ROLAND EXPORTS 407 Vs. NATIONAL INSURANCE COMPANY LIMITED

JUDGEMENT

(1.) This Consumer Complaint has been filed under Sec. 21 of the Consumer Protection Act, 1986 (for short "the Act') against the Opposite Party seeking to direct the OP:-

(2.) Brief facts of the case, as per the Complainant, are that the complaint is aggrieved by the manifest deficiency in service by National Insurance Co. Ltd. Opposite Party (OP), in repudiating their fire loss claim of Rs.2,88,76,088.00 under Standard Fire Policy No.404000/11/10/3300000427. The complainant contended that the claim, supported by Fire Claim Form dtd. 8/10/2011, arose from a blaze that engulfed their insured godown at Plot No.78, Goindwal Industrial Complex, in the early hours on 8/10/2011, destroying about 280 tonnes of polyester raw material valued at about Rs.3.50 Crore. The fire was promptly reported to the Corporation Fire Service, and three tenders extinguished the fire after four hours. Police Station Goindwal Sahib, which recorded Daily Diary Report No.9 of 17/10/2011 noting that the likely cause was festive activities during Dussehra. They contended that the firm was originally a partnership of Mr Rajesh Gupta and Mr Sanjay Goel formed in 2003 for trading and processing natural and synthetic fibres, converted to a sole-proprietorship under Mr Gupta on 6/7/2011. It had insured, on a floater basis, stocks of yarn, fibre, and allied goods valued at Rs.26.00 Crores at several locations from 20/1/2011 to 19/1/2012, and by endorsement dtd. 15/7/2011 duly added the Goindwal premises to the Schedule while deleting three others. Immediately after the incident they notified its bankers, Allahabad Bank and the State Bank of India, as well as the insurer, and lodged the claim. The complainant contended that the insurer appointed three surveyors viz. Ashwani Gupta & Co. to take a preliminary view, Truth Labs to conduct forensic investigation and Atul Kapoor & Co. to assess the quantum of loss. At every stage the complainant furnished all documents and explanations requested, yet the insurer neither disclosed the surveyors' adverse observations nor afforded opportunity to rebut them. Instead, OP issued a show-cause notice dtd. 7/6/2013, relying chiefly on Truth Labs' speculative assertion that kerosene accelerant proved deliberate arson, and threatened to repudiate the claim. They responded on 18/6/2013 with a detailed refutation grounded in police report, the absence of electric supply, and the surveyors' own internal inconsistencies, particularly the third surveyor's self-contradictory stance of quantifying loss at over Rs.52.00 Lakhs while denial of liability. Yet within 10 days, and without reasoned consideration of that reply, the insurer confirmed its decision to repudiate the claim. They secured the survey reports through the RTI Act, 2005 on 19/8/2013 and discovered that it rested on conjectures, uncorroborated allegations of fabricated stock records, and extraneous matters such as landlord disputes or business dealings with Arihant Threads Ltd., none of which bears on policy cover. The Complainant was kept in the dark and the repudiation is unlawful and constitutes a clear deficiency in service by OP.

(3.) Upon notice, the complaint was forcefully resisted by the OP by filing their written version and contended that the complaint is, frivolous and filed with mala-fide intent. The complainant enterprise id engaged in commercial trading of fibres and yarn and the manufacture of twisted/doubled yarn, cannot claim the status of a "consumer' under Sec. 2(1)(d) of the Act, because the insurance was obtained exclusively for commercial gain, not for livelihood by self-employment. Jurisdictional objections also arise from non-joinder of indispensable parties. State Bank of India and Allahabad Bank hold an agreed-bank clause and hypothecated charge over the insured stock, have asserted an insurable interest, and must be arrayed. Universal Sompo General Insurance Co. Ltd., which bears thirty-per-cent co-insurance under the same policy, is likewise absent. On merits, the claim was processed in strict accordance with the policy. The complainant held Floater Policy No.404000/11/10/3300000427 for Rs.26.00 crore, later endorsed on 15/7/2011 to include Plot No.78, Industrial Complex, Goindwal Sahib. Upon receiving intimation of a nocturnal fire on 10/10/2011, the insurer deputed (i) Ashwani Gupta & Co. for a spot survey, (ii) Atul Kapoor & Co. for final loss assessment, and (iii) Truth Labs, a team headed by two former Directors of the Punjab Forensic Science Laboratory and a former CBI Superintendent for forensic and field investigation. The spot surveyor recorded wholesale non-co-operation, late production of only photocopied stock registers and physical implausibility of stacking 280-plus tonnes of polyester in the modest shed. He noted that neighbouring premises of Arihant Threads Ltd. closely linked with them contained identical bales, suggesting trans-location of stock. The final surveyor inspected all relevant sites, confirmed that the godown lacked authorised electricity, and found the stock register freshly written "in one go'. Measuring floor area and bale dimensions, he concluded that the maximum conceivable quantity was far below the 281 MT claimed. Employing a volumetric calculation, adjusting for poor-quality and extraneous material detected by Truth Labs, and applying the contractual excess, he valued the net loss at Rs.50,34,186..00 In view of material irregularities he advised the insurer to examine liability on the policy terms. Truth Labs' exhaustive investigation excluded accidental causes, no power supply, no human presence, no propensity for spontaneous combustion, and detected kerosene-range hydrocarbons throughout the debris. Forensic GC-MS analyses, corroborated by controlled burn tests, demonstrated deliberate ignition with accelerants. White ash and molten flows evidenced low-grade or extraneous matter. Handwriting examination of the photocopied stock register showed all entries penned by one individual at one sitting, confirming fabrication. Truth Labs opined that the management, having motive, means, and opportunity, likely orchestrated the fire for financial gain. On 7/6/2013 the insurer issued a detailed show-cause notice reciting the findings and invoking Conditions 6 and 8 of the Policy, which respectively require full production of authentic records and forfeit all benefits where fraud or wilful destruction is involved. Their reply of 18/6/2013 offered no credible rebuttal, failed to produce original registers, call-data records, or evidence of stock movements, and did not explain the presence of accelerants. After multi-layered scrutiny, OP repudiated the claim vide letter dtd. 30/6/2013 and the same is neither arbitrary nor deficient in service; it is the inevitable consequence of contractual breaches established by independent experts. The Apex Court has consistently held most recently in "Vikram Greentech India Ltd. v. New India Assurance Co. Ltd. (2009 5 SCC 599)' and "Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd. (2010 10 SCC 567)', that insurance contracts must be enforced according to their express terms, that uberrima fides is essential, and that courts may neither rewrite policies nor extend cover beyond their language. Even assuming that any liability survived, it could never exceed the final surveyor's quantified loss of Rs.50,34,186..00 In the circumstances, the claim stands vitiated ab initio by the insured's failure to comply with Condition 6 and by the fraudulent conduct proscribed by Condition 8.The OP therefore prays that the complaint be dismissed with costs.