State Consumer Disputes Redressal Commission
New India Assuaance Co. Ltd. vs M/S Sarc Printline on 9 January, 2026
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
Date of Institution: 04.11.2024
Date of Hearing: 13.11.2025
Date of Decision: 09.01.2026
FIRST APPEAL NO. 720/2024
IN THE MATTER OF
NEW INDIA ASSURANCE CO. LTD.,
BOMBAY LIFE BUILDING,
N-34, CONNAUGHT CIRCUS,
NEW DELHI-110001.
(Through: Mr. D. N. Singh, Advocate)
...Appellant
VERSUS
M/S. SARC PRINTLINE,
208/6F, SHAHZADA BAGH, DAYA BASTI,
NEW DELHI-110052.
(Through: Mr. Siddharth Aggarwal, Advocate)
...Respondent
DISMISSED PAGE 1 OF 21
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. BIMLA KUMARI, MEMBER (FEMALE)
Present: Mr. D. N. Singh, Counsel for the Appellant, E-mail:
[email protected].
Mr. Siddharth Aggarwal, counsel for the Respondent, E-mail:
[email protected].
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL, PRESIDENT
JUDGMENT
1. The present Appeal is preferred by the Appellant against the Impugned Order dated 31.08.2024., passed by the District Consumer Disputes Redressal Commission-I (North District) [Govt. of NCT of Delhi] Ground Floor, Court Annexe-2, Tis Hazari Court Complex, Delhi-110054 titled M/s. SARC Printline vs. New India Assurance Company Ltd. in CC No. 71 of 2023.
2. The District Commission after taking into consideration the material available on record passed the order dated 31.08.2024 whereby it held as under:
"1. The Complainant, which is a proprietorship firm of one Ms. Chander Kant Arora. The said proprietorship firm deals in manufacturing and sales of printed packaging material, stickers and cardboard boxes etc. The complainant firm purchased a New Indian Bharat Sookshma Udyam Surakssha Policy bearing policy No.31030011218000000524 from M/s New India Assurance Co. Ltd. (OP herein). By way of this complaint, the Complainant has challenged the partial settlement of the claim by the OP herein for the total loss after factory premises due to massive fire.
2. The insurance policy purchased by the Complainant covered the printing press of the Complainant situated at Shehzada Bagh Dayabasti, Delhi. The policy which is in question was valid from 07.03.2022 to 06.03.2023 and it covered the sum assured for Rs.35,00,000.00.
DISMISSED PAGE 2 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
3. At this stage it is important to mention here that the policy in question was issued under the Government of India flagship scheme "Bharat Sookshma Udyam Suraksha" which is offered by OP herein under the name New India Bharat Sookshma Udyam Suraksha Policy. The policy under this scheme is very unique as it provides three types of covers- (i) Standard Cover, (ii) Inbuilt Cover and (iii) Standard Add-on Covers. Standard Cover covers the building and structures, plant and machinery, stock and other assets relating to the business of the insured. In Build Cover covers additions, alterations or extensions; stocks on floater basis; temporary removal of stocks; cover for Specific Contents including money documents such as deeds manuscripts, business books, plans, drawings, securities etc., cover for computer programmes, information and data, cover for personal effects of employees, Directors and visitor; Start Up Expenses; professional fee; cost of removal of debris; and additional cost of reconstruction of property incurred solely for complying with municipal regulations. Standard Add-on cover covers frequent fluctuations in stock/ stock values on declaration basis.
4. The policy specifically covered building structure for the sum assured of Rs. 10,00,000.00, furniture fixture & fittings for sum assured of Rs.15,00,000.00 and stocks in process for a sum assured of Rs. 10,00,000.00. Additionally the policy also covered terrorism, earthquake and STFI (Storm, Tempest, Flood, and Inundation).
5. The factory of the Complainant was gutted in a fire accident on 6-7 June 2022. The Complainant, thereafter, lodged an insurance claim with the OP insurance company. The OP Insurance Company, got the claim investigated by M/s Ram Gopal Verma, Insurance Surveyor & Loss Assessor (not a party). The said surveyor submitted its report on 21.10.2022 and has opined that the loss was caused by accidental fire possibly because of electric short circuit. The DISMISSED PAGE 3 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 surveyor also noted that there was no breach of warranties under the policy at the time of survey.
6. The main issue in this complaint, which requires our consideration, is that whether the Surveyor appointed by the OP Insurance Company is correct in applying the depreciation and under-insurance while assessing the claim of the Complainant. The Surveyor has made deductions primarily on these two heads-depreciation and under- insurance.
7. On the issue of application of depreciation, under the policy terms and conditions, the deduction on account of depreciation is not permitted in the insurance policy in question. This insurance policy namely "New Indian Bharat Sookshma Udyam Surakssha Policy" offered by OP herein is a Gol flagship insurance policy under the scheme namely "Bharat Sookshma Udyam Suraksha" Scheme. The features of the scheme as available on the website of IRDAI as well as the policy terms and conditions of the policy in question as filed by the OP herein clearly indicates that the policy envisages to reinstate or replace the destroyed property with a similar property without any depreciation. The policy undertakes to pay the reinstatement/ replacement value of the destroyed property without applying any depreciation. Further, for stocks, the landed cost of the raw material, input cost of the stock in process at the time of loss and manufacturing cost or the contract price of the finished goods is to be paid in case of loss of these stocks. In this context, the relevant policy terms and conditions read as under:
"2. Basis for Sum Insured
i) For Building, Plant and Machinery, Furniture, Fixture and Fittings and any other contents: Reinstatement Value
ii) For Stocks:
a) For raw material: Landed Cost at Your Premises.
b) For stock in process: Input Cost of the stock at the time of damage, DISMISSED PAGE 4 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
c) For finished stock: the Manufacturing Cost of the Finished Stock or the Contract Price of goods sold but not delivered.
Contract Price is in respect only of goods sold but not delivered. for which You are responsible and with regard to which under the conditions of the sale, the sale contract is cancelled by reason of any Damage insured under Bharat Sookshma Udyam Suraksha this Policy either wholly or to the extent of the Damage. The Company's liability shall be based on the Contract Price Bullion or unset precious stones, any curios or works of art or obsolete machinery and the like are to be covered on Agreed Value basis subject to a valuation certificate being submitted and found acceptable by insurer."
8. From the above terms and conditions, it is very clear that the depreciation value as calculated by Surveyor is not correct. The Surveyor committed an error in applying depreciation while assessing the claim. The policy envisages the replacement value of the insured property and for such purpose, the depreciation of the value of property, machinery and stock is not correct. In this context, the definition of "Reinstatement/ Replacement Value" in the policy terms and conditions is defined as under:
"This is the amount at which the Insured Property can be reinstated or replaced by a similar property, without deducting depreciation, and to the extent required to bring that Property to a condition substantially the same as, but not superior, better or more extensive than its condition if it were new on the date it is damaged or destroyed."
9. On the aspect of under-insurance by the Insured, the policy terms and conditions accept the under-insurance by 15% and ignore the under-insurance to that extent. In case there is under-insurance by more than 15%, policy terms and conditions stipulates that insurance claim is reduced in DISMISSED PAGE 5 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 proportion to the difference beyond that under-insurance is applicable to the full extent. In this context, the relevant terms and conditions reads as under:
"Special feature: Underinsurance upto 15% of Sum Insured is waived. Underinsurance occurs if the Replacement or Reinstatement value on the date of loss of any Insured Property is more than the Sum Insured. It is usual in insurance covers that in such a case, the full claim is not paid. It is reduced in proportion to the difference. Under the Bharat Sookshma Udyam Suraksha Policy, difference upto 15% is ignored, but beyond that underinsurance is applicable to the full extent."
10. Hence, if there is any instance of under-insurance, the underinsurance upto 15% cannot be reduced and the applicable under-insurance can only be reduced proportionately by such amount which is above the 15% mark.
11. Now we would be examining the calculations made by the Surveyor. The surveyor had made calculations under three heads: (a) Loss of Stock; (b) Loss of Machinery and (c) Loss for building. We will be examining each of these calculations separately.
12. For loss of stocks, the Surveyor had made following final assessment:
Particulars Claimed Considered by
Amount Surveyor
Loss of Stocks at Rs. 11,10,000.00 Rs. 10,00,000.00
Ground Floor
Loss of Stocks at Rs. 10,85,000.00
Mezzanine Floor
DISMISSED PAGE 6 OF 21
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
Loss of Stocks at Rs. 10,29,580.00
First Floor
Totsl Loss of Stocks Rs. 32,24,580.00 Rs. 10,00,000.00
Less: Deduction of notional salvage of Rs. 15,506.00
stocks
Net Assured Loss of Stocks Rs. 9,84,494.00
13. In this calculation, as the Surveyor has accepted the loss to the maximum permissible extent in accordance with the policy terms and conditions, we are agreeing to the calculation as suggested by the Surveyor with only one small modification. The Surveyor has applied the deduction on account of notional salvage of stocks. The notional salvage cannot be applied in the policy in question as the policy guarantees reinstatement/ replacement value. The salvage is not acceptable in the policy terms and conditions. Hence, we are considering the total loss on account of loss of stock at Rs. 10,00,000.00 without applying any deduction on account of notional salvage of stocks.
14. On the aspect of loss of machinery, the Surveyor has made final assessment for partially damaged machines and fully damaged machines. Partially damaged machines were located on ground floor. These machines were damaged due to water used during extinguishing the fire. The fully damaged machines were located at first floor and were damaged because of fire.
15. The calculation of loss for partially damaged machines by the Surveyor is as under:
Particulars Claimed Amount Considered
by Surveyor
Partially Damaged Rs. 1,75,000.00 Rs. 1,75,000.00
Machines
DISMISSED PAGE 7 OF 21
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
Assessed loss Rs. 1,75,000.00
Less: Deduction against maximum Rs. 1,31,250.00
depreciation of 75%
Net Assessed Loss for Machines at Rs. 43,750.00
Ground Floor
16. The assessment for fully damaged machines by the Surveyor is an under:
Particulars Claimed Amount Considered
by Surveyor
Total Damaged Rs. 13,40,000.00 Rs. 13,40,000.00
Machines
Assessed loss Rs. 13,40,000.00
Less: Deduction against maximum Rs. 10,05,000.00
depreciation of 75%
Deduction Against Salvage Rs. 1,99,245.00
Net Assessed Loss for Machines at Rs. 1,35,755.00
First Floor
17. As we have held in this order, the policy terms and conditions guarantees reinstatement/ replacement value of the machinery, the application of depreciation and salvage is not permissible in the calculation of the assessment. Hence, the Surveyor has made an error in applying deductions on account of depreciation and salvage of the damaged machines.
18. It is also to be noted here that in the final assessment, the surveyor has made another deduction in account of under- insurance. The final recommendation of the surveyor under the head of loss of machinery is as under:
DISMISSED PAGE 8 OF 21
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
Location of Particulars Claimed Considered
Machines Amount by
Surveyor
Ground Partially Rs. 1,75,000.00 Rs. 43,750.00
Floor Damaged
Machines
First Floor Totally Rs. 13,40,000.00 Rs. 1,35,755.00
Damaged
Machines
Assessed Loss Rs. 1,79,505.00
Deduction against under-insurance of 50.66% Rs. 90,937.00
Net Assessed Loss of Machines Rs. 88,568.00
19. The Surveyor has considered Reinstatement Value (RIV) for VAR (value at risk) of plant and machinery installed on ground and first floor of the factory premises at Rs. 30,40,000.00 as per their market survey. As the sum insured for the machinery was Rs. 15,00,000.00, the Surveyor has concluded that the machinery were under-insured by 50.66%. However, there is no explanation or details of the market survey report of the Surveyor available on record. It is also not clear that how and when the Surveyor has conducted the market survey for ascertaining the market value of the said property. In absence of any evidence of market survey, mere arbitrary figure for calculation of total reinstatement value (RIV) by the said Surveyor cannot be accepted. Hence, the observation of the Surveyor that the said factory machinery was under-insured by around 50% cannot be accepted. The Complainant has lodged a claim of Rs. 15,15,000.00 (Rs. 1,75,000.00 for partially damaged machines + Rs. 13,40,000.00 for Total Damaged Machines) on the head od loss of machinery. The said claim is just 1% higher than the insured value of plant and machinery, which is well within the DISMISSED PAGE 9 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 permissible range of 15% of under-insurance, which can be ignored.
20. Even otherwise, in absence of any market survey report, arbitrary assessment of market value of the plant and machinery cannot be accepted and the application of under- insurance clause by the Surveyor can also not be accepted.
21. While assessing the claim on account of loss for building, the Surveyor has made following final assessment:
Particulars Claimed Amount Considered by Surveyor Loss for Rs. 13,60,000.00 Rs. 13,60,000.00 Building Assessed Loss Rs. 13,60,000.00 Less: Deduction against Rs. 2,38,000.00 Depreciation 17.5% Sub Total Rs. 1,22,000.00 Less: Deduction against Under- Rs. 9,66,155.00 Insurance Net Assessed Loss for Building Rs. 1,55,845.00
22. While assessing the loss on account of building, the surveyor has accepted the cost of repairing the building at Rs.13,60,000.00. The surveyor applied depreciation at the rate of 17.5% while considering that the building was constructed in the year 2015 and it has a life of 40 years. Accordingly, the surveyor applied the depreciation @ 2.5% per year for 7 years for coming to figure of 17.5%. Therefore, the surveyor considered the claim amount after deduction of depreciation at Rs. 11,22,000.00.
23. The surveyor has also assessed the total re-instatement value for VAR (value at risk), of building/ factory of the DISMISSED PAGE 10 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 Complainant at Rs.72,00,000.00. As the sum insured for the building was Rs.10,00,000.00, the surveyor has concluded that this is a case of under insurance by 86.11%. Accordingly, the surveyor has applied deduction of 86.11% for under insurance on the depreciated value of the building i.e. Rs.11,22,000.00. As a result, the surveyor assessed the loss of building Rs. 1,55,000.00.
24. In the calculation as submitted by the Surveyor, it is stated that the value of the building is under- insured by almost 86% and accordingly, he has recommended the reduction of the value of the building by 86% on the ground of under-insurance. In this context, the value of the building the basis by which the Surveyor has calculated the value of the building, is not clear. The Surveyor has taken into consideration the reinstatement value of the entire building as per "surveyor's market survey" at Rs. 72,00,00,000.00. There is no explanation of the calculation at the rate of "surveyor's market survey" and the value of the property has not been calculated as per the government recognised calculation methods.
25. It is also to be noted that the OP and the Surveyor, in its report has acknowledged the fact that the factory of the Complainant was situated only on ground and first floor of the building. Under the policy only the factory of the Complainant and not the entire building was insured. However, while calculating market value of the building, the Surveyor has calculated the value of the entire building consisting of six floors (ground plus five floors). As the factory was situated only on two floors, the assessment of the value of entire building is not justified. Hence, even with the calculation as made by the Surveyor, while acknowledging the fact that the factory was situated only on two floors, the market value of the building can only be Rs. 24,00,000.00 and not Rs. 72,00,000.00 as assessed by Surveyor for the entire building consisting of six floors.
DISMISSED PAGE 11 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
26. Further, it is also not clear that how and when the Surveyor has conducted the market survey for ascertaining the market value of the said property. In absence of any evidence of market survey, mere arbitrary figure for calculation of total reinstatement value (RIV) by the said Surveyor cannot be accepted.
27. Hence, the observation of the Surveyor that the said factory building, was under-insured by around 86% cannot be accepted. The Complainant has lodged a claim of Rs. 13,60,000.00 as cost of repair of the building, which is 36% higher than the insured value. Hence, the claim of the Complainant, after applying the acceptable under-insurance value of 15% can only be reduced by 21% (-36%-15%). As a result, while holding that the under-insurance of 86% as calculated by the Surveyor is incorrect, we are of the opinion that the Op insurance Company should have reduced the claim under the head of building cost by only 21% and not below that.
28. Accordingly, in view of the above, we are of the opinion that claim of the Complainant is acceptable as per following chart:
Sl Heads Claim Amount Claim as Claim as
No. accepted by admissible
Surveyor in view of
this order
1. Assessed Rs.32,24,580.00 Rs.9,84,000.00 Rs.10,00,000.00
loss
stocks
2. Assessed Rs.15,15,000.00 Rs.88,000.00 Rs.15,00,000.00
loss for
machines
DISMISSED PAGE 12 OF 21
FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
3. Assessed Rs.13,60,000.00 Rs.1,55,000.00 Rs.7,90,000.00
loss for
building
4. Total Rs.60,99,580.00 Rs.12,27,000.00 Rs.32,90,000.00
Compulsory Deduction Rs.5,000.00 Rs.5,000.00
Payable Amount Rs.12,22,000.00 Rs. 32,85,000.00
29. In its reply, the OP has stated that after receiving the report from the surveyor the OP Insurance Company has made the payment of Rs. 9,15,000.00 to the Complainant on 05.01.2023 for the said insurance claim. However, the discharge voucher annexed by the OP indicates that the said payment was made with respect to insurance under policy No.31030011200100001025 which is different from the policy under which this claim was made. The Complainant, in its rejoinder has accepted the fact that the Complainant has received the said amount with respect to the claim in question, The discrepancy in the policy number in the discharge voucher has not been noticed by either of the parties.
We have gone through the documents on record and we noticed that the policy number mentioned in the discharged voucher is of the Standard Fire & Special Perils Policy for the period from 12.03.2021 to 11.03.2022 however the policy under which the claim was made commenced from 07.03.2022 having policy No.31030011218000000524. As the discharge voucher mentioned the different policy number, we would not have accepted the payment for the claims made under the policy commencing on 07.03.2022. But as the Complainant has acknowledged the said payment under the current policy, we are ignoring the discrepancy of the policy number in the discharge voucher.
30. The OP Insurance Company in its reply has justified the calculation as provided by the surveyor however it is not clear that when the surveyor has made the recommendation DISMISSED PAGE 13 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 of the payment of Rs. 12,20,000.00 for the insurance claim of the Complainant, why the Opposite Party has made the payment of Rs.9,15,000.00. There is no justification given by the OP for reducing the said amount in either in its reply or to the Complainant. The said reduction without any justification is arbitrary and is not acceptable.
31. The OP Insurance Company has also argued that as the Complainant has received the amount of Rs. 9,15,000.00 in full and final settlement of the claims and has signed the discharge voucher, the Complainant cannot file this complaint and challenge the amount paid. We are not agreeable to this argument of the OP. The IRDAI circular with reference to "Discharge Voucher in settlement of claim"
[Ref No: IRDNNL/CIR/Misc/173/09/2015, dated 24th September, 2015] clearly provides that insurers cannot use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora. In this context, the judgment Limited v. Khanna Paper Mills Limited [(2023) 297 DLT 721 is also referred in of Hon'ble Delhi High Court in the matter of New India Assurance Company would not extinguish the legitimate claims of a party and it would be open to which Hon'ble Delhi High Court has held that signing of discharge voucher the party to claim the remaining amount. Hence, even the Complainant has signed the discharge voucher he cannot be estopped from filing this consumer complaint.
32. Accordingly, we are of the opinion that the OP has been deficient in providing services to the OP and has made a deficient payment for the policy claim to the Complainant. The OP should have made the payment, under the insurance cover, of Rs. 32,85,000.00 to the Complainant. Instead, the OP has made the payment of Rs. 9,15,000.00, which is deficient by Rs. 23,70,000.00.
DISMISSED PAGE 14 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
33. Further, it is also to be noted here that the claim was lodged in the month of June 2022 and the Surveyor submitted its report on 21.10.2022. The payment was made by the OP on 05.01.2023. There is no justification of delay in conducting the survey and also in making the payment of the insurance claim to the Complainant.
34. We are aware of the fact that Insurance Regulation and Development Authority of India has promulgated Insurance Regulation and Development Authority of India (Insurance Surveyors and Loss Assessors) Regulations, 2015 which regulates the function of the Insurance Surveyors and loss Assessors. Regulation 13 of the said Regulations of 2015 lists out duties and responsibilities of the Insurance Surveyors and Loss Assessors. Relevant portion of Regulation 13 is reproduced below:
13. It shall be the duty of every Licensed Surveyor and Loss Assessor to investigate, manage, quantify, validate and deal with losses (whether insured or not) arising from any contingency, and report thereon to the insurer or insured, as the case may be., All Licensed Surveyors and Loss Assessors shall carry out the said work with competence, objectivity and professional integrity and strictly adhere to the code of conduct as stipulated in these Regulations.
(1)...
(2) A surveyor or loss assessor whether appointed by insurer or insured, shall submit his report to the insurer as expeditiously as possible, but not later than 30 days of his appointment, with a copy of the report to the insured giving his comments on the insured's consent or otherwise on the assessment of loss. Where, in special circumstances of the case, either due to its special and complicated nature, the surveyor shall under intimation to the insured, seek an extension, in any case not exceeding six months from the insurer for submission of his report.
DISMISSED PAGE 15 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
(3) In cases where the Survey report is pending due to non completion of documents, the surveyor may issue the final survey report independently based on the available documents on record, giving minimum three reminders in writing to the insured.
(4) If an insurer, on the receipt of a survey report, finds that it is incomplete in any respect, he shall require the surveyor under intimation to the insured, to furnish an additional report on such incomplete issues. Such a request may be made by the insurer within 15 days of the receipt of the original survey report. Provided that the facility of calling for an additional report by the insurer shall not be resorted to more than once in the case of a claim.
(5) The surveyor on receipt of this communication shall furnish an additional report within three weeks of the date of receipt of communication from the insurer."
35. The said regulation clearly mandates that the Insurance Surveyor is required to complete its survey and submit its report to the Insurer within a period of thirty day, which may be extended for a maximum period of 6 months, after almost four months since its appointment to examine the claim of the In the case in hand, the surveyor has filed its final survey report on 21.10.2022 Complainant Company. There is no communication on record that would suggest that the Surveyor had sought extension of time. In absence of any extension of time, there no justification in filing the report by the Surveyor after almost four months since its appointment to assess the loss. We do not see any justification in the report of the Surveyor that would suggest that the said Surveyor made any attempt to submit its report within the time frame as stipulated in the IRDAI Regulations of 2015.
36. Once the final report is received, the OP Insurance Company was supposed to take a decision on the claim within 30 days from the said of receipt of report, the maximum time DISMISSED PAGE 16 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 permitted to the OP Insurance Company under different Regulations of IRDAI. The said 30 days period expired on 20.11.2022, There is no justification why the OP insurance Company took another two months for making the payment. Hence, in our opinion, any delay in taking a decision on the insurance claim is liable for penal interest under Regulation 15 (10) of The Insurance Regulatory and Development Authority of India (Protection of Policyholders' Interests) Regulations, 2017.
37. Accordingly, based on above, we hold that the partial acceptance of the claim by the OP Insurance Company of the Complainant Company is not correct. As As a result, we allow the complaint in following terms and pass following order:
(a). OP Insurance Company is directed to make payment of the balance insurance claim assessed by us at Rs. 23,70,000.00 (Rupees Twenty Three Lakh Seventy Thousand Only) along with an interest at the rate of 9% PA from the date of incident i.e. 06.06.2022 to the Complainant Company within a period of four weeks from the date of receipt of this order.
(b). OP Insurance Company is also directed to pay additional sum of Rs. 5,00,000.00 (Rupees Five Lakh Only) to the COmplainant Company on account of compensation and litigation expenses, within a period of four weeks from the date of receipt of this order.
(c). If the payments as directed in directions (a) and (b) are not made within the stipulated time, the OP Insurance Company shall pay interest @ 12% PA on the entire amount payable at the expiry of four weeks from the date of receipt of this order."
3. Aggrieved by the aforesaid order of the District Commission the Appellant/Complainant has preferred the present Appeal contending that the District Commission has erred in not taking into account that the Appellant is not DISMISSED PAGE 17 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 responsible for the acts and omissions of the Surveyor and Loss Assessor, and therefore, there was no deficiency in service on the part of the Appellant. Lastly, the counsel has submitted that there is no delay in paying the claim amount to the Respondent as the Surveyor Report was provided to the Appellant after a significant amount of delay. Pressing the aforesaid submissions, the Appellant has prayed for setting aside the impugned order of the District Commission.
4. The Respondent has filed the Reply to Appeal, denying all the allegations of the Appellant and submitted that there is no error in the impugned judgment as the entire material available on record was properly scrutinized before passing the said impugned judgment. Pressing the aforesaid contentions and submissions, the Respondent has prayed for setting aside the present Appeal.
5. Written Arguments on behalf of the Appellant are on record, wherein, the contents of the Appeal have been reiterated and the same have been considered. Further, the Appellant has relied on the following judgments in support of its case:
(i) Civil Appeal No. 9050 of 2018 tilted Khatema Fibres Ltd. vs. New India Assurance Company Ltd.
(ii) New India Assurance Company Ltd. vs. Mudit Roadways as reported in [(2024) 3 SCC 193]
(iii) Suraj Mal Ram Niwas Oil Mills (P) Ltd. vs. United India Insurance as reported in [(2010) 10 SCC 567]
(iv) Revision Petition No. 211 of 2009 titled Reliance Health Insurance Co. Ltd. vs. Shri Kailash Acharya
(v) Export Credit Guarantee Corporation of India Ltd. vs. Garg Sons International as reported in (2013 (1) Scale 410)
(vi) General Insurance Society Limited vs. Chandumal Jain & Anr. as reported in (1966) 3 SCR 500
(vii) United Insurance Co. Ltd. vs. Harchand Raichand Rai Chandlal (2003) as reported in CPG 393
(viii) New India Assurance Co. Ltd. as reported in II (2009) CPJ 34 DISMISSED PAGE 18 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026
(ix) Satwant Kaur Sandhu vs. New India Assurance Company Ltd. as reported in (2009) 8 SCC 316
(x) Deokar Exports Pvt. Ltd. vs. New India Assurance Company Ltd. as reported in AIR 2009 SC 2026
6. Written Arguments on behalf of Respondent are on record, wherein the contents of the Reply to Appeal have been reiterated and the same have been considered. Further, the Respondent has relied on the following judgments in support of its case:
(i) New India Assurance Company Ltd. vs. Khanna Paper Mills Ltd. as reported in [(2023) 297 DLT 72]
(ii) New India Assurance Company Ltd. vs. Mudit Roadways as reported in [(2024) 3 SCC 193]
7. We have perused the material available on record and heard the counsel appeared on behalf of the parties.
8. The main question for consideration before us is whether the District Commission erred in not holding the deficiency of service on the part of the Respondents.
9. To address this issue, we deem it necessary to refer to Section 2(11) of the Consumer Protection Act, 2019, which provides as under:
"(11) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
(i)any act of negligence or omission or commission by such person which causes loss or injury to the consumer; and
(ii) deliberate withholding of relevant information by such person to the consumer;"
10.Analysis of the statutory position of "deficiency" under Section 2(11) of the Consumer Protection Act, 2019 referred to above clarifies that any dereliction DISMISSED PAGE 19 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 with respect to any fault, imperfection, shortcoming or inadequacy in performance required by law in pursuance of a contract of service on the part of the service provider including any act of negligence or omission or commission or deliberately withholding relevant information on the part of any person amounts to deficiency in service.
11.On perusal of record, we find that the Appellant has failed to adduce any reason for the delay in paying the claim amount as assessed by the Surveyor and Loss Assessor despite several months of the filing of the claim.
12.Further, we find that the District Commission has splendidly pointed out that the Surveyor and Loss Assessor has wrongly accounted for depreciation of the building, and the partially damaged and totally damaged machinery.
13.At this juncture, we deem it necessary to refer to the Section 2 of the Bharat Sookshma Udyam Suraksha Scheme under the IRDAI (Insurance Regulation and Development Authority of India), which provides as under:
"2. Basis for Sum Insured
i) For Building, Plant and Machinery, Furniture, Fixture and Fittings and any other contents: Reinstatement Value"
14.From the bare perusal of the aforementioned section of the policy in question, it is clear that the Survey Report of the Surveyor and Loss Assessor was not prepared in consonance with the IRDAI guidelines, as the claim assessed for building and machinery accounts for depreciation, however, the same is to paid to the Insured on the reinstated value of the said building and machinery. Therefore, we find that the submission of the Appellant that the District Commission erred in holding deficiency on the part of the Appellant/Opposite Party is answered in the negative.
15.In view of the forgoing, we are in agreement with the reasons given by the District Commission and fail to find any cause or reason to reverse the findings of the District Commission. Consequently, we uphold the Judgment dated 31.08.2024 DISMISSED PAGE 20 OF 21 FA/720/2024 NEW INDIA ASSURANCE VS. M/S. SARC PRINTLINE D.O.D.: 09.01.2026 passed by the District Consumer Disputes Redressal Commission-I (North District), [Govt. of NCT of Delhi] Ground Floor, Court Annexe-2, Tis Hazari Court Complex, Delhi-110054 in Consumer Case No. 71 of 2023.
16.Consequently, the present Appeal stands dismissed with no order as to costs.
17.Application(s) pending, if any, stand disposed of in terms of the aforesaid judgment.
18.The Judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
19.File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (BIMLA KUMARI) MEMBER (FEMALE) Pronounced On: 09.01.2026 LR-DK DISMISSED PAGE 21 OF 21