M/s. SEW Infrastructure Ltd v. M/s. The Oriental Insurance Co. Ltd

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Agreement, dated 27.02.2015, with M/s. NHDC Limited (a joint venture of M/s. NHPC Limited Govt. of M.P.), for the project works called Modification and Reconstruction of Energy Dissipation Arrangement (EDA) of main spillway of Indira Sagar Dam, Narmada Nagar, District Khandwa, M.P. The total contract value as per the agreement is Rs.159,98,50,707/- only. The complainant obtained a "Contractors All Risks Insurance Policy (CAR)," bearing No.431200/44/2015/83, for the period of 2 years, w.e.f. 25.03.2015 to 24.03.2017, for a total sum insured of Rs.162,73,50,707/- from the opposite party with an extended maintenance (Defect liability cover for 12 months). The complainant paid a gross premium of Rs.50,19,426/-. The Policy covers the risks at the site of erection i. e. Modification and Reconstruction of Energy Dissipation Arrangement (EDA) of main spillway of Indira Sagar Dam, Narmada Nagar, Distt., Khandwa, M.P. It is further submitted that the complainant has to pay the premium amount in 7 installments as per the details furnished below:

Due to financial constraints, the complainant had not paid 5^th &

6^thinstallments before the due dates. The complainant paid 5^th & 6^th

installment premiums on 17.08.2016. The opposite party accepted the

premium, regularizing the break in the insurance Policy. The remaining

7^thinstallment was paid before due date. It is further submitted that

since the project was not completed as per the scheduled program, the

Principal M/s NHDC Limited extended the project period. Accordingly,

the complainant got extended the policy periodically from time to time.

Vide Endorsement No.431200/44/2015/83/011, dated. 24.03.2017, the

policy was further extended for 12 months from 25.03.2017 to

24.03.2018 by paying premium of Rs.63,16,155/-. Again, vide

Endorsement No.431200/44/2015/83/014, dated 23.03.2018, the

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policy was further extended for a period of 3 more months i.e. from 25.03.2018 to 24.06.2018 by paying premium of Rs.31,08,120/-. Vide Endorsement No.431200/44/2015/83/2015, dated 20.06.2018 and No.431200/44/2015/83/016, dated 21.06.2018, the policy was further extended for a period of 1 month from 25.06.2018 to 24.07.2018 by paying premium of Rs.11,68,529/-. It is further submitted that during 5^thto 14^thAugust 2016 (termed as first loss), there was heavy discharge of flooding of water through main spillway gates of the project, causing damage to the project. Since, there was a break in the Policy due to non- payment of 5^th & 6^thinstallments due on 24.03.2016 and 24.06.2016 respectively, the claim was not laid, though the complainant suffered a huge loss of Rs.52,69,586/- as the same was falling within the policy excess amount. Thereafter, the complainant resumed the Policy by paying the due amounts of 5^thand 6^thinstallment premiums of Rs.6,86,143/- each on 17.08.2016. The complainant periodically extended the CAR Policy, as stated supra. It is further submitted that on 03.09.2016 Mr.K.Gigidhar, the Site-in-charge of the complainant informed the complainant by an email, stating that due to heavy rainfall in Madhya Pradesh, particularly in the catchment area of Narmada River, the flood gates of Indira Sagar Dam were re-opened on 22.08.2016 (termed as second loss) to pass on the excess flood water and that subsequent to closure of flood gates on 01.09.2016 by M/s NHDC limited, a huge damage has been observed to the works consequent upon passing of flood water, over partially completed EDA works. On 06.09.2016 the complainant forwarded the said email, dated 03.09.2016, received from the Indira Sagar Work site and requested the opposite party to depute a surveyor to assess the loss. The complainant has no control over opening of the Dam gates. On 30.03.2017 the complainant submitted duly completed Claim Form, Occurrence Report, detailed Estimate, etc., to the opposite party as requested by the Surveyor Mr. B.

I. Subramanian (SIBA Associates). The complainant estimated the loss as Rs. 16,00,00,000/- and requested the O.P. to release 50% of the estimated loss towards "On Account Payment" for enabling them to commence repair works. Since, the settlement of the claim was getting delayed, on 18.09.2017, the complainant once again requested the O.P. to release at least 60% of the claim amount for enabling them to complete the works. On 29.09.2017, the complainant once again submitted occurrence Report, detailed Estimate, Claim Form, details of Restoration of Works, correspondence made with the Principal,

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Statement of Loss, Statement of Block-Wise Completion of works, Statement showing flood discharges during 2013, 2014, 2015 & 2016 and Provisional Claim Bill, while once again requesting to pay 60% of the estimated loss amount. The complainant submitted similar representations on 17.03.2018 and 17.04.2018 to release interim amount. On 07.08.2018, the complainant submitted a clarification letter. It is further submitted that the Surveyor M/s. SIB Insurance Surveyors & Loss Assessors Pvt. Ltd., Mumbai, informed the complainant that they assessed the net loss @ Rs.8,53,00,637/- and requested the complainant to give consent for the same. Since, the assessment of loss is very less than the claimed amount and since valuable time was already lost, having left with no other alternative, the complainant sent an email, dated 04.01.2019, to the Surveyor, accepting for the said amount. It is further submitted that M/s. SIB Insurance Surveyors & Loss Assessors Pvt. Ltd., have submitted the Final Survey Report on 07.01.2019, assessing the net loss @ Rs.8,53,08,762/- The Surveyors have considered the loss occurred to the project for the second incident occurred on 22.08.2016 only. The Surveyors have not at all considered the first accident (though ascertained the loss to be Rs.52,69,586/-) occurred between 5^th & 14^thAugust' 2016. In spite of the Surveyors' recommendation for net assessed loss amount of Rs.8,53,08,762/- and though the complainant agreed for the same, the O.P. has not settled the claim. As such, on 16.04.2019 the complainant was constrained to send an email to the O.P., demanding to settle the claim within 15 days, else, they will be left with no option except to initiate necessary further action. On 15.05.2019, the complainant once again reminded the O.P. to settle the claim at the earliest. It is further submitted that on 08.07.2019, the complainant clarified about the emails, dated 25.06.2019, and 05.07.2019 of the O.P. that the complainant paid Rs.50,19,426/- only for 2 years for the CAR Policy and that when the policy was extended for another 16 months, the O.P. collected premium of Rs.1,05,92,805/- from the complainant and thus the complainant paid a total premium of Rs.1,56,12,231/- under the subject CAR policy and finally requested the opposite party to settle the claim immediately. It is further submitted that on 04.09.2019 the O.P. repudiated the claim on the ground that there was a break in the policy period due to non-receipt of 5^th & 6^th installments due on 24.03.2016 and 24.06.2016 respectively and that the same were paid only on 17.08.2016 and that there were 2 incidents of water discharge from the Dam occurred during 5^th & 14^thAugust,

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2016 causing damage to the EDA works and that the 2^ndincident of water discharge occurred on 22.08.2016, which was intimated as the subject claim. The O.P. further informed that the "The rainfall had already been started between 5^thto 14^thAugust, 2016 and the gates were already opened once prior to the payment of premium. The claimed damages to the EDA site can therefore be attributable to first incident only when the policy was not in force. Hence, there is a non-compliance of Sec 64 VB of the Insurance Act, 1938." The O.P. alleged the complainant has not complied with Section 64 of Insurance Act, there was violation of General Condition No.1, 5 & 8 of CAR Policy and repudiated the claim. It is further submitted that the complainant further clarified that when CAR Policy was taken for 24 months i.e. from 25.03.2015 to 24.03.2017, the O.P. has collected a premium of Rs.50,19,426/- only and when the complainant intended to extend the Policy for 12 more months, the O.P. informed the complainant that the abnormal increase in the premium was as the claim reported under the said policy. Therefore, the O.P. collected Rs.1,05,92,804/- as against initial premium of Rs.50,19,426/- for 2 earlier years. However, the O.P. apart from collecting the arrears of 5^th & 6^thinstallments and also collected the 7^thinstallment premium in advance on 19.08.2016 itself. Subsequently, the CAR Policy was extended periodically for 16 more months by collecting Rs.1,05,92,804/-. It is further submitted that the Surveyor taking all the practical aspects into consideration assessed the loss @ Rs.8,53,00,637/- after deducting Policy Excess. The observations of the Surveyor were not taken in right perspective. The O.P failed to consider the loading of premium while extended policy. There is abnormal delay in settling the claim. The O.P. has taken almost 2 years for settlement of the claim from the date of loss. Hence, the repudiation the claim is unilateral. It is further submitted that the main allegation of the O.P. that the complainant has not complied with Section 64 VB of Insurance Act, 1938 is not correct. The CAR Policy was resumed w.e.f. 17.08.2016 after a break. The complainant has not made any claim for the first accident occurred during 5-14/08/2016, as there was a break. Since, the second accident/subject claim was occurred subsequently on 22.08.2016, while the CAR Policy was in force, the question of the complainant not complying with Section 64 VB does not arise. The complainant never violated General Condition No.s;1, 5 & 8 of the Policy. There was no mis-representation or non-disclosure. After payment of the dues of 5^th & 6^thinstallments on 17.08.2016 and 7^thinstallment on

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19.08.2016, the second floods/accident occurred. It is a vis major. Nobody anticipates that the second incident would subsequently occur on 22.08.2016. It is not out of place to submit that the project location is in a very remote area and accurate information cannot be received by the complainant immediately. In fact, there was no necessity for the insured to inform the O.P. about the accident, if the claim is below the Policy Excess. As such, the complainant never violated General Condition No.5. The complainant never committed any act of fraud or mis-representation nor concealed any fact to the O.P. All the necessary documents and information was furnished by the complainant to the O.P. as well as to the Surveyor. There was no question of violation of General Condition No.8. The complainant never committed an act of breach of good faith. The Surveyor has well considered all the records, documents, made physical inspection and rightly assessed the loss. Only to have unlawful enrichment and to cause unlawful loss to the complainant and to avoid payment of huge claim of Rs.8,53,08,762/-, the O.P. repudiated the claim, without any basis. As such, the repudiation of the claim is bad, arbitrary, unjust, illegal and against the principles of natural justice. Hence this complaint.

3. The Opposite Party filed Written Version on 18.01.2021, stating, mainly, that: (1) the Complaint is barred by limitation; (2) Complaint is barred for misjoinder or non-joinder of parties; (3) There is no proper cause of action; and (4) There is no Pecuniary Jurisdiction (as per the Orders in IA No.245 of 2022). The Interlocutory Application, vide I.A.No.245 of 2022, filed subsequently by the Opposite Party, seeking for amendment of Written Version, was allowed and the opposite party filed an amended written version on 30.09.2022, the same is considered for adjudicating. The O.P. further stated that the averments mentioned in the complaint are not true and it contrary to Law, hence the complaint is not maintainable under law, and such other averments, which are not specifically admitted herein are denied as false and the Complainant is put to strict proof of the same. In respect of the Paragraph No.1 of the complaint, it is submitted that it may be true, however the Complainant is put to strict proof of the same. In respect of the Paragraph No.2, it is submitted that it is true that the Opposite Party has issued the Contractors All Risk Insurance Policy bearing No.431200/44/2015/83 issued at 17:02 Hrs on 25.03.2015 for a period of 2 years which is effective from the time and date of issuance to 24.03.2017. However the

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policy ceased to be operative for non-payment of the installments premium as agreed, and the remaining contents are denied as false and the complainant is put to strict proof of the same. In respect of the Paragraph No.3 & 4 it is submitted that the Complainant themselves have admitted that they defaulted in making the payment of the installments on the prescribed due dates which itself is the violation of Sec.64 VB of Insurance Act, 1938 and other policy conditions. In respect of the Paragraph No.5, it is denied as false and the complainant have misinterpreted the facts. In respect of the Paragraph No.6, it is submitted that the complainant themselves have admitted that there was a heavy loss to the main spillway gates of the project during the period 5^thto 14^th August, 2016 and further submitted that the claim could not be filed due to the non-payment of 5^th & 6^thinstallments and non-existence of valid policy. Complainant also falsified that the loss is within the excess limit of the policy which was a false averment as no valid policy was existed at the time of loss. The complainant knowing well that there was no subsisting valid policy and the excess in respect of the ACTS OF GOD (AOG) perils for a project less than Rs.1500 crores is 10% of the admissible claim, subject to a minimum deductible of Rs.75,00,000/- (Rupees Seventy Five lakhs only) developed their own false theory without any scientific basis and documentary evidence declared to the Surveyor that the loss was to the extent of Rs.52,69,586/- (Fifty Two lakhs Sixty Nine thousand Five hundred and Eighty Six only) which is incorrect and misleading in view of the foregoing. In order to stand by the false declaration as above was submitted by the complainant that there was no loss/no claim till 17.08.2016 and the loss is within the policy excess and hence not informed to the insurers/opposite parties. By paying the revival premium on 17.08.2016 the complainant misrepresented and falsified and suppressed the reported damages occurred prior to 17.08.2016. The monsoon had set in early August 2016 and the Complainant had suffered huge loss and since there was no subsisting valid insurance policy the Complainant had propounded a theory of 2 occurrences, 1 prior to the inception of the policy and other after the inception of the policy. The rain fall data as submitted by the complainant is as a proof of the same and there was negligible rain fall. Further, the water released from main gate and aux gates in a gradual and regulated manner which cannot cause extensive damage as was claimed by the complainant. The loss reportedly occurred between 5^th and 14^thAugust 2016 is otherwise payable if there was a subsisting

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insurance cover subject to terms and conditions and exceptions of the policy and assessed by IRDA Licensed Surveyor. Therefore, the complainant falsified and misled the Opposite Party for unlawful gain for which they are not entitled. The Complainant made an attempt with a malafide intention to claim from the Opposite Party the undue Claim from the Opposite Party. It is also proved beyond reasonable doubt that it is a afterthought of the complainant to cover the sustained loss or damages occurred prior to the payment of installments within ambit of the policy. It is pertinent to note that the said installments of premium payment were made by the Complainant with a declaration that there was no claims reported till the date of payment of fresh premium made on 17.08.2016 of lapsed installments. The Opposite Party in Utmost good faith accepted the declaration of the complainant and granted the insurance cover vide Endorsement No.431200/44/2015/83/007 dated 17.08.2016 incorporating the Warranty which reads as under "NOT

WITHSTANDING ANYTHING HEREIN TO THE CONTRARY IN THE WITHIN

MENTIONED POLICY IT IS HEREBY AGREED & DECLLARED THAT THE FIFTH INSTALLMENT PREMIUM IS RS.6,86,143/- IS COLLECTED. THE INSURER IS NOT LIBLE FOR ANY LOSS/LIABILITY DURING THE BREAK IN PERIOD I.E. FROM 24.03.2016 to 16.08.2016. SUBJECT OTHERWISE

TO THE TERMS, CONDITIONS, EXCEPTIONS, EXCLUSIONS AND

LIMITATIONS OF THE POLICY. Thus, it is proved the complainant have violated uberrimae fidei (utmost good faith) the most important principle of an insurance contract. In respect of the Paragraph No.7 it s submitted that it is denied as false and the Complainant is put to strict proof of the same. In respect of the Paragraph No.8 It may be true that the complainant have filed certain documents. However, the Complainant is not entitled to receive any claim as there are gross violations of terms, conditions of the policy and also disregarded the important principles of an Insurance Contract. In respect of the Paragraph No.9 & 10 that the Complainant has grossly misinterpreted the Survey Report and wanted to take their advantage. The Surveyor categorically stated that it is not possible for him to distinguish the loss between 1^stand 2 occurrences as reported by the Complainant and solely relied upon the Complainant's version. Further that the loss was not due to floods as defined in the policy and there was no rains during that period. There is no substantiating document from any independent or statutory authority to support the Complainant claim and the Surveyor had issued the report which is recommendatory and moreover the Survey Report is subject to

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the terms, conditions and exception of the policy. In reply to the Paragraph No.11, it is submitted that it has no relevance as it was based on false premise and wrong interpretations of the policy conditions. The version of the complainant that the amount is within the policy excess and hence not reported doesn't hold water as neither there is a subsisting policy nor understanding of the complainant is correct. In respect of the Paragraph No.12 & 13 it is submitted that as mentioned supra that the acts of the Opposite party are based on the prudential norms of Underwriting of insurance business that are in practice from time in vogue all over the world and justifies its repudiation of the claim on the grounds of misrepresentation, falsifying and suppressing the information of the loss sustained prior to the commencement of the revival of the policy. In respect of Paragraph No.14 it is submitted that as mentioned supra the loss assessment was entrusted to an independent and Licensed IRDA Surveyor for assessing the loss not withstanding the fact whether the claim is admissible or inadmissible as per the terms and conditions of the policy. Hence, the Surveyor Report cannot be accepted in toto and is subject to scrutiny and terms, conditions and exceptions of the policy as agreed and accepted by the insured and insurers. In respect of Paragraph No.15 & 16 it is submitted that as explained supra and does not warrant any more explanation which is nothing but repetition. It is to suit the complainant the occurrences were divided into occurrences 1 and 2 to obviate the non-existence of the insurance cover till 17.08.2016 till the payment of lapsed installments of premium payment was made with a sole intention of covering the existing losses by projecting them as if they had occurred after the commencement of the insurance cover. It is further submitted that the Opposite Party have not caused any deficiency of services to the Complainant rather the Complainant themselves are guilt by suppressing and misrepresentation of material facts in a speculative claim and have not approached this Commission with clean hands. In respect of the Paragraph No.18 it is submitted that the complaint is barred by limitation as per the Consumer Protection Act, 2019. In addition to above it is further submitted that the Complainant/insured falsified and made a declaration that the site is claim free and no loss is reported till the date of revival premium paid on 17.08.2016. The above act of the insured is BREACH OF UTMOST GOOD FAITH which is an essential ingredient of an insurance contract. Thus the insured fraudulently wants to cover his past losses in the current endorsement which cover till project is

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completed. The complaint is barred for mis-joinder or non-joinder of parties. There is no proper cause of action. There is no pecuniary jurisdiction. The averments mentioned in the complainant are not true and it is contrary to Law. Hence, the complaint is not maintainable under law. Such other averments, which are not specifically admitted herein are denied as false and the complainant is put to strict proof of the same.

4. During the course of trial, the Complainant is examined as PW1 and marked Ex.A1 to A21, and Sri Y. V. Subba Rao, a retired Deputy Manager of the Opposite Party, is examined as DW1 and marked Ex.B1 to Ex.B21.

5. The points for consideration are :-

(1) Whether this complaint is barred by limitation ?

(2) Whether this commission has Pecuniary Jurisdiction to entertain the complaint?

(3) Whether the complaint is barred for non-joinder necessary Party?

(4) Whether there is any deficiency of service on the part of the Opposite Party?

(5) Whether he complainant is entitled for the reliefs as prayed for ?

(6) To What extent ?

6. Point No.1:- Heard both sides. Perused the material documents available on record of the case and marked as Exhibits on both sides. The opposite party objected that the complaint is barred by limitation, which is not correct as per the record since that the claim of the complainant was repudiated on 04/09/2019 (Ex.A18 & B19) by the opposite party, and there is no further record to show that such repudiation was further enlarged by either party, hence the limitation period for filing the complaint obviously begins from the date of last communication in the claim that is 04/09/2019, and the present complaint filed before this Commission is on 26/09/2020 which is, therefore, well within the limitation period of two years, hence the complaint is not barred by limitation as per the Consumer Protection Act, 2019.

There is, as against the further objection of the opposite party, a proper cause of action, starting from the acceptance of the duly filled in Proposal Form (Ex.B1) along with the consideration of the premium from the complainant and the issuance of the Policy and the subsequent Endorsements thereof issued by the opposite party, and the cause of

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action continued further from the date of revival and restoration of the policy by accepting the defaulted 5^th& 6^thpremium instalments from the complainant by the opposite party on 17/08/2016, and the cause of action further continued till the time and date of the claim repudiation by the opposite party on 04/09/2019, hence there is a cause of action in the matter.

The opposite party further raised an objection that this Commission has no pecuniary jurisdiction to entertain the complaint because of that the premium paid by the complainant to the opposite party was Rs.1,05,92,804/- (Rupees One crore Five lakh Ninety Two thousand Eight hundred and Four only) for the Policy, including the premiums collected for extension of the policy period, for that the opposite party has filed an Interlocutory Application, vide I.A.No.99/2021, in this main C.C. No.323 of 2020, and this Commission has dismissed said I.A., vide Order, dated 30/11/2021, on the ground that the petitioner/opposite party did not take that plea in the written version of the opposite party, and the opposite party filed another Interlocutory Application, vide I.A No.245/2022 in this main C.C. No.323 of 2020 to amend written version and also filed an amended written version which is allowed, vide Order, dated 29/09/2022, with an observation that the newly added pleading would however be decided with the main C.C. based on the material documents. It has further been observed from the evidence affidavits, dated 14/06/2022 & dated 29/06/2022 (Ex.B20), and the addl. evidence affidavits, dated 12/07/2022 (Ex.B21) & 08/08/2022, filed by the opposite party wherein at para no.3, it has very categorically and vividly been stated on oath in all the cited affidavits that the total amount of premium payable in 7 instalments under the Policy is Rs.49,40,248/- (Rupees Forty Nine lakh Forty thousand Two hundred Forty Eight only) and issued the policy to the complainant by accepting the 1^stinstalment premium of Rs.9,17,902/-. Further, on careful perusal of the relevant Policy (Ex.A1 & B6), which is not disputed by either party, it is also evident that the opposite party themselves had very clearly and unambiguously inscribed on the very face of the Policy Schedule that the

"Gross Premium" as Rs.43,96,803/-, we repeat, the Gross Premium was Rs.43,96,803/- (Rupees Forty Three lakh Ninety Six thousand Eight hundred and Three only), and Rs.5,43,445/- and Rs.5/- as Service Tax and Stamp Duty respectively, thus making a Total of Rs.49,40,248/-

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only, and also mentioned the "Period of Insurance" as "from 17:02 on 25/03/2015 To Midnight of 24/03/2017" that is for a period of Two Years only, during which the two incidents of floods occurred and resulted in loss/damage to the subject matter of insurance, and also clearly described the risk details & the Site of Erection as the modification and reconstruction of Energy Dissipation Arrangement (EDA) of the Indira Sagar Dam, Narmada Nagar (M.P.) and then same Policy document was issued to the Complainant by the Opposite Party. Hence the said gross premium amount of Rs. 43,96,803/-, or even the total amount thereof of Rs.49,40,248/- which is a total consideration under the Policy as also contended by opposite party itself and accepted by the opposite party from the complainant, is well within the pecuniary jurisdiction of this Commission has the pecuniary jurisdiction to entertain, and adjudicate the complaint in accordance with the provisions of the Consumer Protection Act, 2019. Therefore, the points on limitation period, on misjoinder and nonjoinder, on proper cause of action and also on the pecuniary jurisdiction of this Commission are answered accordingly and against the Opposite Party. Hence, the objections raised by the petitioner/opposite party and the counter replies thereof filed by the respondent/complainant, and also the observations made by this Commission on the pecuniary jurisdiction of this Commission, vide the respective Orders passed in I.A No.99/2021 and I.A. No.245/2022 stand discussed duly in law and disposed off accordingly.

7. Point No.2 :-

The pleading of the opposite party is that the complaint of the Complainant is bad in law for nonjoinder of the Principals M/s. NHDC Limited (A Joint Venture of NHPCL & Govt. of M.P.) who have not been made as a party to the proceedings of the complaint. It is evident from the record that the complainant neither joinder the said principals as a necessary party in the original complaint nor impleaded them subsequently during the trial as a necessary party, however, it is in the circumstances and facts as discussed herein below that the principals are not necessarily required as a party in the case. In this regard, it is observed from the case record, particularly as revealed from the work order (at page no.3 of Ex.B1) that the complainant as the contractor, as per the contract agreement, is sole liable and responsible to accomplish the assigned civil works of the EDA, and also liable to the Principles to

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indemnify in the event of any damage/loss to the worksite by flooding, etc. The complainant, therefore, as the contractor to safeguard their interests, had obtained the relevant Contractors All Risks Policy (CAR) from the opposite party by declaring M/s. NHDC Limited as the Principals as an obligatory requirement to include them in the policy as per contract agreement, and later amended them as the Insured. Further, the same facts have been found from the final survey report (at para 2.3 of Ex.A13 & B21) that there existed a mutual contract agreement between the Complainant that is M/s. SEW Infrastructure Limited as the Contractors and M/s. NHDC Limited as the Principals with regard to the execution/construction of the modification and reconstruction of the Energy Dissipation Arrangement (EDA) of the main spillway at the discharge side of the Indira Sagar Project Dam, situated at Narmada Nagar, District Khandwa (M.P.). Accordingly, the Complainant obtained the Contractors All Risk Policy (Ex.A1 & B6) from the Opposite Party Insurance Company, duly mentioning M/s. NHDC Limited as the Principal and also the Complainant as the Contractor, covering and insuring the risks, including floods, exposed or involved in execution or construction of the civil works, pertaining to the said EDA civil works. It is also, moreover, an undisputed fact that all the premium amounts under the Policy were paid by the Complainant alone as per the documentary proof of the respective premium Receipts & endorsements & the policy (Ex.A1), issued by the opposite party to the complainant consequent upon receipt of the respective premiums from the complainant only. Thus, it shows and proves sufficiently that the complainant as a sole contractor of the said EDA civil works had an absolute insurable interest to the extent of EDA civil works as per the said contract agreement and such interest and obligation would remain the with the contractor-complainant throughout the validity of the contract agreement till completion of the assigned contract works as per contract agreement in force, unless and until the agreement is cancelled for whatsoever the reason.

To add further, as per the Final Survey Report (Ex.A13 & B21), submitted to the opposite party by M/s. SIB Insurance Surveyors & Loss Assessors Pvt. Ltd., Mumbai, and other documentary evidences placed before this Commission and marked as exhibits herein that M/s. NHDC Limited as the Principals as well as the custodians of the entire Indira Sagar Project (ISP) Dam were quite aware of the activities pertaining to the execution of the assigned civil works of EDA, which were carried out

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by the complainant at the time of the said two different flood incidents resulted in loss/damage to the EDA works, and M/s. NHDCL, being the principals and the custodians of the ISP Dam, were also quite aware of the same losses/damages that occurred in the month of August, 2016 caused by the unprecedented floods during the monsoon season that occurred between the 5^thAugust, 2016 and the 14^thAugust, 2016, which was not reported to the opposite party, and again another similar flood loss/damage that occurred on the 22^ndAugust, 2016 onwards, which was reported to the opposite party. Further, to substantiate this fact that it is the said Principals who had issued to the opposite party through the Surveyor at the request of the Complainant certain claim's vital documents which disclose (i) the daily rainfall record in the river catchment area of the Indira Sagar Dam; (ii) the daily water levels record at the Indira Sagar Dam; (iii) the inflow of flood water from the upstream Dams such as Bargi Dam and Tawa Dam caused by the heavy rainfall in their respective catchment areas; (iv) the outflow or discharge/release of flood water through the main spillway gates, etc., on day-to-day wise basis, and the principals also issued a certificate, confirming the said two incidents which resulted in physical damage to the EDA works, which is reportedly caused by unavoidable opening of the main/spillway gates in view of heavy accumulation of water beyond the bearable capacity of the ISP Dam. Further, the principals also confirmed very categorically the cause, nature and extent in terms of monetary loss sustained by the complainant, and also confirmed the due reinstatement of EDA works in full post-loss/damage, which were all as desired and required by the final surveyor as a proof documentary evidence and to support and substantiate the technical and scientific assessment of the reported loss/damage, and the same documents were duly accepted and considered by the Final Surveyor, whom the opposite party had appointed as final surveyor to cause a detailed survey and report. This clearly goes to suggest that the principals that is M/s. NHDC Limited are not unaware of both the incidents of loss/damage occurred to the EDA works, but the principals are quite aware of the said two occurrences, and the claims records furnished by them are remained as genuine, reasonable, sufficient, substantiative, acceptable in the circumstances, particularly the opposite party when not questioned the authenticity and the author of the said claim documents, as discussed herein supra. It is also evident from the case record that the opposite party, who are pleading now in the case that the complaint is bad in law for

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nonjoinder or misjoinder, had neither questioned, contemplated with during the process/pending of the claim with them nor challenged against such record provided by the principals. It is also a fact from the case record that the opposite party did not question or challenge the final survey report which is a crucial and important document in the circumstances of loss/damage and claims. It is also a point of view that when no suitable action was initiated by the opposite party during claim process or even post repudiation of the claim, but before filing of this complaint, and also failed to produce any material record, showing that the opposite party were contradicting to such data/information/record relating to the claims as furnished by the principals, what else more information or confirmation on the reported incidents and the claim documents could be ascertained from the principals by making them as a necessary party to the proceedings now in the case is not substantiated summarily, hence this pleading is not sustainable accordingly. It has also been a fact observed from the case record, particularly as revealed from the Final Survey Report at para no.1.9 (Ex.A13 & B21) and the Complainant's Letter, dated 17/04/2018 (Ex.A11) that the Opposite Party's higher officials, designatory namely, the Regional Manager and the Deputy General Manager from the Hyderabad Regional Office of the opposite party had caused themselves visited to the said flood affected work site together with the final Surveyor on 11.04.2018 for a detailed inspection of the project, technical aspects, cause of damage, extent of damage occurred during each incident, etc. It is not out of the place to mention that the higher officials also held the discussions with the principals M/s. NHDC Limited and the Complainant in relation to the subject claims, however, there is no record filed by the opposite party to show that the said higher officials whether solely or jointly, if any, contradicting to or contemplating with the cause of damage, nature of damage, extent of loss/damage, nor filed their affidavits, reiterating the facts and observations found during their said physical inspection of the loss/damage at the worksite and the result of the discussions, which is therefore construed as an impediment act on part of the opposite party themselves, hiding and non-disclosing the material information and record relating to the claims, which equally construes as an act of misappropriation and non-disclosure of material facts on part of the opposite party which is against to the spirit of insurance contract and the principles of natural justice as well.

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Further, it is a statutory provision/ruling as laid down as per the Consumer Protection Act, 2019, that all the consumer disputes are summarily redressed and decided on merits, except in a very rare of the rarest occasions that might demand and require invariably the adducement of the oral evidences in person from the experts, etc. This Commission is, therefore, of a considered view that the Principals M/s. NHDC Limited, in the circumstances stated supra, are not required to be a necessary party to the proceedings of the case, further that they shall be treated as a proforma party even if they were impleaded since their role in the claims and the case as well is very limited as discussed supra, and hence the complainant alone is a proper and necessary party in the entire circumstances of the claim in question as well as the case in adjudication. Therefore, this point has accordingly been answered against the Opposite Party.

8. Point No.3 :-

The main objection of the opposite party in advancing the vehement arguments is that there was a breach of Utmost Good faith (Uberrima Fides). As per the Judgment of the Hon'ble Supreme Court, reported 1 (2022) CPJ SC 20 in Manmohan Nanda vs. United India Insurance Co., Ltd., in Civil Appeal No.8386 of 2015-Decided on 06.12.2021 :- (i) Insurance - Principle of Uberrimae Fidei - Insurance contracts are special contracts based on principles of full disclosure- Person seeking insurance is bound to disclose all material facts relating to risk involved-Law demands higher standard of good faith in matters of insurance contracts which is expressed in legal maxim uberrimae fidei- Just as insured has duty to disclose all material facts, insurer must also inform insured about terms and conditions of policy that is going to be issued to him and must strictly conform to statements in proposal form or prospectus, or those made through his agents-Principle of utmost good faith imposes meaningful reciprocal duties owed by insured to insurer and vice versa- Duty of insured to observe utmost good faith is enforced by requiring him to respond to proposal form which is so framed to seek all relevant information to be incorporated in policy and to make it basis of contract-Contractual duty so imposed is that any suppression or falsity in statements in proposal form would result in breach of duty of good faith and would render policy voidable and consequently repudiate it at instance of insurer [Paras 30, 34, 35, 36,

37].

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(ii) Insurance-Duty of disclosure- In relation to duty of disclosure on insured any fact which would influence judgment of prudent insurer and not particular insurer is material fact-Fact must be one affecting risk- Materiality of particular fact is determined circumstances of each case and in-question of fact-Fact, although material is one which proposer did not and could not in particular circumstances have been expected to know, or if its materiality would not have been apparent to reasonable man, his failure to disclose it is not breach of his duty-Full disclosure must be made of all relevant facts and matters that have occurred up to time at which there is concluded contract-Materiality of particular fact is determined by circumstances existing at time when it ought to have been disclosed and not by events which may subsequently transpire-Duty to make full disclosure continues to apply throughout negotiations for contract but it comes to end when contract is concluded-In order to seek specific information from insured, proposal form must have specific questions so as obtain clarity as to underlying risks in policy, which are greater than normal risks. [Paras 38, 39, 40, 41, 42, 43].

(iii) Contract-Contra Proferentem Rule-Applicability -When words are to be construed, resulting in two alternative interpretations then, interpretation which is against person using or drafting words or expressions which have given rise to difficulty in construction, applies- This Rule is often invoked while interpreting standard from contracts- Such contracts heavily comprise of forms with printed terms which are invariably sued for same kind of contracts-Such contracts are harshly worded against individuals and not read and understood most often, resulting in grave legal implications-When such standard form contracts ordinarily contain exception Clauses, they are invariable construed contra proferentem rule against person who has drafted same. This Commission has been, during the trial of the complaint filed by the Complainant under Section 34(1) of the Consumer Act, 2019, submitted with the documentary proof evidences, which are marked as Exhibits on both sides, and also submitted with the oral arguments from both the sides. The Complainant, mainly, averred that the opposite party to have unlawful enrichment and to cause unlawful loss to the complainant has repudiated their huge claim of Rs.8,53,08,762/- without any basis, which was rightly assessed by the Surveyor, and such repudiation is bad, arbitrary, unjust, illegal and against the principles of natural justice, and such action of opposite party in repudiating the

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claim, having extended subsequently the Policy by collecting abnormal premiums not only amounts to deficiency in service but also amounts to unfair trade practice, and such action of the opposite party has subjected to serious inconvenience, hardship and severe mental agony apart from irreparable loss, etc. On the other hand the Opposite Party, while submitting the para-wise written replies to all the averments drawn in the complaint by the complainant and also reiterating more or less the same replies in their respective evidence affidavits, most of the contents of which are as reproduced as above, has vehemently pleaded and argued that the complainant deliberately concealed the information of the loss already occurred in order to get an unlawful gain which is a gross violation of the policy's conditions and breach of Utmost good faith and the doctrine of Utmost good faith (uberrima fides) which is an important ingredient of the insurance contract, and there is also a non- compliance of the Section 64 VB of the Insurance Act, 1938, as the Policy was already ceased to be operative at that particular time of the first incident of loss due to non-receipt of the respective 5^th& 6^thpremium instalments from the complainant, and the subsequent second incident of loss/damage is not a different occurrence but in continuation of the said first incident, etc.

On perusal of the record, it has been revealed and also an admitted fact that there was a break in period of insurance of the Policy (Ex.A1 & B6) caused by the non-payment of the 5^thand the 6^th instalments of premium by the complainant themselves, irrespective of whatsoever the reason for such default or non-payment of the required premiums by the complainant, because it is the obligation on part of the complainant to ensure the insurance policy is in force till the expiry date by paying the mutually agreed premium instalments on time when such instalments facility is availed of by the complainant and also in order to have the intended or desired insurance protection to the property insured as per the policy, failing which the Policy, a legal contract, would become null and void, despite of the fact that the complainant had already paid on time all the other mutually agreed previous premium instalments, thus a break in the period of insurance is a break in coverage of the risk assured by the policy that forfeits the complainant to receive any amounts of claim that might have occurred during such break period, even though such claim resulted or arose by exposure or operation of the perils insured under the Policy, nevertheless, unless and until such a void contract or lapsed policy is duly revived or restored by

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condoning or waiving such break in the policy period by the opposite party.

It is evident that the opposite party, vide Endorsement Nos.431200/44/2015/83/007 & No.431200/44/2015/83/008, both dated 17.08.2016 (at page Nos.12 to 15 of Ex.A1 = Ex.B9 & B10 at page Nos.33 to 36), had accepted and collected the respective defaulted 5^th& 6^thpremium instalments from the complainant alone and thus restored/revived the void Policy, however, excluded any loss/liability during the break period that is from 24/03/2016 to 16/08/2016. It is also equally an important and crucial fact as the entire claim and case on hand is beating around it, but it is not in the etymological meaning of the idiomatic phrase, "beat around the bush." It is only that the opposite party consequent upon receipt of the said defaulted premiums also had obtained a declaration by an email on 17.08.2016 (Ex.B8) from the complainant's office to the effect that there were no claims reported during such break in period. It is pertinent and important to reproduce here the relevant portions of the said Endorsements' wordings, which are similar to each other in all aspects, except the numeric values in endorsement number and premium cheque number, hence for sake of brevity and to avoid repetition, the said endorsement no.007 is extracted here: "Notwithstanding anything herein to the contrary in the within mentioned policy it is hereby agreed & declared that the FIFTH instalment Premium is RS.6,86,143/- IS COLLECTED. THE INSURER IS NOT LIABLE FOR ANY LOSS/LIABILITY DURING THE BREAK IN PERIOD.I.E. FROM 24/03/2016 TO M 16/08/2016. Subject otherwise to the terms, conditions, exceptions, exclusions and limitations of the policy."

And, it is also pertinent and important and appropriate as well to reproduce here the relevant portion of the said No Claims declaration by the email, during the break/gap in policy period: "With reference to the above subject, we confirm that there are no claims are reported from 24.03.2016 to till today."

It is observed that the endorsement issued by the opposite party suffered grossly and gravely from the absence of the important declaration submitted by the complainant about no claims and hence the plain reading of the endorsements' wordings is given to understand that such declaration is not necessary or not required by the opposite party as the same was not incorporated therein, whereas the opposite party pleaded and argued in the case that the complainant had suppressed

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and non-disclosed in the said no claims declaration the material information of the incident of floods already occurred during 05.08.2016 and 14.08.2016, thus breached the principle of utmost good faith and violated the Policy Condition No.1, 5 & 8. It is well considered view that any type of endorsement issued by the insurer is based on a request in express wordform i.e. whether by a letter or a filled in proposal form as may warrant based on relevance of proposed endorsement request from the insured and it shall become a part and parcel of the related policy, a legal contract, hence the same shall not be issued with partial or selective information out of the material information provided by the insured, and any of such material information avoided whether intentionally or otherwise shall therefore not be forming as part and parcel of the intended endorsement as well as the Policy, in such a deficiency the insurer shall be subjected to appropriate action as per the IRDAI (Protection of Policyholders Interests) Rules & Regulations, 2017, and such undesired act construes as a deficiency of service on part of the insurer as per law. It is also observed that the opposite party pleaded and argued that the defaulted premium instalments were considered based on the no claims declaration from the complainant, but it is an vibrant point of view that, for the reasons best known to the opposite party, the important aspect of initiating a required pre-inspection of the risk at worksite is, on prima facie, ignored/avoided by the opposite party when there was about five months gap/break in the Policy, and blindfolded the prevailed monsoon season that might cause heavy rainfall and floods as the river basin generally prone to floods as the nature and extent of works that is the civil works at the water discharge side of the Dam, and the large risk with high value sum insured, etc. It is appropriate to mention here that as was the practice in vogue particularly at that that of revival of the policy that the insurance companies were to follow the purported pre-inspection of the risk before issuing or renewing a Policy when there was a break even a small risk of a motor two-wheeler package Policy even for one day break. It is very strange to observe that the opposite party nowhere mentioned either by documentary evidence or in the oral submissions that whether a pre- inspection of site as per its guidelines is necessary or not necessary in the event of a break in insurance cover/policy, but pressed upon the doctrine of utmost good faith, and if such utmost good faith itself and/or a self-declaration from the insured is enough to waive/condone the delay or break in policy, what is the necessity to implement pre-inspection of

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the risk, hence it is implied that the uberrima fides cannot be relied upon in dealing with every risk like a large risks when a small risk is subjected to pre-inspection. Therefore, it can be concluded that the opposite party, knowingly willfully and anxiously accepted the defaulted premium instalments from the complainant owing and owning risk by them and under such circumstances it is not the complainant at fault as pleaded by the opposite party, but it is the opposite party itself who rendered the deficiency of service. Further, in fact, the principle of utmost good faith (uberrima fides) has to be observed equally by both the parties to the legal contracts, particularly the contracts of insurance, starting from the submission of the Proposal Form by the Proposer/Insured until the time of issuance of the Policy document by the Underwriter/Insurer with the mutually pre-agreed terms and conditions and exclusions which include the rates of premium and the same on both sides shall invariably be continued till the time the contract of insurance i.e. the Policy expires. This Commission, in this regard, observes that the opposite party themselves, therefore, have, on prima facie, breached and violated and acted against the doctrine of utmost good faith and the IRDAI (Protection of Policyholders Interest) Rules & Regulations, 2017, and also violated the true spirit of insurance contract by charging and collecting from the complainant a very higher rate of premium under the same policy than already mutually agreed rates of premium and also by imposing heavy policy excess than the excess amount agreed at the time of extension of the policy period under the same policy, which was restored, on the premise and pretext of a high value claim reported, but remained unpaid. Such unilateral and undeserved and unwarranted decision of the opposite party leads to the deficiency of service on part of the opposite and accordingly the opposite party is also found imbibed and practiced with the unfair trade practices too. Therefore, it is sufficiently with relevant and appropriate inferences as discussed supra observed that the opposite party found adapted the unfair trade practices and rendered the services deficiently, and accordingly this point on the deficiency of service is answered against the opposite party only.

9. Point No.4 & 5:-

It is pertinent to discuss here that the circumstances that lead the present complaint filed by the Complainant before this Commission are, mainly, that a valid claim of the complainant under the Contractors All Risks Policy was repudiated by the opposite party, vide the claim repudiation letter, dated 04/09/2019 (Ex.A18 & B19), stating mainly

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that the complainant violated the Conditions No.1, 5 & 8 of the Policy and breached the principles of the Utmost good faith. As revealed from the case record, particularly, the Final Survey Report (Ex.A13 & B21), that there were two incidents occurred, resulting in the loss of/damage to subject matter of insurance covered under the policy on separate occasions of discharging/releasing of the flood water from the Indira Sagar Project Dam (ISP) viz during the period from 05.08.2016 and 14.08.2016; and also on 22.08.2016 onwards, and both the incidents were attributed to floods in the circumstance of the spillway gates of Dam were opened under the unavoidable and seriously demanded circumstances when the reservoir/catchment area of the Dam was filled with heavy inflow of water on account of the unprecedent rainfall in the Narmada River basin and also inflow of flood water from the Bargi Dam near Jabalpur and from the Tawa Dam near Hoshangabad, both are the upstream of the Indira Sagar Dam, thus when the water levels were reaching beyond the permissible reservoir storage levels and bearable capacity of the Dam, such flood water was released/discharged from the ISP Dam through its spillway gates as well which caused heavy damages to the civil works of the modification and reconstruction of Energy Dissipation Arrangement (EDA) at the discharge side of the Indira Sagar Dam which were being carried out by the complainant as the contractor at the time of said two incidents. It is relevant and pertinent to state here that the opposite party in its written version, etc., pleaded that there is no proper cause of action, and the cause of loss/damage is not attributable to floods, however, no record is filed to show and substantiate this plea is baseless and unsustainable, and hence the cause and nature of damages/loss to the EDA works is, as claimed by the complainant and the principals and also as confirmed and by the surveyor, therefore, reasonably attributed to the floods only. It is further observed that the opposite party raising objection in his arguments that the complainant submitted an occurrence report to the opposite party is a part and parcel of the Ex.B14 at page No 56, the same is mentioned in the surveyor report at point No.4 as follows 4.1 the monsoon usually starts during third week of July but it started early by the end of June itself and the rains intensified on 8-9^thJuly. The Bargi Dam near Jabalpur and Tawa Dam near Hoshangabad, both of which are the upstream of Indira Sagar were filled with water due to heavy rain fall in the catchment areas. The permissible water levels at Indira Sagar as

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on 31^stJuly 31^stAugust and 30^thSeptember were 258M, 260M and

262.13 respectively. However, on perusal of the CAR Policy (Ex.A1 & B6 at page no.14 to 19, the printed terms and conditions and exceptions of the policy), nowhere defined what exactly the flood is, but mentioned the flood/inundation as major perils/AOG perils under the heading: Memo 8 at page no.18 of Ex.B6, and also not mentioned the contingencies or the perils covered, only the named exclusions and conditions spelled out, hence the plain reading of the policy, as titled, gives that it covers all the risks involved in the execution of the works, except the named exclusions only.

It is pertinent and also important to mention here that the loss/damage to EDA, in respect of the said first incident of flood that occurred during 05.08.2016 and 14.08.2016 was not preferred by the complainant with the opposite party since the provisional loss/damage as estimated for Rs.52,69,586/-, on prima facie, was falling within the Policy excess of Rs.75,00,000/- (AOG perils excess). It is pertinent and also important here to refer to the relevant exclusions of the Policy (Ex.A1 & Ex.B6 at page no.17) under heading Exclusions To Section-I:

"The Company, shall not, however, be liable for:- a) the first amount of the loss arising out of each and every occurrence shown as Excess in the Schedule." Further, the relevant as shown at page no.10 of Ex.B6 Policy Schedule, under the heading: Section III is - Excess for Section I & II clearly states and imposes policy excess for AOG/Major Perils Collapse as Sum Insured less than 1500 Cr - 10% of the claim amount subject to a minimum deductible of Rs.25,00,000/- The complainant to this effect submitted a detailed clarification and circumstances of as to the reasons why the loss/damage was not reported to the opposite party is clearly explained by the complainant, vide Letter, dated 07.08.2018 (Ex.B16), besides that it is an admitted fact that the 5^th & 6^thinstalments of premium due on 24.03.2016 and 24.06.2016 respectively were not paid by the complainant on time, but both the dues were paid on 17.08.2016 that is after occurrence of the said first incident and the last and final 7^th premium instalment which was due on 24.09.2016 was also paid on 19.08.2016, and there was no subsisting valid policy cover at the time of the said first incident only, whereas it is also an admitted fact on record that at the time of the second incident of flood that occurred on 22.08.2016 onwards and resulted in a major loss/damage to EDA works

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was, however, duly reported to the opposite party by the complainant, enabling the opposite party to depute a surveyor in order to inspect and assess the loss thereof.

It is observed from the record that accordingly, M/s. SIB Insurance Surveyors & Loss Assessors Pvt. Ltd, Mumbai, were appointed by the opposite party to cause a detailed survey, assessment and report. As is revealed from the final survey report, dated 07.01.2019 (Ex.A13 & B21), the surveyor, consequent upon their appointment and primary physical inspection of the affected worksite, had submitted to the opposite party a preliminary survey report, dated 19/09/2016, and also an interim survey report, dated 19/04/2018, however, those two reports are not filed with the record either by the complainant or the opposite party for the reasons best known to them. It is, however, clearly revealed from the final survey report that the said interim report, dated 19.04.2018, submitted to the opposite party, recommending "On Account" payment of the claim payable to the complainant is on the advice of the opposite party only, and it is further finally revealed from the said the final survey report, dated 07/01/2019 (Ex.A13 & B21), was submitted to the opposite party, duly confirming the cause, nature and extent of damages to the EDA works and also assessing the loss in monetary terms, wherein the assessed amount of loss as arrived by the complainant and the principals in respect of the said first incident was duly excluded as there was no subsisting insurance cover, and recommended to the opposite party to pay the net amount of loss of Rs.8,53,08,762/- (Rupees Eight crore Fifty Three lakh Eight thousand Seven hundred Sixty Two only) to the complainant as per the terms and conditions of the Policy.

It is observed from the record that the opposite party, however, repudiated the claim on the grounds of non-compliance of section 64 VB, violation of conditions No.1,5 & 8 of the policy and also the breach of utmost goods faith which were, however, not proved by the opposite party with any of the documentary proof except mere pleadings and vehement arguments only.

The opposite party filed the affidavit of the surveyor, reiterating relevant contents of the final survey report only, but there is no specific point or objection to show that the repudiation of the claim is reasonable and genuine and the loss occurred at second incident was in continuation of the first incident. In fact, as discussed supra, the

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surveyor, who was licensed by IRDAI, recommended the claim for payment after careful physical inspection of the loss/damage in all aspects of the loss/claim, and also diligent examination of the claim supporting documents furnished by the principals and the complainant, and also carried out a detailed physical inspection of the risk after duly reinstatement of the damaged EDA works by the complainant and thus arrived the assessment of the loss pertaining to the second incident only which is independent and separate loss/damage and not in continuation/connected to the first incident and also as per the terms and conditions of the Policy which was in force at the time of the reported second incident and also the peril operated was an insured peril under the policy, thus there is absolute compliance of Section 64 VB of the Insurance Act, 1938 as per record. It is also observed from the case record that the opposite party has pleaded that let the buyer beware (caveat emptor), placing the burden of due diligence on the buyer of goods or services, but as per the Consumer Protection Act, 2019, which has repealed and replaced the earlier Consumers Protection Act, 1986, has been enacted to deal with the matters relating to violation of consumer's rights, unfair trade practices, misleading advertisements and all those circumstances which are prejudicial to the consumer's rights, the seller of the goods or service provider should therefore beware of as the burden of due diligence has been shifted on to the seller of goods or service provider. Further, it has been observed that the complainant did not inform to the opposite party the first incident occurred during 05.08.2016 and 14.08.2016, therefore the complainant breached the relevant general conditions of the Policy, which reads Ex.B6 at page 15:

"In the event of any occurrence, which might give risk to a claim under the policy, the insured shall:- (a) immediately notify the Company by Telephone or Telegram as well as in writing giving an indication as to the nature and extent of loss or damage; (b) take all steps within his power to minimize the extent of the loss or damage; (c) preserve the parts affected and make them available for inspection by a representative or Surveyor deputed by the Company; (d) furnish all such information and documentary evidence as the Company may require; (e) inform the police authorities in case of loss or damage due to theft or burglary…" It is observed from the above paragraph that any occurrence that leads to give rise to a claim, a claim that is to be preferred with the insurance company for receiving indemnity after deduction of policy excess, etc., only shall invariably to be intimated to the insurer for its

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further necessary and proper action in such reported claim, but all occurrences, which are not to be claimed for any reason whatsoever, need not be intimated to the insurance company as per the plain reading of the aforementioned general condition. It is very clear that the first incident that took place supra was not intimated to the opposite party by the complainant because the probable loss in monetary terms fell within the excess amount of the Policy. The Surveyor also concurred with and considered the probable estimated loss on account of the 1^stincident, however, the same was duly deducted from the scope of the loss assessed on account of the said second incident which was reported to the opposite party. This Commission, in this regard, further observed that the opposite party's allegation or contention that the second incident that took place on 22.08.2016 was in continuation of the said first incident has not been proved with any documentary evidence. Therefore, the pleadings on breach of utmost good faith, suppression of material fact, violation of general conditions Nos.1, 5 & 8 as stated in the claim repudiation letter, dated 04.09.2019 (Ex.A18 & B19), and such other documents on record of the case are not proved, hence remained as mere allegations only.

The case of the complainant is that once the Surveyor was appointed and he recommend the actual loss of the material by the due accident and the opposite parties are liable to settle the claim as per the surveyor report, which is vital report for basing up settlement of the claims. The Hon'ble Supreme Court also has accepted surveyor reports are the authentication for settlement of the claims; it cannot be thrown out the surveyor report and other pretext by the insurance company. Further, it is also observed that the opposite party strangely stated that the survey report is an "informatory" only. But this Commission is of a considered view that the Survey Report is a creation under Section 64 UM of the Insurance Act, 1938, and the same cannot be brushed aside or ignored without a valid reason as per the settled principles of law as held by Hon'ble Supreme Court of India, and hence the survey report is not only an informatory as claimed by the opposite party and it is also a recommendatory as to whether a claim is payable in full or partially or not payable at all under the reasonable circumstances thereof as the survey report is prepared duly with the scientific calculations and equations and also with the technical inputs and evaluations together with the substantiative proof documentary

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evidences thereof as per the terms and conditions of the Policy. As per the judgment of Hon'ble Supreme Court of India, 4 (2021) CPJ 1 SC in Khatema Fibres Ltd., Vs. New India Assurance Company Ltd & aother(V) Consumer Protection Act, 1986 Section 23 - Insurance Act, 1938 Section

64 UM (1A), (2) Jurisdiction -Insurance -Surveyor's Report -Objection raised - Alleged deficiency in service - Surveyor is governed by code of conduct, breach of which may give raise to allegation of deficiency in service - Discretion vested in insurer to reject report of surveyor in whole or in part, cannot be exercised arbitrarily or whimsically and that if so done, there could be allegation of deficiency in service - Consumer Forum which I primarily concerned with allegation of deficiency in service cannot subject 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 quality, nature and manner of performance of duties and responsibilities of surveyor, in a manner prescribed by Regulations as to their code of conduct and once it is found that report is not based on aphorism or vitiated by arbitrariness, then jurisdiction of Consumer Forum to go further would stop

This complainant is relying on the bunch of judgments, it is settled possession for an insurance company cannot be travelled by and grounds mentioned in the letter of repudiation i.e. held in 1. 2020(1) ALD SC 197 Saurashtra Chemicals Ltd., vs. National Insurance Co, Ltd.,-Page No.203- Para 22- Decision - It is settled position that an insurance Company cannot travel beyond the grounds mentioned in the letter of repudiation.

2. 2002(5) SC 337=2002(6) ALT 39.1 DNSC Dr.J.J.Merchant & Ors Vs Shrinath Chaturvedi - Page No.8 - Para-Un-numbered para- Therefore merely because it is mentioned that Commission or Forum is required to have summery trail would hardly be a ground for directing the consumer to approach the Civil Court. For Trail to be just and reasonable long drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is necessary, It should be kept in mind that legislature has provided alternative, efficacious, simple, curtailed on such ground. It would also be totally wrong assumption that because summary trail is provided, justice cannot be done when some questions of facts are required to be dealt with or decided. The Act provides sufficient safeguards. For this purpose we would refer to the procedure prescribed under the Act for disposal of the complaint.

3. Maharastra State -C.C.No.11/2007, Between : Suresh Uttamchand Tiwari vs. National Insurance Company Ltd., dated 11.08.2011- Page

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No.a.6-Para No.a.8 - decision - a. Surveyor nowhere mentioned that fraud is committed by complainant; Page No.b.8 - Para No.b.13-Decision -b. Without considering surveyors report insurance company repudiated the claim. Surveyor while assessing made deductions assumptions and presumptions. Therefore, in the absence of any basis we are treating Surveyors report as a in proper and not incorrect. Thus, we find that there was no valid reason for the Opposite parties not to accept the report of the surveyors for the claims as there is no proof that such report is arbitrary & excessive. Hon'ble National Commission in M.K.U. Private Ltd. V/s. United India Insurance Company (21 February, 2019) and in catena of Judgments Hon'ble Supreme Court also held that, a survey report has to be accepted unless it can be established that, it suffers from some infirmity.

The same line, the opposite parties are relying on the bunch of citations, of the Hon'ble Supreme Court of India, reported in (2014) I Supreme Court Cases 686, Export Credit Guarantee Corporation of India Limited vs. Garg Sons International,

This Commission has observed and discussed supra that the opposite party failed to raise any objection against the final survey report and its enclosures throughout the pleadings, arguments and also in the claim repudiation letter, dated 04.09.2019 (Ex.B19), except general denial. The non-denial of the final survey report by the opposite party specifically on its entirety establishes that the opposite party is in concurrence with it and deemed admitted the liability on its part.

In view of the above facts and discussions of this case and findings and rulings of the Hon'ble Apex Court and Hon'ble National Commission and Hon'ble State Commission, we are inclined to allow the complaint of the complainant, directing the opposite party to pay the claim amount of Rs.8,53,08,762/- as assessed by the final surveyor together with interest @ 6% per annum from the date of repudiation of the claim that is 04.09.2019 (Ex.A18 & B19) till realization in view of an abnormal delay in non-settlement of the claim of the complainant and the opposite party is also liable to pay a compensation of Rs.1,00,000/- towards mental agony and also to pay Rs.25,000/- towards the costs.

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10. Point No.6 :-

In the result, the complaint is allowed in part, directing the opposite party:

(1) To pay claim amount of Rs.8,53,08,762/- (Rupees Eight crore Fifty Three lakhs Eight thousand Seven hundred Sixty Two only) together with interest @ 6% per annum from the date of repudiation of the claim that is 04/09/2019 till realization.

(2) To pay a compensation of Rs.1,00,000/- (Rupees One lakh only) towards trauma and mental agony.

(3) To pay the costs of Rs.25,000 /- (Rupees Twenty five thousand only).

Time for compliance is 45 days from the date of receipt of this order.

Typed to my dictation and pronounced in the open Court on this the 23^rdday of February, 2023.

MEMBER MEMBER PRESIDENT

KPS

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant PW1 :- Y.Gangadhara Rao. For Opposite Party DW1 :- Y.V.Subba Rao

EXHIBITS MARKED

For Complainant:

Ex.A1 -is the photostat copy of Contractors All Risk Policy Schedule, bearing Policy

No.431200/44/2015/83 along with endorsements and receipts. Ex.A2 - is the email, dated 03.09.2016.

Ex.A3 - is the email, dated 06.09.2016.

Ex.A4 - is the email, dated 23.03.2017.

Ex.A5 - is the email, dated 23.03.2017.

Ex.A6 - is the letter, dated 30.03.2017, regarding submission of documents against the claim reported at Indira Nagar Project.

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Ex.A7 - is the photostat copy of Contractors All Risk Insurance, Notification of Physical Loss or Damage.

Ex.A8 - is the photostat copy of letter, dated 18.09.2017. Ex.A9 - is the photostat copy of letter, 29.09.2017, regarding submission of documents against claim reported at Indirasagar Project. Ex.A10 - is the photostat copy of letter, dated 17.03.2018 regarding request to pay on account Payment against the claim reported at Indiranagar Project.

Ex.A11 - is the photostat copy of letter, dated 17.04.2018, regarding Request to pay on Account Payment against claim reported at Indiranagar Project.

Ex.A12 -is the photostat copy of letter, dated 07.08.2018, regarding damage occurred at Indiranagar Dam under CAR policy No.431200/44/2015/83.

Ex.A13 - is the photostat copy of Final Survey Report, dated 07.01.2019. Ex.A14 - is the email, dated 16.04.2019.

Ex.A15 - is the email, dated 27.04.2019.

Ex.A16 - is the photostat copy of letter, dated 15.05.2019, regarding request for settlement of flood damages claim reported under CAR Policy No.431200/44/2015/83.

Ex.A17 - is the email, dated 08.07.2019.

Ex.A18 - is the photostat copy of letter, dated 04.09.2019, regarding claim under CAR Policy No.431200/44/2015/83, flood damage at Indira Sagar Dam.

Ex.A19 - is the photostat copy of letter, dated 29.12.2016 addressed to the Chief Engineer (Civil) ISPS NHDC Limited Narmada Nagar, by the Complainant.

Ex.A20 - is the photostat copy of letter, dated 30.12.2016 addressed to the complainant by the Sr. Manager, (Civil), Dam-EDA Division. Ex.A21 - is the photostat copy of Details of Local Rainfall (Location-NCA Rain Gauge, Old View Point, Narmada Nagar, Khandwa, MP.

For Opposite Parties:

Ex.B1 -is the photostat copy of Contractor's All Risks Insurance. Ex.B2- is the photostat copy of email, dated 23.03.2015. Ex.B3- is the photostat copy of "The Oriental Insurance Company Limited" regarding period of cover required details. Ex.B4 -is the copy of email, regarding installment details for CAR Policy. Ex.B5- is the copy of email, dated 26.03.2015.

Ex.B6- is the photostat copy of Contractors All Risk Policy Schedule, bearing Policy No.431200/44/2015/83.

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Ex.B7- is the photostat copy of Car Sum Insured More than 100 crores- Endorsement Schedule, dated 23.06.2015.

Ex.B8 - is the photostat copy of email, dated 17.08.2016. Ex.B9 - is the photostat copy of Car Sum Insured More than 100 crores- Endorsement Schedule, dated 17.08.2016.

Ex.B10- is the photostat copy of Car Sum Insured More than 100 crores- Endorsement Schedule, dated 17.08.2016.

Ex.B11- is the photostat copy of Car Sum Insured More than 100 crores- Endorsement Schedule, dated 20.09.2016.

Ex.B12 - is the photostat copy of Car Sum Insured More than 100 crores-Endorsement Schedule, dated 05.12.2016.

Ex.A13 - is the photostat copy of Car Sum Insured More than 100 crores-Endorsement Schedule, dated 24.03.2017.

Ex.A14- is the photostat copy of Contractors All Risk Insurance, Notification of Physical Loss of Damage.

Ex.A15- is the photostat copy of letter, dated 30.12.2016. Ex.A16 - is the photostat copy of letter, dated 07.08.2018. Ex.A17 - is the photostat copy of letter, dated 30.08.2018. Ex.A18 - is the photostat copy of "Section 64VB in the Insurance Act, 1938".

Ex.A19 - is the photostat copy of letter, dated 04.09.2019. Ex.A20 - is the photostat copy of email, dated 17.08.2016. Ex.A21 - is the photostat copy of letter, dated Final Survey Report, dated

07.01.2019.

MEMBER MEMBER PRESIDENT

KPS

//CERTIFIED TRUE FREE COPY//

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C.C. No. 323 OF 2020 Dt: 23.02.2023:

Notice affixed on the Notice Board (Cause List)

Order Pronounced (Vide Separate) In the result, the complaint is allowed in part, directing the opposite party:

(1) To pay claim amount of Rs.8,53,08,762/- (Rupees Eight crore Fifty Three lakhs Eight thousand Seven hundred Sixty Two only) together with interest @ 6% per annum from the date of repudiation of the claim that is 04/09/2019 till realization.

(2) To pay a compensation of Rs.1,00,000/- (Rupees One lakh only) towards trauma and mental agony.

(3) To pay the costs of Rs.25,000/- (Rupees Twenty five thousand only). Time for compliance is 45 days from the date of receipt of this order.

MEMBER MEMBER PRESIDENT