AVM Jonnalagadda Rajendra, AVSM, VSM (Retd), MEMBER

1. This Revision Petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 (the "Act") against the Haryana State Consumer Disputes Redressal Commission, at Panchkula ("State Commission‟) dated 09.10.2017 in FA No. 772/2016 dismissing the Appeal filed by the Petitioner/OP and affirmed the District Consumer Disputes Redressal Forum, Kaithal (District Forum‟) order dated 15.07.2016 which partly allowed the complaint.

2. For convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

3. Brief facts of the case, as per the complainant, are that he is engaged in the business of manufacturing lead-acid batteries for earning his livelihood under a proprietorship firm named and styled as M/s. Chetan Electronics, at VPO Pharal, District Kaithal. He purchased an Air Testing Machine from Industrial Automation, Rajpura for Rs.6,00,000 vide bill dated 09.11.2013. This machine was financed by OP-2 and, at the time of availing the loan, OP-2 got the said machine insured with OP-1 vide Policy No.110705/11/13/11/00000265, valid from 17.12.2013 to 16.12.2014. During the midnight of 15/16.07.2014, a sudden fire broke out in the complainant‟s unit and, as a result, the Air Testing Machine along with other battery charger machines and five batteries were completely destroyed. The complainant informed the OPs about the incident and lodged a DDR at Police Station Pundri on 20.07.2015. Thereafter, the complainant lodged a claim with OP-1. However, OP-1 repudiated the claim. Alleging deficiency in service against the OPs, the complainant filed a consumer complaint before the District Forum seeking insured amount of Rs.6,00,000 along with compensation of Rs.3,00,000 towards grave mental and physical harassment and Rs. 55,000 litigation costs.

4. Upon notice, OP-1 appeared before the District Forum, whereas OP-2 failed to appear and was accordingly proceeded ex parte vide order dated 08.10.2015. OP-1 filed written version raising preliminary objections regarding the maintainability, lack of cause of action, and locus standi of the complainant. It was further contended that he concealed true and material facts. It is OP-1‟s case that the policy issued to the complainant was a Standard Fire and Special Perils Policy, which specifically contains the following exclusion clause:

                          "Loss, destruction or damage to any electrical machine, apparatus, fixture or fitting arising from or occasioned by overrunning, excessive pressure, short circuiting, arcing, self-heating or leakage of electricity from whatever cause (lightning included); provided that this exclusion shall apply only to the particular electrical machine, apparatus, fixture or fitting so affected and not to other property which may be destroyed or damaged by fire so set up."

5. On the aforesaid exclusion clause, OP-1 contended that the complainant is not entitled to any claim under the policy and that her has no insurable interest or locus standi to file this complaint. It was further contended that there is no deficiency in service on the part of the OP-1. On merits, all the averments made in the complaint were denied and dismissal of the complaint was prayed for. The learned District Forum vide Order dated 15.07.2016 partly allowed the complaint with the following directions:-

                          "7. From the pleadings and evidence of the case, it is clear that the complainant has purchased one Air Testing Machine for the sum of Rs.6,00,000/- vide bill, Ex.CC. It is also clear that the Complainant got the said machine financed from Op No.2 and at the time of availing the loan facility, Op No.2 got the machine insured with Op No.1. It is not disputed between the parties that the Insured machine was destroyed in the fire which broke out in the unit in the Intervening night of 15.16.07.2014. The dispute between the parties is that according to the Ops, there was no Insurable Interest of the complainant in view of exclusion clause, whereas according to the complainant, no terms and conditions were told or explained to him by Op No.1 or his official. From the reply of Op No.1, it is clear that Op No.1 has not mentioned therein that the terms and conditions of the policy were told, explained and made to understand to the complainant. They have only alleged that the terms and conditions given in the policy may be read as part of reply. Unless and until the terms and conditions of the policy were told, explained and made to understand to the insured, the same cannot be relied upon. As already stated above, Op No.1 has not mentioned in his reply that the Insured was explained about the exclusion clause. Moreover, the policy, Ex.OP1 is very much clear that the clauses, warranties, endorsement etc. are written in very small letters. It is necessary to mention here that firstly, the cover note was issued and the insurance policy was dispatched later on by the company. So, in the circumstances, it has become the duty of company to explain the terms and conditions including exclusion clause to the insured and it was the duty of Ops to prove the same on the file but Op No.1 has failed to prove on the file that they have explained the terms and conditions to the insured. In this regard, we can rely upon the authorities produced by the complainant including the authority titled as Star Health and Allied Insurance Co. Ltd. Vs. Asha & others (supra), wherein it has been held that it is the duty of the insurance company to prove that these terms and conditions were explained to the insured, when cover note was issued. The above-said authorities produced by the complainant are fully applicable to the facts of present case. So, we are of the considered view that the repudiation of claim made by Op No.1 is wrong and illegal. Hence, Op No.1 is deficient while rendering services to the complainant.

                          8. It is clear from the pleadings that Op No.1 has appointed a surveyor and loss assessor, who submitted his report but the Op No.1 has not placed the same on the file. At the time of arguments, on the asking of this Forum, the Op No.1 has placed the photo-stat copy of the final survey report dt. 13.08.2014 on the file. According to this report, it is clear that Sh. Ashish Bahl, surveyor and loss assessor was appointed as surveyor and he assessed the loss to the tune of Rs.5,10,000/- but due to exclusion clause, he denied the all amount and assessed the loss of the Air Testing Machine as NiI. As discussed above, the Op No.1 has wrongly repudiated the claim of complainant under the exclusion clause, so, the Op No.1 is liable to pay the cost of repair of Air Testing Machine to the tune of Rs.5,10,000/- as assessed by the surveyor. In this regard, we rely upon a judgment II(2008) CPJ, page 182 (NC), titled as United Insurance Co. Ltd. Vs. Maya, wherein it has been held that the surveyor report should not be dismissed summarily as the surveyor is independent and qualified person appointed under the relevant provisions of Insurance Act, 1938.

                          9. Thus, as a sequel of above discussion, we allow the complaint and direct the Op No.1 to pay Rs.5,10,000/- as cost of repair of Air Testing Machine and further to pay Rs.5,000/- (Five thousand) as pay lump sum compensation on account of harassment, mental agony and costs of litigation charges.

                          Let the order be complied with within 30 days, failing which, the complainant shall be entitled interest @ 8% p.a. A copy of this order be sent to both the parties free of costs. File be consigned to the record room after due compliance."

6. Being aggrieved by the District Forum order, the OP filed Appeal No.772 of 2016 and the State Commission vide order dated 09.10.2017 dismissed the Appeal with following observations:

                          "5. Against the impugned order dated 15.07.2016, the OPs/appellant has filed appeal before us reiterating the same pleas as raised before the District Forum. We have heard the learned counsel for the parties and have gone through the record, from the perusal whereof the following salient features stand established by documentary evidence:-

                          i) the complainant purchased the Air Testing Machine and he got the same insured from the OPs.

                          ii) the machine got destroyed in fire during the validity period of the Insurance Policy.

                          iii) Immediate information was given to the Police as well as to the Insurance Company.

                          iv) The Surveyor of the Company inspected the premises as well as the machine in question and thereafter submitted the report assessing the loss of the machine by destruction in fire.

                          v) The surveyor however, opined that there was exclusion clause in the Insurance Policy, which provided that in case of fire by short circuit, the compensation was not payable to the insured.

                          vi) Deriving benefit out of this exclusion clause the OPs-

                          Insurance Company-Appellants repudiated the claim by taking shelter of the fire caused by short circuit, even though no body had stated so or produced any evidence in support of this. No expert has been produced by the Insurance Company to prove or even through light on the cause of the fire, much less by short circuit.

                          vi) Further even the Corporation of the exclusion clause in the insurance policy was not explained to the complainant when the cover note of the Insurance Policy was issued

                          6. Therefore, in view of the aforesaid established facts, the conclusion of the learned District Forum that the repudiation of the claim of the complainant by the Insurance Company was without any basis is in accordance with law. The mere fact that the exclusion had been incorporated in the insurance policy which provided that in case of fire by short circuit claim for compensation would be repudiated does not justify the repudiation in all cases, unless it stands established by cogent documentary evidence that in fact the fire in question, was caused by short circuit. This onus on the part of the Insurance Company could only be discharged by producing by some expert, in which duty the appellant miserably failed. Consequently, we fully endorse and uphold the well reasoned and detailed order passed by the District Forum and dismiss the appeal with no Order as to costs

                          7. Statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellant against proper receipt and identification in accordance with rules after the expiry of period of appeal and revision, if any filed in the case

7. Being dissatisfied by the Impugned Order dated 09.10.2017 passed by the State Commission, the Petitioner/OP has filed the instant Revision Petition bearing no.478 of 2018.

8. The learned counsel for Petitioner/OP-1 argued that the Complainant obtained a Standard Fire and Special Perils Policy from 17.12.2013 to 16.12.2014 through his banker, Canara Bank, in respect of Air Testing Machine purchased for his unit, M/s Chetan Electronics. On the night of 15/16.07.2014, a fire broke out in the premises of the Respondent, resulting in damage to the insured Air Testing Machine along with other machinery and batteries at the premises. Upon receipt of information regarding the incident, the Petitioner-Insurer appointed a Surveyor to investigate the matter. The Surveyor inspected the site, examined the relevant documents including DDR No.22(A) dated 20.07.2014 registered at PS. Pundri, District Kaithal, and reviewed the CCTV footage. Based on his investigation, the Surveyor concluded that the fire had originated within the Air Testing Machine due to short- circuit. It was argued that the insurance policy specifically excluded liability for loss or damage to electrical machines due to short-circuit, arcing, self-heating, or leakage of electricity. Thus, the OP repudiated the claim strictly in accordance with the exclusion clause in the policy. However, the District Forum allowed the complaint and directed the OP to pay Rs.5,10,000 towards the repair of the machine, along with compensation and litigation expenses, which was affirmed by the State Commission. It was argued that the findings recorded by both the fora are erroneous and contrary to the material available on record, as the cause of fire due to short-circuit stood established by the Surveyor‟s report, police DDR, and the CCTV footage. According to the Petitioner, the Complainant himself admitted that the origination of fire was from the machine. Thus, no further expert evidence was required. He relied on Hon‟ble Supreme Court in UIIC vs. Samir Chandra, III (2005) CPJ 2 (SC), wherein it was held that an admission is the best evidence against the person making it. The Surveyor‟s report, being detailed and reasoned, could not have been disregarded without cogent reasons. The claim of the Complainant that the policy terms and conditions were not explained or printed in small font was also challenged. He asserted that it is the duty of the insured to acquaint himself with the terms and conditions of the policy before accepting it, as held in UIIC vs Subash Chandra, III (2010) CPJ (NC) and Sushila Devi vs LIC I(2016) CPJ 351 (NC). Further, the terms of an insurance contract must be strictly construed and where liability is expressly excluded, the courts are bound to give effect to such exclusions. Reliance was placed on UIIC vs. Orient Treasures Pvt. Ltd., (2016) CPJ 6 (SC) and V.K. Karyana Store vs. OIC, 2014 (3) CLT 47 (NC). He asserted that the repudiation of the claim by the Petitioner was fully justified and in accordance with the policy conditions.

9. Per contra, learned counsel for the Complainant argued that the impugned order dated 15.07.2016 passed by the District Forum and affirmed by the State Commission vide order dated 09.10.2017 clearly establish, on the basis of documentary evidence, that the Complainant had purchased an Air Testing Machine for a sum of Rs.6,00,000 which was duly insured with the OP Insurer during the relevant period. It was contended that the machine was destroyed in a fire incident during the subsistence of the insurance policy and the incident was promptly reported to the police as well as to the Insurer. Thereafter, the OP appointed a surveyor who inspected the premises and assessed the loss. However, the Insurer repudiated the claim by taking shelter under an alleged exclusion clause relating to fire caused by short circuit, despite the absence of any cogent evidence or expert opinion to establish that the fire had in fact occurred due to a short circuit. It was further submitted that both the fora below concurrently held that the OP Insurer failed to discharge the burden of proving the applicability of the exclusion clause. The insurer also failed to establish that the terms and conditions of the policy, including the exclusion clause, were ever explained to the insured at the time of issuance of the cover note or policy, particularly when the policy conditions were printed in extremely small font and were allegedly supplied subsequently. In view of these findings, the claim repudiation was rightly held to be arbitrary, illegal, and amounting to deficiency in service. He further argued that this Revision Petition does not disclose any ground warranting interference with the concurrent findings of facts. There is neither any admission nor reliable evidence supporting the Petitioner‟s allegation that the fire was caused due to short circuit. Even otherwise, the Petitioner was liable to honour the claim in terms of the proviso to the alleged exclusion clause. Accordingly, it was prayed that the Revision Petition, being devoid of merit, be dismissed with exemplary costs.

10. The OP-2 Bank did not appear before this Commission despite service of notice. Accordingly, OP2 was proceeded ex-parte vide order dated 11.03.2026.

11. We have carefully examined the pleadings and documents placed on record and have given thoughtful consideration to the submissions advanced by learned counsel for both parties.

12. In the present case, it is undisputed that the Complainant had purchased an Air Testing Machine for Rs.6,00,000, and that the said machine was insured with OP Insurer under a Standard Fire and Special Perils Policy from 17.12.2013 to 16.12.2014. It is also not in dispute that during the intervening night of 15/16.07.2014, a fire broke out in the premises of the complainant, resulting in destruction of the insured machine. The claim of the complainant was repudiated by the Petitioner primarily on the ground that the fire originated due to a short circuit within the machine and that the loss was excluded under the policy. The principal contention of the OP Insurer is that the surveyor appointed by the OP concluded in his report that the fire had originated due to a short-circuit within the Air Testing Machine and therefore the claim was not payable in view of the exclusion clause in the policy wrt electrical machines. It was further argued that the fora below failed to properly appreciate the surveyor‟s report and erroneously held the repudiation to be illegal. It is well settled that the report of a surveyor appointed under the provisions of the Insurance Act carries evidentiary value and ordinarily deserves due weight. However, it is equally settled that such a report is not conclusive and must be supported by cogent reasoning and credible evidence. In this case, except for a general observation made in the survey report, no scientific analysis, expert opinion, or technical material has been produced to conclusively establish that the fire was caused by a short circuit within the machine.

13. The State Commission has specifically recorded a finding that the OP Insurer failed to produce any expert evidence to substantiate the alleged cause of fire as short circuit. Even the DDR lodged with the police does not conclusively attribute the cause of fire to short circuit. In the absence of clear and convincing evidence establishing the precise cause of fire, the Insurance Company cannot take benefit of the exclusion clause merely on the basis of conjecture or assumption.

14. Another important aspect noted by the fora below is that the Insurance Company failed to establish that the terms and conditions of the policy, particularly the exclusion clause, were ever explained to the insured at the time of issuance of the cover note or policy. The District Forum observed that the policy conditions were printed in extremely small font and the insurer failed to produce any material to show that the exclusion clause had been specifically brought to the notice of the insured. The insurer, being the author of the contract, was required to demonstrate that such exclusionary terms were duly communicated to and understood by the insured. In the absence of such proof, reliance upon the exclusion clause becomes doubtful.

15. The law governing insurance contracts is well settled. Insurance is a contract of utmost good faith. However, the burden to establish suppression of material facts lies squarely on the insurer. The Hon‟ble Supreme Court in United India Insurance Co. Ltd. Vs M/s Hyundai Engineering & Construction Co Ltd & Ors 2024 LiveLaw 409 has held:

                          "16. Insurance is a contract of indemnification, being a contract for a specific purpose, Oriental Insurance Co. Ltd. v. Sony Cheriyan, (1999) 6 SCC 451, which is to cover defined losses, United India Insurance Co. Ltd. v. Levis Strauss (India) (P) Ltd., (2022) 6 SCC 1. The courts have to read the insurance contract strictly. Essentially, the insurer cannot be asked to cover a loss that is not mentioned. Exclusion clauses in insurance contracts are interpreted strictly and against the insurer as they have the effect of completely exempting the insurer of its liabilities, New India Assurance Co. Ltd. v. Rajeshwar Sharma, (2019) 2 SCC 671; Canara Bank v. United India Insurance Co. Ltd., (2020) 3 SCC 455; Oriental Insurance Co. Ltd. v. Samayanallur Primary Agricultural Coop. Bank, (1999) 8 SCC 543.

                          12.

                          "17. In Texco Marketing P. Ltd. v. TATA AIG General Insurance Company Ltd., Oriental Insurance Co. Ltd. v. Samayanallur Primary Agricultural Coop. Bank, (2023) 1 SCC 428, while dealing with an exclusion clause, this Court has held that the burden of proving the applicability of an exclusionary clause lies on the insurer. At the same time, it was stated that such a clause cannot be interpreted so that it conflicts with the main intention of the insurance. It is, therefore, the duty of the insurer to plead and lead cogent evidence to establish the application of such a clause, National Insurance Company Ltd. v. Vedic Resorts and Hotels Pvt. Ltd., 2023 SCC OnLine SC 648. The evidence must unequivocally establish that the event sought to be excluded is specifically covered by the exclusionary clause, National Insurance Co. Ltd. v. Ishar Das Madan Lal, 2007 (4) SCC 105. The judicial positions on the nature of an insurance contract, and how an exclusion clause is to be proved, shall anchor our reasoning in the following paragraphs."

16. In Narsingh Ispat Ltd Vs Oriental Insurance Company Ltd. & Anr 2022 LiveLaw (SC) 443, Hon‟ble Supreme Court reiterated National Insurance Co Ltd vs Ishar Das Madan Lal (2007) 4 SCC 105 (Para 12) and held that exclusionary clauses and allegations of suppression must be strictly proved by cogent and reliable evidence, and in case of ambiguity, the benefit must go to the insured.

17. The District Forum, after examining the material on record, relied upon the surveyor‟s assessment of loss to the extent of Rs.5,10,000/- and directed the Insurance Company to pay the said amount along with nominal compensation. The State Commission, upon reappraisal of the record, affirmed the said findings holding that the repudiation of the claim by the Insurance Company was without sufficient basis.

18. The findings recorded by both the fora below are essentially findings of fact based on appreciation of the evidence available on record. The Petitioner/OP has not been able to demonstrate that the said findings suffer from any jurisdictional error, material irregularity, or perversity warranting interference by this Commission in exercise of its limited revisional jurisdiction.

19. The scope of revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986 is extremely limited. As held by the Hon‟ble Supreme Court in Rubi (Chandra) Dutta v. United India Insurance Co. Ltd., (2011) 11 SCC 269, Sunil Kumar Maity v. SBI (Civil Appeal No. 432 of 2022), and Rajiv Shukla v. Gold Rush Sales and Services Ltd., (2022) 9 SCC 31, this Commission cannot interfere with concurrent findings of fact unless the same are shown to be perverse or suffering from jurisdictional error or material irregularity.

20. In the present case, we find no infirmity, illegality, or jurisdictional error in the well-reasoned orders passed by the District Forum and affirmed by the State Commission. The repudiation of the claim by the Insurance Company was rightly held to be unjustified and amounting to deficiency in service.

21. In view of the foregoing discussion, we find no merit in the present Revision Petition. The impugned order dated 09.10.2017 passed by the State Commission in First Appeal No.772 of 2016 affirming the order of the District Forum dated 15.07.2016 does not suffer from any jurisdictional error or material irregularity warranting interference by this Commission.

22. Accordingly, the orders passed by the learned District Forum and affirmed by the learned State Commission are upheld and Revision Petition No.478 of 2018 is dismissed.

23. There shall be no order as to costs.