Chronological facts of the case, relevant for the purpose of disposing the petition, are recapitulated below.

The complainant availed a loan of Rs. 3 lakh from K.S.F.C. (the 'financial institution') for a stone crushing unit to eke out his livelihood. The unit was hypothecated to the financial institution. The insurance co. insured the unit for the period 26.02.2000 to 25.02.2001. The policy was taken by the financial institution on behalf of the complainant. The sum insured was Rs. 2,50,102/-. The premium was paid by the financial institution to the insurance co. On 23.03.2000 there was an incident of fire due to which the entire unit was burnt and completely destroyed beyond usable condition. The policy was valid and in place at the relevant time of the incident. The complainant immediately intimated the concerned police station, the concerned tehsildar, the financial institution and the insurance co. On 24.03.2000 the complainant made a claim of Rs. 2,50,102/- with the insurance co.

The insurance co. appointed a surveyor to assess the loss. The surveyor gave its report on 28.08.2000. In conclusion it recorded the following in respect of assessment of loss:

ASSESSMENT OF LOSS

In the absence of genuine inspection report and quotation preferred by competent authorised service agent of the subjectmatter insured machinery, I am unable to arrive any conclusion on assessment of loss. Since the insured did not taken effort to prove/substantiate the losses suffered due to the alleged fire peril the payment of liability in respect of the claim by the insurer does not arise. (as per the translated version provided by the insurance co. with its petition) That is, the surveyor concluded that it was unable to assess the loss since the complainant did not take effort to prove / substantiate the losses suffered due to the alleged fire peril. Decision on the claim, to settle it or to repudiate it, was not taken by the insurance co. for over 09 years.

The complainant filed a complaint with the District Commission on 31.03.2009.

5. The District Commission allowed the complaint on contest. For ready appreciation, extracts of the appraisal made by the District Commission are reproduced below:

The above survey report clearly shows that the surveyor noted the machineries and also its serial numbers and confirmed the accident. And in conclusion the Surveyor analyzed that the fire might have been probably resulted from spark expelled during stone blasting/ detonating operation and fell down over the thatch roof shed hereby intensified into flame which had eaten away the plant and machineries installation shed. And in the very same survey report he has noted that he had sought certain documents to verify and confirm the authenticity and genuiness of the claim but the complainant failed. And further noted that Complainant not bothered to arrange inspection of the machineries by competent technician so as to enable him to recognize the extent of damage caused to the plant and machineries due to fire perils. Surveyor couldn't arrive into a reasonable conclusion regarding the extent of actual damages and consequential losses. We are

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very surprised to note the above contents because the surveyor being a expert should hold all qualification to conduct the assessment of the damage/loss. Just because Complainant not arranged the technician it cannot be blamed to the Complainant. It is the bounded duty of the surveyor to hold inspection by engaging a technician if necessary. Surveyor failed to assess the loss in this case shows his incapacity. Further it is the definite case of the Opposite Party that the Complainant not produced the documents sought by the Surveyor. But the Complainant contended that he had submitted all the required documents to assess the claim. The enclosures noted down by the Surveyor in his report reveals that the surveyor was in possession of prescribed claim form filled and furnished by the insured, replacement quotation furnished by the insured, police mahazar report. Further it is significant to note that the insurance policy was obtained by the KSFC Limited i.e., the financier of the Complainant by submitting the proposal. When that being the case, the documents required by the Surveyor should have been obtained from the K.S.F.C. instead of delaying the settlement of the claim. It is a known fact that all the Insurance Companies considering the policy only after taking all the necessary documents or otherwise no company will come forward to issue a policy. Even in this case the company is not exception to the above. While issuing the policy the Opposite Party Company definitely received the particulars of the plant and machineries and other accessories. It is needless to say that the Insurance Company developed a tendency of asking for one or the other documents just to delay and deny the claim. The claim of the insured cannot be denied in this case just because the Complainant not produced the documents which already in the possession of the Opposite Party Company while issuing the insurance policy. It is mandate for the company to settle the claim reasonably, rejection of claim on technical ground for non- production of particulars unjustified. In the given case, the documents insisted by the surveyor in his letters dated 29.3.2000 and 25.4.2000 ought to have been complied by the Company not by the Complainant. The documents produced by the Complainant before this Hon'ble Forum clearly reveals that on 23.3.2000 at about 10.30 a.m. the above stated machinery accidentally caught fire and the entire machinery along with accessories were burnt. That the statement issued by the Tahasildar dated 10.5.2000 also support the case of the Complainant. The Surveyor and the Opposite Party Company inspite of holding necessary documents not settled the claim till this date amounts to deficiency in service.

In view of the above reasons, we hereby direct the Opposite Party i.e., Oriental Insurance Co. Ltd., represented by its Branch Manager to pay Rs.2,50,000/- (less salvage if any) to the Complainant i.e., a total loss suffered by the Complainant along with interest at 9% p.a. from the date of accident till the date of payment. However, the interest as well as compensation both cannot be allowed. Interest is always inclusive of compensation. Further Rs.1,000/- awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

6. In the result, we pass the following:

ORDER

The complaint is allowed. Opposite Party i.e., Oriental Insurance Co. Ltd., represented

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by its Branch Manager is hereby directed to pay Rs.2,50,000/- (Rupees two lakh fifty thousand only) (less salvage if any) to the Complainant along with interest at 9% p.a. from the date of accident till the date of payment. Further Rs.1,000/- (Rupees one thousand only) awarded as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.

Copy of this order as per statutory requirements, be forwarded to the parties free of costs and file shall be consigned to record room.

(as per the translated version provided by the insurance co. with its petition)

6. The insurance co. appealed before the State Commission. The State Commission again appraised the evidence and dismissed the appeal. For ready appreciation, extracts of the appraisal made by the State Commission are reproduced below:

9. The fact that the said fire incident took place on 23/03/2000 during the insurance coverage period is not in dispute. Then the concerned public authority visited the spot inspected it, drawn Mahazar etc., At the instance of the complainant Op appointed its surveyor, surveyor visited the spot but he could not conduct the survey, to the reasons best known to him, though complainant assisted the surveyor in all respect for settlement of the claim. The evidence of the complainant in that regard appears to be natural cogent and consistent. There is nothing to discard his sworn testimony. It is a quality of evidence that is more important than that of quantity. As against this unimpeachable evidence of the complainant, the defense set out by the OP appears to be defense for defense sake just to shirk their responsibility and obligation.

10. According to the Op, their surveyor addressed a letter on 29/03/2000 to the complainant for production of certain documents for consideration but complainant failed to comply the same. Admittedly, the said insurance policy was taken by K.S.F.C on behalf of the complainant so it is the K.S.F.C who must have been in possession of relevant records pertaining to the said unit. In addition to that if the surveyor is interested to look into the said documents he would have approached the Op because Op is also in custody of the said document in one or the other way while accepting the proposal and issuing the policy, that is not done. Surveyor has arbitrarily contended that he was not assisted by the complainant in completion of the survey. We do not find any justification in the said settlement of the surveryor under the existing facts and circumstances of the case.

11. It is further contended by the Op that the complaint is barred by time. Though incident has taken place in the year 2000, complaint filed is in the year 2009. As admitted by the Op neither it settled the claim nor repudiated the claim. The repeated request and demand made by the complaint to Op to settle the claim but it went in vain. Unless and until Op intimated the complainant either in allowing the claim or repudiating the claim, complainant will accrue the recurring cause of action. There is an inordinate delay in settling the claim. This amounts to deficiency in service. There are no such reasonable and substantial grounds made out by the Op so as to keep the claims pending for all these years. The approach of Op in that regard does not appear to be fair and honest.

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12. The DF thoroughly considered each and every aspect of the matter and rightly come to the conclusion that there is a deficiency in service on the part of the Op. That conclusion appears to be just, proper and judicious. On the other hand, apparent has failed to show before this Commission that the impugned order under appeal is erroneous, unjust and it suffers from legal infirmity, unsustainable in law. There is no proof that, the said order suffers from any error appellant on the face of record requiring our interference. We don't find any illegality or irregularity in the impugned order passed by the DF.

(as per the translated version provided by the insurance co. with its petition)

7. As such this petition has been filed apropos concurrent findings of the two fora below.

8. We see that the State Commission has passed a well-appraised reasoned Order. It has agreed with the findings of the District Commission. We see no palpable misappreciation of evidence, as may require de novo fresh re-appreciation in revision. On the face of it we see no jurisdictional error, or a legal principle ignored or erroneously ruled, or miscarriage of justice having been occasioned. The award made by the District Commission, as affirmed by the State Commission, appears just and equitable in the facts of the case.

9. Learned counsel for the insurance co. argues that the complaint was barred by limitation, the incident of fire took place on 23.03.2000, the complaint was filed after 09 years on

31.03.2009.

However, this issue has been dealt with and decided in favour of the complainant by both the fora below.

Admittedly, the incident took place on 23.03.2000, the complainant preferred his claim on 24.03.2000, the surveyor made its report on 28.08.2000. But the insurance co. kept sitting over the claim, it neither settled the claim nor issued a reasoned speaking repudiation, as such it was too obviously a continuing cause of action and was therefore not barred by limitation. However, looking at it another way, sub-section (2) of section 24A of the Act 1986 allows the District Commission, for sufficient cause, to condone the delay beyond the period of two years from the date on which the cause of action arose. When the insurance co. was not deciding the claim, neither settling it nor repudiating it, keeping the matter in a state of suspended animation for 09 years, this in itself was sufficient cause to condone the delay if any in filing the complaint.

Either way, it being a continuing cause of action, as has been rightly held by the two fora below, or even otherwise there being sufficient cause to condone the delay, the complaint is not hit by limitation.

Here it may also be added that the delay in not settling the claim for a prolific period of 09 years and keeping it in a state of suspended animation in itself constitutes ingredients of 'deficiency' within the meaning of section 2(1)(g) of the Act 1986, as has been rightly observed by the State Commission in para 11 of its Order (quoted above).

10. Learned counsel further argues that "certain statutory licences" from "concerned

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authorities" are required for running a "stone mining / crushing unit" and the surveyor had asked for the said licences but the complainant had not provided the same to him. As such there was no other alternative but to sit over the claim because the onus was on the complainant to provide those licences so that the insurance co. could satisfy itself that the

"mining / crushing" activity was being lawfully carried out by the complainant. The submission is that when the activity was not being lawfully conducted there was no question of allowing the claim.

This argument has obvious elements of inner-fallacy. A submission is being made that "certain statutory licences" from "concerned authorities" were being asked for from the complainant, to satisfy itself that the activity was being lawfully conducted, but without citing the specific licence(s) or the specific authority(ies). And with no evidence in support to show that any licence(s) as may be required were not available, a submission is being made that when the activity was not being lawfully conducted there was no question of satisfying the claim. In the surveyor's report dated 28.08.2000 the following is written:

VIOLATION OF POLICY CONDITION:

As per informations gathered the insured establishment is a granite stone mining/crushing unit which needs;

Statutory licence from local panchayat authorities for the business operation.1.

(2) Mining licence from State Geological Department

(3) Explosive licence from Govt. of India Explosive Department. The insured is responsible for furnishing those valid documents in order to fulfil the obligations as per condition of fire policy.

(as per the translated version provided by the insurance co. with its petition) A mere reading shows that the VIOLATION OF POLICY CONDITIONS as written in the surveyor's report is patently ambiguous and incoherent to say the least. For reason of being so vague and enigmatic, any normal reader will find it hard to comprehend which specific licence(s) and from which specific authority(ies) were required.

Learned counsel could not inform whether the insured unit written as "granite stone mining/crushing unit" in the surveyor's report was a mining unit or a crushing unit or a mining-cum-crushing unit. He could also not inform which specific "statutory licence" and from which specific "local panchayat authorities" and of which Panchayat (the District Panchayat or the Block Panchayat or the Village Panchayat) were required. Likewise which specific "mining licence" was required, whether a "State Geological Department" even exists in the concerned State. Similarly which "explosive licence" and from which "Govt. of India Explosive Department" and falling under which Ministry was required. Learned counsel submits that it could be "poor choice of words", but the complainant was required to produce all such licence(s) whichever they may be and satisfy the insurance co. that

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he was conducting his operations lawfully. The contention is that the insurance co. had no other alternative but to sit over the claim till as such time the complainant came forth and convinced it of the lawfulness of his operations by producing all licence(s) whichever they may be to its entire satisfaction.

We are unable to understand such logic. To us, this is plain and simple arbitrary discriminative unreasonable highhandedness.

11. We agree with the learned counsel that the licence(s) that a stone crushing unit requires should be in place including (a) at the time of taking the insurance policy and (b) at the time of the incident of accident.

There is however nothing on record to show that the licence(s) as required were not in place, in fact so much so that the specific licence(s) and the specific issuing authority(ies) have not even been indicated by the surveyor with any semblance of coherence in its report or even now by the insurance co. in its petition or at the time of arguments on its behalf. Nothing prevented the insurance co.'s surveyor to confirm from the relevant authority(ies) whether or not the requisite licence(s) were in place. There was no justification or reason for the insurance co. to sit over the claim and keep it in a state of suspended animation for 09 years. If it wanted to allege and sustain that the operation of the unit was not being lawfully conducted, the burden was on the insurance co. to establish such fact. If, as argued by the learned counsel, the onus was on the complainant, and the complainant was not discharging his onus, it was for the insurance co. to take a decision accordingly and repudiate the claim within reasonable time. There was no reason for the insurance co. to sit over the claim and keep it in a state of uncertain abeyance for 09 years between 2000-2009, and then still not decide it during the original proceeding before the District Commission in 2009 and the appellate proceedings before the State Commission in 2010-2011 and the revisional proceedings before this Commission in 2012-2021, except, as already said above, for reasons of arbitrary discriminative unreasonable highhandedness.

Notwithstanding the afore, this issue has been aptly dealt with by both the fora below in favour of the complainant. And the District Commission and the State Commission have inter alia made it quite obvious in their Orders that the insurance was taken by the financial institution which had financed the unit and with which the unit was hypothecated and all relevant documents had been provided by the financial institution to the insurance co. and the documents were available with both the financial institution and the insurance co.

12. Learned counsel further argues that an insurance contract is of utmost good faith. We wholly agree with him. In case there is any semblance of malafide, malfeasance, illegality, etc., on the part of the insured, a question arises on his good faith. However, good faith is both ways, it is obligatory on the insurance co. also. If there is manifest arbitrariness, discrimination, unreasonableness, highhandedness, unfairness, deceptiveness, etc., on the part of the insurance co., a question arises on its good faith too.

13. The two fora below have returned findings of deficiency in service as defined in section 2(1)(g) & (o) of the Act 1986.

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We concur.

14. The petition, being misconceived and bereft of worth, is dismissed. The insurance co. shall comply with the award within four weeks from today, failing which the District Commission shall undertake execution, for 'enforcement' and for 'penalty', as per the law.

The insurance co. through its chief executive (its chairman or managing director or the director in-charge of its affairs or the director in-charge of the subject-matter, whichever member of its board of directors he may be) shall be well advised to look into this matter and ensure systemic improvements so that such manifest arbitrary discriminative unreasonable highhandedness is avoided in future (needless to elaborate, unsavoury elements of corrupt practices are often implicit in such instances).

15. The Registry is requested to send a copy each of this Order to all parties in the petition and to the chief executive of the insurance co. as well as to the District Commission within three days. The stenographer is requested to upload this Order on the website of this Commission immediately.

......................

DINESH SINGH

PRESIDING MEMBER

......................J

KARUNA NAND BAJPAYEE

MEMBER

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