State Consumer Disputes Redressal Commission
Kamdhenu Pickles & Spices Industries ... vs Regional Claims Manager Hdfc Ergo And ... on 30 March, 2026
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
JUDGMENT RESERVED ON: 1510112026
JUDGMENT PRONOUNCED ON: 30/03/2026
CONSUMER COMPLAINT NO. 266 OF 2012
Kamdhenu Pickles & Spices Industries Pvt. Ltd., Krishi Bhavan, 1379, Bhavani Peth, Pune,
Maharashtra -- 411042. .......Complainant
Versus
Regional Claims Manager HDFC Ergo, 6th Floor, Leela Business Park, Andheri-Kurla
Road, Andheri East, Mumbai, Maharashtra - 400059.
Managing Director Hdfc Ergo, 6th Floor, Leela Business Park, Andheri-Kurla Road,
Andheri East, Mumbai, Maharashtra - 400059. .......Opposite Parties
BEFORE:
HON'BLE MR. JUSTICE A.P SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
For The Complainant : Mr. Amit Kumar Maihan, Advocate
For The Opposite Party : Mr. Vishnu Mehra, Sr. Advocate With
Mr. Rahul Negi, Mr. Vimal Prakash Panday,
Advocates & Ms. Yogita Sharma, A.R. Of
Respondent
JUDGEMENT
PER HON'BLE MR. BHARATKUMAR PANDYA, MEMBER Heard Mr. Amit Kumar Maihan, Advocate for the Complainant and Mr. Vishnu Mehra, Senior Advocate for Opposite Party and Ms. Yogita Sharma, A.R. of Respondent.
The facts of the present case which are admitted by both the parties are that the Complainant, Kamdhenu Pickles & Spices Industries Pvt. Ltd., is engaged in the business of manufacturing pickles and spices and had obtained two fire insurance policies from the Opposite Party, HDFC ERGO General Insurance Company Ltd., in respect of its two units situated at Gat No. 53, S. No. 7, Mouje Sate, Vadgaon Maval, Taluka Vadgaon, District Pune. It is also not in dispute that the first policy ("Policy A") bearing No. FMD0006404000100 for an insured sum of Rs.3 Crores was valid from 22.05.2010 to 21.05.2011, and the second policy ("Policy B") bearing No. FMD0006002000100 for an insured sum of Rs.7 Crores was valid from 30.04.2010 to 29.04.2011. Both parties admit that the second policy ("Policy B") had expired prior to the fire incident, whereas the first policy was in force on the date of the Page 1 of 16 incident. It is further admitted that a fire incident occurred on the night of 12/13.05.2011 at the premises of the Complainant and that the said fire occurred in Unit No.1, i.e., the old unit established in the year 1992. It is also not disputed that upon intimation of the loss, the Opposite Party appointed M/s Cunningham Lindsey International Pvt. Ltd. as a licensed surveyor to assess the loss, and the surveyor submitted its report dated 27.03.2012. Both parties also admit that the surveyor assessed the loss suffered by the Complainant and prepared a Statement of Summary of Claim, wherein the loss was quantified at approximately Rs.2,48,02,374. It is further admitted that the Opposite Party made part payment of Rs.50 Lakhs on 21.07.2011 and Rs.25 Lakhs on 16.04.2012, totaling Rs.75 Lakhs, and that a legal notice dated 23.04.2012 was issued by the Complainant, to which the Opposite Party responded vide letter dated 26.06.2012. It is also admitted that the present complaint was filed on 03.10.2012 and that the Opposite Party subsequently filed its Written Statement on 19.11.2013, followed by the filing of a rejoinder by the Complainant on 25.04.2014.
3. However, the material facts which are seriously disputed between the parties pertain to the interpretation of the insurance coverage, the applicability of policy conditions, and the correctness of the deductions made by the Opposite Party while settling the claim. The Complainant asserts that the two insurance policies were independent and distinct, each covering separate units, and that the policy for Rs.3 Crores exclusively covered the stocks of Unit No.1 where the fire occurred. This position is sought to be substantiated by the email dated 16.06.2011 (Annexure CC-4), wherein it is indicated that the Rs.3 crore policy related to Unit No.1 and the Rs.7 crore policy related to Unit No.2. The Complainant further contends that the endorsements dated 14.07.2010, which were issued at the instance of the insurer for adding certain office locations, were accepted in good faith and did not alter the fundamental coverage of Unit No.1 under the Rs.3 Crore policy. It is also the case of the Complainant that the surveyor, after detailed inspection and verification of records, assessed the net loss at Rs.2,48,02,374 and that the insurer has arbitrarily reduced this amount by applying an incorrect deduction under the head of under-insurance by taking into account the stocks of both units, even though the fire occurred only in Unit No.1. The Complainant denies any discrepancy in stock records and asserts that all relevant documents were duly verified by the surveyor. It is further contended that the insurer has failed to provide any valid or reasoned Page2of16 justification for reducing the assessed loss from Rs.2.48 Crores to Rs.75 Lakhs and that such conduct amounts to deficiency in service and unfair trade practice.
On the other hand, the Opposite Party disputes the Complainant's interpretation of the policies and contends that both units formed part of a single industrial establishment located at the same premises and that the coverage must be read holistically in light of the policy terms and endorsements. The insurer asserts that the endorsements dated 14.07.2010 modified the risk structure and were binding on the Complainant, and therefore the Complainant cannot rely selectively on the original policy terms while ignoring the modified coverage. It is further contended that the email dated 16.06.2011 issued by HDFC Bank cannot override the contractual terms of the insurance policy. The Opposite Party also maintains that although the surveyor assessed the gross loss, the surveyor's report is recommendatory in nature and the final liability of the insurer must be determined after applying policy conditions such as under-insurance, excess clause, and admissibility of stock. The insurer justifies the deduction under the head of under-insurance on the ground that the total stock at the premises, including stock in both units, was required to be considered for determining adequacy of the sum insured. It is further contended that the payments made to the Complainant were on an interim basis and reflect the bona fide conduct of the insurer. The Opposite Party also raises issues regarding possible discrepancies in stock valuation and contends that the Complainant has failed to establish the exact quantity and value of stock destroyed. It is therefore argued that the dispute is purely contractual in nature and does not constitute deficiency in service.
The Complainant filed its evidence by way of an affidavit along with documents marked as Annexures A, B, C, and D on 07.01.2013. Opposite Party through Shri Akshay Bose filed evidence by way of an affidavit on 21.05.2014. The Opposite Party also filed its evidence by way of an affidavit on 18.06.2014, and on the same date, the surveyor submitted his evidence by way of an affidavit. Additionally, the Complainant filed further evidence by way of affidavits on 17.04.2014 and 27.06.2014.
We have carefully perused the pleadings and evidence placed on record by the parties and have duly considered the submissions advanced by the learned counsels appearing for the parties. The matter was heard at considerable length on Page 3 of 16 and noting the contentions by Ld. Advocates, the following order was passed:
"Dated: 13.03.2025 ORDER I. Beard learned Counsel for the parties.
This is a dispute relating to an insurance claim for a loss suffered in a fire in thel premises of the Complainant in a unit that was set up in 1992. It is the case of the Complainant that in the same premises that there are two units the other one having been set up in the year 2010. To secure the assets of both the units two policies were taken, one which was a fire policy, where the insured sum was Rs.3 crores and the duration whereof was from 22.05.2010 to 21.05.2011. The second policy which was also a fire risk policy for an insured sum of Rs.l7 Crores had a duration from 30.04.2010 to 29.04.2011. Unfortunately an incident of fire took place on 13.05.2011 after almost two weeks of the expiry of the second policy that was for Rs. 7 crores. The Complainant set up his claim under the other fire policy where the sum insured was Rs.3 crores that was valid from 22.05.2010 to 21.05.2011 only. Admittedly the said fire policy is in respect of the stocks. The fire took place in the unit that had been established in 1992.
The claim was set up and according to the Insurance Co. they appointed M/s Cunningham Lindsey as surveyors who submitted a report on 27.03.2012. The surveyor while submitting his report calculated the loss and then made several deductions, including a deduction of Under Insurance as a result whereof the loss assessed was reduced to almost half of the amount that was assessed as loss. This reduction was made on the basis of calculating the entire stocks of both the units even though the fire had occurred only in one of the units.
The Insurance Co. responded to the objections raised by the complainant vide its letter dated 26.06.2012 stating that the claim of the Complainant was not justified as the policy covered the stocks of both the units and therefore the deduction through Under Insurance was correct.
Questioning the correctness of the stand taken by the Insurance Co. in the said reply, the complaint was filed on 03.10.21012 and notices were issued on the I complaint. Certain queries were raised and since the Insurance Co. failed to file its written statement, their right to do so was forfeited on 03.07.2013 by an order of this Commission. However, a Review Application was filed being RA/257/2013 and the matter was again heard on 21.10.2013 when on the basis of certain decisions of the Apex Court, the Review Application was entertained with an opportunity to the Insurance Co. to file their written version was granted subject to deposit of half of the claimed amount to be retained by this Commission till disposal.
Mr. Mehra learned Sr. Counsel for the Insurance Co. submits that the said amount was deposited but on account of some inadvertence the fact that a certain amount had already been deposited under the orders could not be pointed out at that stage. Nonetheless, the matter remained pending and the case was adjourned from time to time where after the pleadings were exchanged and a rejoinder to the written version/statement filed by the Opposite Party, Insurance Co. was also filed.
'From the written version it is evident that the amount which was found indemnifiable as per the insurer's report was stated to have been paid to the Complainant which was to the tune of Rs.75 lakhs. It was also stated that a balance of Rs.8,97,497/- remains to be paid which Mr. Mehra submits that the Insurance Co. is prepared to pay to the Complainant. This fact has also been stated in paragraph 11 of the written version.Page 4 of 16
The contest therefore remains only with regard to the deduction under the head of Under Insurance as reflected in the assessment of the surveyor. Learned Counsel for the Complainant has urged that this is absolutely unjust and as a matter of fact the policy in question was not meant for the other unit, the stocks whereof have been taken into account for calculating Under Insurance. The submission appears to be that there are two separate units that had been insured under the policies but the policy in question was exclusively in respect of the old unit established in 1992 where the fire had occurred. In such circumstances the insurance Co. could not have calculated the Under Insurance on the strength of stocks placed in both the units and therefore the report of the surveyor is also incorrect.
Mr. Mehra learned Sr. Counsel for the Insurance Co. has pointed out that the surveyor Mr. Rajesh Ranadive has filed his affidavit supporting the interim survey report and is on record. He also urges that the stocks are nowhere bifurcated and therefore the argument on behalf of the Complainant is untenable Learned Counsel for the Complainant contends that there is no final survey report and the process adopted by the Insurance Co. is contrary to law and settled legal norms. He therefore prays that the matter be adjourned and be heard on the next date to enable the learned Counsel to advance detail submissions.
Let the matter be listed on 05.05.2025."
The principal grievance •of the Complainant arises on account of the deduction applied by the Opposite Party--Insurance Company under the head of "Under Insurance" while settling the claim pertaining to the fire incident dated 13.05.2011. The Complainant has contended that such deduction for "underinsurance" is arbitrary and unjustified because the complainant has two distinct and distinctly separate and independent units at Gat No 53 which are identifiable as "old unit (or unit 1)" and "new unit (or unit 2)". Unit 1 was originally established in 1992 while unit 2 was started only from the year 2010. The "policy A" for Rs. 3 crore, under which the claim is made, was obtained for old unit (or Unit 1), which unit was in operation from the year 1992 and for which insurance was being obtained from year to year from 1992 onwards. The policy A was intended to thus exclusively cover old unit 1 only, and not new unit 2. For unit-2, which started in 2010, a new, separate and independent policy for Sum Assured of Rs. 7 crores ("policy B") was obtained for the period one year on 28.04.2010. The contention thus is that the subject policy A for SA of Rs. 3 crores was neither intended by the parties to cover, nor in fact covered, the "new unit (or unit 2)" and hence, the "value at risk", for the purpose of policy A for examining underinsurance, if any, has to be computed/arrived at by inventorising and considering the stocks only in unit 1 without any reference to stocks in unit 2. The surveyor has arbitrarily overlooked and rejected the contention of the complainant and has wrongly inventorised and considered the total stock at Gat No. 53, including Page 5 of 16 that of "unit 2", despite the fact that the policy A covered only the stocks of Unit No.1 where the incident of fire occurred.
7. As seen from the record, it is not in dispute that the Complainant had obtained two insurance policies, one for Rs.3 Crores (Page 34) and another for Rs.7 Crores (Page 36), covering stocks at the same risk location/premises of "Gat No. 53". It is also not in dispute that the fire occurred in Unit No.1 (i.e. one of the two units) on 13.05.20111 during the subsistence of the Rs. 3 Crore "policy A". However, policy B, for Rs. 7 tore, additionally covering the same risk location of "Gat No 53", (allegedly obtained to cover only "new unit" or "unit no. 2") had already expired before the incident took place, thus rendering the whole risk-location of of Gat No 53, which before expiry of Policy B stood cumulatively covered for SA Rs. 10 crores underinsured to the extent of the cover of the expired policy, which somehow, could not at all be renewed by the complainant. The policy document along with the endorsement dated 14.07.2010, are reproduced hereinbelow for ready reference:
ENDORSEMENT
-.Naof h i : Kemdhunu Pickles & Spices Industries Pvt. Ltd.
PQ1
I 9L 6Ptr FMCCCG6<040031CO
P I V Esnhv Opts: May 21. 2Ut 1
E,iEerswr~igpt_Tyno: - p pmlum Soa ing Endorsement
' E9QArwemcnl Numn~,r: ~. FM000cs4o4900Ioo$p1
Er,kontea,ent ".11MPat r July 0S, 2910 - -
,D~ag_at_L3pto: .Juts 11.2010
the requost elite insured that Addilleu of tusk rscatloo Address in the amended to rend as ur.Eer:, Locnlion address of the Insured: t) Krlvhibhavan, 1379. Ottavani Pe h, Pune-411042.
' - 2) 49. Ohsvani Poth, Puns --41' 042 sec, Conditions and Warranties
1) RootarChose Applicable .
a utherwl a is the leryns. conditions and oxetusions o} Poiiey.
ICFC ERGO Grrneral lnsuronee Company Limited stoo4 -
ae the m.,CCaranon war the patty ie nrea' ed N: F!ADOOa6424oOO1 OOC*1.
':n ctmsideralicu of Fleatur Extra ehargod over and a7ove the polay raw the Si. In agoropatu under the po6Vyr is available Too the Iosalfans 'Asyrdleroln labia' basis In inspect of movable properly. At-alt Ogles during :he currency of this poI y the Insured should have a •good Internal audit and accounting procedtke wider which the total amount-at Nsh arid pop locations can ba ectat)Mshed at any pattfculer tlme if required' Page 6 of 16 a6 CJf. ;it And S r11$ tmSvia.Vmco !!¼r11$ f
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7. VParaianlsd f'2 d J EB491FSt haao ®86C I16P46Um N $ MuMtW,~1€xv® has HIM rer! 1Gr°0vi fl h)OM th ftM lamt Pa 3 Yars:
' 't7kQJL~ C' Nam:al 61x*is a9 per eWO` Wlif.?5 ~'ia ~~ ::5a i. •'YJh '*~,r.7, um 10com, F Lap- 4*5lm I ura. owie 006cores-t4 A AGO S-5`.S 47 GI§,ii ;7iraw9 3uW'ed to a i WmiLi er AF IG,OC AGO Pc$l • 5%ut;Rdm amSn1 Rk ese b a MWM - ap'Na2J:4 1 7.1 It appears clear on the face of the policy documents that (i) The risk location is described as whole of Gat no.53 s.no.57, without any identification or mention of Unit 1 or Unit 2 or old unit or new unit. (ii) Endorsement dated 14.07.2010 has added 2 Page 7 of 16 i additional locations in addition to the one specifically covered i.e., "Gat No.53 S.No.711 bringing the total risk premises covered under the "floater cover" to three for sum assuIed for Rs. 3 Crore. No specific exclusion of "New Unit" or "Unit No.2" is mentioned or appear to be even intended from the face of the policy document.
Herein below reproduce the Surveyor assessment and his basis of applying under insurance!:
Aswrssm cm As mentioned ahon C. the loss is norketl nul based in honks Iti accounts. as per the dcmils given in annex urc enclosed nilh this report. Summary is reproduced below for ready rcferencc.
-. --
Cross I.nss A55esscd 22956933 ,
Less I )epreeiation
I Market \ ;due of I.nss 22956933
_...0 stock either
Sal%m_e \'aluc , Affected
buns/damaged and lost
andlor needs to be disposed
and hence salvage value
considered NIL( Insured may
be advised to destroy the
affected stock and submit the
destruction certy.)
Net Assessed buss Amount 22956933
14549435 Based on Books of Accounts,
Insured's Shire due to Iii. U.I. worked out Q 63.3S'/.
as per annexure-E
---
Adjusted ('him Amount
As per Policy
lisccss
Tentative Net Adjusted Claim Am
font j
ered - t5000000 1
On Account Payment Consid
Balance ('luim
MME:NDA'1'IONS
REMARKS AND ItECO
basis for their
, on without prejudice
was conveyed to insured that, they are not
Above assessment consen t, for the reason
has not given their
acceptance but insured
adjustment of Under Insurance.
agreeing with
perIt the
is ased. provisi's
is insured of policy
onconten tion
In our view. the under insuran ised.
ce applied/adjust preferr
conditi ons. under which the claim
terms and YCGM, 1'rn %Kt
1 NIN[Gdl1
l .liY Tn 1•ID`.10ONJM 1•/ivav Nll
I). M' .....eSS•w`-~H_c.
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~l.1uK\mcl,aJ' "c.
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Page 8 of 16
that they had an intention to cover the, stock al only Old building, which is contrary to the policy document. which covers the entire stock within premises/locations.
Insured could not give any evidence For their intention and the matter is understandably under review by insurer and Bank.
In the mean time insurer has requested us to check the possibility of recommendation of hirther "(ht Account" payment.
In view of the detailed assessment given, insured's nc• claim is worked out to about Its. 13.97.197/-.
We had already recommended release of "On Account" payment tip to Rs. 50,00.000/- and hence insurer may consider further release of"On Account" payment up to Its. 25.00.000/-. if deem lit.
We here by confirm that the final net adjusted claim amount will be more than total "On Aceoum'' payment recommended at this stage.
CONCLUSION to apprise The report is being issued without prejudice to the rights of tote Insurers, in order at this stage, and apparent the Insurers of the nature of loss, extent of damage, as known to release "on account cause/liability. The report is also intended to enable the insurers appropriite by them at this stage.
payment" up to the recommended amount, ifdecmed Insurers may have on the report.
We would appreciate tiny comments the Iniernatiunal I'vt. Ltd., For, Cunningham I.indsey Rajesh Ranadive (I), FIV, FIIISLA BE (Mech) AMIi:, C:. i:.
Regional Director-North Munthai Surveyor & Loss Assessor, illt ru'eshrnnudivetircwtnin'+hamlintIse\.
Page 9 of 16 /ANNEXURE-A S'1',,,Vr iMIN'I' OF SUMMARY OF CLAIM FOR 1 O08'&11A:64AGE CAUSED TO STOCK B1;LONGfNG TO INSV14E1) : MIS. KA61DIILNU PICKLES & SPICES I74UUSTRUES PVT. LTD_,, FUME DATE (W I.OSSIFIRLr : I3.(J&203I S. No. T, s540IfJ SATE, VAI)CAON IAVAL, LOSS LOCATION : CUT NO. 53,5.
Th.NADGAON, 0151, PUNS, INSURER : EIDMC ERGO GENF;RA41NSURANCE CO. LTD., Mr3MRAI POLICY TYPE & \0.: STANDARD ItIRE AND SPECIAL PERIL. POLICY N'0. FM tlan00S4040001g0 COVVHAGF.:: S'!OCK OF PICKLE AND SPICES--S,I. = Rs, 3,00,O6OO 1- Noce : I. Vmtuc of Stock at ait'ictcd Iccatioaa, considere3 in both New & Old ]h dings
2. Drucrs are sep•rtelg capuralised'auid not a part ofssookass per boolt3 ofaceoun and hence not consider€d in Astssment as well as in Valuation I S. E",,etietllars Amount Antoont Remarks No, Claimed A3 sscd Rs. Ks, I Vatl:e of Taus Stock, worked- 100702206 81915432',As rr details given in attachsd out based on mif;.alion oil annequrn-13.
books of acccnnt. Note : As per insureA record,
1'iastic Dams swwerdtely
capitaiiwd ands nw part of
.
Msaccklinventory and heiace .101
considered h :ass•asstAsnent as
well as i11 valllatica.
Las Valor: of Saved Slack nt 54372005 563720[15 Valac of Saved Stock .rtuudin
• Afi cce l Loeinion cost of Drums, as per celails
• given in anachcd annexure-C
Sub Towl 46410201 27543927
Lis Value.of Sayed Stock at Otilcr- 2725621 2725621 As per the details give% in
Safe I.ocv ons annaxure-D
Sub 3'otal....CIG..., 43684580 24813306
Page 10 of 16
Sub "ro'fcl.._ I ifl... 43684550 2.91fl01
Less Agreed cduclimm SC about 7.S% O 186ii73
M5 discussed llatrinv. mee11.'lg wiitI -
instn'wd at ors J%1un'bal '0) I3)ec.
,Vaiuu of darn: Stock - As 43684560 22956933
arrived Freon Record
tCcon less Asssecacd.-..........C/F......_ 22956933
Less Deprecizccan O Not Applicable
.Markel V.I... I* Loss - 22956933
• 5:.9vwgc Vnl•av O ASfccccd saoc3 tithe
barn^.Ida_naad and lost and/ix
_ n_cds 10 be disposed and hence
salvage voluc considesud NIL(
Insured may be advised i c
•
da:scroy the aftccted stock and
s:.bnaic M. dcs[n,ccion cony-)
• Ncl Aayssc;1 e.,s Amount 22986933
Less [nsurcd`sShvm-dre to U.L L4549435 Based an Docks o: Accounts.
LJ 1. worked oat [`e 63.38%+, as.
pits annexure-E
Adjusted Cla?nr An..ounc 8407497
Less Excess 1C0-CC As per Po92cy
\e[ Adjusted Claim Amount 8397-=97
Less O,t Account Payment Gons,ider_d 5000000
Eialvncr CI,tha 3397497
8. The fundamental contention of the complainant is that the two policies obtained were intended to be separate policy for separate unit. In other words, policy A was obtained to cover only the old unit and no part of the stock of the new unit was intended to be covered by policy A. Similarly for policy B, which expired, but which was intended to cover only new unit no.2. Reliance is place on the HDFC bank letter to the insurer at page no. 38 reproduced as under:
Further to our meeting at 14utnbai, the actlonsbr-e from the, client side ( sending you a eontirnation with respect to measures taken by them for preventing fire) is completed for renewal of existh4pclicics wort) -Rs, I0Crores. 7iic mail blow details the same. Secondly, someti ing critical information thatwe wish to fare with you with respect to the claim lodged bd the company. It ips came in to light that the company had insured stock s cnlh F2s.30Q Lacs for stock located at their factory unit number 1. The od cr policy of Rs.700 Lacs which got expired or 29.04.2011 was tSant for stock located in unit 2. This is correct since the second policy was taken at the time of enhancement of limits that we did in year 2010 antlJor covering the stock located in Unit 2 worth lts.100 Gass. So its clear that the company has taken co separate policies for covering their stock at two different units at thcir factory. .
Si s in earlier year, the company had taken policies worth Rs.300 Laos only for covering stock located at Unit 1.1 have cosies o`•ihc earlier policies taken by the company from llajaj AlBianzc., , ' Considering this, we strongly recommend that the company be helped in getting their claim upto the policy amount of Rs.300 Lacs. ' Page 11of 16 8.1 It is also the contention that not only the insurance company wrongly avoided mentioning the unit-wise risk locations in the policies, and it also wholly wrongly and unnecessarily prompted the complainant to obtain the endorsement for covering additional locations under floater clause. On the other hand the insurance company has categorically denied the allegations and contentions and stated that that the contention of the complainant with regard to the limited coverage of unit 1 only under policy A is not at all supported by the policy document itself and such contention is contrary to the written contract. The policy is otherwise also more comprehensively covering the risk and thus beneficial to the insured as was clearly intended by the insured. Even while obtaining the endorsements for covering two additional locations for both the policies in July 2010, the insured has not felt necessary to obtain the respective correction or endorsement in the risk-location and thus there is no merit in the contention of the complainant. As a matter of fact, the contention is raised as an after thought only because the Policy B has negligently not been renewed by the complainant. Both the policy A and Policy B described the risk location as "Gut no.53 S.No.7" and both the policies together, alongwith endorsements, had total coverage of Rs.10 crore on floater basis covering the risk locations of (a) Gut No.53 S. No. 7 (b) Krishibhawan, and (c) 49, bhavani peth. It is only for the reason that complainant carelessly failed in renewing policy B of Rs.7 crore which expired on 29.04.2011 that the complainant has been visited by the adverse consequence of such failure by way of the existing valid sum assured turing out to be much less than the total value at risk and it is this reason that the insured has to come out with an artificial and stretched contention that the policy A in fact covered only a part of risk location mentioned in the policy. It is the contention that as noted by the surveyor, the value at risk at insured risk-location of Gut no.53 was Rs.8,19,15,932/- as against the valid existing available sum assured SA of only Rs.3 crore. Thus, the insured, as per the fundamental principles of insurance, is deemed to have self-insured the stock worth Rs.5,19,15,932/-, and therefore, the under-insurance of 68.38% has rightly been applied by the surveyor in Annexure-E of his report to arrive at the indemnifiable loss of Rs.83,97,497/-:Page 12 of 16
Particulars Amount
Value of Stock As on Date 81915932 Arrived at: based oh-B6k n1jñfj-*tSj
AnnexureB. ( The. Polio, .. Prkloea
also and hence total
valuation purpose.
Available Sum Insured. 30000000 As per Policy `" €
tw.,`~~, ,.
.
Under Insurance in % 63.38
8.2 It is therefore contended that no fault or deficiency at all can be found in the
Survey report or in the OP's conduct. As admitted by the complainant in para 9 of the complaint, an amount of Rs. 75 lakhs having already been paid by the insured, a further amount only of Rs. 8,97,497/-, from the indemnifiable loss as assessed by the surveyor needs to be further paid by the insurer which it has already shown willingness to pay. Mr. Mehra on behalf of insurance company put reliance on the Supreme Court decision in Polymat India Pvt. Ltd. v. National Insurance co. Ltd. & Ors. (2005) 9 SCC 174, for convincing the contention that insurance contract has to be read as recorded in the policy document and it the duty of the court to interpret the document as understood between the parties, and, when the contract is reduced in writing, the same cannot be changed or read differently without mutual agreement in that behalf between both the parties. Similarly, the decision in General Assurance Society Ltd. v. Chandumull Jain and Anr. (1966) SCC Online SC 208, was also relied upon.
9. We have carefully considered the material on record and heard the learned counsels for the parties. A perusal of the Policy document read with or without the endorsement clearly reveals that the insurance coverage was not confined to a any one single unit at Gat No. 53 in isolation but was structured in a manner that the stocks across the whole of the risk location of Gat No. 53, S. No. 7, Mouje Sate;
Vadgaon Maval, Taluka Vadgaon, District Pune and also beyond such risk location (two new risk location covered by endorsement) were part of a composite or floater risk coverage. The endorsement obtained subsequently reflects that rather restricting the coverage to any particular single unit, even additional two locations apart from the original risk location of Gat No. 53, were also incorporated into the policy coverage and the risk was to be considered on an aggregate and floater basis for Page 13 of 16 Sum of Assured of Rs. 3 Crore. In view of such unambiguous description of risk location in the policy, the contention of the Complainant that the policy for Rs.3 Crores was exclusively restricted to Unit No.1 cannot be accepted because such contention is patently unacceptable on the face of the policy document and description of the risk location read with or without the endorsement. The surveyor, M/s Cunningham Lindsey International Pvt. Ltd., after conducting detailed inspection and verification of records, prepared the survey report dated 27.03.2012 (Page 73) and the statement of summary of claim (Page 39 and Page 82). A careful examination of the working of adequacy of sum insured, placed on record as Annexure A-8 (Page 93), shows that the surveyor calculated the under-insurance by taking into account the total stock available at the Gat no. 53, which is the risk location. This approach is further supported by Annexure A-6 (Page 86) and Annexure A-7 (Page 90), which detail the stock at the loss location and other locations respectively.
10. In our considered view, the view and methodology adopted by the surveyor and the insurer is fully consistent with the policy. Once the policy operates as a floater policy covering multiple locations, and the value at risk as found by the surveyor is more than double the sum assured under the policy (which stock quantity and valuation figures are not disputed), the principle of under-insurance via "self-insurance", as rightly submitted by Mr. Mehra, has to be applied by comparing the total value of stock at risk across all covered locations with the sum insured. The surveyor has therefore correctly applied the principle of under-insurance by aggregating the stocks of both the units for arriving at the figure of value at risk. The argument of the Complainant that only the stock of Unit No.1 should have been considered overlooks the risk location mentioned in the policy without any exclusion of unit 2 or so-called new unit from the coverage. The Complainant has relied upon the email dated 16.06.2011 (Page 38) issued by HDFC Bank to contend that the policies were unit-specific. However, such communication cannot override or alter the contractual terms of the insurance policy. It is a settled principle that the rights and obligations of the parties are governed strictly by the policy document, including its endorsements, clauses and warranties, and not by third-party correspondence. Therefore, the reliance placed by the Complainant on the said email is misplaced, more so, when the complainant has not positively sought to correct the risk-location address as is canvassed now. As a matter of fact, had the incident occurred in the Page 14 of 16 o so-called unit-2, the stock, therein would have, as per the existing policy, stood covered to the extent of Rs. 3 crores, and the insured in that case would, while raising the claim, not have raised the contention that the stock is not covered under the policy as is now attempted to be raised in the present complaint. Having enjoyed the cover for the stocks both at the so-called unit 1 and unit 2, under the very policy A to the extent of Rs.3 crores for nearly the whole duration of the policy, it now does not lie in the mouth of the insured to contend that the actual intended cover was only for unit 1 and not for unit 2 when the risk location as mentioned on the policy document does not mention unit 1 but in fact covers all the stocks in the premise at at whole of the premise at Gat no. 53. What is relevant is the scope of coverage under the existing policy and its endorsements. The endorsement dated 14.07.2010 clearly indicates that the coverage was further extended beyond Gat no. 53 to multiple locations under floater clause, which expansionary action of the insured is exactly contrary to the intent of restricted coverage which is now contended to be the intention at the time of obtaining the policy. We, therefore, find no merit in the complaint. The record also shows that the Opposite Party has acted upon the surveyor's report and has paid a sum of Rs.75 Lakhs to the Complainant and has further expressed its willingness to pay the balance amount of Rs.8,97,497, as reflected in the written statement (Pages 50-93). This conduct of the Opposite Party indicates that the claim was processed in accordance with the surveyor's assessment and policy conditions, and cannot be termed as arbitrary or deficient. It is well settled that the surveyor's report, though not binding, carries significant evidentiary value and cannot be disregarded unless there are cogent reasons to do so. In the present case, the Complainant has failed to demonstrate any fundamental error in the surveyor's methodology except to dispute the aggregation of stocks. However, as discussed above, such aggregation and computation of value at risk at the risk location of Gut No. 53 is fully justified in view of the categorical and unambiguous risk location mentioned in the policy, the floater clause and the endorsement forming part of the policy. Accordingly, we are of the considered opinion that the deduction applied under the head of under-insurance by the Opposite Party is in consonance with the policy terms, conditions and endorsements. Hence, the complaint has no merit.
11. In view of the above findings, we hold that the Opposite Party has not committed any deficiency in service or unfair trade practice and has rightly arrived at Page 15 of 16 the indemnifiable loss of Rs.83,97,497/-, out of Rs.75 lakhs has already been paid. We, therefore, direct the insurance company to pay, within a period of three months, the balance of Rs.8,97,497/- along with 6% interest for the period 16.04.2012 till the date of payment. Failure to pay within three months would entail the interest at the at the enhanced rate of 8% from 30.06.2026 on the amount remaining unpaid on that date. The complaint is accordingly disposed of.
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(A.P. SAHI, J.') PRESIDENT Sd/-
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(BHARATKUMAR PANDYA ) MEMBER _ PawaNaj Page 16 of 16