AVM J. RAJENDRA, AVSM, VSM (RETD.) MEMBER

1.      The present First Appeal has been filed under Section 51 of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act”) against the Order dated 28.01.2021 passed by the State Consumer Disputes Redressal Commission, Haryana, Panchkula (hereinafter to be referred as “the State Commission”), in Consumer Complaint No. 398 of 2018, wherein the Complaint filed by the Complainant (Respondent herein) was accepted.

2.      As per Office report, there was a delay of 106 days in filing the present appeal. An Application being IA/4634/2021 seeking condonation of delay was also filed.  However, vide Order dated 25.07.2022 passed by this Commission, it was found that there was no delay and the application was disposed of accordingly.

3.      For Convenience, the parties in the present Appeal being referred to as mentioned in the Complaint before the learned State Commission. The Complainant “M/s. Krishna Overseas” is a Proprietorship firm engaged in Export trading of Utensils, Kitchen Accessories, Woolen, Acrylic Polyester, Blankets, Shawls, Bed Sheets, Fabric, curtains, Mats etc. since 2008 for livelihood. While the "United India Insurance Co. Ltd.” is referred to as the Opposite Party/ Insurer (OP in short) in this matter.

4.      Brief relevant facts of the case as per the Complainant are that the Complainant firm obtained marine open insurance from the OP, initially for Rs. Five Crores, which was later enhanced to Rs. 10 Cr and subsequently to Rs. 15 Cr. The Complainant’s firm vide its invoice No.24 dated 25.09.2014 dispatched on 30.09.2014 sent 7250 cartons of kitchen utensils to M/s Spartan Relief EPZ Ltd., Nairobi(Kenya). Initially, the complainant got custom shipping bill No.5294271 dated 30.09.2014 and thereafter complainant issued the gate pass No.149 for 3625 cartons and pass No.150 for 3625 cartons both dated 30.09.2014 and thereafter sent the sealed container through M/s Alpha Logistics Services, K-64 A, Kalkaji, New Delhi-110019 on 30.09.2014. Similarly, the complainant vide its invoice No.25 dated 01.10.2014 dispatched on 04.10.2014 sent 3700 cartons of kitchen utensils to M/s Spartan Relief EPZ Ltd., Nairobi (Kenya). The complainant again got custom shipping bill No.5329917 dated 01.10.2017 and thereafter the complainant issued Gate Pass No.151 for 3700 cartons dated 04.10.2014 and thereafter sent the sealed container through M/s Alpha Logistics Services. After custom clearance at Delhi, the goods sent through Mundra Port, Gujarat to Mombasa Port, Kenya for supply to the vendee of the complainant.

5.      On 08.11.2014, the Complainant received an e-mail along with the photographs of the containers from their vendee i.e. M/s Spartan Relief EPZ Ltd., Nairobi. In the e-mail, the vendee stated that the goods supplied through invoice No.24 dated 25.09.2014 was short of 5770 cartons and they have received 1480 cartons only against gate pass No.149 and they have not received any goods/ cartons against Gate pass No.151 i.e. 2625 cartons. The complainant again received an email dated 14.11.2014 from the vendee i.e., M/s Spartan Relief EPZ Ltd that the goods supplied through invoice No.25 dated 01.10.2014 were also short of 2848 cartons and they have only received 852. M/s Spartan Relief EPZ Ltd., paid the amount of USD 43137.65 cents to the complainant towards 1480 cartons received by them vide invoice No.24 dated 25.09.2014 and USD 68524 towards the 852 cartons received by them vide invoice no.25 dated 01.10.2014.

6.      Based on the Complainant’s complaint, M/s Alpha Logistics Ltd, lodged an FIR No.789 on 17.11.2014 under section 420, 407, 34 IPC at Police Station Sarita Vihar, Delhi. After investigation, two truck drivers from M/s Alpha Logistics were arrested, and Police recovered 533 cartons of Utensils and Rs.4,76,940 from them, which was released on superdari by Complainant from the court.

7.      The Complainant insured the goods shipped under invoice No. 24 and 25 with the Opposite Party and filed claims for USD 1,06,860.40 and USD 53,708, respectively. The OPs appointed Shri JC Gupta as surveyor. He assessed the loss as Rs.70,92,801 vide letter dated 16.08.2016. The OP thereafter referred the matter to M/s Bharat Associates, Karnal for further investigation. This report filed on 22.09.2017 rejected the claims on the grounds that invoice number 23 dated 28-29/09/2014 was forged and manipulated by the complainant. Further, based on the report dated 22.09.2017, a verification report dated 26.09.2017 was also made by CA Shri Surinder K Singla rejecting the claim.

8.      The Complainant asserted that the goods to be dispatched vide invoice No.23 dated 17.09.2014 were routed on 06.10.2014 due to routine delay. He explained that his firm booked transport from M/s Tyagi Road Carriers who sent empty trucks with builty to on 29.09.2014. However, due to incomplete shipment, the goods were not loaded, and the trucks were returned. M/s Tyagi Road Carriers attested this fact in an affidavit dated 07.07.2018. Further, this is recorded at the rear of the builty of M/s Tyagi Road Carriers stating that the goods due for dispatch on 29.09.2014 were shipped later on 06.10.2014. Thus, there was no fraud or cheating. Moreover, the goods dispatched through invoice No.23 dated 28-29.09.2014 with shipping bill No.5292456 dated 30.09.2014 were duly received by the vendees of the Complainant namely UNHCR GLOBALSC-SMS, Supply Management Service, IPOLY UTCA, Budapest (Hungary) through OKI General Trading LLC, Dubai. They also made the payment for the goods received. All the documents were handed over to M/s Bharat Associates, Karnal, but none of these documents are mentioned in the report. The OP wrongly repudiated the claim vide letter dated 06.03.2018. In response to repudiation of the claim, the Complainant sent an email on 28.05.2018 to M/s Bharat Associates Investigators pointing flaws in investigation. It was alleged that the OP committed deficiency in service and engaged in unfair trade practices by denying rightful claim to the insured property. However, no reply was received. Being aggrieved by repudiation of the claim, the Complainant approached the. State Commission seeking issue of appropriate direction to the OPs. to pay Rs.86,95,777 on account of price of the goods along with interest @ 15% p.a. from the date of repudiation of claims by the OP on 06.03.2018 till its actual realization, Rs.1,50,000 as compensation towards mental agony, torture and physical harassment and Rs.1,50,000 towards deficiency in service and Rs.1,10,000 as litigation expenses.

9.      In their reply, the OPs/Insurer raised various preliminary objections by stating that the Complainant is not consumer, concealed material facts, the matter involves disputed questions of facts and law, non-joinder of necessary parties etc and requested that the complaint be dismissed. It was asserted that the OPs conducted a thorough investigation through M/s Bharat Associates, an authorized investigators along with Chartered Accountant Shri Surinder Kumar Singla. The investigation revealed that there were material discrepancies in the sale/purchase/dispatch bills/ invoices/ builties/ GRs and accounts, which were procured fraudulently by the complainant’s firm to wrongfully obtain insurance claim. Based on the terms and conditions of the insurance policy and exceptions within the insurance contract, the OP/ Insurer repudiated the claim vide letter dated 06.03.2018. It was further pointed that, in a fraudulent and malicious manner, the Complainant used the entire premium deposit for other consignments and had no premium credit at the time of the alleged loss. This is not permissible under the insurance policy. The OP asserted that the Complainant did not have an insurable interest in the consignment either at the time of insurance or at the time of the alleged loss. This is in violation of Section 8 of the Marine Insurance Act, 1963. Therefore, the complaint should be liable to dismissed.

10.    The learned State Commission partly allowed the complaint, with the following Order: -

“16. Hence with the above observation and discussion there are sufficient grounds to accept the complaint and while accepting the complaint, the O.Ps. are directed to refund of the amount of Rs.84,08,290/- along with interest, other admissible claims which includes physical mental and litigation expenses, and the total amount is restricted to Rs. One Crore. In case there is a breach in making payment within the stipulated period of 45 days from the date of passing this order, in that eventuality, the provisions enshrined under section 72 of the C.P. Act would also be attractable.

11.    Being aggrieved by the impugned order, the Appellant filed this present Appeal seeking the following:-

“(A) Set aside the final order dated 28.01.2021 passed by the Hon'ble State Commission, Haryana, Panchkula in Complaint Case No. 398 of 2018.

(B) Allow the present First Appeal and award the cost of the Appeal to the Appellant.

(C) Pass any other or further order (s) as this Hon'ble Commission deems fit and proper in the facts and circumstances of the present case.”

12.    In the Appeal, the Appellant mainly raised the following issues:

(a)  The State Commission failed to consider that the special condition of the Marine Cargo Policy, which sets a maximum liability limit of Rs. 25 lakhs for any one event of loss/theft during road transit from Panipat to ICD, Tuklagabad. In a cryptic and partially non-explanatory order directed payment of Rs. 84 lakhs without specifying the interest rate or period.

(b)  The State Commission failed to consider the report by CA Shri Surender K. Singla dated 26.09.2017, which established that there was insufficient balance or exhaustion of the sum insured at the time of dispatch of the lost consignment.

(c)  The goods receipt issued on 06.10.2014 is invalid as no carbon copy record was held with the carrier. Thus, there was no insured sum balance left after the dispatch of consignment vide invoice No. 23 on 28.09.2014, Thus, losses under Invoice No. 24 & 25 are not covered under the policy.

(d) The Appellant underscored the importance of the "Limit of Liability" condition in the Marine Open Cover, signifying the maximum sum insured for the shipment(s), a crucial condition for the insured as it caps the insurance company's liability.

(e) The State Commission failed to discuss the basis on which the Hon'ble Supreme Court ruled in the case of Galada Power. Simply relying on the ratio without discussion on facts of the present case does not provide the correct perspective.

13.    Upon the notice on the memo of Appeal, the Respondent has not filed any reply. In the synopsis filed, the Respondent reaffirmed the case's facts, asserted that the State Commission rightly held that the Respondent has not presented any fraud or cheating with respect to invoice No. 23 of 17.09.2014.

14.    In his arguments, the learned counsel for the Appellant/OP reiterated the grounds stated in the Appeal. His arguments centered on key issues, including the alleged forgery of documents related to the timing of goods dispatch, the exhaustion of the sum insured, discrepancies in goods receipts, and the interpretation of the "Limit of Liability" condition in the insurance policy. He questioned the State Commission's handling of investigation and survey reports. The primary contention is that the goods with respect to invoice No. 23 were actually dispatched on 28.09.2014 i.e. prior to dispatch of goods under invoice No. 24 & 25, under which loss is claimed. The respondent forged GR receipts against invoice No. 23, changing the date of dispatch as 06.10.2014 i.e. after the dispatch of goods under Invoice. 24 & 25. Thus, they had already utilized and exhausted the sum insured with its invoice No. 23 and there was no balance left to cover the risk in invoice No. 24 & 25. The investigator was appointed to investigate the claim against Invoice No. 23 of 06.10.2014 found handwritten serial numbers whereas all other GRs bear printed numbers. Further, the truck numbers did not match. The sum insured was not available to cover dispatch under invoice No. 24 & 25 and the cover under invoice No. 23 was forged as 06.10.2014. Thus, due to insufficient sum insured and forged GRs, the claim is not found admissible.

15.    The investigator vide addendum to investigation report dated 14.12.2017 noted that, after his prior report a joint meeting was held with Respondent and he wrote 2 emails dated 06.12.2017 and 11.12.2017 to visit Tyagi Road Carrier, Panipat, who issued the GRs receipts. There, the investigator found GR No. 11899 was issued on 29.09.2014 and 11900 to 11902 issued on 29.09.2014. However, on reserve of all 4 GRs, the date 06.10.2014 was written without any signatures or rubber stamp. The second copy of GR No. 11899-11902 stated to be dated 06.10.2014 are fake and same were actually issued on 28/29.09.2014. No carbon copies of the said GRs were maintained, and no justification was given for not issuing fresh GRs later. Hence, the GRs of 06.10.2014 are dubious. The report of CA regarding verification of utilized premium revealed insufficient balance of sum insured, at the time of dispatch of lost consignment. The CA noted that the loss under invoice No. 24 & 25 is uninsured as sum had exhausted by invoice No.23 of 17.09.2014. The CA report further revealed that the insured failed to provide documents despite many requests and didn’t cooperate. No inward & outward register was held and the CCTV footage was not provided. Certain GRs issued on 06.10.2014 against invoice No. 23 are fake and were issued actually on 28.09.2014. The policy special conditions have a single carrying limit of Rs. 25 lakhs.

16.    The LEO (Let Export Order) with respect to invoice No. 23 dated 17.09.2014 was prepared and printed on 01.10.2014 and reflects the Shipping Bill date of 30.09.2014. This document duly signed and stamped by the Customs, ICD, Tuklagabad reflects the date as 01.10.2014. Therefore, the goods reached the port prior to the alleged date of discharge 06.10.2014. Thus, there was no balance of sum insured left after dispatch of consignment vide Invoice No. 23 on 28.09.2014. Therefore, two losses under invoice No. 24 and one under No. 25 dispatched on 30.09.2014 and 04.10.2014 respectively are not covered under the policy. The State Commission failed to consider the recommendation of the CA for appointment of investigator. The judgment of Hon’ble Supreme Court in National Insurance Co. Ltd. vs. Harjeet Rice Mills [III (2005) CPJ 6 (SC)] holding that the insurance companies are well within their rights to appoint an investigator after obtaining surveyor report. Hon'ble Supreme Court has also held in the case of Bajaj Allianz General Insurance Co. Ltd. & Anr. vs. State of MP (Civil Appeal No. 2366-67 of 2020, decided on 24.04.2020) that in a Marine case, the burden of proof lies upon the insurer to prove its case. The Marine Cargo Open Policy was subject to special condition that the Maximum Liability' of insurer will be restricted to Rs. 25 Lakhs for any one event for any Road Transport. The order to pay Rs.84,08,290 along with interest, which has also not been defined up to which period and at what percentage of Interest, and other admissible claims which includes physical and mental and litigation expenses have not been explained. The Hon'ble Supreme Court in Chief Administrator, HUDA and Anr. Vs. Shakuntla Devi (Civil Appeal No. 7335 of 2008) has held that "While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant is able to establish his charge." Thus, grant of consolidated amount towards Physical Mental expenses/suffering is wholly misconceived and untenable in view of the judgment of the Hon'ble Supreme Court in Sikka Papers Ltd. vs. National. The Hon'ble Supreme Court in Galada Power & Tele Ltd. v. United India Insurance Co. Ltd., [(2016) 14 SCC 161] is misplaced as the State Commission has not discussed the facts of the case which are different. He has also relied upon the judgment passed by Hon’ble Supreme Court in case of National Insurance Co. Ltd.  v. Harjeet Rice Mills [III (2005) CPJ 6 (SC] to support his case.

17.    On the other hand, the learned Counsel for the Respondent reiterated the facts of the case in the Complaint and the Affidavit of evidence filed before the State Commission. He vehemently contested the Appellant's actions, particularly the rejection of the First Survey Report without providing adequate reasons and the initiation of a second survey. He cited legal precedents to support their stance and emphasized the lack of consideration for crucial evidence in the Second Survey Report. He argued against the Appellant's interpretation of maximum liability and raised concerns about unfair trade practices related to premium calculations. Lastly, the Counsel highlighted the severe hardship caused by the ongoing stay and requested its removal or the option for the Respondent to withdraw the sums in question. He asserted that the Appellant arbitrarily, whimsically and without assigning any cogent reason rejected the report of Shri JC Gupta (First Surveyor) appointed by the Appellant itself. The first survey report dated 16.08.2016 prepared by Shri JC Gupta, assessed loss to be Rs. 70,92,801 to the Respondent. However, after lapse of 13 months, the Appellant with mala fide intent referred the matter for de novo investigation by M/s Bharat Associates. This investigation report dated 22.09.2017 (Second Survey Report) declared that the Respondents were not entitled to the claim. Basis on the Second Survey Report, a verification report dated 26.09.2017 was issued by CA Surinder Singla, refuting the claim without taking the relevant facts and documents under consideration. It was settled by Hon'ble Supreme Court in New India Assurance Co. Ltd. v. Sri Buchiyyamma Rice Mill [(2020) 12 SCC 105] that there ought to be cogent reasons for appointing a second surveyor, after receiving the report from the first. The Hon'ble Supreme Court at paragraph 17 held as follows:

"...while determining whether the appointment of a second surveyor is justified, one must take into consideration the necessity of doing so and it must be weighed in the context of relevant facts and circumstances, including deficiencies or omission in the report of the first surveyor."

18.    There is no mention of the First Survey Report or reasons as to why the same was ignored and/or discarded. The Second Survey Report and verification report are invalid, and the repudiation letter was issued by the Appellant in complete violation of established norms as second surveys cannot be conducted without giving compelling reasons for denial of the first survey report. The goods that were to be dispatched by the Respondent vide invoice dated 17.09.2014 was issued on 30.09.2014, and the goods were finally dispatched on 06.10.2014 due to routine delay as the goods were not loaded when M/s Tyagi Road Carriers sent their trucks on 29.09.2014. However, on account of incomplete shipment, the Respondent was constrained to return the trucks empty. Further, the goods dispatched by the Respondent were duly received by the vendees and the said vendees have also advanced payment of the goods received by them. Despite the Respondent having submitted the supporting documents in this regard to M/s Bharat Associates, these find no mention in the Second Survey Report. The Respondent is entitled to Rs. 84.08,290 along with interest and other admissible claims as the maximum contractual liability of the Appellant to pay insurance is Rs. 1 Crore. As per the Special Conditions clause of the Marine Cargo Open Policy, the maximum liability of the Appellant is Rs. 1,00,00,000 for any sea vessel. Therefore, the contention of Appellants that the maximum liability for loss towards each of the 3 consignments is Rs. 25,00,000 is prima facie erroneous. The. State Commission vide the impugned order has appropriately held that the Respondent is entitled to payment of Rs. 84,08,290, along with interest and other admissible claims which include mental and physical agony faced by the Respondent, and litigation expenses.

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

20.  The primary issue in this case revolves around the Appellant's rejection of the insurance claim made by the Respondent. The Appellant contends that the claim is invalid due to alleged forgery, misrepresentation, and violations of policy terms, particularly the liability limit set forth in the Marine Cargo Policy. This dispute also encompasses the burden of proof regarding the dispatch dates of goods under various invoices and the impact of a stay order on the Respondent's financial situation. In summary, the central question is whether the denial of the Respondent's insurance claim is justified and this case hinges on the examination of evidence, policy terms, and legal precedents to determine the validity of the claim. This essentially centers on the sequence and timing of goods dispatched under various invoices and how these dispatches affected the availability of the insured sum, forming the core of the contention between the parties. There's contention that goods under Invoice No. 23 were allegedly dispatched earlier on 28.09.2014 but reported later on 06.10.2014, leading to doubts about the availability of the insured sum at the time of subsequent dispatches (Invoices 24 & 25). The Appellant/insurer alleged that the Complainant exhausted the insured amount with the dispatch of goods under Invoice No. 23, invalidating the claims made for subsequent dispatches (Invoices 24 & 25). The Appellant also contended that the goods mentioned in Invoice No. 23 were dispatched before the goods covered by Invoices 24 & 25. They presented evidence suggesting that the insured sum was utilized or depleted with the dispatch of goods under Invoice No. 23, hence rendering subsequent claims invalid. Alleged discrepancies in documentation and the sequence of events were cited as evidence supporting the exhaustion of the insured sum. Upon Investigation, the report of CA regarding verification of utilized premium revealed insufficient balance of sum insured, at the time of dispatch of lost consignment. The CA noted that the loss under invoice No. 24 & 25 is uninsured as sum had exhausted by invoice No.23 and the insured failed to provide documents despite many requests and did not cooperate. No inward & outward register was held and the CCTV footage was not provided. Certain GRs issued on 06.10.2014 against invoice No. 23 are fake and were actually issued on 28.09.2014. The policy special conditions have a single carrying limit of Rs. 25 lakhs. The Appellant submitted the LEO (Let Export Order) wrt invoice No. 23 dated 17.09.2014 was prepared and printed on 01.10.2014 and reflects the Shipping Bill date of 30.09.2014. This document duly signed and stamped by the Customs, ICD, Tuklagabad reflects the date as 01.10.2014. Therefore, the goods reached the port prior to the alleged date of discharge 06.10.2014. Thus, there was no balance of sum insured, left after dispatch of consignment vide Invoice No. 23 on 28.09.2014. Therefore, two losses under invoice No. 24 and one under No. 25 dispatched on 30.09.2014 and 04.10.2014 respectively are not covered under the policy. The State Commission failed to consider the recommendation of the CA for appointment of investigator. On the other hand, the Respondent/ Complainant countered these allegations by presenting evidence by way of Affidavit dated 07.07.2018 of M/s. Tyagi Road Carriers by stating that the goods due for dispatch on 29.09.2014 were shipped later on 06.10.2014. Moreover, the goods dispatched through invoice No.23 dated 28-29.09.2014 with shipping bill No.5292456 dated 30.09.2014 were duly received by the vendees of the Complainant namely UNHCR GLOBALSC-SMS, Supply Management Service, IPOLY UTCA, Budapest (Hungary) through OKI General Trading LLC, Dubai. They also made the payment for the goods received. All the documents were handed over to M/s Bharat Associates, Karnal, but none of these documents are mentioned in the report.

21.    The Appellant/insurer has also contended that certain bills, invoices, and related paperwork submitted by the Complainant were forged or manipulated to wrongfully obtain an insurance claim. They raised concerns about discrepancies in the documents submitted and alleged that the Complainant manipulated or falsified certain invoices, bills, and shipping documents related to dispatch. Further in the arguments, the Appellant asserted that the investigator vide addendum to the report dated 14.12.2017 noted that, after his prior report a joint meeting was held with Respondent and he wrote 2 emails dated 06.12.2017 & 11.12.2017 to visit Tyagi Road Carrier, Panipat, who issued the GRs receipts. There, it was found that GR No. 11899 was issued on 29.09.2014 and 11900 to 11902 issued on 29.09.2014. However, on reserve of all 4 GRs, the date of 06.10.2014 was written without any signatures or stamp. The second copy of GR No. 11899-11902 dated 06.10.2014 are fake and were actually issued on 28/29.09.2014. No carbon copies of the said GRs were held, and no justification was given for not issuing fresh GRs later. Hence, these GRs are fake. On the other hand, the Respondent in forcefully countered these allegations by presenting evidence supporting the authenticity and accuracy of their documentation. They argued that the paperwork submitted accurately reflected the dispatches and transactions made, emphasizing that the documents were genuine and not forged. The Respondent provided explanations and evidence to substantiate the legitimacy of their submitted paperwork.

22.    The relevant portion of the Marine Cargo Open Policy is reproduced below: -

Special Condition:- “Insured will declare every consignment on Monthly basis and shall get the Sum Insured enhanced before it is exhausted. Maximum Liability of the Company will be restricted to :- for any one vent Rs.100 Lacs, for any one seal vessel : Rs.100 Lacs and for any one Road Vessel Rs. 25 Lacs. Basis of valuation will be Invoice Price.”

23.    The insurance company charged necessary premium from the Complainant. It is clearly proved on record that the goods against invoice No.23 had not been dispatched on the alleged date leaving sufficient sum insured with the Complainant. The action and persistence of the Appellant in repudiating the claim clearly tantamounts to unfair trade practice and deficiency in service. This is even after charging premium as per invoice value, which in certain cases is for beyond Rs. One Crore. Therefore, restricting the liability to Rs. 25 Lakhs in case of transportation by road cannot be justified. The surveyor who examined the entire records and the facts of the case, admitted and determined loss as Rs.84,08,290, and restricted it to Rs.70,92,801 stating certain reasons. In the given and established circumstances, there was no valid reason whatsoever for Respondents to appoint an investigator and then a CA, who submitted their reports after the lapse of 13 months.     

24.    The learned State Commission observed that:-

“12.    If the surveyor has already given the report in favour of the claimant, why investigator as well as chartered accountant were appointed by the insurance company. The report of the investigator as well as chartered accountant are already biased. The surveyor J.C. Gupta and Co. restricting the claim to Rs.70,92,801/- by relying upon special conditions mentioned in the policy is totally illegal and against law. The special conditions mentioned in the policy 10.16 states that maximum liability of the company will be restricted to, for any event: Rupees 100 lakhs, for anyone sea vessel: rupees 100 lakhs and for any one road vessel: Rupees 25 lacs. Basis of valuation shall be invoice price. Once the company has accepted the insurance for the invoice value which was about Rs.1.23 crores, the restriction cannot be imposed and is illegal and against law.

13.      It is proved on the record that the insurance company is charging premium for the entire value of goods as mentioned in the invoices, but, restricting its liability in the above said terms, which is totally illegal and unjustified. The report of Bharat Associates Ex. C-24 has wrongly repudiated the claim of the complainant, in which report, the investigator has reproduced a table at Sr. No.6.10 showing the sum insured and the balance remaining after deduction from the sum insured in terms of the different invoice. As per this table, it is clear at S.R.No.13 that the premium has been charged for the said invoice amount which is more than rupees one crore but has restricted the liability to rupees One crore. The insurance company has charged the premium against invoice No.18 mentioned at serial No.9 for a sum of Rs.1.23 crores and against invoice No.21 at serial No.11 for Rupees 1.70 crores while the liability was restricted to rupees one crore in both the cases. It is not clear whether the said consignments versant by road or sea but it is definite that the liability of the company was restricted to rupees one crore in both the cases as the insurance company has charged excess premium to the extent of Rs.23/- lacs in one case and Rs.70/- lacs on the other case, which cannot be permitted as per law. Counsel for the complainant has relied upon judgment of Hon’ble Supreme Court titled M/s Galada Power Vs. UIIC (Supra), which is relevant in the present case as in this case surveyor confirmed the shortage and thereafter an investigator appointed by the insurance company and relying on the report of investigator, the insurance company repudiated the claim. There was no valid reasons to appoint investigator, who submitted his report after eight months. The order of repudiation was set aside by the Hon’ble Supreme Court. Relevant portion of the judgment is reproduced below:-

“17. In the instant case, the insurer was in custody of the policy. It had prescribed the clause relating to duration. It was very much aware about the stipulation made in clause 5 (3) to 5 (5), but despite the stipulations therein, it appointed a surveyor. Additionally, as has been stated earlier, in the letter of repudiation, it only stated that the claim lodged by the insured was not falling under the purview of transit loss. Thus, by positive action, the insurer has waived its right to advance the plea that the claim was not entertainable because conditions enumerated in duration clause were not satisfied. In our considered opinion, the National Commission could not have placed reliance on the said terms to come to the conclusion that there was no policy cover in existence and that the risks stood not covered after delivery of goods to the consignee.

18. Coming to the merits of the claim we find that the surveyor had given a report that there was a loss. He had also quantified it. The State Commission after elaborate discussion has held as follows:-

        The surveyor also confirmed in their reports, the shortage/ loss of AAAC due to pilferage during transit and estimated the loss as per Ex.A.12. This shortage was also confirmed by Katigorah police as per Ex.A.13 and as reiterated earlier by the Tage Over Certificate, Ex.A19. Taking into consideration that the surveyors appointed by the insurance company have completed their investigation and submitted their reports and thereafter an investigator was appointed on 16.04.1998 without ANY VALID REASONS. It is held by the National Commission in (2004) 1 CPJ 10 (NC) in Gammon India Ltd., Vs. New India Assurance Cp. Ltd. that ‘Report of first surveyor not accepted, second surveyor appointed-Appointment of second surveyor not explained-Deficiency in service proved-Report of first surveyor upheld’ and the investigator in the instant submitted his report on 28.12.1998 i.e. almost 8 months after his appointment. Taking into consideration all the above submissions, we are of the considered opinion that the appellant/complainant was able to establish that there was shortage/damage to the consignment which was given to second respondent for transportation.”

19. Though the said aspect has not been gone into by the National Commission, yet we find, the finds recorded by the State Commission are absolutely justified and tenable in law being based on materials brought on record in such a situation we do not think it appropriate that an exercise of remit should be carried out asking the National Commission to have a further look at it. In any case, the exercise of revisional jurisdiction by the National Commission is a limited one. We may hasten to add that to satisfy ourselves, we have perused the surveyor’s report and scrutinized the judgment and order passed by the State commission in this regard and we are completely satisfied that the determination made by it is absolutely impeccable.”

25.    The present case is fit to put reliance on the Order of Hon’ble Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Limited and Another, (2009) 8 SCC 507, decided on 24.08.2009, wherein it was held that:

"32. There is no disputing the fact that the surveyor / surveyors are appointed by the insurance company under the provisions of the 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...

35. In our considered view, the Insurance Act only mandates that while settling a claim, assistance of a surveyor should be taken but it does not go further and say that the insurer would be bound by whatever the surveyor has assessed or quantified; if for any reason, the insurer is of the view that certain material facts ought to have been taken into consideration while framing a report by the surveyor and if it is not done, it can certainly depute another surveyor for the purpose of conducting a fresh survey to estimate the loss suffered by the insured."

37. The option to accept or not to accept the report is with the insurer. However, if the rejection of the report is arbitrary and based on no acceptable reasons, the courts or other forums can definitely step in and correct the error committed by the insurer while repudiating the claim of the insured. We hasten to add, if the reports are prepared in good faith, with due application of mind and in the absence of any error or ill motive, the insurance company is not expected to reject the report of the surveyors."

26.    In Khatema Fibres Ltd. v. New India Assurance Company Ltd., 2021 SCC OnLine SC 818, decided on 28.09.2021 it was held that:

“32. It is true that even any inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law or 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 64UM(1A) 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 64UM(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 raise 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.

38. A Consumer Forum which is primarily concerned with   an allegation of deficiency in service cannot subject the surveyor’s report to forensic examination of its anatomy, just as a civil court could do. Once it is found that there  was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the   surveyor, in a manner prescribed by the Regulations   as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by   arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop.”

27. Based on the above discussion and on careful examination of the material on record we find no reason to interfere with the order of the learned State Commission dated 28.01.2021. The FA 441 of 2021 is therefore dismissed for being devoid of merit.

28.    All pending Applications, if any, stand disposed of accordingly.

29. The Registry is directed to release the Statutory deposit amount, if any due, in favour of the Appellant, after compliance of the order of the learned State Commission.