1.      The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 31.07.2013 passed by the State Consumer Disputes Redressal Commission, Gujrat (“the State Commission”), in CC No. 26 of 2007, wherein the Complaint of the Complainant (Appellant) was Dismissed.

2.      For convenience, the parties in the present matter are referred to as mentioned in the Complaint before the State Commission. The Complainant, Diptiben Nileshbhai Modi, is the proprietor of Shrinath Parlor and operates her parlor as well as a firecrackers retail counter at the same address for her livelihood. The Divisional Manager, United India Insurance Company Ltd. is referred as OP-1, while the Divisional Manager, New India Insurance Co. Ltd. is referred as OP-2. Union Bank of India, Branch Raipur Darwaja, is referred to as OP-3.

3.      Brief facts of the case, as per the Complainant, are that initially she had obtained a 'Standard Fire & Special Perils Policy' No. 060400/ 11/04/01227 valid from 25.10.2004 to 24.10.2005 from OP-1, covering an amount of Rs.20,00,000/-, which included stocks at premises No. 2866, Raipur Gate, Ahmedabad. She took an insurance policy No. 060400/11/04/01255 for Rs.5,00,000/- covering the risk to building at premises No.2857, Piparadi Ni Pole, Raipur Gate, Ahmedabad. She also had taken cash credit facility of Rs.12,00,000/- from OP-3 Bank, and OP-3 Bank took a policy No. 212400/11/0401312 from 21.09.2004 to 20.09.2014 against the Cash Credit for Rs.12,00,000/- from OP-2 for the said building No.2857. OP-3 took another policy No. 212405/ 11/04/01319 from 21.09.2004 to 20.09.2005, covering Rs.20,00,000/-, which included cover for stock and material at the premises No.2857, Piparadi Ni Pole, Raipur Gate, Ahmedabad from OP-2. During the validity of the Policies, on 09.09.2005, at 8:10 PM, a fire broke out at the parlour, resulting in complete destruction of firecracker stock and all other items. Additionally, the building was damaged and collapsed, resulting in unfortunate death of one person. She suffered a loss of Rs.38,15,000/- and filed a claim with both OP-1 & OP-2 through OP-3 Bank, who appointed a Surveyor to assess the loss. The insurer proposed settlement for Rs.5,00,00/-, considering the audit report of Rs.21,15,000/-, as entire stock was destroyed. However, she relied on the CA report from M/s. Dipesh S. Chokshi for 2005-2006, which stated the loss as Rs.21,15,000/- against stock and Rs.17,00,000/- against the building, totalling Rs.38,15,000/-. She did not claim against insurance taken by OP-3 from OP-2. She contended that everything was lost in this incident and was forced to apply for bankruptcy. Aggrieved, she filed CC No. 26 of 2007 seeking Rs.38,15,000/- with 10% interest, Rs.5 Lacs as compensation, and Rs.1 lac against costs.

4.      In reply, OP-1 asserted that the policy issued by them vide No. 060400/11/04/1227, covered loss against Hazardous Goods for premises No. 2866. However, the Complainant had stored goods in premises No. 2857, which was not covered under the policy. Thus, there is no liability to settle any claim against the policy coverage of Rs.20,00,000/- for the incident on 09.09.2005 at premises No. 2857, Pipardi's Pole, Raipur, Ahmedabad. As per OP-1, the insurer was not responsible to settle any claim against the said policy, and no order could be passed against them.

5.      As regards premises No.2857, OP-1 has contended that the policy No. 060400/11/04/01255 covers damage to premises No. 2857. However, the Surveyor's report and documents she submitted revealed that she was not the owner of premises No. 2857. Thus, she had no insurable interest. Therefore, the Complainant was not entitled to receive claim against the building. OP-1 further contended that her application for bankruptcy did not comply with the necessary legal procedures, as the Registrar of the City Civil Court was not joined as a party. OP-1 also contended that she did not make the insurer a party to the bankruptcy mater, rendering the procedure illegal. OP-1 pointed that she had obtained insurance policies totalling Rs.17,00,000/- against the same building from OP-2 and she suppressed this fact from OP-1 and taken insurance policy of Rs.5,00,000/-. She was entitled to claim under only one policy, and claiming under both policies was not legally permissible. Additionally, OP-1 argued that her claim exceeded the actual value of the property as per the surveyor's report and the balance sheet. As per the surveyor's report and as per the balance sheet after deducting depreciation value, on 01.04.2005, the total value was Rs.3,21,391.13ps and so Complainant cannot get more amount than this against the loss. OP-1 also raised concerns about the calculation of the claim based on bank statements, asserting that a valid certificate from the Explosive Inspector or Authority was necessary due to the control of firecrackers under the Arms and Ammunition Act. Further, OP-1 highlighted discrepancies in the location of the firecrackers stock as declared by the Complainant and the location specified in the insurance policy.

6.      In its reply, OP-2 contended that there was no deficiency in their service and the Complainant was not their consumer, as she was engaged in commercial activities and obtained insurance policies for her business. Thus, the Consumer Commission lacked jurisdiction. Also, the complainant had filed a common complaint for multiple causes of action, which was not permissible. They made efforts to settle the claim but did not receive cooperation from the Complainant. They stated that the claim file was closed on 20.01.2006, as informed to her and the bank. She suppressed the fact of the claim file closure.

7.      OP-2 clarified that the policy was issued based on the proposal of the Complainant's bank, covering the period from 21.09.2004 to 20.09.2005 for Rs.20,00,000/- against the stock of material and the building. They highlighted that the surveyor had requested necessary cooperation from the Complainant and the bank, but neither was present during the surveyor's visit. OP-2 further mentioned that the Complainant's request for a premium refund was accepted, and the policy was cancelled on 20.01.2006 after the receipt of the request letter on 18.01.2006. Moreover, OP-2 denied her allegations and stated that the Complainant failed to insure the goods in time, leading the bank to take insurance from OP-2 on her behalf against hypothecated goods by deducting the premium from her account. They emphasized that her decision to take another policy from OP-1 was unnecessary, and she could only claim from one insurance company. OP-2 accused the complainant of having malicious intentions to obtain money from both insurance companies by lodging claims with both.

8.      In rely, OP-3 Bank contended that as per the Securitization Act, they were required to take insurance against the goods hypothecated with them to safeguard against non-performing assets, following the guidelines of the Reserve Bank of India. There was no fault on the part of the bank. After providing notice to her, they informed the insurer to settle the claim. Additionally, the Complainant provided an undertaking and declared that any complaint filed against OP-3 be considered withdrawn, thereby acknowledging that the bank had primary rights to any compensation or amount receivable. As a result, Application No. 47/2008 was filed in both Debt Recovery Tribunals with her consent. Moreover, OP-3 contended that the Complainant, without informing the bank, had filed complaints against OP-1 and OP-2 knowingly and intentionally, with malicious intent. OP-3 contended that she was not entitled to receive anything from them under these circumstances.

9.      The Ld. State Commission, following due deliberation and assessment of the case's facts and circumstances, dismissed the complaint, with the following reasons :-

 “Reasons for the Decision –

 Discussions are made along with point no.1 to 4. Complaint bearing no.26/2007 of present complainant namely Diptiben Nileshbhai Modi who is proprietor of Shreenath Parlour and is doing business at Building No.2855, Pipardi s Pole, Raipur Darwaja, Ahmedabad. As the said Complainant was doing business of Firecrackers, she had taken insurance policy from opponent no.1 insurance company and the said policy was named as "Standard Fire and Special Perils Policy" of Rs.5,00,000/- whereas the other policy bearing no.060400/11/ 04/01227 of Rs.20,00,000/- was taken for the coverage of Hazards Goods and material stock. In the said policy, the place of coverage was shown as building no.2866 whereas the fire took place on 09/09/2005 at the building no.2857, which is proved as per the Policy Report and as per the Final Survey Report of Surveyor Sh. Ashwin K. Sheth. There is no dispute about the same. For the building no.2866, policy bearing no.060400/11/04/01255 of Rs.5,00,000/- was taken. As informed by the complainant, the firecrackers which were kept at building no.2857 have got totally burnt in the fire and loss of the same was assessed as Rs. 16,15,000/-, which is exhibited at page no. 15 of Survey Report. Whereas as per the Survey report page no. 170, loss is shown as Rs. 16,55,000/- for the stock lying at building no.2858. As per the report of Surveyor, if the loss is proved, then in that case, Diptiben Nileshbhai Modi who is the proprietor of Shrinath Parlour will be entitled to get compensation for such loss under Consumer Complaint No.26/2007. Such opinion is given by the surveyor. It is the submission of the complainant that insurance company has not shown the report of surveyor due to bad intention and by this insurance company has suppressed the details of the report and by this kept insurer in dark and so these facts should be considered. It is argued by Shri Milan Dudhia, Advocate of the complainant that Diptiben Nileshbhai Modi and her husband Nileshbhai Hiralal Modi both were jointly doing business in building no.2857 and 2858 in the name of Shreenat Parlour and Shreenath Cold drinks and by considering these facts with the complaint and as per report of surveyor, complainant is entitled to get claim amount as per policy conditions. Whereas it were the arguments of Advocate Sh. V. P. Nanavati and Sh. S. C. Shah and Sh. M.J. Shelat that complainant Diptiben vide her complaint no.26/2007 complained that she was doing business at Building no.2857 in the name of Shreenath Parlour as Proprietor and at the same place, she had kept stock of firecrackers which were got burnt on the date of incident and so she is entitled to receive compensation, the said argument is not true and correct. It is the arguments of the opponents that said complainant Diptiben N. Modi had kept stock of firecrackers in building no.2857 and some additional stock was shifted and kept at building no.2858 which had got burnt in the fire, So the complaint was filed. However, it is submitted by both the advocates of both insurance companies that the policy was issued for the building no.2866 where the material of Shreenath Parlour were kept, which is produced as at Annexure-2. As per the report of surveyor, building no.2866 is situated lastly and so its shed had got damaged, the loss of which comes to Rs.4,000/- and other than this, this building had not got any type of damage or loss. It is submitted that as per  the terms and conditions of the policy, while making any payment, Rs. 10,000/- is deductable on account of excess amount and if this amount is deducted from Rs.4,000/-, then in that case, complainant is not entitled to receive any amount because there was no stock of firecrackers lying at building no.2866 and there was no damage or loss to the said building. It is the submission of Advocate Sh. Milan Dudhia that as per the report of surveyor, if it is considered that firecrackers are not placed at building no.2866 but in such case, this building is having insurance coverage under policy no.01257 of Rs.5,00,000/- and under such circumstances, complainant is entitled to receive Rs.5,00,000/- against the loss and damage occurred to that building no.2866. However, as per the survey report, there is substance to the above mentioned argument of Shri. Milan Dudhia. Under these circumstances, it is proved that complainant has taken the insurance policy called "Standard Fire and Special Perils Policy" for building no.2866 and as per the complainant's complaint, it is proved that firecrackers are placed in the building no.2857 and 2858, which had got burnt and if the claim excess amount of Rs. 10,000/- is deducted from the loss of Rs.4,000/- then, complainant is not entitled to receive any amount due to placement of material and stock at other place than the insured place. So, complainant is not entitled to receive anything. So, under the circumstances, without discussing any technical issues. Complaint no.26/2007, point no1 is decided in negative and as other points are not needed to discussed, they are not decided and discussed and final order is passed as under: -

Order

Consumer Complaint no.26/2007 of the complainant is dismissed with costs.”

10.    Being aggrieved by the impugned order, the Complainant (Appellant herein) has filed this present Appeal seeking:-

(a)     Be Pleased to admit this appeal

(b)     Be pleased to quash and set aside the judgment and order dated 31/07/2013 passed by the Hon’ble. CDRC Gujrat in     Complaint No. 26/2007.

(c)     Be pleased to allow the prayer which has been prayed by the appellant in complaint no.26/2007 before the Ld. State Commission.

(c)     Be pleased to allowed any relief which tis Hon’ble commission deems fit.

11.    In the Appeal, the Complainant raised the following main issues:

1. The State Commission failed to note that the insurance policies obtained by the Appellant covered the risk for the building at 2857, Pipardi Ni Pole, Raipur Gate, Ahmedabad-1. Both Respondent No. 1 & 2 issued policies for the same premises, covering risks for the building and stock. These policies were issued in the name of Shrinath Parlor, of which the Appellant is the proprietor.
2. The State Commission erroneously interpreted Respondent No. 3 letter dated 15.12.2005, following a letter from the Appellant on 14.12.2005 and wrongly assumed that she requested for refund of premium. It further presumed that Respondent No. 2 accepted this on 20.01.2006 and cancelled the policy, informing the surveyor. Respondent No. 2 and 3 had mislead the facts.
3. Respondent No. 1 appointed a surveyor who assessed the loss. The State Commission has authority to award the assessed loss from Respondent No. 2. However, the Commission failed to do so, necessitating the quashing and setting aside of the order.
4. The State Commission neglected to note that the Respondents neither settled nor repudiated the claim for an extended period, constituting deficiency of service and unfair trade practice as defined under the Act. The Commission did not record findings on these issues despite being specifically raised in the complaint.

12.    Upon being served notice of the memo of appeal, Respondent No. 1 & 2 filed their respective written submissions appreciating the impugned Order passed by the Ld. State Commission. Despite being served notice, Respondent No. 3 - Union Bank of India did not appear, leading to it being proceeded ex-parte vide dated 06.04.2017.

13.    The learned Counsel for the Appellant reiterated the grounds of appeal and emphasized that this Commission has the authority to award compensation, particularly relying on the survey report. The survey report by Shri Ashwin K. Sheth pertains to building No. 2886, which is adjacent to building No. 2866 and shares a common wall. Therefore, the report for premises No. 2866 should be considered for assessing the loss, even though the policy covers building No. 2857. The Appellant contends that they are entitled for compensation for loss of both the building and stocks, which were entirely destroyed in the unfortunate incident. Hence, the Appellant urges the quashing and setting aside of the order passed by the State Commission and grant the relief sought in the complaint.

14.    The learned Counsel for the Respondent No. 1 reiterated the facts of the case and asserted that the Appellant is guilty of supressing material facts with the sole intent to mislead this Commission and fabricate a fictious case. The Survey’s Report is candid with details that the Appellant’s claims fell outside the purview of their insurance policies. He argued that the importance of surveyor’s report cannot be overstated as both the Hon’ble Supreme Court and this Commission have consistently emphasized its significant. He relied on Roshan Lal Oil Mills Ltd. & Ors., (2000) 10 SCC 19 (para 7), Oriental Insurance Co. Ltd. v Pavan Enterprises & Anr. I (2016) CPJ 503 (NC) Para 12, and Khateema Fibers Ltd. vs New India Assurance Company Ltd. and Another 2021 SCC OnLine SC 818 para 32, 37 and 38 in support of his arguments. He highlighted that the records undeniably reveal that the premises where the fire accident occurred is not covered by insurance under the Appellant’s Insurance Policy. The fire occurred in No. 2857 is explicitly excluded from coverage, and the absence of proof of ownership or insurable interest for the damaged buildings presented significant challenge to the Appellant's claim. He emphasized that the fire brigade report unequivocally established that only building No. 2858 was affected by fire, undermining her assertion of service deficiency.

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

16.    The primary issue for determination is whether the Appellant is entitled to insurance coverage for the losses incurred due to said fire accident at the premises, under the insurance policies in question obtained from the Respondents. This includes determining whether the premises where the fire occurred were covered under the insurance policies, whether the Appellant complied with the terms of the policies, whether there was any suppression of material facts by her etc.

17.    In this regard, is a matter of record that Diptiben Nileshbhai Modi, the Complainant was the proprietor of Shreenath Parlour and is doing business at Building No.2866, Pipardi Ni Pole, Raipur Darwaja, Ahmedabad. As she was in the business of firecrackers, she took a "Standard Fire and Special Perils Policy" of Rs.5,00,000/- from OP-1 and other policy No. 060400/11/04/01227 of Rs.20,00,000/- was taken to cover Hazards Goods and material stocks. In the said policy, the place of coverage was building No.2866. Pertinently, the fire accident occasioned at building No.2857 on 09.09.2005. This is proved as per the Policy Report and the Final Survey Report of Shri Ashwin Sheth. For building No.2866, policy No.060400/11/04/01255 for Rs.5,00,000/- was taken. The firecrackers which were kept at building No.2857 got totally burnt in the fire and Rs.16,15,000/- was assessed as loss. It is the contention of the Complainant that Diptiben Nileshbhai Modi and her husband were jointly doing business in building No.2857 and 2858 in the name of Shreenath Parlour and Shreenath Cold Drinks. It is the arguments of OPs that she had kept stock of firecrackers in building No.2857 and some additional stock at building No.2858 which had got burnt. The policy was issued for the building No.2866 where the material of Shreenath Parlour were kept. As per the report of surveyor, building No.2866 is situated last and so its shed had got damaged, the loss of which was Rs.4,000/-. Other than this, this building had not got any type of damage or loss. As per the policy terms and conditions, while making any payment, Rs.10,000/- is deductible as excess charges. As this amount is deducted from Rs.4,000/-, the Complainant is not entitled to receive any claim amount as there was no stock of firecrackers at building No.2866 and there was no damage or loss to the said building. Also, while building No.2866 had insurance cover under policy No.01257 for coverage of Rs.5,00,000/- and under such circumstances, she is entitled to receive Rs.5,00,000/- against the loss and damage occurred to the building, however she has not established the ownership and insurable interest. Therefore, the Complainant is not entitled to receive any amount due to location of stocks at other than the insured place.

18.    The Hon’ble Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Limited and Another, (2009) 8 SCC 507, decided on 24.08.2009, has 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."

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

“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 withan 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.”

20.    In view of the discussion above, I am in the considered view that the Order of the State Commission does not suffer from any illegality. The FA No. 763 of 2013 is, therefore dismissed.

21.    There shall be no order as to costs.

22.    Pending applications, if any, stand disposed of accordingly.