M/S Beri & Beri Cold Storage And General ... vs Syndicate Bank & Anr. on 30 March, 2026

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National Consumer Disputes Redressal

M/S Beri & Beri Cold Storage And General ... vs Syndicate Bank & Anr. on 30 March, 2026

          IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
                              AT NEW DELHI

                       ORIGINAL PETITION NO. 54 OF 2004

  M/s Beri & Beri Cold Storage and General Mills Pvt. Ltd. having its registered office at
  Siyana Road, Bulandsahar, U.P.
  Through its Managing Director, Mr.Krishan Gopal Beri
                                                                 ... COMPLAINANT
                                          Versus

   (1)    Syndicate bank, having its registered office at Manipal - 576 119 India.
         Also having branch of its bank at Bulandsahar, U.P.

    (2) National Insurance Company Ltd. having its registered office at 3, Middleton
       Estate, Calcutta. Also having its branch at : DM Colony Road, Bulandsahar, U.P.
                                                          ... OPPOSITE PARTIES

  BEFORE:
      HON'BLE MR. JUSTICE A.P. SAHI, PRESIDENT
      HON'BLE MR. BHARATKUMAR PANDYA, MEMBER

  Appeared at the time of Arguments
  For the Complainant       : Mr. Eklavya Dwivedi, Mr. Prithvi Singh, Mr. Varoon Biyani
                               Advocates

  For Opposite Party No. 1: Mr. Puneet Taneja, Senior Advocate with
                            Mr. Dhruv Dwivedi, Advocate
  For Opposite Party No. 2: Ms. Shantha Devi Raman, Advocate
                             Ms. Tanisha Gopal, Advocate

  PRONOUNCED ON 30th MARCH, 2026
                              ORDER

A. P. SAHI, J (PRESIDENT)

1. This is a complaint arising out of an insurance claim for an incident dated 29.06.2002. The complainant alleges details of the cause of losses, the risk whereof was covered under two insurance policies issued by the opposite party - National Insurance company. The complainant is a cold storage for stocking potatoes and other such farm products more particularly during the potato season for which a Stock Protection policy was taken bearing no. 1 188555 for the period 04.05.2002 to 08.08.2002. The sum insured under the said policy for the stock of potatoes was Rs.25 lakhs.

2. The second policy was for the period 12.06.2002 to 11.06.2003 bearing no. 188773 for the building, plant and machinery. Both the policies have been filed on record. The Stock Policy specifically mentions an Assured Bank Clause. The plant, building and machinery also refer to the Syndicate Bank, Bulandsahar who are the bankers and had extended the loan as a mortgager of M/s Beri & Beri Cold Storage and General Mills Pvt. Ltd. - complainant herein.

3. After the incident on 29.06.2002, the complainants allege to have intimated the Insurance Company as well as the Bank and a surveyor was appointed by the insurance company, who is said to have visited on 02.09.2002 but no assessment was carried out as he was statedly recalled on the premise that there was no incident of fire. Consequently neither any survey is said to have been conducted or reported. With the bank pursuing the matter by writing several letters to the insurance company, the same ended up in a very quick repudiation by the insurance company vide its letters dated 11.07.2002 and 25.07.2002 respectively in relation to both the policies. The said repudiation led to communications and complaints to the Finance Ministry, Government of India and also legal notices whereafter having failed to get their grievances redressed, the complainants filed this complaint on 06.07.2004. 2

4. The deficiencies alleged against the bank are that the bank itself had taken up the responsibility to secure the insurance coverage and had clearly omitted its obligation of specifying the coverage that were desirable inspite of the fact that the bank itself had made it a condition precedent while executing the hypothecation deed and mortgaging the property against which the loan was granted to the complainant. The allegations against the bank are that from the documents on record it is well-established that the bank was itself under the impression of the entire coverage and had while communicating to the insurance company also indicated that the shortcoming, if any, in the description of the policy or any lack of coverage was the responsibility of the insurance company itself and hence the claim should be indemnified. The complainant also alleges that after the claim was repudiated, the bank while contesting the present complaint has almost taken a U-turn and has based its contest on unacceptable pleas. The complainant has pointed out that the bank is now attempting to resile back from its own stand that stood admitted in its own documents and these inconsistent pleas therefore clearly establish the deficiency on the part of the bank.

5. The complainant also alleges that at no stage did the bank ever called upon the complainant to rectify any error of coverage in the policies and in the given circumstances the bank cannot now take a summersault to shed its responsibility or liability of the loss suffered by the complainant. 3

6. The complainant has alleged deficiency against the insurance company stating that the insurance company has completely failed in its duty to get a survey conducted and the repudiation is based on without any reference to any survey report. This amounts to a clear breach of the provisions of Section 64 UM of the Insurance Act, 1938 as well as the Regulations framed by the IRDA and the legal position on this issue as enunciated by the Apex court. It is, therefore, urged that the insurance company is equally liable for the deficiencies aforesaid and hence the loss deserves to be indemnified and the complaint deserves to be allowed. The claim of Rs.1,16,36,000/- and the interest thereon has been claimed.

7. Notices were issued and the written versions of the bank as well as the insurance company have been filed to which a rejoinder was also filed as recorded in the order sheet dated 14.08.2006. The matter kept on being adjourned and was heard on 13.10.2008 when the following order was passed:

"Total amount of Rs. 1,16,31,386/- has been claimed by the complainant under four different Heads. Under the Head - 'Farmers potatoes' - payment made @ Rs. 200/- per bag as assigned by farmers and D. Horticulture Officer, an amount of Rs. 25,33,650/- has been claimed. It is not in dispute that potatoes which were destroyed in fire on 29.06.2002 belonged to the farmers and the complainant Cold Storage. On enquiry, ShrraaKajan states that payments were made to the farmers by means of cheques. He points out that some of the farmers had 4 filed complaints against the complainants and in some of those complaints, even the awards have been made. He further points out that the amount paid to the farmers has been reflected in the balance-sheet of the complainant - Cold Storage. In this back drop, complainant is directed to disclose on affidavit the details of the cheques along-with amounts issued to the farmers and encashed by them. Along-with affidavit, the copies of awards and the pending complaints will be filed before 26.11.2008 on which date matter will be listed for further proceedings."

8. A perusal of the said order indicates that the complainant had also taken a stand that due to the loss suffered, the farmers had to be compensated and the complainant was called upon to disclose the material in respect thereto which stands recorded in the order dated 26.11.2008. The same is extracted herein under:

"Mr. M.L. Mahajan, Learned Counsel appearing for the complainant states that on 13.10.08, the matter was argued at length before the Bench comprising Hon'ble Mr. Justice K.S. Gupta as Presiding Member and Hon'ble Mr. S.K. Naik as Member. After hearing the matter, the Commission directed the complainant to disclose on affidavit the details of the cheques alongwith amounts issued to the farmers and encashed by them. The Commission also directed that along with the affidavit the copies of awards and the pending complaints be also filed before this date. Mr Mahajan states that he could not comply with the said direction as the record to be referred to and filed, is voluminous and he has, therefore, made an application seeking some time as well as adjournment for the purpose. The other side has no objection. In 5 the circumstances, we grant four weeks' further time to the complainant to comply with the directions contained in the order dated 13.10.08.

The matter be listed on 6.02.09 before the same bench for direction and further proceedings."

9. The evidence by way of affidavit was filed and the matter remained pending on adjournments on one count or the other. Even though the matter was heard on some occasions and was listed for re-hearing but the same was not disposed of and stood adjourned. During the pendency of the complaint, the Syndicate bank merged with Canara Bank and a change of nomenclature was brought about with an amended memo of parties. The Covid intervened and with the change of some counsel, the matter was taken on 02.11.2023 when it was dismissed for want of prosecution. M.A. No. 624 of 2023 was filed. That was allowed on 06.02.2024 and the case was directed to be listed for hearing. This is how that the matter came up on 01.09.2025 before us when we heard the matter and passed the following order as an adjournment had been sought on that date by the complainant appearing in person:

"Heard the Complainants who have appeared in person and pray that since their counsel is held up in the Supreme Court therefore, the matter may be adjourned for today.

With the help of the learned counsel for the Bank and the learned counsel for the Insurance Company, we have prima facie perused the documents filed alongwith the Complaint and we find that the claim was repudiated by the Insurance Company on 31.01.2003. The repudiation is on the ground that the coverage, 6 under which the indemnity was sought, was not available in the policy and consequently, the Complainants were not entitled to any indemnification.

However, from the documents which have been filed on record, there seems to be a communication by the Bank with the Insurance Company regarding the status and nature of the coverage under the policy which seems to be a matter that deserves to be clarified by the Bank as well as from the records and the evidence that has been filed by the respective parties during the pendency of this Complaint which has only seen just two decades of life before this Commission. We were not inclined to adjourn the matter any further but in view of the request so made, as a last measure, we place this Complaint at 02:00 pm on 25.09.2025."

10. The hearing commenced on 25.09.2025 when learned counsel for the complainant and the learned counsel for the insurance company concluded their submissions. The order sheet dated 25.09.2025 is reproduced herein under for ready reference:

1. The present complaint arises out of a claim of indemnity of Rs.1,16,36,000/- for the loss suffered by the complainant which he alleges to be a risk covered under the two policies issued by the OP-2 National Insurance Co. Ltd. The policies were acquired for securing the covered risks under a Standard Fire and Perils Policy that has been ultimately repudiated by the National Insurance Co. Ltd. vide letters dated 11.07.2002 and 25.07.2002 on the ground that the coverage of the risk does not extend to machinery breakdown loss as the policies cover only the insurance for the building, potatoes and carrots against the loss of "fire 7 only". Consequently, the claims were not covered and hence it was repudiated.

2. We have heard Mr. Eklavya Dwivedi, learned counsel for the complainant, who has advanced his submissions and concluded his arguments whereupon submissions were commenced by Ms. Shantha Devi Raman, learned counsel for the OP-2 Insurance Company, who has also concluded the same. The arguments on behalf of the Bank, OP-1 could not proceed due to paucity of time and Mr. Taneja, learned Senior Counsel for the Bank urged that the matter may be fixed for some other date to enable him to advance his submissions on behalf of the Bank.

3. Mr. Dwivedi commenced his arguments by inviting the attention of the Bench to the letter of sanction of loan by the Bank dated 04.02.2000 to urge that the Bank itself had imposed a condition that a fire insurance with the coverage of strikes, riots and electrical risks and other insurance covers shall be obtained from one of their approved companies with an endorsement of Bank clause. Condition no. 3 of the first page of the letter has been read out which recites the said condition. He therefore submits that the policy that had to be obtained, had to necessarily and compulsorily contain coverages as indicated in the aforesaid clause, and had to be obtained only from an approved Insurance Company as per the choice of the Bank itself. He therefore submits that this was virtually a compulsive condition which stands further fortified by the Annexure appended to the same where an additional condition no. 7 for adequate comprehensive insurance to be acquired for both primary as well as collateral securities. Learned counsel therefore submits that with the said 8 terms, the policy had to necessarily include the nature of the coverage as indicated therein.

4. He then points out that the policy documents and the cover notes clearly indicate that it was the Bank which had acquired the policies. The first policy for the stock of potatoes stored in the cold storage with the assured Bank clause effective from 04.05.2002 to 08.08.2002 has been filed as Annexure P4 (page

27) to the complaint. The coverage for the stock of potatoes is for three months and the coverage is loss or damage or consequential loss due to "fire and allied perils".

5. The second fire policy for the building, plant and machinery is for the period 12.06.2002 to 11.06.2003 and is also a standard fire policy where the coverage is for the loss or damage "due to fire and allied perils" as per the terms and conditions. The coverage for the stocks is for Rs. 25 lakhs and the coverage for the building, plant and machinery is Rs. 1 Crore each. The second policy is on record as Annexure P3 at page 26.

6. According to the complainant, as alleged, the insurance coverage was continuing from before and the policy was being renewed since the year 2000 itself. According to the complainant, the Bank of its own had obtained the comprehensive policies and the premiums were debited in respect of the two policies directly from the account of the complainant.

7. The complainant then alleges in paragraph 16 that on 29.06.2002, there was a mishap in the cold storage as "fire flared up" resulting in the total collapse of the compressor and electric motor, a collapse of the machinery that brought the entire cooling system of the machinery to a halt that broke down. The temperature could not be maintained and the potatoes got 9 destroyed and the incident caused damage to the building and the cold storage itself.

8. It is urged that with the aforesaid unfortunate occurrence, the complainant immediately informed the Bank as well as the Insurance Co. The intimations dispatched to the Insurance Company by the complainant on 29.06.2002 with a copy of the same to the Syndicate Bank has been filed with the reply of the Insurance Company as Annexure R2/D at page no. 102.

9. It is then urged that the Bank itself forwarded the claim intimation to the Insurance Company through their letter dated 08.07.2002 which has been filed as Annexure R2/C with the reply of the Insurance Company. It is pointed out that on receipt of the said intimation, the Insurance Company appointed a Surveyor as stated in paragraph 18 of the complaint and according to the learned counsel, the Bank itself in its communications has admitted the visit of the Surveyor who conducted a survey on 02.09.2002 as was disclosed later on and who assessed the loss to the tune of Rs. 32 lakhs.

10. It is however urged that the Insurance Company hurriedly prepared two letters of repudiation dated 11.07.2002 and 25.07.2002 that have been filed as Annexure R2/F at page no. 104 and Annexure R2/H of the reply filed by the Insurance Company which was directly addressed to the Bank with no intimation to the complainant. Learned counsel submits that this intimation by the Insurance Company to the Bank made directly establishes that the Insurance coverage had been acquired and obtained by the Bank itself and it is for this reason that the Bank was also intimated of the said letter of repudiation about which no 10 information was given to the complainant by the Insurance Company.

11. Learned counsel then urged that the Insurance Company and the Bank were both attempting to protect the assets of the complainant which is evident from the letter written by the Bank to the District Magistrate on 01.09.2002 filed as Annexure P5 (page no. 28 of the complaint) and a letter dated 03.09.2002 dispatched by the Insurance Company to the District Magistrate for extending protection and security to the cold storage which has been filed as Annexure P6 (page 29 of the complaint). It is urged that both the letters indicate the damage caused and the loss suffered to the items that were insured by the Insurance Company.

12. It is pointed out that in the letter dated 01.09.2002, the Bank has admitted before the District Magistrate that the Bank had insured the project and the stock of potatoes with the National Insurance Company and it is they who were looking after the aspect of recovering claims from the Insurance Company and consequently, the assets and property of the cold storage be protected. The letter written by the Insurance Company on 03.09.2002 to the District Magistrate is almost similarly worded and a copy of the same has been sent to the Bank. Learned counsel therefore submits that these documents also indicate that the risk of the cold storage were duly insured and comprehensively covered and the Bank as well as the Insurance Company were making all efforts to protect the assets of the cold storage by approaching the District Magistrate, which confirms the extensive insurance coverage.

13. Learned counsel then contends that the aforesaid contentions on behalf of the complainant are further fortified by the letter dated 04.09.2002, Annexure P7 (page 30), letter dated 12.09.2002 Annexure P8 (page 32) and the letter dated 24.09.2002 Annexure P9 (page 34), which demonstrate that the Bank had been clearly intimating the Insurance Company that they had taken the policy covering all risks, and if there was any lack of coverage, then it was the responsibility of the Insurance Company and its fault. Learned counsel has extensively read all the three letters to urge that firstly the loss was intimated with the cause of excessive heating, which he argues was due to fire, and the consequential collapse of the machinery causing an estimated loss of Rs. 32 lakhs as indicated by the Surveyor who is stated by the Bank and Insurance Co. to have visited on 02.09.2002.

14. It is then pointed out that the third letter dated 24.09.2002 of the Bank categorically alleges lapses on the part of the Insurance Company of having extended an inadequate coverage in the policy which was an act of cheating by the Insurance Co. and keeping the Bank under a false impression that their assets were fully secured. The nature of the losses were also described therein and in effect the Insurance Company was directly blamed for not having taken appropriate steps and hence, necessary action should be taken for the settlement of the claim with intimation to the Bank. It is pointed out that all these three letters, copies whereof were sent to the complainant, nowhere indicate that the claim had been repudiated.

15. It is then submitted that it is for the first time that through the letter dated 31.01.2003, the Bank intimated the complainant 12 that their claim had been rejected by the Insurance Company and a copy of the said letter is Annexure P10 (page no. 36).

16. Thereafter the complainant also dispatched a detailed request to the Bank for pursuing the claim through the Insurance Company and also requested for a sanction of funds to re- establish the business vide letter dated 24.03.2003 where in paragraph 8 of the said letter, the complainant has categorically mentioned about the fire in the cold storage. It is urged that not only this, a complaint was made to the Secretary, Banking and Insurance Division, Government of India through a letter of the same date to intervene in the matter and to get the claim settled, where also it was alleged by the complainant that a fire had taken place as indicated in paragraph 8 of the said letter. Both these letters are on record whereafter the complainant was intimated about the claim having been declined by the Insurance Company through the letter of the Ministry dated 02.06.2003. These documents have been filed with the evidence affidavit of the complainant sworn by Shri Krishan Gopal Beri on 10.08.2006.

17. Learned counsel for the complainant then urged that from a perusal of these letters and documents on record, it is evident that the Bank itself had defaulted in obtaining full coverage under the policy as was desired by it in the terms of the loan sanction letter dated 04.02.2000 as referred to above. Learned counsel has emphasized that it was the Bank itself which had acquired the policy from the Insurance Company and therefore any shortcoming in the coverage cannot be attributed to the complainant, who was under the impression that the Bank had been taking care of protecting the assets of the cold storage by securing it in all possible ways and not confining it only to the risk 13 coverage of fire. Nonetheless the incident also involved a fire with excessive heat that was generated and which fact had been communicated to the Insurance Company as is evident from the communications made thereon by the Bank to the Insurance Company. It is therefore submitted that even though the intimation sent by the complainant did not spell out the details yet the claim was due to the loss that was suffered in the circumstances as indicated in the complaint and the same was also supported by the letters dispatched by the Bank itself to the Insurance Company. The risk was therefore clearly covered and there was no occasion for the Insurance Company to have repudiated the same.

18. The Bank also has practically admitted its own deficits relating to the acquisition of the policy by not taking full coverage and thus there is a clear deficiency on the part of the Bank itself and the Insurance Company has also erroneously repudiated the claim when the understanding with regard to the nature of the coverage was very clear as the policy had been taken for the plant, machinery and the stocks comprehensively.

19. Learned counsel then urged that the Insurance Company failed to discharge its obligation as no survey report was obtained in spite of the fact that the Surveyor visited and is stated to have conducted a survey on 02.09.2002. Learned counsel submits that the incident was reported on 29.06.2002 and therefore the Insurance Company has clearly violated the IRDA Regulations in this regard as well as the provisions of the Insurance Act, 1938 by not getting a prompt survey done immediately on getting the intimation of the incident and on the other hand, the Surveyor was recalled by the Insurance Company as admitted by them in 14 their reply before this Commission without getting a survey report. It is then submitted that the appointment of the Surveyor Mr. Manoj Kumar Sharma is admitted to the Insurance Company and his visit is admitted to the Bank in its letter which has not been disputed by the Insurance Company. It is therefore evident that the Surveyor also fell short in the performance of his duties as contemplated under the IRDA Regulations, 2002, a copy whereof has been placed before us. It is urged that he has failed to perform his statutory duties particularly under Regulation 13, and such failure according to the learned counsel falls within deficiency of service on the part of the Insurance Company.

20. Learned counsel has invited the attention of the Bench to the written submissions filed on 01.04.2024 vide Diary No. 12546 with particular reference to paragraph 22 and the relevant judgments of the Apex Court as indicated in paragraph 26 of the said written submissions. Learned counsel has therefore urged that the Bank was in clear deficiency in service with regard to its obligations of securing a comprehensive insurance policy, which is evident from the three letters pointed out above as well as the other surrounding circumstances and facts and further from the intimations given to the District Magistrate and then the pleadings before this Commission. He therefore submits that the Bank has been equally a defaulter and consequently the policy has to be construed as covering the risk and the claim has to be held to be indemnifiable in the background of the said fact holding the Bank to be equally responsible.

21. It is then urged that the Insurance Company has also been deficient in services for all what has been stated above and the conduct of the Surveyor and the absence of the survey report 15 clearly amounts to a breach of the obligation which the Insurance Company has failed to discharge as obliged to do under Section 64UM of the Insurance Act, 1938. Learned counsel has emphasized that the Insurance Company cannot absolve itself of the responsibility to get the survey conducted and assess the loss once the claim has been raised. It is urged that the Insurance Company could not have assumed the absence of the coverage of the risk without a survey report, which is compulsory according to the statutory provisions, and also as per the decision cited by the learned counsel and specifically pointed out in the written submissions referred to above.

22. Learned counsel has then invited the attention of the Bench to some facts which according to him establish the default of the Bank where peculiar averments have been made in three affidavits filed as evidence on behalf of the Bank. The affidavits are by Mr. M. L. Garg, the then Branch Manager, Mr. Shyam Sundar, who had worked as Incharge of the Branch and then the subsequent Branch Manager, Mr. S. M. Aggarwal, which affidavits are on record. Learned counsel, inviting the attention of the Bench to the various averments made therein, urges that the Bank has taken a U-turn and a strange plea of blaming the complainant of having obtained the letters from the said three Branch Managers that were sent to the Insurance Company namely the letters filed as Annexure P7, P8 and P9. Learned counsel submits that this is a clear desperate attempt to wriggle out of their own admissions and it is urged that these affidavits are carefully tailored and designed to somehow of the other dilute the impact of the aforesaid letters which cannot be permitted through an affidavit. It is urged that the affidavits have been motivatedly filed with a 16 view to take a stand which is contrary to record and therefore an adverse inference should be drawn on the filing of such affidavits as evidence. Learned counsel submits that all of a sudden, the Bank has played a different tune in these affidavits, denying the happening of the fire and also a totally concocted plea that the letters had been obtained by misrepresentation by the complainant. Learned counsel submits that there is no document or any other material to substantiate this stand taken in the three affidavits, which deserves to be discarded outright and the contents thereof are uncreditworthy of being considered as evidence. Learned counsel submits that this attempt on the part of the Bank is a complete after thought and it is pointed out that these affidavits have been filed on the same date i.e. 08.08.2006 long after the Insurance Company has filed its reply affidavit way back in the year 2005. It is therefore urged that the Bank has attempted to disassociate itself in order to unshoulder its responsibility and liability which deficiency is established on the basis of record. The affidavits therefore deserves no credence and with this, learned counsel for the complainant has concluded his arguments subject to a rejoinder after replies of the OPs.

23. Ms. Raman advanced her submissions on behalf of the Insurance Company urging that the terms and conditions of the policy are sacrosanct and therefore in the absence of any coverage other than the fire and allied perils, there is no question of any indemnification, in as much as, firstly the complainant never raised any claim regarding occurrence of fire nor is there any evidence to that effect. She submits that the argument raised on behalf of the complainant that the compressor had ammonia gas available for its operation, and the overheating had been 17 caused giving rise to some alleged fire is an argument of imagination. She submits that neither was there any intimation about fire nor any claim arising out of fire. For this, she has invited the attention of the Bench to the intimation sent by the complainant to the Insurance Company on 29.06.2002 and also the Bank clearly reciting "due to machinery malfunction our stock of potatoes and carrots are rotten. Kindly send your Surveyor to assess the damage." It is urged that this unequivocal recital clearly establishes that the loss was due to machinery malfunction which resulted in the loss of temperature to be maintained for preserving the potatoes and carrots, and this failure of machinery and absence of cooling that may have led to the loss, but certainly not fire. She submits that there is no protection and coverage under the policy for mechanical breakdown.

24. Inviting the attention of the Bench to the other communications that have been referred to by the learned counsel for the complainant, she submits that there was no fire mentioned in any of the communications even by the Bank particularly Annexure P7, P8 and P9. She submits that the letter written by the Bank also nowhere mentions any fire. To the contrary, the allegation is that due to excessive heating of the compressor there was a machinery breakdown. It is urged that this was the internal malfunctioning of the compressor, which has nothing to do with the fire.

25. She then submits that the improvement which is sought to be made by the complainant is long thereafter and after the repudiation of the claim in the letters that were sent to the Bank on 24.03.2003 and the complaint to the Ministry of Finance where in paragraph 8 of the letters, the word "fire" has occurred that too 18 even without any explanation as to the nature of the fire and the extent thereof. She submits that this improvement and claim of fire has practically seen an averment for the first time in paragraph 16 of the complaint.

26. Turning towards the terms of the policy, she has invited the attention of the Bench to clauses 6 and 7 of the General Exclusions contained in the policy that loss or destruction or damage to the stocks in the cold storage caused by change of temperature was not indemnifiable. Further, loss, destruction or damage to any electrical machine, apparatus arising from or occasioned from overrunning excessive pressure etc. including self-heating from whatever cause was not indemnifiable. She therefore submits that if the machinery breakdown brought about any change of temperature, the same was not indemnifiable. She has once again reiterated that fire is categorically defined under clause „1‟ of the policy and there being no evidence of any fire, there was no coverage to be indemnified.

27. She has then explained the reply given by the Insurance Company in the opening paragraphs of the preliminary objections where it has been stated that as per the information gathered from the then Branch Manager of the Insurance Company, Mr. Verma, one Mr. Manoj Kumar Sharma had been initially requested to visit the loss site, so as to further appoint a Surveyor or conduct the survey. It came to the notice of Mr. Sharma that the loss was due to machinery breakdown and since the coverage was only of fire insurance, he was called back. The claim was therefore not registered and the Bank was informed accordingly.

28. She has referred to the two letters dated 11.07.2002 and 25.07.2002 to urge that these letters have been received by the 19 Bank and there is no denial of the same. It is thereafter that the Bank attempted to put the blame on the Insurance Company through the letters dated P7, P8 and P9, two of the said letters having been denied, and therefore the claim stood declined on clear grounds as there was no coverage for machinery breakdown or loss of potatoes and carrots due to such breakdown.

29. It has then been stated that the policy was acquired by the Bank in terms in which it was sought by the Bank. There was no unfair trade practice as alleged and it is also pointed out by her that there are separate policies for losses of machinery breakdown and deterioration in the stocks of potatoes in the cold storage and in the present case, there was no such coverage or policy. The building, plant, machinery and the stocks were covered only against the fire and nothing else. The complainant has attempted to virtually re-write the policy according to its own interpretation having realised that there was neither any coverage nor in fact there was any fire. She then submits that the Insurance Company was not obligated to issue any comprehensive policy to cover all types of losses. If the Bank did not propose or acquire any such policy, nor did it seek change in the policy by way of any endorsement, then in that event there is no occasion to lay the blame on the Insurance Company. The argument therefore against the Insurance Company is without any basis. It is urged that the entire claim was an afterthought when it was realised by the complainant that there was no coverage other than fire.

30. It is also urged that the allegation of no information being given to the complainant is without any basis and in fact the Bank was attempting to stake the claim on behalf of the complainant. It is urged that later on, it seems that the Bank was found to have 20 not acquired the policy as desired by the complainant, the complainant has then made allegations of lapses against the Bank also for which the Insurance Company cannot be held liable.

31. She then submits that the allegations made by the complainant about spontaneous combustion without any flame having occurred due to overheating is neither proved nor established and in fact, there was no fire at all. In the absence of any actual fire or the loss caused due to any of the insured item due to fire, the claim is without any basis. The repudiation is therefore valid and it was intimated promptly to the Bank.

32. With regard to the sending of the letters by the Bank to the Insurance Company, paragraph 19 of the reply of the Insurance Company admits having received the letter as referred to in paragraph 19 of the complaint, which is the letter dated 04.09.2002 Annexure P7. However, in paragraph 19 of the reply, the Insurance Company has stated that a reply was also sent that is appended as Annexure R2/J. We made an enquiry from learned counsel about the said Annexure which does not find place in the reply, nor is it appended with the same and learned counsel could not give any satisfactory answer, and in fact there is no Annexure R2/J on record. While replying to the other letters mentioned in paragraph 28 - 29, Annexure P8 and P9 of the complaint, the reply given is in paragraph 20 - 23 of the reply of the Insurance Company where the only sentence occurring is "the rest of the alleged correspondence is not admitted". We enquired from the learned counsel about the same as to why there is no specific reply to the said letters, which the Bank is alleged to have sent to the Insurance Company, the learned counsel states that the Bank itself has filed the three affidavits of Mr. Garg, Mr. Shyam Sundar 21 and Mr. Aggarwal, where they have admitted that the letters had been obtained by the complainant on misrepresentation. She therefore submits that the said letters have no evidentiary value and to the contrary are adverse to the claim of the complainant.

33. Concluding her arguments, she has cited two decisions, one in the case of Kishan Cold Storage and Anr. vs. Bajaj Allianz General Insurance Co. Ltd. & Ors., decided by NCDRC on 21.04.2016, paragraphs 13, 14, 20 and 21 to contend that in that case also, no machinery breakdown policy had been taken and therefore the National Commission held that there was no justification to direct the Insurance Company to indemnify the claim. She then relied on the judgment of the Apex Court in the case of Shree Ambica Medical Stores & Ors. vs. Surat People's Co-operative Bank Ltd., (2020) 13 SCC 564, paragraphs 23 to 26 to contend that there cannot be any assumption of risk so as to hold the Insurance Company to be liable and in the present case as demonstrated above, since there was no peril covered other than fire, the complainant cannot claim any indemnification as they were not prevented from obtaining any further coverage of Machinery breakdown or Deterioration of Potatoes. She therefore urges that the complaint deserves to be dismissed against the Insurance Company as neither is there any indemnifiable claim nor is there any material to establish the actual loss by fire and consequently, the claim deserves to be dismissed. With the said contentions, she also rests her arguments, subject to any rejoinder after the Bank concludes its arguments.

34. List on 22.10.2025 at 2.00 pm. 22

11. Learned counsel for the bank advanced his submission on 05.02.2026 which stands recorded and extracted herein under:

"1. The arguments of Mr. Taneja, learned Senior Counsel for the Syndicate Bank commenced by urging that there is no consumer service provider relationship between the complainant and the Bank regarding the insurance coverage and even otherwise the complainant was under a contract of loan with the Bank for running his business of cold storage and generating profits. The complainant in the light of his own prayer as claimed under relief clause of the complaint has indicated loss of profits to the tune of Rs.20 lacs per year. Mr. Taneja therefore submits that the complainant himself has disclosed facts which demonstrate that the loan was for a pure commercial purpose and the sanction of the loan amount demonstrates the same. He submits that the recitals of an insurance coverage is obligation on the complainant in order to secure the interests of the complainant and the hypothecated goods which does not amount to any service viz a viz the insurance by the Bank. Mr. Taneja submits that there is no question of any deficiency being claimed against the Bank as the policy was entirely taken by the complainant and which was purchased from Hauz Khas Branch of the Bank at Delhi whereas the business is situate at Bulandshahar. The Bank that had extended the loan is also situate at Bulandshahar and there is no occasion for the Bank to have taken the insurance from Delhi nor is there any evidence to that effect. The submission of Mr. Taneja is that this entire transaction of insurance was done exclusively by the complainant and therefore there was no such involvement of the Bank so as to construe any element of deficiency regarding the process of insurance or the issuance of the policy.

2. He then submits that the affidavits filed on behalf of the Bank namely that of Mr. M.L. Garg, Mr. Shyam Sunder and Mr. S.M. Aggarwal have been filed after taking stock of the entire developments including the survey conducted by the Insurance Company and its repudiation and therefore any letters written by the Bank that have been made the basis of the allegations of the involvement of the Bank, cannot in any way accrue any benefit to the contentions raised on behalf of the complainant.

3. The presence of an assured Bank clause in the insurance coverage does not create any consumer service provider relationship between the complainant and the Bank regarding the insurance coverage. The entire control over the purchase of the Insurance Policy, its renewal or presentation was totally in the hands of the complainant with no involvement of the Bank at all.

4. To substantiate his submissions Mr. Taneja has cited two decisions, one in the case of the Chief Manager, Central Bank of India & Ors. vs. M/s A.D. Bureau Advertising Pvt. Ltd. & Anr., 2026 INSC 288 in Civil Appeal No.7438/2023 decided on 28.02.2025 by the Apex Court and the decision in the case of Kishan Cold Storage & Anr. Vs. Bajaj Allianz General Insurance Co. Ltd. & Ors., CC/52/2009 decided on 21.04.2026 by this Commission. With the aid of the aforesaid decisions Mr. Taneja submits that the Bank only had a contractual relationship with regard to the loan extended to the complainant which was solely for the purpose of the business of the complainant, and the same being a business to business transaction, this relationship cannot in any way have any impact in respect of the claim of indemnification under the insurance coverage, which is entirely between the complainant and the Insurance Company. Mr. Taneja 24 more heavily relying on the order of this Commission in the case of Kishan Cold Storage (supra) paragraphs-13, 14, 26 & 27 has urged that this Commission has categorically held that the complainant was not a consumer in terms of the Consumer Protection Act, 1886 of the Bank for the insurance coverage and the entire relationship between the Bank and the complainant was for providing facility of a loan to set up a cold storage which was a commercial activity. The complaint had been dismissed by this Commission and therefore Mr. Taneja urges that the ratio of the said decision squarely applies on the facts of the present case.

5. Learned counsel has read out the letters written by the Bank and Mr. Taneja urges that the writing of such letters by the Bank official cannot in any way create any liability much less a contractual relationship for adjudicating any deficiency in respect of the service of the Insurance Company. The Bank therefore should be absolved in its entirety and as a matter of fact the complaint deserves to be dismissed as against the Bank.

6. Mr. Taneja has concluded his submissions and Mr. Eklavya Dwivedi, learned counsel for the complainant shall now advance his submissions in rejoinder on the next date fixed.

7. Learned counsel for the opposite party No.2 Ms. Tanisha Gopal is also present. Let the matter be listed on 27.02.2026."

12. Mr. Dwivedi, learned counsel for the complainant concluded his rejoinder with appropriate responses to the same by Mr. Taneja, learned senior counsel for the bank, by advocate Ms. Shantha Devi Raman for the insurance company, whereupon orders were reserved.

13. While concluding his rejoinder Mr. Dwivedi has cited certain decisions and has reiterated the arguments with reference to the documents on record to 25 emphasize that the bank and the insurance company both are responsible for deficiency in service, the bank having failed to take a comprehensive policy and the insurance company having failed to get a survey conducted to assess the loss thereby committing a breach of the Insurance Act and the Insurance Regulations.

14. Another legal argument was advanced by him contending that the complainant is a consumer. The present case does not in any way fall outside the Act on the ground that the nature and purpose of the services are commercial in nature. He has urged that the definition of services, which excluded services for commercial purposes from the ambit of the Act, was brought by way of amendment w.e.f. 15.03.2003 whereas the incident in the present case is of 29.06.2002, hence the law as was applicable on the date of event deserves to be taken into account even though the complaint was filed later on.

15. He has further urged that the complainant being a company is well within the definition of the word "person" and therefore, the complaint is maintainable under the Consumer Protection Act, 1986. He has relied on the decision of Karnataka Power Transmission Corporation & Anr. Vs. Ashok Iron Works Pvt. Ltd. (2009) 3 SCC 240 to substantiate his submissions. At the outset these two arguments have been refuted by Mr. Taneja, learned senior counsel for the bank contending that the amended definition would be applicable keeping in view the fact that the complaint was filed later on and 26 that the law as applicable on the date of the filing of complaint has to be invoked. He further submits that the bank has its contract with the complainant with respect to the loan and there was no obligation on the bank for taking any insurance coverage. As such, the coverage of insurance is a matter between the complainant and the insurance company but so far as the bank is concerned, it had only a commercial relationship with the complainant and hence, the complaint is clearly a loss for a commercial enterprise and this being a commercial purpose, the complaint would not be maintainable against the bank for any losses.

16. We have found the complaint to be maintainable on behalf of the complainant as a consumer for all the reasons that we will be recording hereinafter but at this stage the issue, as to whether a company could file a complaint or not, stands concluded by the Apex court in the decision of Karnataka Power Transmission Corporation (supra) and lately once again reiterated by the Apex court in the case of Kozyflex Mattresses Pvt. Ltd. Vs. SBI General Insurance Company Ltd. & Anr. (2024) 7 SCCC 140. The complainant, therefore, is very much a person within the meaning of the Consumer Protection Act and is a consumer entitled to maintain this complaint.

17. Mr. Dwivedi has also explained the distinctions and the law as cited on behalf of the learned counsel for the bank in the case of The Chief Manager, Central Bank of India & Ors. V. M/s AD Bureau Advertising Pvt. Ltd. & Anr. In Civil Appeal No. 7438 of 2023 and Kishan Cold Storage Vs. 27 Bajaj Allianz General Insurance Co. Ltd. in CC No. 52 of 2009 and has then referred to various paragraphs of the reply of the OP No. 1 bank and the reply filed on behalf of OP No. 2 insurance company. He has also invited the attention of the bank to the affidavit of Mr. A.S.M. Murthy to substantiate his submissions with regard to the participation of the surveyor as well as his inputs to the insurance company and the bank.

18. He has then once again referred to the affidavits of the three managers namely Mr. Shyam Sunder, Mr. Garg and Mr. S.M. Agarwal to point out the anomalies in the stand taken by the bank. He urges that the insurance company was duly intimated about the fire promptly where after the surveyor was appointed and this fact stands established once again with the letter dated 24.03.2003 sent by the complainant.

19. Mr. Dwivedi also urged that there is no evidence of the surveyor and therefore, the repudiation was invalid. The conclusions could not have been drawn without any survey. He urges that the deputation of a surveyor being mandatory is acknowledged as a deficiency if it has not been carried out in terms of Section 64 UM and the Regulations framed thereunder. For this he has cited the judgment in the case of Shree Ambica Medical Stores & Ors. Vs. Surat People's Co-operative Bank Ltd. & Ors. (2020) 13 SCC 564 as well as the judgment of the Apex court in the case of Khatema Fibres Ltd. Vs. New India Assurance Co. Ltd. & Anr. (2023) 15 SCC 327 . He has also referred to the ratio of the decision in the case of Sonnell Clocks & 28 Gifts Ltd. v. New India Assurance Co. Ltd., (2018) 9 SCC 784 to substantiate his submissions. Mr. Dwivedi has also handed over rejoinder submissions in writing pointing out to the violation of the Insurance Act and the Regulations as well as the inconsistencies in the stand taken by the Bank and the Insurance Company.

20. He has concluded his arguments once again by saying that the affidavits of the OP No. 1 and the OP No. 2 both admit the event, which has happened and the intimation of its cause and therefore they cannot turn around to say that the bank was misled or to have not accepted the incident resulting in any deficiencies.

21. Mr. Taneja had also reiterated his submissions and so did advocate Ms. Raman for the insurance company urging that the insurance company cannot be held liable as an insurance contract is to be governed by its terms and conditions and in absence of coverage, the repudiation does not suffer from any liability. The allegation that the insurance company had omitted to carry out any responsibility is incorrect in as much as there was no incident of fire for being surveyed and in the absence of any such incident, the entire claim was without any coverage and therefore, the insurance company was at liberty to have repudiated the claim which does not suffer from any infirmity. The complainants have been unable to establish the incident through any cogent method without any proof as to whether they did call for any help from the fire brigade or any other authorities and in the absence of any such 29 evidence of the occurrence of fire, the entire claim is unfounded and does not deserve any acceptance.

22. Having heard learned counsel for the parties and having considered the submissions raised, we have already indicated above that the complainant falls within the definition of the word "consumer" being a person. The next question is as to whether the complaint has been filed for a service which may fall within the definition of the word "commercial purpose". The prayer made in the complaint is of a claim of indemnity arising out of an insurance cover, the interpretation whereof is involved herein. The allegations are of lapses against the bank also but as would be unfolded herein after, the peculiar facts of this case would lead to the conclusion that the bank had a clear interest in the insurance coverage as the policy was issued with an Assured Bank clause. Thus, the claim is intertwined, which also includes an allegation against the bank about its shortcoming in acquiring a comprehensive policy, which according to the complaint was omitted to be done. It is, therefore, evident that it was a combined transaction of insurance coverage with the involvement of the bank which stood fulfilled by the bank that pursued the insurance claim itself as would be narrated hereinafter. The bank, therefore, conducted itself in a manner by taking upon itself the responsibility of coverage and recovering the loss through intimations from the insurance company.

23. Thus, the dominant purpose behind the entire claim is to secure the benefit of indemnity through insurance coupled with the alleged deficiencies on the part of the bank. This peculiar transaction, therefore, cannot be segregated to treat the claim to be exclusively for a commercial purpose more so when a claim of insurance has been held to be a claim of indemnification and not profit generation, thereby making such claims amenable to the jurisdiction of the Consumer Protection Act. This law has been now settled by the Apex court confirming the view taken by the National Commission in the case of National Insurance Co. Ltd. v. Harsolia Motors, (2023) 8 SCC 362 . We, therefore, hold that the present complaint filed on behalf of the complainant as a consumer is maintainable as the complainant is a beneficiary having insurable interest and keeping in view the fact relating to the allegations of omission by the bank in taking a comprehensive insurance coverage in our opinion, allows the complaint to be maintainable for examining the alleged deficiencies.

24. In order to confirm our conclusions hereinabove, it is necessary now to delineate on the nature of the policy, the terms thereof and the manner in which it was acquired. We may first refer to the document, which is the sanction letter dated 04.02.2000 when the loan came to be sanctioned to the complainant. The said document has been filed as Annexure P2 to the complaint issued by Syndicate Bank where Condition No. 3 recites that, "Fire insurance with strikes, riots, and electrical risk and other insurance cover shall 31 be obtained from one of our approved companies with the bank clause." The complainant has alleged that right from the beginning the bank itself had acquired the policy and the policy terms and conditions were kept by the bank itself.

25. It goes without saying that the complainant had set up this project of cold storage of about Rs.2.36 crores and for that had approached the Bank at its branch office at Bulandsahar for a loan of Rs.92 lakhs. Accordingly, the bank undertook also to obtain the policy and which was in accordance with the manual of instructions issued by the Reserve Bank of India that has been quoted in paragraph 9 and is extracted herein under:

"Reserve Bank of India manual of instructions volume-II (A) with a heading "Advances on page No. 245/247 (9.11.10) Point VI scrutiny of policy

(a) On receipt of the first stamped premium receipt of the insurance policy the manager will scrutinize the policy and find out, if all the details have been mentioned correctly.

Point (VII) Renewal of policy (no loan shall at any time be permitted to continue without full insurance cover)."

26. The complainant has, however, admitted in Paragraph 10 that before the project was started, the complainant had obtained a silent policy from the New Delhi Branch office at Hauz Khas of the OP No. 2 that was from 01.09.2000 to 31.03.2001 when the project was at its nascent stage. 32

27. The bank is stated to have approached the insurance company at its branch office at Bulandsahar and requested to issue a comprehensive policy to cover all risks. This policy commenced after the expiry of the silent policy referred to above.

28. According to the complainant, he was informed that the said policy was acquired which was comprehensive to cover all the risks relating to the project of the cold storage and accordingly the premium account of Rs.59,850/- and Rs.4,489/- respectively were debited by the bank itself from the account of the complainant to cover the risk of plant, machinery and accessories and the stock of potatoes. This policy in the year of the commencement of the business ran for the plant and machinery, accessories from 13.06.2001 and 12.06.2002 and for the stock by potatoes for the period 13.06.2001 to 12.10.2001.

29. In order to assess the involvement of the bank in the acquisition of the policy, condition no.3 of the loan sanction letter has already been indicated above. The terms and conditions that were attached with the letter of sanction also, in Clause 7, direct that the instructions laid down in the manual and circulars issued from time to time shall be strictly followed so as to safeguard the interest of the bank. The policies that have been issued clearly mention the name of Syndicate Bank over and above the complainant's name, and there is no dispute that the insurance policies were issued with an assured bank clause endorsement. The policies were available with the bank, and the fact 33 that the bank was itself concerned about the losses that were reported stands communicated in the letter dated 08.07.2002, whereby the bank informed the Insurance Company of the said losses. The said letter is extracted hereinunder:

30. It appears that on receiving the said information, the request of the bank was declined, stating that the risk was not covered in the policy. The repudiation letter dated 11th July 2002 is extracted hereinunder: 34

31. This letter refers to the same incident dated 29th June 2002, and it states that the coverage was for loss of fire and not for machinery breakdown. The letter dated 29.06.2002 is extracted hereinunder:

35 36

32. The bank, on 15th July 2002, wrote back to the Insurance Company, making reference to both the policies and complaining that the Insurance Company was simply denying the claim, which was not correct as the cover note clearly mentioned plant and machinery also. It was further asserted that it covered the damage of potatoes and, as per the information received from the complainant, a substantial quantity of potatoes have also been spoiled. As such, the request was to review the policy and send the surveyor to examine and assess the damage of machinery as well as potatoes and carrots. An inquiry was also made about the type of coverage, as there was a total denial of the claim regarding plant and machinery. This said letter is extracted hereinunder:

37 38

33. The letter requests the Insurance Company to depute a supervisor (surveyor) to assess the damage. The next letter is by the bank, addressed to the District Magistrate, Bulandshar, seeking police protection for the cold storage, intimating the occurrence at the cold storage and the breakdown resulting in the deterioration of potatoes. The said letter also indicates that the bank had insured the said project and potatoes with the National Insurance Company, Bulandshar, and that they were pursuing the matter for recovering the claim from the Insurance Company.

34. In response thereto, the Insurance Company again stated that the loss was not covered, as the occurrence was due to failure of the compressor. The said intimation, which once again repudiated the claim dated 25.07.2002, is extracted hereinunder:

35. This letter dated 1st September, 2002, written by the Bank Manager of Syndicate Bank, Bulandshar, to the District Magistrate, is extracted hereinunder:

36. It may be pointed out that the bank itself has admitted a visit by the surveyor to the site on 2nd September, 2002, which will stand demonstrated by the letter to be referred to hereinafter.

37. On 3rd September, 2002, the bank wrote another letter to the District Magistrate on the same subject, again asserting that the cold storage was insured by them, and a specific reference was made to the policy that was valid from 12thJune 2002 to 11thJune 2003, which is policy no.188773 for the building, plant and machinery. Nonetheless, reference to the insurance of the potatoes was also made, and it was indicated that the damage to the potatoes was due to lack of maintenance of temperature and partial damage due to other reasons, and two other items that were insured. The letter dated 3rd September, 2002, is extracted hereinunder:

42 43

38. Thus, all the letters continuously indicated that the bank had insured the cold storage. Then comes the crucial letter dated 4th September, 2002, which is more revealing. The same is extracted hereinunder:

39. This letter records several facts which are crucial for the present controversy. In paragraph 1 of the letter, it is categorically stated that the project was financed, and to cover the interest of the bank, it was the Insurance Company that had made the request for insuring the project for Rs.2 crores for the building, plant and machinery, and Rs. 25 lakhs for potatoes, covering all risk factors, including breakage of machinery, and deterioration of potatoes. It then categorically records that the desired premium by the Insurance Company has been paid by them. Thus, the bank in this letter admits having obtained the insurance coverage itself.

40. Then comes the realisation about the shortcomings in the policy, which seems to be on account of the repudiation letters dated 11th July 2002 and 25th July 2002. Surprisingly, the bank, while writing to the Insurance Company on 4 th September 2002, called upon the Insurance Company, informing it that if there was any lack of coverage, it was the responsibility of the Insurance Company, as they had asked for comprehensive coverage and the desired premium had been paid. The letter therefore demonstrates that the bank had undertaken the entire negotiation of seeking insurance coverage and had also intended the comprehensive coverage of the risks and losses.

41. The bank has further indicated the extent of damage of 13,600 bags of potatoes and the excessive heating, which has resulted in the collapse of the machinery.

42. What is more informative is that the bank, in this letter, records that, as requested by them, the surveyor of the Insurance Company had visited and surveyed the loss on 2nd September 2002. This statement in the said letter, therefore, is clear evidence of the fact that the surveyor had been appointed and who did make a visit to assess the loss on 2nd September 2002. The letter also indicates the estimated loss of Rs.25 lakhs for potatoes and Rs.7 lakhs for the damage of machinery, in total a sum of Rs.32 lakhs. A request was thereafter made for compensating the damages, keeping in view the losses suffered and the piquant situation of the company, where the loss had to be compensated to the farmers as well. A copy of the said letter has been addressed to the complainant, the District Magistrate, and the District Horticulture Officer, who were conducting the process of negotiating the payment of the losses suffered by the farmers.

43. The Bank did not fall short of its pursuit and again dispatched a letter on 12 th September 2002 to a higher official of the National Insurance Company at Calcutta, complaining of the irregularities against the Branch Manager of National Insurance Company Bulandshar, in respect of the claim. The said letter is extracted hereinunder:

44. Once again, it has been reiterated by the bank that it is they who had asked the Insurance Company to insure the project covering all risks and that the desired premium had been paid by them. It was again repeated that the surveyor appointed had visited and surveyed the loss on 2nd September and that the loss assessed was Rs.32 lakhs. This letter, therefore, in effect, was 47 again a repetition by the bank itself, followed by another letter to the Insurance Company on 24th September 2002.

45. This letter puts the entire blame on the Insurance Company, stating that it was entirely a lapse on the part of the Branch Office of the NIC, Bulandshar, in carrying out inadequate inception of the insurance policy and also amounted to cheating the bank. The said letter is extracted hereinunder: 48

46. The aforesaid correspondence by the Bank including the letter dated 08.07.2002 and its response by the Insurance Company to the Bank, the letter dated 15.07.2002 of the Bank and its response on 25.07.2002, the letter of the Bank dated 01.09.2002 and the letter of the Insurance Company to the District Magistrate dated 03.09.2002, the letter of the Bank dated 04.09.2002 and finally the letters dated 12.09.2002 and 24.09.2002 all quoted above leave no room for doubt that the Bank had been unilaterally on its own without any undue influence or any form of misleading information had been independently dispatching these letters accepting that the insurance policy had been acquired at their instance and the premiums had also been paid.

47. Mr. Taneja, learned Counsel for the Bank attempted to explain that these letters had been issued by the Bank officials under some misconception and that they had been misled to issue the said letters. We express our serious concern on such an argument for the simple reason that the Bank has attempted to explain its altered position by filing three affidavits of the same date i.e. 08.08.2006. The first affidavit is by Mr. M. L. Garg who claims himself to have been working at the Bulandshahar Branch of the Syndicate Bank between June, 2001 to 15.06.2002 as the Senior Branch Manager. In this affidavit it is admitted that Mr. Garg had got the renewal of the insurance on behalf of the Bank. Paragraph No.-3 and 4 of the said affidavit are extracted herein under:

"3. I state that the Bank gets the assets of the borrowers insured if the borrowers themselves do not get the same insured on their own. In cases where the insurance policies have been taken for the earlier period by the borrowers, the Bank will only renew the insurance on the same terms and conditions as that of the existing insurance policies in the normal course of business. In the present case, the petitioner did not get the insurance policy renewed as required under the terms and conditions agreed to him.

4. I state that as the petitioner did not get the assets insured as agreed and as the assets charged to the bank are at risk, I on behalf of the bank only got renewed the insurance of the assets being the building and plant and machinery of the petitioner for the period 12.6.2002 to 11.6.2003 vide cover note 188773 and the stock of potatoes under the cover note 188555 dated 4.5.2002 for the period of three months as required by the petitioner under the same terms and conditions of the insurance policies as the petitioners themselves deemed it fit to be insured and got the same done by the policies under cover notes as stated above. I state that a copy of the said cover notes has been enclosed by the petitioner themselves as Annexure P-3 and Annexure P-4. I state that the premium was paid to the insurance company by debiting to the loan account of the petitioner."

48. This has been clarified in Paragraph No.-5 which is extracted herein under:

"5. I state that primarily it is the duty of the petitioner himself to protect his property from such risks as he may foresee with regard to his project as others who are connected /related only with one facet of his project can not foresee all kinds of risks involved in the project. I state that it was by compulsion of the bank finance that the machinery and stock was insured by the bank against risk due to fire as the petitioner did not do so as required under the contract."

49. Mr. Garg has attempted to explain that the Bank is not obliged to get the insurance done which is the obligation of the insured. The said affidavit therefore leaves no room for doubt that neither the incident has been disputed as Mr. Garg has clearly stated that he was a Manager of the Branch at the relevant time. The cover note has also been filed by him along with the policy.

50. Then comes the affidavit of Mr. Shyam Sunder who took charge after Mr. Garg had been transferred temporarily between 16.06.2002 and 06.09.2002. It is Mr. Shyam Sunder who for the first time creates an impression in Paragraph No.-4 as if he was misled to issue the letter as it was sent without informing that the claim had been rejected by the National Insurance Company Limited. Paragraph No.-4 of the said affidavit is extracted herein under:

"4. I state that the said Sri Kishan Gopal Beri has once again approached us suppressing the fact that his claim was rejected by the National Insurance Company and misrepresenting that he was assured by the Officials of the National Insurance Company Limited that their claim will be settled if a letter is obtained from the Bank addressed to them in the form he brought. I was not aware of the scheme of the said Sri Kishan Gopal Beri and believed the representations of him and gave him the letter dated 4.9.2002 which has been enclosed to the petition as Annexure P-7."

51. We find this to be a very strange assertion inasmuch as the chronology of events and the letters that have been extracted herein above, clearly indicate that both the letters of repudiation dated 11.07.2002 and 25.07.2002 are addressed to the Manager of the Syndicate Bank. We find it surprising that Mr. Shyam Sunder is making an allegation of suppression against the Complainant when the record speaks clearly otherwise as indicated above. There is no question of any suppression by the Complainant and to the contrary after having received the letter dated 11.07.2002 the Bank has responded by re-agitating the claim through its letter dated 15.07.2002. In such circumstances neither the affidavit of Mr. Garg nor that of Mr. Shyam Sunder can be accepted as creditworthy and deserves to be rejected as having been sworn against record. Coming to the third affidavit of Mr. S. M. Agarwal, this is a complete somersault where the issue of the claim being of a 52 commercial nature, the claim being not bonafide and that the Complainant had made false representations have been stated with an assertion that the Complainant has concocted a story of fire when in fact there was never a fire in the premises of the Complainant.

52. We are surprised at this improvement in the affidavit which was simultaneously filed by Mr. Agarwal because of certain glaring infirmities. The Complainant had categorically alleged that Mr. Manoj Kumar Sharma had been been appointed as a Surveyor upon the intimation given by the Bank and the Bank itself has admitted of having come to know of the Surveyors visited on 02.09.2002. What is surprising in the affidavits is that in Paragraph No.-7 Mr. Agarwal states "it is clear from the survey of the Respondent No.- 2 Insurance Company that the loss of potatoes was due to failure of machinery and excessive heat produced in the plant." In paragraph No. 18 it has been asserted that unfortunately it was found by the Insurance Company that there was no fire that had occurred. Again in Paragraph No. 32 it has been asserted that the survey report of the Opposite Party No. - 2 Company held that there was no fire. We find these assertions to be indicating as if there was some survey report which has been deliberately withheld. If that is not so then there is clear failure on the part of the Insurance Company by not getting a survey conducted or proceed on the basis of a report which is clearly envisaged under Section 64 UM of the Insurance Act, 1938. This is therefore a clear deficiency on the part of the insurance company as well and the 53 judgments cited by Mr. Dwivedi on this score are therefore squarely applicable on the facts of the present case. We may however point out that this is the stand of the Bank and not of the Insurance Company and therefore it would be apt to examine the affidavit filed on behalf of the insurance company.

53. The said affidavit is of Mr. A. S. N. Murthy, Manager, National Insurance Company Limited dated 01.02.2013 that has been filed on 04.02.2013 before this Commission after 7 years of the filing of the affidavits by the Bank that have been discussed herein above. The Insurance Company has come up with its contentions denying any liability on the ground of the absence of coverage. But at the same time the Insurance Company has categorically referred to all the communications by the Bank to it and the response of the Insurance Company to the Bank. They are the same communications which have been referred to herein above. This affidavit therefore confirms that the Bank had been communicating voluntarily and the story set up by the Bank that it had been misled to issue letters to the Insurance Company is absolutely incorrect. Once the Insurance Company has admitted having received these communications in its affidavit referred to above, then it is absolutely clear that the Bank is attempting to wriggle out of the communications which are clear admissions and stand corroborated by the Affidavit of the Bank of the Insurance Company. The bank has nowhere contested the affidavit of the Insurance Company.

54. This affidavit of the Insurance Company through Mr. Murthy in Paragraph No.- 8 states as under:

"8. It may also be submitted here that initially the company had appointed Mr. Manoj Kumar Sharma, Surveyor who along with the Branch Manager initially visited the site. However, when it came to the notice that only fire insurance was taken by the Complainant and the loss was due to machiney break down, as per the facts narrated by the complainant, the claim was not registered and the surveyor was withdrawn as there was no insurance policy covering the Machinery Breakdown and Deterioration of Stocks. The insurance policy taken by the complainant through the Bank was only for fire and allied perils, the perils specifically mentioned in the policy and the alleged loss was not on account of any perils covered under the policy."

55. The aforesaid averments in the affidavit leaves no room for doubt that the Insurance Company had appointed Mr. Manoj Kumar Sharma who had visited the site along with the Branch Manager. Thus, the recital in the letters of the bank dated 04.09.2002 and 12.09.2002 that the surveyor had visited on 02.09.2002 is corroborated and confirmed. The surveyor had visited and there was an estimated loss of Rs.32,00,000/- indicated as recorded in the said letters. Perusal of Paragraph No. - 8 of the affidavit quoted above, therefore dispels all doubt of the sending of the surveyor and his visit along with the Branch Manager. The Insurance Company therefore did not register the claim 55 and according to them the Surveyor was withdrawn as they did not find any coverage under the policy. As noted above, the Insurance Company at no stage has attempted to get the survey conducted which in our opinion is a deficiency inasmuch as whether there was a fire or not and whether the claim was indemnifiable under the coverage of the policy could have only been assessed had the Surveyor conducted the survey and tendered its report. The insurance company has completely withheld these facts and the affidavit of Mr. Murthy filed in the year 2013 in a complaint of the year 2004 clearly speaks volumes of the manner in which the Insurance Company has conducted itself. The repudiation letters / communications dated 11.07.2002 and 25.07.2002 which were not even sent to the Complainant are vitiated for non-compliance of the provisions of Section 64 UM of the Insurance Act, 1938. The lapse on the part of the Insurance Company to have got the Survey conducted is a clear indication of having failed to discharge its statutory obligation and therefore a deficiency.

56. The stand taken by the Insurance Company is very peculiar inasmuch as in the letter dated 11.07.2002 it states that the building and potatoes were insured against loss of fire and not machinery breakdown loss. The letter dated 25.07.2002 states that it was only a loss due to fire which was covered whereas the information given was that the loss was due to the failure of a compressor.

57. It is the said issue which has to be examined as to whether the said communications even otherwise can be sustained inspite of all the contradictions that have been pointed out herein above. The first letter of repudiation dated 11.07.2002 states that the Insurance Company has insured the building, potatoes and carrots against loss of fire and not machinery breakdown loss. It is correct that the letter dated 29.06.2002 dispatched by the Complainant to the Insurance Company states that due to malfunction of system of compressors are damaged and therefore the Surveyor be sent to assess the same. A copy of the said letter has been sent to the Bank. The Bank dispatched the letter on 08.07.2002 for deputation of the Surveyor. The Insurance Company has failed to record or even intimate as to when had Mr. Manoj Kumar Sharma visited the site to verify the correctness or otherwise of such a claim. What is evident from Paragraph No.-8 of the affidavit of Mr. Murthy is that Mr. Manoj Kumar Sharma, the Surveyor, did visit the site and according to the letter of the Bank the said visit was on 02.09.2002. We fail to understand that if the intimation had been received by the Insurance Company through the letter dated 29.06.2002 it is not understood as to why the Insurance Company did not promptly and immediately send the surveyor. Admittedly the Surveyor is said to have gone after the repudiation letter had been issued on 11.07.2002. The date of visit of the Surveyor now stands confirmed with the recital contained in the letter of the Bank dated 04.09.2002 where the date of the visit has been 57 categorically mentioned as 02.09.2002. This visit is even after the second repudiation on 25.07.2002. What we find is that the affidavit of the Insurance Company is completely misleading inasmuch as on the one hand the receipt of the letter dated 29.06.2002 has been admitted in Paragraph No.-5 of the affidavit of Mr. Murthy. The same is extracted herein under:

"5. Vide letter dated 08.07.2002, the respondent No. 1, Bank intimated the claim to the respondent insurance company by enclosing the letter of the complainant dated 29.06.2002. Copies of the said two letters are filed as ANNEXURE R-2/C and ANNEXURE R-2/D respectively along with reply filed by the respondent insurance company. In the letter dated 29.06.2002 it was stated by the complainant that due to machinery malfunction our stock of potatoes and carrots are rotten and, therefore, surveyor may be deputed to assess the damage."

58. However in Paragraph No.-8 which has been extracted herein above of the same affidavit no date of the visit of the Surveyor has been mentioned which is a clear deliberate omission. The affidavit as noted above has been filed in the year 2013 long after the affidavits of the Bank which were filed in the year 2006, where also the Bank had failed to disclose the date of the visit and instead took a somersault that all the letters issued by them was on account of having been misled. This contradiction therefore belies the stand taken by the Insurance Company and it confirms that they sent the Surveyor after they had repudiated the claim. This is putting the cart before the horse. The visit of the Surveyor on 02.09.2002 is meaningless.

59. There is no evidence of any Survey having been conducted after receiving the intimation on 29.06.2002. There is no evidence of any survey report inspite of the fact that the Bank has indicated something in its affidavit as narrated above, whereas the Insurance Company has completely taken a U-turn by saying that the Surveyor had been recalled. These contradictory stands clearly establish a clear default on the part of the Insurance Company by not getting the survey conducted and by issuing letters of repudiation long before the visit of the Surveyor who had visited the site on 02.09.2002. The withholding of such vital and relevant information is itself indicative of a stand by the Insurance Company through which it is attempting to mislead this Commission. The very filing of the affidavit in the year 2013 as indicated above, and with the inconsistencies in the affidavits of the Bank and the Insurance Company appears to be a deployment of averments to shift the blame against each other when the Bank had categorically written about the deficits in the issuance of the policy wherein it had clearly stated that the Insurance Company had not acted barely by extending the entire coverage as desired.

60. Be that as it may it is the Complainant who was caught in between and who had after having suffered the loss had to pay compensation to the farmers through the District Magistrate which facts are not disputed. The loss had occurred for the reasons that had been explained by the Complainant but in order to assess the loss and to find out the extent thereof, It was the job of 59 the Insurance Company and also the Bank which had taken upon itself the responsibility to obtain the policy. Thus it is the Bank and the Insurance Company that were clearly deficient in conducting themselves in accordance with the terms of the policy, their obligations as also the statutory provisions of the Insurance Act, 1938 which has been clearly violated by the Insurance Company for all the reasons stated herein above.

61. We therefore find that the Complainant has made out a case for grant of relief but the question is in the absence of any survey having been conducted or assessment having been made can the quantum be fixed.

62. The only indicator that we have is the estimated loss referred to by the Bank in the letters dated 04.09.2002 and repeated in the letter dated 12.09.2002 where a damage to the stocks of potatoes has been assessed at Rs.25,00,000/- and to the machinery to the tune of Rs.7,00,000/-. Thus a total of Rs.32,00,000/- was assessed way back in the year 2002 itself. We have every reason to believe that this estimated loss was made when the Branch Manager of the Bank and the Surveyor Mr. Manoj Kumar Sharma are stated to have visited on 02.09.2002. The said letters have not been contradicted by the Insurance Company whereas the Bank has taken an unusual stand of having issued letters under some misconception. We had already rejected the arguments of the Bank and therefore the same being the only basis we provide that the Bank and Insurance Company shall share an 60 equal liability of Rs.16,00,000/- each to pay for the losses estimated by them to the Complainant.

63. It is after almost 22 years that the matter is being finally disposed of and therefore in our considered opinion it will not be appropriate now at this stage for issuing directions of the assessment of the loss afresh keeping in view the fact that the incident itself is of the year 2002. We therefore find it necessary to close this Petition holding that the Bank by filing incorrect affidavits and taking an inconsistent stand has tried to shield the lapses on its part in acquiring the policy and on the other hand the Insurance Company was clearly deficient by not conducting the survey and acting in violation of law as already discussed herein above.

64. We therefore allow this Complaint to the said limited extent and since we are handicapped at this stage with any further details we do not find it appropriate to award interest more than 6% on the said amount that shall be payable to the Complainant from the date of filing of the Complaint i.e. 06.07.2004 upto the date of actual payment in the respective proportions as directed above by the Opposite Parties.

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(A.P. SAHI, J) PRESIDENT ............................................. (BHARATKUMAR PANDYA) MEMBER AJ/Babita/MSS/C-1/Reserved 61

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