by the Regulations made under the Act, in terms of Section 64 UM (1) of the Insurance Act, 1938, as it stood then; or (ii) that the insurer acted arbitrarily in rejecting the whole or a part of the Surveyor's Report in exercise of the discretion available under the Proviso to Section 64 UM (2) of the Insurance Act, 1938.
37. Two things flow out of the above discussion, They are (i) that the surveyor is governed by a code of conduct, the breach of which may give rise to an allegation of deficiency 'in service; and (ii) that the discretion vested in the insurer to reject the report of the surveyor in whole or in part, cannot be exercised arbitrarily or whimsically and that if so done, there could be an allegation of deficiency in service.
11.1 It is accepted legal proposition that an approved surveyor's assessment is necessary for a claim as per the Insurance Act 1938. The Supreme Court in Sri Venkateshwara Syndicate V Oriental Insurance Company Limited, (2009) 8 SCC 507 considered the relevance of the Report of Surveyor and observed as under
31. 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 assesses 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.
32. 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 officer concerned 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.
33. Scheme of Section 64-UM, particularly, of sub-sections (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor.
12. We have also considered the rival contentions and arguments of the complainant and the opposite parties no 1 & 2. The opposite parties no 1 & 2 in reply to the complaint stated that the complainant is not a consumer qua the opposite parties no 1 & 2 as the policy in question was obtained in the M/s Swama Motors to protect the commercial interests. The counsel for the opposite parties no 1 & 2 also argued that the complainant is not a consumer qua the opposite parties no 1 & 2. The counsel for the complainant has countered said argument and stated that the complainant is a consumer under the Act. Admittedly the complainant was a distributor of spare parts of VE Commercial Vehicles Limited. The complainant has procured floater Standard Fire & Special Perils Policy in its own name in respect of stocks of commercial vehicle spare parts (Eicher) whilst stored and kept at warehouse. The policy was valid on the day of fire incident. Although the complainant was appearing to be indulging in the commercial activities but procuring a policy for insurance of business articles cannot be said that the policy was procured for commercial purposes. The opposite party no 1 is the service provider. The opposite party no 2 is the Branch Manager of the opposite party no 1. Section 2 (d) of the Act defines Consumer and as per section 2 (d) (ii) consumer means a person who hires or avail of any service for consideration but it does not include a person who avails such service for any commercial purposes. The complainant availed the services from the opposite parties no 1 & 2 by procuring the policy in question and also paid the premium plus tax. The policy in question was not procured for commercial purposed but procured only for insurance and protection of business goods. We do not find any legal force in the contention of the opposite parties no 1 & 2 that the complainant was not a consumer qua the opposite parties no 1 & 2. We accordingly hold that the complainant is a consumer under the respondents no 1 & 2 as per mandate of section 2 (d) of the Act.
13. The counsel for the complainant primarily argued that the opposite parties no 1 & 2 despite furnishing requisite documents to the opposite party no 3 for assessment of loss has repudiated claim of the complainant. The complainant stated that the complainant submitted claim of Rs. 6,97,37,720/- on 14.10.2013 towards the loss caused in fire incident and claimed to have submitted requisite documents to the opposite party no 3 as and when demanded for assessment of loss caused in the fire. The complainant vide letter dated 28.11.2013 was asked by the opposite party no 3 to submit requisite documents and further vide email dated 27.02.2014 again requested the complainant to provide copies of the purchase bills of the claimed items which can be co-related with the claim bills. The opposite party no.3 vide email dated 28.06.2014 again asked the complainant to submit further documents/evidences in support of the claim. The complainant in the complaint stated and deposed in affidavit of Sunil Kapoor, proprietor of the complainant that the complainant supplied stock/ inventory lists maintained at Panipat and Delhi Warehouse in excel format; balance sheets; VAT returns for Delhi and Panipat Offices as on 31.03.2011, 31.03.2012 and 31.03.2013; clubbed ITR for assessment years 2011-2012, 2012-2013 and 2013-2014; certificate issued by Eicher Trucks and Buses giving actual value of purchases made by the complainant; Trading Account certified by the Chartered Accountant; Purchase details verified by VE Commercial Vehicles besides other requisite documents. The opposite party no 3 submitted Survey Report dated 01.04.2015 wherein assessed total net loss of Rs. 48,83,696/-. The opposite parties no 1 & 2 stated that the complainant did not supply the requisite documents and information as demanded by the opposite party no 3 to assess the loss and to prepare the Survey Report and the opposite party no 3 was justified in considering only stock which was physically seem to be damaged as the complainant did not provide any acceptable evidence of the claimed quantity of stock. The opposite party no 3 stated that the opposite party no 3 assessed the loss on the basis of information and documents provided by the complainant and had given ample opportunity to the complainant to establish quantum of claimed loss as evident from survey report. The opposite party no 3 prepared the survey report based on the available information and documents provided by the complainant. The opposite party no 3 also highlighted the disparities between claim and the supporting evidence.
13.1 It is apparent that the opposite parties no 1 & 2 after receipt of information on 13.10.2013 regarding fire incident caused in Panipat warehouse of the complainant on 12.10.2013 and submission of claim of Rs. 6,97,37,720/- on 14.10.2013 appointed the opposite party no 3 to assess the loss. The opposite party no 3 submitted Survey Report bearing no 6027 dated 01.04.2015. The opposite party no 3 in Survey Report dated 01.04.2015 reported that the complainant did not maintain any stock register, inward outward register etc. for the items stated to be lying in the affected warehouse and also did not furnish trading account on date of loss. It was further noted that claimed items/quantities were not based on any acceptable stock records/stock registers and excel sheet maintained in another office of the complainant situated at Delhi was also noticed with several disparities. The opposite party no 3 in Survey Report dated 01.04.2015 categorically stated that the claimant did not provide any acceptable evidence to establish damage to the claimed items/quantities. It is apparent that the Supreme Court vide order dated 15.03.2024 has remitted the matter back to this Commission for a fresh decision after affording opportunity to the opposite party no 1 to get a fresh surveyor's report or any other material if placed before the Commission. Thereafter opposite party no 1 in pursuance of order dated 15.03.2024 appointed another surveyor Ram Gopal Verma, Insurance Surveyors & Loss Assessors to investigate and assess the loss caused due to fire and as claimed by the complainant. The surveyor in Report dated 27.06.2024 with regard to claim bill/excel sheet noted that the complainant did not provide any invoice no/page no of purchase bill to correlate the purchase bills with the claimed items and the complainant could not substantiate the claimed quantity. The Surveyor in final observation affirmed the net loss Rs. 48'83,696/- as assessed by the opposite party no 3. It is reflecting from the previous Survey Report dated 01.04.2015 and subsequent Survey Report dated 27.06.2024 that the claimant did not provide or furnish requisite information and documents to both surveyors which can correlate with insurance claim of the complainant although the complainant empathetically stated that the complainant had supplied requisite documents and information to the opposite party no 3 as per requirement for assessing claim of loss. This Commission in order dated 09.11.2023 believed contention of the complainant regarding supply of documents to the opposite party no 3 as detailed in the complaint and herein above but order dated 09.11.2023 has already been set aside by the Supreme Court vide order dated 15.03.24.
13.2 The counsel for the complainant argued that the opposite party no 3 repeatedly sought documents which were already submitted or practically unavailable post-fire and said approached was contrary to law. The opposite party no 3 has arbitrarily rejected claim of the complainant on flimsy ground. It was also argued that certification by independent Chartered Accountant was discarded by the opposite party no 3 without any justification and cogent reasons and certification was also not acknowledged by the subsequent surveyor. It was further argued that the respondent no 3 arbitrarily discarded the documents produced by the complainant to establish actual value and quantity of the stock and relied upon alleged inconsistencies in purchase bills. The counsel for the complainant also placed reliance on letter dated 12.03.2014 sent by the opposite party no 3 to the opposite parties no 1 & 2 whereby requested the opposite party no 1 & 2 to preserve of Rs. 6 crores. The letter dated 06.03.2014 which was written by the Standard Chartered Bank to the opposite parties no 1 & 2 confirming the fire loss was also referred. The counsel for the complainant lastly argued and referred RTI filed by the complainant on 17.05.2016 for seeking supply of interim/final survey reports and other documents. The counsel for the complainant also referred decision delivered by the Supreme Court in Gurmel Singh V Branch Manager, National Insurance Company Limited wherein it was observed as under:
5. In the present case, the insurance company has become too technical while settling the claim and has acted arbitrarily. The appellant has been asked to furnish the documents which were beyond the control of the appellant to procure and furnish. Once, there was a valid insurance on payment of huge sum by way of premium and the Truck was stolen, the insurance company ought not to have become too technical and ought not to have refused to settle the claim on non-submission of the duplicate certified copy of certificate of registration, which the appellant could not produce due to the circumstances beyond his control. In many cases, it is found that the insurance companies are refusing the claim on flimsy grounds and/or technical grounds. While settling the claims, the insurance company should not be too technical and ask for the documents, which the insured is not in a position to produce due to circumstances beyond his control.
13.3 The counsel for the opposite parties no 1 & 2 after referring Conditions 6 & 8 of the policy argued that the complainant has failed to adhere to essential policy conditions which obliged insured to submit complete and verifiable claims and non-fraudulent claims. The counsel also relied on earlier Survey Report dated 01.04.2014 and subsequent Survey Report dated 27.06.2024 wherein it was reported that the claimant submitted exaggerated and fraudulent claim which was not substantiated by the necessary and requisite documents. The counsel further argued that survey reports are binding and cannot be rejected unless proved arbitrary. The complainant has also violated conditions 6 & 8 of the policy.
13.4 We have perused the documents submitted on record by the complainant and stated to be supplied to the opposite parties no 1 & 2 in support of the claim. The complainant in written synopsis dated 28.09.2025 that the opposite parties no 1 & 2 in response to RTI confirmed the receipt of complete documents. The claimant through its proprietor Sunil Kapoor submitted an application under RTI Act, 2005 to the opposite party no 1 for supply of certified copies of entire case file, copies of interim/preliminary and final survey reports and copies of claim notes. The complainant primarily relied on excel sheets to demonstrate items in stock. The opposite party no 3 in survey report dated 01.04.2015 considered the excel sheets submitted by the complainant. The opposite party no 3 in Survey Report dated 01.04.2015 reported that the complainant did not make any stock register besides maintaining the inward outward registers for the items lying in the affected warehouse. We are of the considered opinion that the rough excel sheets stated to be maintained by the complainant cannot be a valid substitute for stock registers and excel sheets cannot accepted as correct indicative of items in the stock stated to be lying in the affected warehouse. The complainant also referred and relied on Invoice-cum-Despatch Note issued by Eicher (VE Commercial Vehicles Limited). However these Invoice-cum-Despatch Notes may be indicative of purchases by the complainant but we are of the opinion that these notes do not conclusively or on probability proved that these items were lying in the affected warehouse on the day of fire. The complainant also relied on copies of purchase book for the period with effect from 01.04.2012 to 31.03.2013 which are much prior to day of fire i.e. 12.10.2013 and such cannot be accepted as reliable and credible evidence of items in stock lying in the affected warehouse on the day of fire. We have carefully considered and perused the documents referred and relied on by the complainant in support of the claim but these documents are not sufficient and good enough to substantiate claim of the complainant against the opposite party no 1.
13.5 We have also carefully perused Survey Report dated 27.06.2024. The subsequent surveyor Ram Gopal Verma in Survey Report dated 27.06.2024 has made comprehensive analysis of the claim of the complainant in light of information and documents submitted by the complainant. The surveyor in Survey Report dated 27.06.2024 with regard to excel sheets mentioned that the complainant did not mention source from where items or part thereof were procured by the complainant. The surveyor in the Report dated 27.06.2024 reported that the complainant did not provide Invoice-cum-Dispatch Note to substantiate claimed quantity although the complainant claimed to have supplied Invoice-Cum-Despatch Notes to the opposite party no 1 and also placed on record but we have already observed that these Invoice-Cum-Dispatch Notes along with purchase bills do not establish details and particulars of items stated to have lying in affected warehouse on the day of fire incident in absence of stock registers depicting details of items lying in affected warehouse on day of fire. The Surveyor in the Report dated 27.06.2024 also took note of Invoice-cum-Dispatch Notes supplied by the complainant to the surveyors and rightly observed that these Invoice-Cum-Dispatch Notes were not linked/correlated with the claim bills of Rs. 6,57,56,438/-. The Surveyor in Survey Report dated 27.06.2024 also adequately considered Provisional Trading Account as on date of loss i.e. 12.10.2013 and observed and rightly so that closing stock on the day of fire incident could not be verified in the absence of stock register, purchase register and sales register and it is not the case of the complainant that these documents were got burnt/destroyed in fire. The surveyor in Report dated 27.06.2024 also deliberated documents not supplied by the complainant and these documents are stock register/day wise stock register/inward outward register. The surveyor observed that stock register is very important document to determine item-wise quantity of stock lying in the affected warehouse on the day of fire and we are in complete agreement in said observation of the surveyor as made in Survey Report dated 27.06.2024. The Surveyor in Report dated 27.06.2024 rightly observed that excel sheet cannot be relied on for physical verification of damaged items. We in view of above discussion are of considered opinion that the complainant did not provide necessary and requisite documents to the surveyors and as we are in agreement with the argument advanced by the counsel for the opposite parties no 1 & 2 that the complainant did not supply documents and has made exaggerated claim in violation of conditions 6 & 8 of the policy.
14. The counsel for the complainant empathetically argued that the opposite parties have violated Regulation 13 of the Insurance Regulatory and Development Authority of India (Insurance Surveyors and Loss Assessors) Regulations, 2015 which mandated that the surveyor or loss assessor shall submit report to the insurer as expeditiously as possible but not later than 30 days of appointment. The complainant in the present case informed the opposite party no 1 about incident of fire on 13.10.2013 i.e. next day of fire incident and thereafter the opposite party no 3 was appointed as surveyor. Although date of appointment of the opposite party no 3 as surveyor is not clear from the record but it is apparent that the opposite party no 3 did not submit survey report within 30 days as per Regulation 13 (2). It is also reflecting that the opposite party no 3 has written many communications through email to the complainant for submission of requisite documents which was not done by the complainant. Thereafter the opposite party no 3 submitted Survey Report dated 01.04.2015 on basis of documents made available by the complainant. The delay in submission of survey report by the opposite party no 3 was understandable and was caused due to lapses and omission on the part of the complainant. Accordingly it cannot be said that the opposite party breached Regulation 13 (2). There is no legal force in the argument advanced by the counsel for the complainant.
15. The counsel for the complainant also argued that claim of the complainant was repudiated by the opposite party no 1 on 03.01.2016 after substantial delay from submission of survey report dated 01.04.2015 which was in violation of Clause 9(5) of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002 which mandates insurer shall offer a settlement of the claim within a period of 30 days from the receipt of survey report. It was argued that this delay does amount to deficiency in service. We do not consider that procedural lapse in settlement of claim after receipt of survey report is fatal to the defence of the insurer. The claim of the complainant cannot be accepted merely on ground of delay in settlement of claim by the opposite party no 1 i.e. the insurer.
16. The fire incident happened on 12.10.2013 and at that time Standard Fire and Special Peril Policy procured by the complainant was valid. The complainant submitted claim on 14.10.2013. The opposite party no 3 was appointed as surveyor and the opposite party no 3 being surveyor submitted Survey Report dated 01.04.2015. Subsequently Ram Gopal Verma was appointed as surveyor in pursuance of order dated 15.03.2024 passed by the Supreme Court and said surveyor also submitted Survey Report dated 27.06.2024. The opposite party no 3 assessed the loss at Rs. 48,83,696/- which was also affirmed by the subsequent surveyor Ram Gopal Verma. It is accepted provision that the survey report is a crucial and relevant document in assessment of the claim and cannot be disregarded unless proved arbitrary. Both Survey Reports dated 01.04.2015 and 27.06.2024 do not suffer from any infirmity and can be accepted to determine or assess claim submitted by the claimant. However the opposite party no 1 has repudiated entire claim of the complainant vide repudiation letter dated 03.01.2016 which was not justified and without any basis. The complainant was at least entitled for reimbursement of claim amounting to Rs. 48,83,696/- along with interest and cost of litigation. Accordingly the present complaint is allowed to the extent of Rs. 48,83,696/- and accordingly the opposite party no 1 is directed to pay Rs. 48,83,696/- as loss claim to the complainant along with interest at the rate of 9% from date of repudiation of claim vide letter dated 03.01.2016 up till date and litigation cost of Rs. 2,00,000/-. The opposite party no 1 is directed to pay said amount within 60 days after adjusting the amount already paid by the opposite party no 1 to the complainant and if the awarded balance amount is not paid within 60 days then the opposite party no.1 shall be liable to pay interest at the rate of 12% to the complainant. The complaint is accordingly decided along with pending application if any.
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