Delhi District Court
Udai Veer Singh vs New India Assurance Co Ltd And Ors on 18 October, 2024
IN THE COURT OF MS. PREETI AGRAWAL GUPTA,
DISTRICT JUDGE (COMMERCIAL COURT)-01,
NORTH WEST, ROHINI, NEW DELHI
CS (COMM) No. 46/2021
SHRI UDAI VEER SINGH,
PROPRIETOR
M/S Laxmi Brand,
Naya Rasoolpur,
Saiyad Wala Road, Gali No. 6, Kartar Nagar,
Firozabad, Uttar Pradesh-283203
...Plaintiff
Vs.
01. NEW INDIA ASSURANCE COMPANY LTD.
Delhi Regional Office-1
R.G. Centre, 3rd Floor
Local Shopping Complex, Block-B
Lawrence Road, Delhi-110035
02. NEW INDIA ASSURANCE COMPANY LTD.
(Deleted in terms of orders dated 22.02.2022)
Through its Divisional Manager,
SCO-39, Second Floor
Old Judicial Complex, Sector-15,
Gurgaon-122001
Haryana
03. SH. SANDEEP BHARTI
Insurance Surveyors & Loss Assessors Pvt Ltd.
C-67, 2nd Floor, Inder Puri, New Delhi-110012
... Defendants
SUIT FOR RECOVERY OF RS. 67,20,000/- (RUPEES SIXTY
SEVEN LACS TWE THOUSAND NTY ONLY) ALONGWITH
PENDENTELITE AND FUTURE INTEREST @ 18% PER
ANNUM FROM DATE OF INSTITUTION OF THE SUIT,
TILL THE DATE OF REALISATION OF DECREETAL
AMOUNT
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 1 of /73
PREETI by PREETI
AGRAWAL
AGRAWAL GUPTA
GUPTA Date: 2024.10.18
16:17:29 +0530
(PREETI AGRAWAL GUPTA)
District Judge (Commercial Court)-01
North-West/Rohini/New Delhi.
18.10.2024
Date of institution of suit : 21.01.2021
Date of Assignment to this court : 27.01.2021
Date of hearing of final argument : 05.10.2024
Date of Judgment : 18.10.2024
JUDGMENT
1. By way of present judgment I shall conscientiously adjudicate upon the Suit of plaintiff for Recovery of Rs.67,20,000/- alongwith interest @ 18% per annum pendentlite and future, from the date of filing of the suit till its realization with costs of the Suit. The present suit for recovery has been filed before this Court as a 'Commercial Dispute' under Section 2(1)(c) of the Commercial Courts Act, 2015, arisen out of the non-payment of claim of the plaintiff, against Insurance Policy taken by him, from the defendant(s).
2. As derived from the pleadings, the concise facts of the plaint are being summarised hereunder.
2.1 The plaintiff Sh.Udayveer Singh is the sole Proprietor of a business operating under the name and style of M/s. Laxmi Brand, located at Naya Rasoolpur, Saiyad Wala Road, Gali No. 6, Kartar Nagar, Firozabad, Uttar Pradesh-283203. The business specializes in executing various types of decoration work on bangles, after sourcing them in raw or semi-finished form, from manufacturers.
2.2 Defendant No. 1 is one of India's leading general insurance companies, with its registered and head office located at Digitally signed CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI by PREETI AGRAWAL Page 2 of /73 GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:17:38 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 87 M.G. Road, Fort, Mumbai. The company has over three decades of experience in the non-life insurance business and claims to have a corporate mission focused on providing insurance protection to all, ensuring customer satisfaction, operating on sound business principles, minimizing national waste, and contributing to the development of the Indian economy. As a corporate entity, Defendant No. 1 is represented by its Chairman and Managing Director, who is responsible and accountable for the company's conduct and affairs.
2.3 Defendant No. 2 is the divisional office from which the insurance policy was obtained, while Defendant No. 3 is the surveyor appointed by the insurance company. Consequently, Defendants No. 1 and 2 are jointly and severally responsible for the actions and inactions of Defendant No. 3. 2.4 The plaintiff obtained Standard Fire and Special Peril Insurance Policy bearing No. 31280011190100000225 from the defendants, covering stocks and stocks in process of all kinds, as well as other goods related to the trade. The policy, issued by the insurance company, is effective from 5:52 PM on 09.08.2019 to 08.08.2020, with a sum insured of Rs. 60,00,000/- (Rs. Sixty Lakhs Only). This coverage includes stock and stock in process, subject to the following clauses:
a) Designation of Property Clause.
b) Reinstatement Value Policy Clause.
c) Local Authorities Clause.
2.5 The Standard Fire and Special Peril Policy covers loss or damage to the insured property, subject to an excess clause for CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 3 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:17:45 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 Acts of God (AOG) perils, which is set at 5% of the claim amount, with a minimum of Rs. 10,000/- applicable for each and every loss.
No terms and conditions of the said policy were ever provided to the plaintiff along with the policy schedule by the defendants. The insurance policy was obtained by the plaintiff solely with the intention of safeguarding and indemnifying himself against any future contingencies, arising from events covered under the policy. The unit/godown, which is duly covered under the said policy, ceased operations at approximately 9:00 PM on 31.10.2019. The employees shut down all the machines and cut off the power supply to the unit, by switching it off from the panels. 2.6 On 01.11.2019, at approximately 2:30 AM, a person named Mr. Yogesh Kumar noticed fire and smoke emanating from the godown. He promptly informed the plaintiff as well as the local fire brigade. Meanwhile, the plaintiff quickly arrived at the godown and, with the help of his neighbors, utilized all available methods to control the fire and also informed the Municipal Fire Services, requesting their prompt assistance. The fire brigade arrived at approximately 2:39 AM and began spraying water from the vents of the basement. The smoke and fire spread to various parts of the ground floor and basement, making it impossible for anyone to enter the basement. By around 4:30 AM, the fire brigade personnel managed to control the fire in both the basement and the godown. However, the smoke and water caused significant damage to the bangles stored elsewhere in the building. 2.7 On 01.11.2019, the plaintiff informed Defendants No. 1 and 2 about the loss, on the same morning. Subsequently, as CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 4 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:17:52 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 directed by them, he filed the fire loss claim along with all relevant documents at the defendants' office. In the meantime, the plaintiff also lodged a complaint at the Rasulpur Police Station in District Firozabad. The police registered the incident as a General Diary (GD) entry, recorded as GD Entry No. 052 dated 02.11.2019. After several requests and reminders from the plaintiff, Defendants Nos.
1 and 2 finally appointed Defendant No. 3, Mr. Sandeep Bharti, as the investigator and surveyor to investigate and assess the loss on 04.11.2019.
2.8 On 5.11.2019, Defendant No. 3, the surveyor, visited the site and pressured the plaintiff to segregate the damaged materials from the sound/saved materials, despite there being no visible sound material. All finished and semi-finished articles were completely damaged, some by fire and smoke and others by water used by the fire brigade. The plaintiff repeatedly informed the surveyor that, as a business engaged in bangle decoration, the entire stock was ruined/damaged and that segregation was impossible. However, the surveyor insisted that the plaintiff submit the required documents based on the Letter of Request (LOR) he provided, within a day or two, fully aware that all records had been destroyed in the fire. Defendant No. 3, the surveyor, insisted and communicated to the plaintiff via an email dated 7.11.2019 regarding the necessary documents and information required for processing the claim.
2.9 The plaintiff again contacted the defendants, the surveyor (Defendant No. 3), on 09.11.2019, requesting a re-visit to the site. However, the defendants did not respond or visit the Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 5 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:17:57 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 location. With Diwali approaching, the plaintiff was compelled by the police and neighbors to dispose of the damaged material, as it was emitting a foul and unbearable odor/stinking smell.
Complaints from the neighbors escalated to the point of confrontation, leaving the plaintiff with no choice but to remove the stinking, completely damaged material from the site. 2.10 On 10.12.2019, the plaintiff informed the defendants that, due to the surveyor's lack of response and pressure from society and neighbors, he had no option but to dispose of the damaged material. Shortly after, the plaintiff received a letter dated 11.12.2019 from the surveyor (Defendant No. 3). In the letter, the surveyor acknowledged receiving the plaintiff's documents but complained that they were in loose condition and lacked a covering letter. The surveyor further directed the plaintiff to resubmit the documents as per the Letter of Requirements (LOR) by 26.12.2019. Additionally, the surveyor noted in the letter that, since he had been prevented from physically verifying the salvage, the loss quantification would be provisionally limited to his observations during the initial site survey on 5.11.2019. Despite this, the surveyor had not taken any action to assess the damaged materials for over a month, which was critical to the claim process. 2.11 Thereafter, the plaintiff, both personally and through the defendant's insurance agent, made numerous attempts to contact the defendants. Despite these repeated efforts, the defendants remained non-responsive. Eventually, the defendants rejected the plaintiff's legitimate claim on false and flimsy grounds, citing the terms and conditions of the policy. It is important to note CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI Digitally signed by PREETI Page 6 of /73 AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:18:03 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 that these terms and conditions were never supplied to the plaintiff at the time of issuing the insurance policy or even thereafter. 2.12 The defendants' approach throughout the claim process has been non-responsive and contrary to the principle of speedy claim disposal. Despite repeated communications, they failed to reply to the plaintiff's letters or emails, instead employing delay tactics that led to an unjust claim rejection. This rejection appears to be a deliberate attempt to harass the plaintiff and deny the legitimate payment owed. The defendants' conduct suggests the insurance policy was issued with the intent to defraud, collecting a substantial premium with no real intention of honoring the claim. 2.13 The defendants employed a strategy to avoid liability by delaying the settlement of the plaintiff's legitimate claim and ultimately repudiating it through unfair trade practices. In a personal meeting, the plaintiff strongly rebutted their objections, clarified the issues raised by the defendants' insurance agent, and requested an immediate reconsideration and settlement of the claim. The surveyor submitted an arbitrary report on 29.12.2019, and unjustly rejected the claim as "No Claim" based on false and flimsy grounds. In rejecting the plaintiff's legitimate claim, defendants 1 and 2 raised objections solely to cover their deficiency in providing a timely resolution and this strategy reflects an unfair trade practice. When soliciting the policy, the plaintiff fully explained the nature of their business, the risks involved, and the potential financial impact of any mis-happening and the defendants, having assessed these risks, advised the plaintiff to take the policy. Trusting their representations of speedy claim CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 7 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:18:10 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 resolution, the plaintiff paid the required premium. However, when settling the claim, the defendants raised baseless objections to evade their liability, constituting unfair trade practice. 2.14 After the defendant rejected the claim without providing a cogent reason, the plaintiff was compelled to file an RTI application to obtain a copy of the survey report and related documents. The plaintiff was shocked to discover, in the documents provided on 09.11.2020, that the claim was rejected without any explanation/reason. The defendants claimed to have informed informed the plaintiff through a letter dated 17.07.2020, which wa never communicated to the plaintiff, that they were invoking General Condition No. 6 of the policy to reject the claim. 2.15 The surveyors and the defendants made no effort to assess the loss suffered by the plaintiff; instead, they unjustly rejected the plaintiff's legitimate claim on flimsy grounds. The defendants entirely disregarded the fact that a complete lockdown was in effect due to the COVID-19 pandemic, making it impossible for the plaintiff to gather the requested information. Moreover, the defendants made no effort to collect this information from public bodies or tax authorities at their ends. Instead, they appeared unduly hurried to close the plaintiff's claim file. The defendants, as a service provider, have failed to fulfill their obligations as promised when issuing the policy. Their approach, along with that of the appointed surveyor, has been non-responsive and not aligned with the principle of speedy claim disposal. The insurance company of the plaintiff has been denied despite all necessary intimation and submissions made by the plaintiff and even have CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 8 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:18:16 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 employed various tactics to delay the claim settlement and hurriedly and unjustly rejected the legitimate claim. 2.16 The plaintiff issued a Legal Notice dated 21.10.2020, through Counsel, demanding payment of Rs.60,00,000/- (Rupees Sixty Lakh only) along with interest at 12% within 15 days of receipt of the Notice. The defendants replied through their lawyer, in a vague manner, without denying the amount due to the plaintiff. 2.17 Defendants 1 and 2, in connivance with Defendant 3, have conspired to commit fraudulent and illegal acts to dupe and cheat the plaintiff. Although plaintiff suffered a loss of approximately Rs.65,00,000/- (Rupees Sixty-Five Lakh only), he has restricted his claim to Rs.60,00,000/- (Rupees Sixty Lakh only), which was the insured amount under the policy in question as the insurance company rejected the claim of the plaintiff, legal action was initiated b the plaintiff. The plaintiff filed an Application for Pre-Institution Mediation under Section 12A of the Act, before the South District Legal Services Authority, New Delhi, which was concluded with a Non-Starter Report dated 17.03.2020. Hence, the present Suit.
2.18 The cause of action to file the present Suit has been claimed firstly during intervening night of 31.10.2019 and 01.11.2019, when a fire broke out at the plaintiff's site and plaintiff informed the defendants about the loss, over the phone, and the defendants directed for a written report. The cause of action further arose on 04.11.2019, when the defendants appointed a Surveyor, Mr. Sandeep Bharti, to assess the loss; Between 07.11.2019 to March 2020, when the plaintiff submitted claims and supporting CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI AGRAWAL Page 9 of /73 PREETI GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:18:37 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 documents to the Surveyor, addressing queries/objections raised by the Surveyor throughout this period; on 29.12.2019, when the surveyor submitted a report dismissing the plaintiff's claim as "No Claim"; When the plaintiff continued to engage with the defendants by sending letters and emails requesting reconsideration of the claim, but the claim was not settled; on 09.12.2019, when the plaintiff served a Legal Notice upon the defendants, but received no payment or satisfactory response; when plaintiff filed for Pre-
Institution Mediation, which was concluded with a 'Non-Starter Report' issued on 18.01.2021. Plaintiff claims that cause of action is still substituting and continuing.
2.19 By way of the present Suit, it is case of the plaintiff that the defendants are jointly and severally liable to pay to the Plaintiff the amount of Rs.60,00,000/- as principal amount plus Rs.7,20,000/- as interest @ 12% p.a. w.e.f. 29.02.2020 till filing of the Suit, totaling to Rs. 67,20,000/- and interest @18% p.a. from the date of filing of the Suit till its realization, is also prayed against the defendants.
3. Summons of the Suit were served upon the defendants and the defendant no. 1 & defendant no.3 filed their respective Written Statements. However, vide orders dated 22.02.2022, application U/O 1 Rule 10 CPC filed on behalf of plaintiff, seeking deletion on the ground of not a necessary party, was allowed and accordingly, defendant no. 2 was deleted from the array of the parties.
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 10 of /73 Digitally signed PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:18:44 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
4. The crystalised facts in defence and contest by defendant no.1 and 3, as averred in respective Written Statements, are as under.
WRITTEN STATEMENT ON BEHALF OF DEFENDANT NO.1 4.1 As per the averments in the Written Statement, the suit of the plaintiff has been outrightly denied raising preliminary objections that the present Suit is not maintainable in its present form and hence, liable to be rejected; the Suit is an abuse of process of Law, filed to harass, inconvenience, and extort money from the defendants and is liable to be dismissed with exemplary costs, owing to failure of plaintiff to adhere to the insurance policy's terms and provide necessary documents; the Suit is false, frivolous, and without any valid cause of action, warranting dismissal under Order VII Rule 11 of the CPC; the plaintiff has failed to establish a case, as per his own admission in an email dated 10.12.2019 to the surveyor, where he stated that he had disposed of the salvage at the loss site, thereby violating condition No.6 of the Standard Fire and Special Perils Policy; plaintiff has not approached the Court with clean hands, suppressing material facts, and therefore, not deserving any relief and suit is liable to be dismissed.
4.2 On merits, the defendant averred that the suit of the plaintiff is absolutely false and based on frivolous grounds. As per averments in the written statement, The insurance policy was issued subject to specific terms, conditions, and exclusions. The CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 11 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:18:50 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 due observance and fulfillment of these terms and conditions by the insured were a condition precedent, to the insurance company, admitting any liability. One key condition was General Condition No. 6, which states as follows:-
"6(i) On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage, or such further time as the Company may in writing allow in that behalf, deliver to the Company.
(a) A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles items or property damaged or destroyed, and of the amount of the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not including profit of any kind.
(b)Particulars of all other insurances, if any.
The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof. documents, investigation reports (internal/ external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with."
4.3 It is denied that the plaintiff immediately informed defendants No.1 and 2 about the alleged loss on 01.11.2019, as claimed. In fact, the plaintiff informed his insurance agent, M/s CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 12 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:18:56 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 Prisha Insurance Brokers Pvt. Ltd., on 01.11.2019, who then notified the insurer via email on 02.11.2019. It is further stated that the surveyor was appointed promptly after receiving the information about the fire incident. It is categorically denied that the surveyor pressured the plaintiff to segregate the damaged and sound/saved material, as alleged. In fact, there was a substantial amount of sound and saved material, clearly visible in the photographs taken by the surveyor at the site in the presence of the plaintiff. It is also entirely denied that all finished and semi- finished articles were completely damaged, as claimed. 4.4 It is strongly denied that the plaintiff requested the surveyor to revisit the site on 09.11.2019 or that the surveyor failed to do so. This baseless excuse is merely an attempt to cover up the plaintiff's unauthorized, unapproved, and illegal disposal and movement of the material, done with ulterior motives, without allowing the surveyor to inspect and verify the segregated damaged and sound/saved material. It is alleged that the plaintiff ignored repeated requests from the surveyor, obstructing the proper assessment of the loss.
4.5 It is stated that the surveyor was not aware of what the plaintiff had reported to the insurer in his letter dated 11.12.2019.
The surveyor's letter of the same date was merely a routine reminder regarding the plaintiff's pending requirements. Furthermore, the plaintiff had not provided a complete set of the requested documents or information, and the documents submitted were not organized in a manner that allowed for a clear understanding of their relevance, nor were they accompanied by a CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 13 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:19:02 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 covering letter. As a result, the surveyor requested the documents be properly supplied to facilitate a thorough evaluation of the plaintiff's claim. In this regard, the surveyor's emails dated 07.11.2019, 27.11.2019, and 11.12.2019 have been relied upon.
Additionally, the surveyor's email dated 11.12.2019 reiterated the need for physical verification of the segregated materials during the claim assessment process and informed the plaintiff of the consequence of failing to do so, the loss quantification would be provisionally restricted to the observations made during the survey visit on 05.11.2019 amounting to Rs.9,31,617/-. These details underscore the surveyor's transparent actions and conduct throughout the process.
4.6 It is denied that the plaintiff was not provided with the terms and conditions of the policy, as alleged. These terms and conditions were an integral part of the insurance policy itself. Additionally, it is outrightly denied that the plaintiff's claim was rejected on false or flimsy grounds by referring to terms and conditions that were not supplied to him, as alleged. The No Claim letter of of the Insurer duly explained the reasons for denial of the plaintiff's claim. It is asserted that the plaintiff did not comply with the specified terms and conditions of the insurance policy and, despite repeated requests and reminders, failed to provide the necessary documents and information required to assess the loss. This failure ultimately led to the rejection of the plaintiff's claim. 4.7 It is strongly denied that any strategy was adopted by defendant to dismiss or reject a legitimate claim without reasonable grounds, or that such actions amounted to unfair trade practices or CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 14 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:19:09 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 arbitrary conduct, as alleged. The surveyor submitted a report dated 30.12.2019 recommending 'No Claim' due to the plaintiff's failure to provide the required documents and information, further steps were taken, when the plaintiff later submitted some documents. These documents were once again sent to the surveyor for review (scrutiny and recommendation). After examining the documents, the surveyor, in his letter dated 29.02.2020, reported that he was still unable to quantify the loss due to the absence of critical documents, such as details of the damaged stock, total stock, stock registers, audited furnishing costs, and the police investigation report concerning G.D. No. 052 dated 31.10.2019 etc. Additionally, the plaintiff failed to physically segregate the stock of bangles (both plain and decorated) on the ground floor and in the basement into damaged and sound/saved quantities, as required. This segregation was necessary for the surveyor to conduct a verification visit in line with the supporting documents submitted during the claim process. As a result, the surveyor reiterated his earlier recommendation of 'No Claim' and advised closing the claim file due to violations of the specified terms and conditions. 4.8 It is submitted that Insurance is a "subject matter of solicitation", and the plaintiff chose to take the Insurance Policy from New India Assurance Co. Ltd. voluntarily, without any coercion or enticement. The defendants rejected the plaintiff's claim based on the plaintiff's failure to provide the required documents as per the Letter of Requirements (LOR). The terms and conditions of the policy were part of the policy document and were duly provided to the plaintiff. Furthermore, the defendants CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by Page 15 of /73 PREETI PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:19:15 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 reconsidered the earlier surveyor's report and the opinion recommending rejection of the claim, but found no valid reason to disregard the policy conditions. Consequently, the claim was rejected after careful consideration of all factors. 4.9 It is averred that a false and frivolous legal notice dated 21.10.2020 received from plaintiff, was duly responded to by the answering defendants via a reply dated 20.12.2020, through their Advocate, Sh. Surender Kumar Verma and that the reply dated 20.12.2020 is based on true and actual facts. It is alleged that the plaintiff is attempting to take undue advantage of his own actions.
The fire incident occurred on the night of 01.11.2019, and the surveyor conducted a physical inspection of the site on 05.11.2019. The surveyor, via a Letter of Requirements (LOR) dated 07.11.2019, requested the plaintiff to submit all necessary documents to assess the claim, with reminder LORs sent on 27.11.2019 and 11.12.2019. However, the plaintiff failed to provide the requisite documents and information. The plaintiff is taking baseless excuses of the COVID-19 pandemic, which led to lockdown starting on 23.03.2020, as a justification, despite having several months prior to that to submit the necessary documents for adjudicating the claim.
4.10 It is specifically denied that the plaintiff has suffered any loss of Rs. 65 lakhs, as alleged. The plaintiff's Stock Statements and the Certificate of Stock clearly indicate that the total stock value maintained at the premises at the time of the loss was approximately Rs. 65 lakhs, while coverage was sought for only Rs. 60 lakhs. This discrepancy indicates that the claim is subject to CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 16 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:19:20 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 underinsurance. The claim has been denied in totality. Any claimed interest thereupon, is therefore, denied. Therefore, praying for outright dismissal of the Suit.
5. WRITTEN STATEMENT ON BEHALF OF DEFENDANT NO.3.
5.1 As per the averments in the Written Statement on behalf of defendant no.3/surveyor, the suit of the plaintiff has been outrightly denied raising preliminary objections that the present suit is misconceived and does not disclose any cause of action against the defendant, liable to be dismissed on this ground alone; there is no privity of contract between the plaintiff and the answering defendant, creating no obligation on the part of the answering defendant towards the plaintiff; the plaintiff purchased an insurance policy from Defendant No.2, and any liability rests with Defendants No.1 and 2, who received the premium for the policy.
5.2 Further, it is averred that the defendant averred that Defendant No.3 is a licensed Independent Surveyor (Fellow Surveyor), appointed by the IRDA, with approximately 36 years of professional experience. He is well-versed in his duties and handled the plaintiff's claim in accordance with the prescribed rules and regulations. It is averred that Defendant No.3 was appointed by Defendant No.1 on 04.11.2019 to conduct a survey of the loss suffered by the plaintiff. On 05.11.2019, a visit was made to the plaintiff's premises, where Defendant No.3 instructed the plaintiff to physically segregate the stock of bangles (plain and decorated) CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 17 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:19:26 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 on the ground floor and basement into damaged and sound/saved quantities, and to provide countable details for verification. Claim supporting documents were also requested. These instructions were reiterated via a registered post letter and email dated 07.11.2019.
Since no response was received, Defendant No.3 sent another registered post reminder on 27.11.2019 and an email on 29.11.2019, asking for compliance to assess the loss. 5.3 It is case of defendant no.3 that in clear violation of Defendant No.3's advice, the plaintiff disposed of the damaged and undamaged stock without informing any of the defendants, raising suspicion about the plaintiff's claim. Despite two prior requests, the plaintiff neither provided the required documents nor allowed physical verification of the goods. Defendant No.3 sent another registered post letter and email on 11.12.2019, requesting the submission of the previously asked-for documents by 26.12.2019. The plaintiff was required to submit all documents within 30 days. Since no documents were received from the plaintiff, Defendant No.3, in the report dated 30.12.2019, recommended the claim be treated as a "No Claim" due to the lack of cooperation from the plaintiff. This recommendation was made in accordance with Clause 6 of the General Terms and Conditions of the policy. 5.4 It is further averred that despite the issuance of the Survey Report dated 30.12.2019 by him (Defendant No.3), a set of documents, sent by the plaintiff to Defendant No.1, was later handed over to him for review. Upon reviewing these documents, it was evident that the plaintiff had still not provided the necessary documents required for the claim assessment. In a letter dated CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 18 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:19:32 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 29.02.2020, Defendant No.3 concluded that the essential documents for assessing the claim were still missing, making it impossible to conduct a proper assessment, which relied on physical verification and the requested documents. Therefore, Defendant No.3 had completed the work assigned to it. 5.5 It is vehemently denied that upon visiting the site on 05.11.2019, the surveyor pressured the plaintiff to segregate the damaged and sound/saved materials, especially given that the plaintiff claimed all records were destroyed in the fire. Defendant No.3 visited the plaintiff's premises to conduct a standard survey and requested stock segregation, which is a normal practice. Even if the plaintiff's request was considered, physical verification and quantification of the stock in various categories were essential. It is outrightly denied that the plaintiff called the defendants, specifically the Surveyor, on 09.11.2019 to revisit the site, and that the defendants failed to respond or visit. It is denied for lack of knowledge that the plaintiff issued a letter dated 10.12.2019 informing the defendants about the Surveyor's non-response and the disposal of damaged material under pressure from society or neighbors. The email issued by defendant No.3 dated 27.11.2019 and 11.12.2019 are admitted as necessary for assessing the loss through physical verification.
5.6 It is further submitted that the report by Defendant No.3 is not binding on the insurance company. If the insurance company finds the report lacking in credibility or adequacy, it is within their right to appoint another surveyor or conduct their own assessment. Thus, Defendant No.3 had a very limited role, which CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 19 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:19:37 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 was carried out fairly and in accordance with the applicable rules and regulations. There is no privity of contract between the plaintiff and defendant no.3. Service of Legal Notice dated 21.10.2020 upon defendant no.3 or reply thereof, if any, has been vehemently denied. The claim has been denied in totality. Any claimed interest thereupon, is therefore, denied. Therefore, praying for outright dismissal of the Suit.
6. Replication was also preferred by the plaintiff to the Written Statement to defendant no.1, wherein contents of the plaint have been reiterated and the averments and allegations in the Written Statement have been denied.
6.1 It is stated that the alleged survey report dated 30.12.2019, submitted by the defendant along with the written statement, is not relevant to the facts and circumstances of the case, as it is not based on actual facts but rather on the surveyor's conjectures and assumptions. The surveyor failed to inspect and survey the site of the incident promptly and diligently, and the report is based on unfounded premises. The surveyor claims to have assessed the loss provisionally, as stated in Paragraph 13.1.6 of his report. Consequently, the purported repudiation of the plaintiff's claim by the defendant regarding the quantum of loss is entirely misleading.
6.2 It is averred that defendant did not supply any terms and condition of the policy and the averments made in the corresponding para of Written Statement itself proves the negligence of the defendants, as per IRDA guidelines. Hence, the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 20 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:19:43 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 question of triggering or violation of any condition does not arise at all. The plaintiff has denied the claims and assertions made by defendant no.3. It has been reiterated that the surveyor did not complete his ob effectively and re-asserted that surveyor visited the accident site in a casual manner, failing to perform his duties diligently. It is reasserted that the surveyor was aware that the entire stock was damaged yet the surveyor intentionally neglected to ass3s the actual loss caused due to fre at the premises of he plaintiff. The plaintiff submitted all relevant documents to the best of his ability, however, the defendant, under false pretence, unjustly restricted the claim amount to Rs.9,31,617/-. The high handedness of he defendant has been stressed to the fact and even restricted claim amount was not granted and the entire claim of the plaintiff was unreasonably rejected.
7. On completion of pleadings, following issues were arrived at to be adjudicated upon by the Court:
1. Whether the claim against insurance company amounting to Rs. 60,00,000/- was rightly declined by the defendant? OPD
2. Whether the plaintiff is entitled to claim amount with interest @ 12% per annum amounting to Rs. 67,20,000/- till the date of filing of the suit?
OPP.
3. Whether plaintiff is entitled to interest pendent lite and future and if so, at what rate ? OPP.
4. Whether there is no privity of contract between the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 21 of /73 Digitally signed PREETI by PREETI AGRAWAL AGRAWAL GUPTA Date: 2024.10.18 GUPTA 16:19:49 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 plaintiff and defendant no. 3 and whether defendant no. 3 is not liable ? OPD3.
5. Relief ?
8. In exercise of power u/o. XV A Rule 6 (o) and (p) CPC, Court appointed Local Commissioner Mr. P. C. Ranga, Retd Additional District & Sessions Judge, who has recorded the evidence in this matter and filed his report of compliance.
9. Plaintiff in support of its case examined himself as PW1, tendered his evidence by way of affidavit Ex.PW1/A bearing his signatures at Point A and Point B and relied upon the documents, detailed as under:-
SL NO. DOCUMENT(S) EXHIBITED AS
1. Central Sales Tax Registration Certificate (17) EX-PW1/1
2. GST Registration Certificate in favor of plaintiff EX-PW1/2
(18-20)
3. Copy of Rent Agreement (21-22) EX-PW1/3
4. Original Insurance Policy (Standard Fire & EX-PW1/4
Special Perils Policy) issued by the defendant (23-26)
5. Police intimation report dated 01.11.2019 (27) EX-PW1/5
6. Copy of entry dated 01.11.2019 in General Police EX-PW1/6 Dairy details regarding Fire took place. (28)
7. E-mail regarding intimation of incident to EX-PW1/7 defendant on 01.11.2019 (29)
8. Email/letter dated 04.11.2019, regarding EX-PW1/8 appointment of surveyor by defendant (30)
9. Police Memo dated 10.11.2019, for early disposal EX-PW1/9 of debris. (31)
10. News paper clipping dated 09.11.2019 regarding EX-PW1/10 fire took place (32)
11. GST Return 1 for June, September, December EX-PW1/11 2019-2020 (33-39) Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 22 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:20:24 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
12. GSTR 2A for the period April 2019 to October EX-PW1/12 2019 (40)
13. GSTR 3B for the period April 2019 to October EX-PW1/13 2019 (41-54)
14. Electricity Bills of the plaintiff firm.(55-56) MARK-A
15. Intimation to Asst. Commissioner GST dated EX-PW1/15 06.11.2019 regarding FIR took place (57)
16. Balance Sheet for the year ended on 31.03.2017 EX-PW1/16 (58-60)
17. Balance Sheet for the year ended on 31.03.2018 EX-PW1/17 (61-64)
18. Balance Sheet for the year ended on 31.03.2019 EX-PW1/18 (65-87)
19. Provisional Balance Sheet (as on date of loss EX-PW1/19 i.e.31.10.2019) (88-92)
20. 'Certificate of the stock Statements' from April EX-PW1/20 2019 to October 2019 issued by CA (93-96)
21. Letter dated 08.11.2019 from Local MLA EX-PW1/21 regarding fire and total loss suffered by the plaintiff. (97-98)
22. Affidavits of neighbors Sh. Saurav @ Saurabh, EX-PW1/22 Sh. Vikas Rathor, also of plaintiff, regarding the occurrence of fire and total loss. (99-101)
23. Stock Ageing Analysis, for the period from EX-PW1/23 01.04.2019 to 30.10.2019. (102-103)
24. Ledger accounts of all clients of plaintiff for the EX-PW1/24 period 01.04.2019 to 30.10.2019 (104-144)
25. Summary of monthly purchases done by the EX-PW1/25 plaintiff for the period 01.04.2019 to 30.10.2019 (145)
26. Ledger account regarding purchases done by the EX-PW1/26 plaintiff for the period 01.04.2019 to 30.10.2019 (146-151)
27. Summary of monthly sales done by the plaintiff EX-PW1/27 for the period 01.04.2019 to 30.10.2019 (152)
28. Ledger account regarding sales done by the EX-PW1/28 plaintiff for the period 01.04.2019 to 30.10.2019 (Colly) (153-156)
29. Photographs showing burnt stock (157-158) EX-PW1/29 CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 23 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:20:30 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
30. Claim Bill Fav. Defendant (159) EX-PW1/30
31. Fire Brigade Report dated 12.11.2019 (160-161) EX-PW1/31
32. Invoice/Receipt dated 11.11.2019 issued by EX-PW1/32 tractor owner, for disposing of the debris. (162-166)
33. Intimation to UCO Bank, Firozabad, dated EX-PW1/33 01.11.2019 regarding fire took place. (167)
34. Certificate dated 19.12.2019 issued by UCO Bank EX-PW1/34 regarding Loan against hypothecation of goods.
(168)35. Certificate dated 19.12.2019, regarding non- EX-PW1/35 availability of stock register by plaintiff. (169)
36. Emails exchanged between the parties. (170-191) EX-PW1/36
37. Certificate regarding damage of complete stock EX-PW1/37 (192)
38. Courier receipt regarding submission of EX-PW1/38 documents in the office of surveyor (193)
39. Certificate issued by UCO Bank regarding 'No EX-PW1/39 necessity of Stock Audit'. (194)
40. Fire insurance claim form (195-196) EX-PW1/40
41. Email dated 17.07.2020 sent by defendant, EX-PW1/41 containing Repudiation Letter. (197-198)
42. ITR for the assessment Year 2017-18 (199-201) EX-PW1/42
43. ITR for the assessment Year 2018-19 (202-204) EX-PW1/43
44. ITR for the assessment Year 2019-20 (205-207) EX-PW1/44
45. Copy of Legal Notice dated 21.10.2020 sent by EX-PW1/45 the plaintiff's Advocate (208-212)
46. Postal Receipts of Legal Notice (213) EX-PW1/46
47. Track report of the Legal Notice (214-216) EX-PW1/47
10. PW1 in his deposition has reiterated the contents of the plaint 'On Oath'. PW1 deposed that he is the sole proprietor of M/s. Laxmi Brand, located in Firozabad, Uttar Pradesh, dealing in decorating bangles, sourced in raw or semi-finished form. (Central CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 24 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:20:35 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 Sales Tax Registration Certificate exhibited as Ex.PW1/1, GST Registration Certificate in favor of plaintiff exhibited as Ex.PW1/2 and Copy of Rent Agreement exhibited as Ex.PW1/3). It is further deposed that the plaintiff obtained a 'Standard Fire and Special Perils Insurance Policy' from Defendant No. 1, a leading insurance company in India, effective from 09.08.2019 to 08.08.2020, covering stock worth Rs.60,00,000/-. (Original Insurance Policy issued by the defendant exhibited as Ex.PW1/4). It is further deposed that on 01.11.2019, a fire caused significant damage to the plaintiff's stock, and the plaintiff promptly notified the insurance company and filed a claim. (Police intimation report dated 01.11.2019 is exhibited as Ex.PW1/5; Copy of entry in General Police Dairy details regarding Fire took place is exhibited as Ex.PW1/6; E-mail regarding intimation of incident to defendant on 01.11.2019 is exhibited as Ex.PW1/7; News paper clipping dated 09.11.2019 regarding fire took place is exhibited as Ex.PW1/10;
Intimation to Asst. Commissioner GST dated 06.11.2019 regarding FIR took place, is exhibited as Ex.PW1/15; Fire Brigade Report dated 12.11.2019 is exhibited as Ex.PW1/31; Intimation to the bank dated 01.11.2019 regarding fire took place is exhibited as Ex.PW1/33; Certificate regarding damage of complete stock is exhibited as Ex.PW1/37; Letter dated 08.11.2019 from Local MLA regarding fire and total loss suffered by the plaintiff is exhibited as EX-PW1/21; Affidavits of neighbors regarding the occurrence of fire and total loss are exhibited as EX-PW1/22; Photographs showing burnt stock are exhibited as EX-PW1/29 (Colly)). PW-1 further deposed that defendants Nos. 1 and 2 appointed Defendant CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 25 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:20:40 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 No. 3 as the Surveyor, who assessed the site on 5.11.2019.
(Email/letter regarding appointment of surveyor by defendant is exhibited as EX-PW1/8). The plaintiff informed the surveyor that It is further deposed that the entire stock was ruined and could not be segregated. However, the surveyor insisted on document submission, despite the records being destroyed in the fire. It is further deposed that after multiple attempts to communicate with the insurance company and the Surveyor, the plaintiff was compelled to dispose of the damaged stock, due to societal pressure. (Police Memo dated 10.11.2019, for early disposal of debris is exhibited as EX-PW1/9). It is further deposed that despite following up with the defendants, the claim was unjustly rejected on 29.12.2019, with the Surveyor, citing flimsy reasons.(Emails exchanged between the parties are exhibited as EX-PW1/36; Courier receipt regarding submission of documents in the office of surveyor is exhibited as EX-PW1/38; Email dated 17.07.2020 sent by defendant containing Repudiation Letter is exhibited as EX- PW1/41) It is further deposed that the defendants' actions were deliberately evasive, failing to provide the terms and conditions of the policy and ignoring the plaintiff's communications. This non-responsive behavior, along with delays and the rejection of the claim, constitutes unfair trade practices. The plaintiff also deposed that no effort was made by the defendants to account for the challenges posed by the COVID-19 lockdown in collecting the requested information. It is further deposed that as a result, the plaintiff filed/issued a legal notice demanding Rs.60,00,000/- with 12% interest for the loss, which went CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 26 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:20:46 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 unaddressed by the defendants. (Copy of Legal notice dated 21.10.2020 sent by the plaintiff's Advocate is exhibited as Ex.PW1/45; Postal Receipts of Legal Notice is exhibited as Ex.PW1/46 and Track report of the Legal Notice is exhibited as Ex.PW1/47). It is further deposed that the plaintiff resorted to Pre- Institution Mediation, which ended without 'Non-Starter Report' from DLSA (N/W), and subsequently filed this Suit, claiming Rs.60,00,000/- plus interest, totaling Rs.67,20,000/-. The plaintiff further seeks 18% interest from the date of filing the suit until realization.
11. The sole plaintiff witness as the proprietor himself has been cross-examined by ld. Counsel for the defendant no.1, during which, the witness has testified that he was running in the premises measuring about 22x30 sq. ft. in the area including the ground floor and basement thereby having the business area of about 1200 sq. ft.. PW1 explained that he started his business in the year 2014- 2015 and admitted that he had taken a loan from UCO Bank to the tune of Rs.9.5 lakhs. PW1 further deposed that he was paying Central Sales Tax (CST) since the year 2016 and has his business registered in the year 2014, relying upon his Registration Certificate Ex.PW1/1. The witness was specifically asked the value of stocks of goods at the time of commencement of his business in the year 2014 to which the witness valued the same at about Rs. 30 lakhs. He further referred to his CST Registration Certificate issued in the year 2016-2017 as Ex.PW1/2 issued as on 28.07.2018. PW1 was further cross-examined in respect of his rental premises for which copy of Rent Agreement has been filed as Ex.PW1/3. The CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 27 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:20:53 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 witness explained that he had taken the insurance first time in the year 2018 and continued to be examined on the subsequent date regarding the date of intimation given to the defendant about the fire incidence. He failed to recollect the exact date but admitted that the information was given after 2 days of the incidence through toll free number of the defendant company and that the Surveyor of the defendant company visited the place of incidence after 3 days of the intimation. PW1 explained that defendant was duly intimated about the fire on the same date itself i.e. on 01.11.2019 and that the damaged stock was lying at the business premises at the time of visit of the Surveyor, both in the basement as well as on the ground floor. The witness has categorically denied having handed over any list of requisite documents given by the Surveyor and answered that a letter was received by him from the Company after about 8 days, which letter he could not trace or file. As regards the Insurance Policy in question, the witness explained that he had taken Standard Fire and Special Perils Policy of the sum assured value of Rs. 60,00,000/- (Rupees Sixty Lakhs Only) commencing from 09.08.2019 till 08.08.2020 and was ill equipped to explain the cause of fire. PW1 emphasized that he posted all the necessary documents as per list of documents provided by the surveyor within 15 days which included Bills of sale and purchase, balance sheet, newspaper cutting of the incidence, fire report, F.I.R. etc. It is testified that all other necessary documents were produced after 3-4 days of the demand and explained that the entire documents could not be placed at first instance due to internet disruption due to some local disputes. PW1 admitted the Notice dated 07.11.2019 CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 28 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:21:01 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 from the Insurer and another Notice on 27.11.2019 through post.
12. He deposed that after 4-5 months of the incidence, his policy agent received an email whereby his claim was rejected without disclosing any reason. He reiterated the value of total stock @Rs.60,00,000/- and was confronted with his own document Ex.PW1/29 which are photographs showing the burnt stock. PW1 confirmed that the stocks shown in the photographs Ex.PW1/29 were lying in his godown at the time of fire and that the photographs were taken by public persons present at the time of incidence and later transferred to his phone. Reliance upon the photographs have been strongly disputed for want of any certificate U/S 65 B of Indian Evidence Act pertaining to Ex.PW1/29. PW1 was confronted with Fire Insurance Claim Form Ex.PW1/40 to which the witness explained that the same was filled by his Insurance Agent who take his signature. He categorically denied that his claim was rejected for want of submission of necessary documents. The witness was further cross-examined about the status of place of incidence when he reached the premises, to which witness admitted that the premises was locked and the keys were in his possession. He denied that the stocks were not of the value claimed. Interestingly, a new case has been introduced during cross-examination by the defendant, which is beyond the averments in the Written Statement making the suggestion that the plaintiff deliberately caused fire to the stocks to claim Insurance. Same suggestion, as such, has been denied, and is not admissible for consideration, as being beyond pleadings and is accordingly, discarded from consideration. The witness specifically denied that CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 29 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:21:07 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 he was making a false claim. The Plaintiff did not examine any other witness and the plaintiff's evidence was closed.
13. In defence evidence, defendant no.1 got examined Sh. Santosh Hembram, Deputy Manager, Lawrence Road Branch, Delhi, as DW1, who tendered his evidence by way of affidavit Ex.DW1/A bearing his signatures at Point X and Point Y and relied upon the documents, detailed as under:-
SL NO. DOCUMENT EXHIBITED
AS
1. Term and condition of policy Ex.DW1/1
2. Surveyor Report dated 30.12.2019 (20-57) Ex.DW1/2
3. Email communication between the defendant and Ex.DW1/3
surveyor. (58-59)
4. Final Recommendation letter of surveyor dated Ex.DW1/4
29.02.2020, negating the Claim. (60-63) (OSR)
5. Letter of rejection dated 03.03.2020 (64) Ex.DW1/5
(OSR)
6. Reply of defendant dated 20.12.2020 to Legal "Mark-A"
Notice of plaintiff dated 19.10.2020. (65-71)
14. The witness/DW1 has reiterated the contents of the Written Statement, 'On Oath' and has deposed that he is the Regional Manager of the New India Assurance Company (Defendant No.1) and is well conversant with the facts and circumstances of the case, making him competent to swear this affidavit, is sufficiently familiar with the facts and circumstances of the case and has examined all relevant documents and records in relation to it. DW1 deposed that the said Insurance Policy was issued subject to the specified terms, conditions, and exclusions. The terms and conditions of the insurance were part and parcel of Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 30 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:21:12 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 the insurance policy itself. (Terms and conditions of policy is Exhibited as Ex. DW 1/1). The insurance policy taken by the plaintiff was subject to the specified terms and conditions. The due observance and fulfillment of these terms, conditions, and requirements, insofar as they pertain to actions to be taken or complied with by the insured, were conditions precedent for the admission of any liability by the insurance company. DW1 further deposed that the plaintiff informed his brokers, M/s Prisha Insurance Brokers Pvt. Ltd., on 01/11/2019, about the fire incident, who subsequently notified the insurer via email dated 02.11.2019.
The surveyor was appointed immediately upon receiving information about the fire incident. However, the plaintiff was not complying with the repeated requests made by the surveyor to facilitate the actual assessment of the loss.
15. DW1 further deposed that The insurer, via emails dated 10.12.2019 and 11.12.2019, informed the surveyor about the disposal of the stock of bangles. In response, the surveyor, through an email dated 11.12.2019 and a Registered Post letter, expressed regret that, despite specific advice during the survey visit and the Letters of Request (LORs), the plaintiff had not carried out the physical segregation of the stock into damaged and saved categories. Furthermore, the plaintiff did not furnish a complete set of documents or information requested by the surveyor and the documents provided were not arranged properly, making it difficult to ascertain the chronology of events and understand the facts of the matter. In this regard, the emails dated 07.11.2019, 27.11.2019, and 11.12.2019 from the surveyor have been relied upon. It is CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI Digitally signed byPage 31 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date: 2024.10.18 GUPTA 16:21:19 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 deposed that there was necessity of physically verifying the segregated material for assessing the plaintiff's claim and the surveyor reminded the plaintiff via email on 11.12.2019 about these requirements, failing which, the quantification of loss would be provisionally restricted to the damage observed during the survey visit on 05.11.2019, which amounted to Rs. 9,31,617/-. Surveyor report is relied upon as Ex.DW1/2, Email communication between defendant and surveyor is exhibited as Ex DW 1/3, Final recommendation letter of the surveyor is exhibited as Ex DW 1/4, Letter of rejection of claim is exhibited as Ex DW 1/5, Reply to the Legal Notice dated 20.12.2020 is marked as Mark-A.
16. DW1 has further deposed that 'Insurance is a subject matter of solicitation', and obtaining a policy from New India Insurance Co. Ltd. was the plaintiff's choice. He was neither coerced nor enticed into it. The plaintiff was required to observe and fulfill the terms, conditions, and requirements related to the insurance policy as a condition precedent for the admission of any liability. However, the plaintiff failed to comply with the fundamental requirements for substantiating the loss, resulting in the rejection of his claim, as outlined previously. The defendant rejected the claim after thorough consideration. Additionally, the plaintiff communicated with the answering defendant through insurance brokers, Prisha Insurance Brokers Pvt. Ltd., and occasionally through Advocate Vijay Kumar Jain of Vijay & Company. Despite these communications, neither the plaintiff nor his representatives complied with the requirements to provide the necessary documents as per the Letter of Requirements (LOR), Digitally signed CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI by PREETI AGRAWAL Page 32 of /73 AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:21:27 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 even after repeated reminders.
17. DW1 further deposed that as per the plaintiff's Stock Statements and the Certificate of Stock that the total value of stock maintained at the premises at the time of loss was approximately Rs.65,00,000/-, whereas coverage was only sought for Rs.60,00,000/-. This discrepancy clearly indicates that the claim is subject to underinsurance. Additionally, claim for further interest @ 18% on the sum insured of Rs.60,00,000/-, is disputed on the ground that the same would result in unjust enrichment for the claimant.
18. DW1 was duly cross-examined on behalf of he plaintiff, wherein the witness admitted that his deposition was on the basis of record, as he had no personal knowledge in the present matter. DW1 failed to answer, if there was any discrepancy at the ends of the plaintiff in giving information of fire within the stipulated time. The witness failed even to recollect quantum of loss as per the report of the Surveyor and gave a bald denial to the suggestion that the Surveyor had failed to quantify the loss by fire caused at the premises of the plaintiff. DW1 deposed that the sum insured in the present policy was Rs.60,00,000/- and deposed that it was a case of 'under insurance' as the loss was more that the sum insured. He explained that in such cases where the claim was more than the insurance cover, the insurance company decreases the loss claimed from the loss assessed by the Surveyor. DW1 admitted in his cross-examination that the fact of fire in the godown of the plaintiff was assessed and verified by the concerned Surveyor. He further admitted that plaintiff had a fire incidence at the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 33 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:21:37 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 shop/godown. DW1 also categorically admitted that the loss of the plaintiff occurred due to fire, was covered as per the Insurance Cover Policy in question.
19. DW1 was specifically cross-examined if the Insurer assessed the loss wholly based on the physical verification to which the witness clarified that the claim of the insured was assessed on the basis of corroboration of physical verification with documentary proof. DW1 admitted that the insurer had not filed any document to reveal how the loss of the plaintiff caused by fire was assessed and testified that as per company policy, the procedure to assess the loss is to first do a physical verification and thereafter corroboration with the documentary proof. He denied that the entire burden of physical verification was put on the plaintiff and denied that the damaged material was producing foul and unbearable un-stinking smell due to which the police authority directed the plaintiff to remove the damage material or that entire damage material was removed from location by the plaintiff, under police direction. He denied that the documents submitted by the plaintiff were not entertained by Surveyor or the defendant on the pretext that same were not tagged together but were in loose condition. He denied that the Surveyor had sufficient time of ten days to quantify the loss by physical verification before the plaintiff removed the same. He denied the suggestion that the present claim was repudiated owing to negligence of the Surveyor of the Insurer. DW1 testified that the claim of the plaintiff was repudiated on two grounds, firstly, for non-quantifying loss by physical verification and secondly, for non-completion of required CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 34 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:21:43 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 documents. He admitted that it was the job of the Surveyor to quantify the loss by physical verification, while denying that the claim of the plaintiff was repudiated due to own negligence and carelessness of Insurance Company. Defendant no.1 did not examine any other witness and the DE was closed.
20. It is pertinent to mention here that during evidence proceedings before Ld. Local Commissioner, an application U/S 151 CPC, was moved on behalf of defendant no.1, for summoning Sh. Sandeep Bharti (defendant no.3 herein). Vide orders of my Ld. Predecessor dated 02.03.2023, it was observed, as under :-
"02.03.2023 Present: Sh. Vatan Sharma, Counsel for plaintiff.
Sh. Sushant Dahiya, Counsel for defendant no.1 and 2.
Sh. Sushant Dahiya, Counsel for defendant no.3.
Heard. File perused.
An application under S. 151 CPC was moved on behalf of defendant no.1 for summoning Sh. Sandeep Bharti. Heard. Sh. Sandeep Bharti is defendant no.3 in this case who has already filed written statement. At this stage, learned counsel for defendant seeks permission to withdraw the present application. In view of submissions, the application is dismissed as withdrawn...."
Accordingly, defendant no.3 was never examined in the witness box.
21. Arguments on behalf of the parties have been heard at length and the entire record including the pleadings have been perused. The applicable law has been duly considered. The entire evidence, both oral and documentary, have been appreciated. Issue- wise findings are being discussed hereunder:-
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 35 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:21:49 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 ISSUE NO.1
1. Whether the claim against insurance company amounting to Rs. 60,00,000/- was rightly declined by the defendant? OPD
22. The issue as framed is very peculiar to the facts of the present case. The present Suit for Recovery filed by the plaintiff arises pursuant to an Insurance Policy Ex.PW1/4 by which the plaintiff had taken standard fire and special peril insurance policy vide policy no. 31280011190100000225, issued by defendant/Insurer for a period of 09.08.2019 to 08.08.2020. It is an undisputed fact that on intervening night of 31.10.2019 to 01.11.2019, the premises/godown of plaintiff caught fire which was reported immediately to the fire Authority who made best efforts to douse the fire and after considerable efforts of more than two hours, the fire at the premises of the plaintiff could be brought in control. The plaintiff claims to have suffered considerable loss of about Rs.65,00,000/- and has restricted his claim to the insured amount of Rs.60,00,000/-. It is further an admitted fact on record that the claim of the plaintiff was repudiated by the Insurer vide letter of rejection dated 30.03.2020 relied upon by the defendant as Ex.DW1/5.
23. Pursuant to filing of the present suit for claiming the insurance cover amount by the plaintiff from the insurer/defendant, the defendant no.1, who is the material defendant, has taken a defence that the said insurance policy was issued in favour of plaintiff subject to terms, conditions and requirements and has Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 36 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:21:56 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 placed heavy reliance of general condition no.6 with the arguments wherein the insurer is duty bound to deliver a claim within 15 days of loss or damage, for all stocks/properties damaged or destroyed and to submit all such necessary specifications and plans, invoices and investigation report alongwith the documentation for the circumstances under which the loss or damage occurred. Reliance has been placed on General Condition No.6, with the defence that the claim of the plaintiff was not payable under the Insurance policy for non-compliance of necessary terms and conditions by the plaintiff. At the time of filing the Written Statement, it has been pleaded for the defendant that there was unexplained delay in notifying the insurer about the loss by fire which took place on 01.11.2019 as the insurer was notified vide email dated 02.11.2019.
It is defended that the surveyor of the defendant promptly visited the site of the plaintiff on 05.11.2024 wherein the Surveyor found that there was substantial amount of sound and saved material, clearly visible in the photographs taken by the Surveyor at site, in the presence of the plaintiff. As per the first report of the Surveyor, plaintiff was asked to segregate the damaged material from the sound material. It is the case of the defendant that despite repeated requests, plaintiff failed to provide the requisite records and documents necessary for just and proper assessment of the insurance claim of the plaintiff.
24. It is further a peculiar fact in the present case that the plaintiff claims that all finished and semi-finished articles were completely damaged by fire and subsequently, by the smoke and water, used by the fire brigade. Since the business of the plaintiff CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 37 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:22:01 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 involved delicate goods involving glass bangles and bangles decoration material, plaintiff claims to have repeatedly informed the Surveyor that his entire stock was ruined/damaged and that segregation, as sought, was not possible. Defendant no.3 issued a email/LOR dated 07.11.2019 and 27.11.2019, asking the plaintiff to furnish documents pertaining to the loss quantification with the communication vide letter issued by its Surveyor Mr. Sandeep Bharti upon the plaintiff seeking physical segregation of stocks of bangles and asking for revisit for verification of the stocks. A detailed Surveyor assessment report Ex.DW1/2 relied upon by defendant, in itself reveals the possession of the police report Ex.PW1/5 and the Surveyor reported that the Insured failed to furnish the requested police investigation report, putting entire responsibility of collecting requisite material unilaterally upon the plaintiff.
25. Further, detailed perusal of report of the defendant/Insurer Ex.DW1/2 shows the enclosed fire report dated 10.12.2019 in respect of the fire at the premises of plaintiff, Newspaper report, relied upon as Ex.PW1/10 by plaintiff and also the letter issued by plaintiff to UCO Bank Firozabad, intimating the occurrence of the fire at the godown/premises. The Surveyor report further itself encloses many photographs depicting the nature and extent of damage to the stocks of the plaintiff and makes mention of lack of claim supporting documents despite issuance of LOR dated 07.11.2019 and 27.11.2019. It is case of the defendant admitting receipt of email dated 10.12.2019 on behalf of plaintiff whereby it has been duly communicated that the damaged goods CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 38 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:22:07 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 have been cleared from the premises seeking permission to get the premises white-washed to resume business of the plaintiff. Surveyor report includes the reference of email dated 11.12.2019 advising the plaintiff to provide the report after segregating the burnt stock. Here is the subject matter of dispute wherein plaintiff has claimed to have been issued email to the defendant on 10.12.2019 informing that due to Surveyor's lack of response and pressure from society and neighbours, the damages goods had to be disposed of. Interestingly, both the plaintiff and defendant claim to have issued email of even dates i.e. 10.11.2012 and 11.12.2019 respectively, in respect of the damaged material, wherein the defendant has averred that he was unaware about the plaintiff's intimation about disposal of the damaged goods and taking the plea that the mail dated 11.12.2019 was issued by him, seeking report of segregation from the plaintiff, unaware about the email issued by the plaintiff on 10.12.2019.
26. On perusal of judicial record, another fact which is worth considering here is the document/letter of communication dated 10.11.2019 places reliance on Ex.PW1/9 which is the direction issued by the Police Station, Rasulpur, Janpad, Firozabad. The bare perusal of the letter Ex.PW1/9 reveals that the plaintiff was asked by the police authority to remove the damaged/burnt goods from the premises of plaintiff, within 24 hours of receipt of the letter, failing which the plaintiff would suffer criminal prosecution. The letter issued by the concerned police station has specifically made reference to the stinking goods lying at the premises and the complaints received from the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 39 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:22:15 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 neighbourers about unbearable foul smell emanating from the damaged/burnt goods lying at the premises/godown of the plaintiff which caught fire and is a subject of Insurance in the present case.
The plaintiff/witness has not been cross-examined qua document Ex.PW1/9 which remains unchallenged and undisputed by the defendant. In these facts and circumstances, the defence raised by the defendant on two accounts justifying the rejection of the claim, firstly, for failure to get the loss quantified by the Surveyor by physical verification and secondly, for non-completion of required documents, needs strict proof by the defendant in order to satisfy the case of the Insurance Company in asserting that the Insurance Claim of the plaintiff was rightly declined by the defendant, which is the issue in question.
27. During the course of arguments addressed by ld. Counsel for defendant, it is argued that the insurance policy was issued subject to the specified terms, conditions and exclusions. The due observance and fulfillment of the terms, conditions, requirements in so far as they relate to anything to be done or complied with by the insured were condition precedent for admission of any liability of the insurance company. One key condition was General Condition No. 6, which states as follows:-
"6(i) On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage, or such further time as the Company may in writing allow in that behalf, deliver to the Company.
(a) A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 40 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:22:20 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 all the several articles items or property damaged or destroyed, and of the amount of the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not including profit of any kind.
(b)Particulars of all other insurances, if any.
The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof. documents, investigation reports (internal/ external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with."
It is contended that the plaintiff has not come with clean hands before this Hon'ble Court since as per his own admission in an email dated 10.12.2019 to the surveyor, he stated that he had disposed of the salvage at the loss site, thereby violating condition No.6 of the Standard Fire and Special Perils Policy. It is contended that the plaintiff's unauthorized and illegal acts with ulterior motive of disposing and moving of the material without allowing inspection and verification by the surveyor of segregated damaged material and sound/saved material, disentitles the plaintiff to press for any claim against the insurance company against the insurance cover in question.
28. It is further contended on behalf of defendant that despite the LOR issued by the surveyor to the plaintiff, requiring CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally Page 41 of /73 signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:22:26 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 physical segregation of stock of bangles into damaged and sound/saved categories, plaintiff failed to comply and instead, disposed of the entire goods, without furnishing an opportunity to the surveyor of the insurance company to quantify the loss. It is further contended that the plaintiff had not furnished complete set of documents/information asked for by the surveyor. Even the documents that were furnished were not arranged in proper manner to ascertain the chronology of the events and discern the acts of the matter. Ld. Counsel for defendant has relied upon emails dated 07.11.2019, 27.11.2019 and 11.12.2019 of the surveyor, in this regard. It has been further contended that the loss quantification of the damaged goods at the premises of the plaintiff, as per surveyor visit dated 05.11.2019, is restricted to Rs.9,31,617/-, denying any further entitlement of the plaintiff.
29. In support of its own case and in contradiction of the defence raised by the insurance company/defendant against the claim of the plaintiff, it has been strenuously contended on behalf of the plaintiff that Insurance company has raised frivolous and baseless defences in order to escape its legal liability to compensate the plaintiff for losses incurred in the unfortunate fire that broke out at the premises/godown of the plaintiff on the intervening night of 31.10.2019 and 01.11.2019. It is contended that the insurance company is trying to gain advantage of its institutional position in concealment of such terms and conditions, that were neither conveyed to the plaintiff nor applicable to the case of the plaintiff, for the Insurance cover of the plaintiff that was granted by the insurer/defendant, after exercise of due diligence. Reliance has CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 42 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:22:31 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 been placed upon the judgments of Hon'ble Supreme Court of India as under:-
(i) In the case of M/S Modern Insulators Ltd vs The Oriental Insurance Co. Ltd reported in(2000) 2 SCC 734, where the following order has been passed.
"As the above terms and conditions of the standard policy wherein the exclusion clause were included, were neither a part of the contract of insurance nor disclosed to the appellant respondent cannot claim the benefit of the said exclusion clause."
(ii) In "Bharat Watch Company vs. National Insurance Co. Ltd. [2019 (6) SCC 212] (supra)", the Hon'ble Supreme Court has held as follows:-
" The basic issue which has been canvassed on behalf of the appellant before this Court is that the conditions of exclusion under the policy document were not handed over to the appellant by the insurer and in the absence of the appellant being made aware of the terms of the exclusion, it is not open to the insurer to rely upon the exclusionary clauses."
(iii) In Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Company [IV (2010) CPJ 38 (SC)], it was held as under:-
"the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties."
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 43 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:22:36 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
30. During further course of arguments, heavy reliance has been placed on behalf of the plaintiff on the pronouncement of National Consumer Disputes Redressal Commissioner New Delhi in Consumer Case No. 1094 of 2018 titled as 'M/s.
Anjaneya Jewellery Vs. New India Assurance Co. Ltd. & Ors.' decided on 21.09.2021, wherein two guiding principles applicable between contractual parties to a insurance cover, have been laid down as under:-
" From the discussions of Hon'ble Supreme Court, two principles emerged as follows:
(i) There is no difference between a contract of Insurance and any other Contract, and it should be construed strictly without adding or deleting anything from the terms thereof.
(ii) It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know.
The insured must disclose and similarly, the insurance company and its agents must disclose all material facts in their knowledge since the obligation of good faith applies to both equally. If the above terms and conditions of the standard policy wherein the exclusion clause were included, were neither a part of the contract of insurance nor disclosed to the Insured, the Insurance Company cannot claim the benefit of the said Exclusion Clause.
31. It is contended for the plaintiff that the defendant/insurance company was not legally sound in taking the defence of any 'exclusion clause' to justify repudiation of the insurance claim of the plaintiff, praying that same is not sustainable in the eyes of law. It is contended that there is no material on record CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 44 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date: 2024.10.18 GUPTA 16:22:42 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 to establish that the insurance company at any point of time, ever informed to plaintiff about applicability of any 'exclusion clause' to the insurance cover applicable. It is argued that even otherwise, the resort of 'exclusion clause' by the defendant/insurer is not applicable to the facts of the present case, as the surveyor of the insurance company was duly informed soon after the fire broke out at the premises/godown of the plaintiff, i.e. the very next day itself to the agent of the insurer, who thereupon, informed the defendant insurance company on the subsequent day. It is submitted that physical survey of the godown/premises of the plaintiff was already conducted by the surveyor of the insurance company on 05.11.2019. Reliance has been placed on the surveyor report relied upon by the defendant as Ex.DW1/2 to submit that the annexed photographs taken by the surveyor, which form part of the final surveyor report, in itself, displays the pitiable condition of the stock of the plaintiff which are glass bangles, post fire break out at the premises/godown of the plaintiff. It is submitted that the plaintiff conveyed to the surveyor concerned repeatedly that the nature of goods of the plaintiff were totally destroyed either by direct fire or by smoke and water, subsequent to the efforts to douse fire and post fire consequences and that they were no sellable goods that could be retrieved from the junk of goods that was left behind by the fire break out. It is further contended that the disposal of the damaged goods lying at the premises/godown of the plaintiff were forcibly disposed of under directions of the police authority, as relied upon vide Ex.PW1/9 and the same fact was duly conveyed to insurance company. It is prayed that the plaintiff cannot be made to suffer for CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 45 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:22:47 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 any act done by him, as per law. On account of submissions of documents and necessary submissions, reliance has been placed on all the exhibits tendered by the plaintiff witness pertaining to the stock statement, GST return for the relevant periods, balance-sheet pertaining to the previous two years and the current year as Ex.PW1/16 to Ex.PW1/18. It is prayed that the plaintiff duly complied with all the requisites and was only constrained due to voluminous records to be provided, which took considerable time and subsequently, during the process, there were certain obstacles claimed owing to the fast approaching COVID situation. It is contended that the defendant has not been able to discharge the burden in its favour, upon the issue.
32. The fact, evidence, contentions of the Counsels and legal position has been duly considered in respect of the issue under adjudication.
33. The defendant/Insurance company has placed heavy reliance on the 'exclusion clause' of general condition no.6 submitting that the physical survey of damaged stocks of the plaintiff, after the fire break out, was crucial to the quantization of reasonable compensation payable by the insurance company to the plaintiff. It is case put forth by the insurance company that the plaintiff did not comply with LORs issued by the surveyor via emails dated 07.11.2019 and 27.11.2019, addressing upon the need for physical verification of segregated material for claim assessment process. The facts of the case are relevant to be considered briefly. It is an undisputed case about the fire break out at the premises/godown of the plaintiff on intervening night of CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 46 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:22:52 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 31.10.2019 and 01.11.2019. It is also an admitted position that the defendant insurance company issued an insurance policy with a sum insured of Rs.60 lakh on 09.08.2019 which was valid till 08.08.2020, with a sum insured of Rs. 60,00,000/- and the coverage included stock and stock in process, subject to standard clauses such as (a) Designation of Property Clause (b) Reinstatement Value Policy Clause and (c) Local Authorities Clause. It is not the case of the defendant company that any of the subjective clauses, have been flouted vide the present claim of the plaintiff under consideration.
34. The major defence in denial of claim of the plaintiff, on the basis of which the present issue has been framed, is of the alleged non-compliance by the plaintiff to submit to requisite compliances by way of production of segregated goods and documents as sought. In this regard, the Court has appreciated the email dated 11.12.2019 heavily relied upon by defendant, as issued from the surveyor of defendant no.1, who has been impleaded as defendant no.3 in the array of parties, relied upon collectively Ex.DW1/3 and is not a denied document by the plaintiff. By way of email dated 11.12.2019, plaintiff was re-reminded about the pending LOR dated 07.11.2019 and 27.11.2019 to furnish his compliance after arranging physical segregation of stock of bangles lying on the ground floor and in the basement and separate them into damaged goods vs. sound/saved quantity. It is the case of the defendant/insurer that in absence of arranging physical segregation of stocks of bangles in countable manner and making the same available for fresh survey of the insurance company, the loss CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 47 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:22:58 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 quantification would be provisionally restricted to the observations as per survey visit dated 05.11.2019. Further, requisition of detailed analysis certificate pertaining to the stock, claim form, copy of police investigation report, copies of electricity bills, right up of the plaintiff firm and its activities, Memorandum of account from 01.04.2019 to 31.10.2019 and record pertaining to bank account, GST ledger account of the plaintiff firm, were sought to be submitted on or before 26.12.2019. There were some minor queries also associated and connected with the afore-detailed requisitions.
As per the Survey and Assumption report vide Ex.DW1/2 which is dated 30.12.2019, the claim of the plaintiff was recommended for rejection.
35. On perusal of the entire thread of emails and communications relied upon by defendant, leading to final recommendation letter of survey dated 29.02.2020 relied upon as Ex.DW1/4 and letter of rejection dated 03.03.2020 relied upon as Ex.DW1/5, the insurance company examined its surveyor report dated 30.12.2019, and issued the final recommendation dated 29.02.2020 vide Ex.DW1/4 observing :-
"02. Thus, the insured failed to furnish the above critical documents pertaining to Quantification of Loss, Value at Risk, Value of Loss and Cause of Loss."
As per the final recommendation report Ex.DW1/4, reference and reliance has been again made to lack of segregation of damaged and sound/saved quantifies of stocks of the plaintiff at the site on fire and failure of the surveyor of the insurer to visit the Digitally signed CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. by PREETI Page 48 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:23:04 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 site of plaintiff after the said segregation. Further reference has been made to disposal of the burnt stocks by the plaintiff, as informed to the insurance company by their broker's e-mail dated 11.12.2019 about disposal of the stocks. Recourse was taken to general condition no.6 of Standard Fire and Special Peril Policy with the observation that the same had been violated due to lack of opportunity of the insurance company to quantify the stock loss followed by the opinion of the assessors that 'Insurers are not liable to pay any compensation for the above reported loss and may close this case by considering it as 'No Claim' It is the own case of the insurer/defendant that wide Ex.DW1/5 dated 03.03.2020, a letter of rejection was conveyed to the plaintiff, which was based on the final recommendation report of the surveyor Ex.DW1/4.
36. It is considered that the plaintiff has tendered the requisite documents vide its testimony to satisfy the Court about the insurance policy Ex.PW1/4, police intimation report dated 01.11.2019 vide Ex.PW1/5, e-mail of intimation to the defendant vide Ex.PW1/7 and most importantly, police Memo dated 10.11.2019 vide Ex.PW1/9. All other relevant financial documents of the plaintiff's firm by way of CST Registration, GST Registration, periodic GST returns during the year 2019-2020, electricity bills of the plaintiff firm, balance-sheets of the plaintiff's business ending on 31.03.2017, 31.03.2018, 31.03.2019, Certificate of stock statement issued by CA for April 2019 to October 2019 vide Ex.PW1/20 and all other requisite document as per LOR have been placed on record and stated to have been duly submitted to the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 49 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:23:11 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 insurer on demand. The only defence in respect of submission of documents on behalf of surveyor has been about his non satisfaction about proper tagging and sequencing, as reflected from the mutual communications and as such, the defendant/insurer has themselves not denied want of any such requisite financial documents as a reason for rejection of claim of the plaintiff. During cross-examination of PW1, plaintiff has categorically deposed that the insurance was taken by him in respect of his business stocks first in the year 2018, which in itself reflects that the year of fire which is in October/November 2019 was a year of subsequent year of insurance cover, taken by the plaintiff. It is a matter of common practice of the insurance business that an insurance cover for a definite 'insured' amount, is issued after proper analysis and assessment by the agents of the insurance company, in respect of the actual stocks and likelihood loss that may need to be compensated, in case of mishappening for which, the entire cover is being granted.
37. During cross-examination, the plaintiff witness admitted that all the requisite documents could not be promptly posted by him, due to administrative difficulties, suspension of internet connection and also the volume of documents that were required to be submitted. It is nowhere the defence raised by insurance company about any suspected cause of fire at the premises of the plaintiff and therefore, any cross-examination of the plaintiff on that aspect is irrelevant. On examination of the evidence tendered on behalf of defendant, it has already been considered in the discussion herein-above, relevant to the issue in CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 50 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:23:17 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 question. During his cross-examination, the deposing witness of the defendant was unable to furnish any definite answer to the quantification of loss by the surveyor of the insurer and categorically admitted that the sum insured in the present policy of the plaintiff was to the tune of Rs.60 Lakhs. DW1 admitted that the surveyor of the insurer had assessed and verified the fire at the shop of the plaintiff and that the same was duly covered in the insurance policy issued by defendant/insurer. A specific suggestion was put to DW1 on behalf of plaintiff that the damaged material was producing foul and unbearable stinking smell, due to which, police authority directed the plaintiff to remove the damaged material and that the plaintiff under directions of the police removed the material from the location. Same has been evasively denied by the witness, though as discussed, has been duly proved vide Ex.PW1/9 by the plaintiff witness.
38. It has already been considered that vide Ex.PW1/9, plaintiff was under directions from PS Rasulpur, Janpad, Firozabad, to remove the entire stocks from the premises/godown of t he plaintiff, which had been damaged due to fire break out oat his premises, on the intervening night of 31.10.2019 and 01.11.2019. The police directions also makes reference to the discomfort and complaints received from the neighbourers with directions to the plaintiff to remove the entire stock within 24 hours of the issuance of letter on 10.11.2019. It is the case of the plaintiff that he was, in these circumstances, was forced to dispose off the stock from the premises, in order to save himself from criminal prosecution. Admittedly, the said fact has been duly communicated CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 51 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:23:23 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 to the insurance company by the broker of insurer vide email dated 10.12.2019. It is the case put forth on behalf of insurer that the surveyor email dated 11.12.2019 was not in response to the plaintiffs mail dated 10.12.2019, but was issued irrespective and not in response of the email issued by the plaintiff. The photographs which have been relied upon by the plaintiff to display the damaged condition of the stocks lying at the premises/godown of plaintiff vide Ex.PW1/29 have been contested during his cross-
examination, for want of requisite Certificate U/S 65 B of Indian Evidence Act and challenge for want of proof. However, interestingly, the similar or same photographs have also been taken and placed reliance on by the insurer vide its surveyor assessment report Ex.DW1/2, which is a proved document. A careful perusal of the pictures of the damaged stocks lying at the premises/godown of the plaintiff demonstrates the nature of stock which are glass bangles and any reasonable person, with inherent common logic, can figure out the impossibility of segregation of stocks amongst the goods lying post fire break out in the premises/godown of the plaintiff. The very nature of stocks/goods of the plaintiff are not only delicate in nature, but are ornamental and have been rendered useless by the fire breakout. If any of the stocks would have been left undamaged by the fire, the subsequent efforts of the fire brigade to douse the fire by fire extinguishing means including water and smoke engulfed in the premises, during and post fire extinguished time, would have rendered the entire glass bangles useless, for either being marketed or for being sent for decoration for further sale. It is also a matter of common knowledge that any CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 52 of /73 Digitally signed by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:23:30 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 such ornamental goods of delicate nature, lying with high heat, foul smell and smoke, would render such delicate products unusable and unsalable. The very report of the surveyor and the record of the insurer, in itself points out at the fallacy and casual approach of denial resorted to by the insurance company in having issued the letter of rejection dated 03.03.2020 vide Ex.DW1/5 solely based on the final recommendation letter/report of the surveyor Ex.PW1/4 which largely places reliance upon the failure of the plaintiff to allow physical survey of segregated goods lying at the premises/godown of the plaintiff. The case of the insurance company, in the facts and circumstances, is not covered within the 'exclusion clause' as per general condition no.6, asserted by the defendant/insurance company.
39. The Court has already considered well settled guiding principal laid down in M/s. Anjaneya Jewellery (Supra) and applying the principles laid down by Hon'ble Supreme Court of India in M/S Modern Insulators Ltd. (Supra), Bharat Watch Company (Supra) and Suraj Mal Ram Niwas Oil Mills (Supra), to the facts of the present case, there is no material on record to establish that the plaintiff has failed to comply any of the necessary terms and conditions of the insurance policy. The duty of the insurance company to exercise good faith is fundamental to the insurance law and the facts and circumstances of each case are to be judged, in the backdrop if plaintiff had defaulted either deliberately or by lack of exercise of diligence or if the plaintiff has failed to cooperate in any manner towards the necessary collection of relevant material by the insurance company to ascertain the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 53 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:23:36 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 claim of the plaintiff. The defendant has not been able to satisfy the Court that its case is covered under any 'exclusion' or 'exemption' in order to absolve the insurer from its liability under the insurance policy Ex.PW1/4, which was admittedly issued by the defendant/insurer company to the plaintiff, in respect of the premise/godown of the plaintiff and the unfortunate fire breakout at the premises of the plaintiff has not been alleged or attributed to any of the inaction or negligence of the plaintiff. The impossibility of availability of segregated material from the stocks of the plaintiff, as demanded by the insurance company, have been hit by impossibility due to nature of stocks, directions of police authority to remove goods and of course the bonafide impression that the physical survey on behalf of defendant/insurance company, as already been conducted on 05.11.2019 as admitted by the insurance company and also forms part of the surveyor report Ex.DW1/2.
40. In view of the aforesaid facts and reasons, defendant has not been able to discharge the burden to prove whether the claim against insurance company amounting to Rs.60,00,000/- was rightly declined by the defendant.
41. Accordingly, issue no.1 is decided against the defendant and in favour of the plaintiff.
ISSUE NO.4
4. Whether there is no privity of contract between the plaintiff and defendant no. 3 and whether defendant no. 3 is not liable ? OPD3.
Digitally signed by PREETIPREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:23:41 +0530 CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 54 of /73 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
42. The present suit has been filed by the plaintiff against the defendants with defendant no.3 in the array of parties as surveyor, who was assigned the claim of the plaintiff and was in communication with the plaintiff throughout the dealings, which led to the rejection of claim of the plaintiff vide survey report dated 30.12.2019 vide Ex.DW1/2.
43. A defence has been raised by the defendant on the ground that defendant No.3 is a licensed Independent Surveyor (Fellow Surveyor), appointed by the IRDA and was appointed by defendant no.1 on 04.11.2019 to conduct a survey of the loss suffered by the plaintiff. It has been submitted that defendant no.3 conducted the survey as per rules and submitted his report before the Insurance Company. It is further averred that the report by Defendant No.3 is not binding on the insurance company. If the insurance company finds the report lacking in credibility or adequacy, it is within their right to appoint another surveyor or conduct their own assessment. Thus, Defendant No.3 had a very limited role, which was carried out fairly and in accordance with the applicable rules and regulations.
44. It is vehemently denied that the defendants, as service providers, failed to deliver the promised services at the time of issuing the policy. Furthermore, it is denied that defendant no.3 is a service provider to the plaintiff, as defendant no.3 has not provided any services to the plaintiff nor charged him any fees. There is no privity of contract between the plaintiff and defendant no.3. It is further averred that there was nothing to settle between the plaintiff and defendant no.3, as dispute, if any, lies solely between the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 55 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:23:49 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 plaintiff and defendant no.1 and 2. Defendant no.3 has been unnecessarily dragged into the present litigation and that defendant no.3 acted solely in a professional manner, and no unfair trade practices were adopted by him.
45. It is the case contended by ld. Counsel for plaintiff that defendant no.3 has not stepped into the witness box to discharge the onus of his defence. It is further contended that the repudiation claim of the plaintiff was due to carelessness and negligence of defendant no.3 and that he be held jointly and severally liable to the claim of the plaintiff.
46. During course of arguments, ld. Counsel for defendant no.1 has submitted that insurance policy in question and a contractual obligations arising out of the insurance policy, are between the plaintiff and defendant no.1 and further conceded that defendant no.3 was nominated as surveyor of defendant no.1 and accordingly was indemnified by defendant no.1 and did not have any personal liability towards the insurance policy.
47. Keeping in view the admission of liability, if any, towards the claim of the plaintiff by the insurance company and further proved fact vide insurance policy Ex.PW1/4 that there were contractual obligations between the plaintiff and the defendants no.1/2, the plaintiff has not been able to substantiate any personal liability of defendant no.3 towards the plaintiff, against the insurance policy in question. It is not the case before the Court where the present suit has been filed by the plaintiff on the basis of any malfeasance or damages for malafide actions of defendant no.3, but is purely based on the claim of the plaintiff, pursuant to Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 56 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:23:55 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 his insurance policy Ex.PW1/4.
48. Accordingly, plaintiff has not been able to prove the case of any personal liability of defendant no.3 towards the plaintiff, in respect of the present Suit.
49. Issue no.4 is disposed of in favour of defendant no.3, accordingly.
ISSUE NO.2
2. Whether the plaintiff is entitled to claim amount with interest @ 12% per annum amounting to Rs. 67,20,000/- till the date of filing of the suit? OPP.
50. Before adjudicating upon the present issue, it is pertinent to mention that vide orders dated 22.02.2022, application U/O 1 Rule 10 CPC filed on behalf of plaintiff, seeking deletion of defendant no.2, on the ground of not a necessary party, was allowed and accordingly, defendant no. 2 was deleted from the array of the parties.
51. The present suit has been filed by the plaintiff as sole Proprietor of a business operating under the name and style of M/s. Laxmi Brand, at his rental premises at Naya Rasoolpur, Saiyad Wala Road, Gali No. 6, Kartar Nagar, Firozabad, Uttar Pradesh- 283203. Nature of business of plaintiff involves execution of various types of decoration work on glass bangles, after sourcing them in raw or semi-finished form, from manufacturers. The present claim is based on assertions of the plaintiff that he obtained CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 57 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:24:03 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 Standard Fire and Special Peril Insurance Policy bearing No. 31280011190100000225 from the defendants, covering stocks and stocks in process of all kinds, as well as other goods related to the trade. The policy, issued by the insurance company, is effective from 5:52 PM on 09.08.2019 to 08.08.2020, with a sum insured of Rs. 60,00,000/- (Rs. Sixty Lakhs Only). The said insurance policy has been duly tendered by plaintiff/PW1 as Ex.PW1/4 and is not the subject matter of dispute. As regards, its issuance and insurance cover of the premises for the goods claim. The unfortunate fire at the premises of the plaintiff broke out on the intervening night of 31.10.2019 and 01.11.2019, which was immediately reported to fire service on which, fire was doused by the fire department which took about two hours to control the fire. Fire led to heavy smoke and use of water to douse fire caused severe damage to the goods stored which were glass bangles primarily and it is also a matter of record that the defendant/insurance company was intimated about the loss by insurance agent on 02.11.2019 after the plaintiff informed its agent on the very next date i.e. on 01.11.2019. The police intimation report dated 01.11.2019 has been relied upon and has been proved as Ex.PW1/5. The police registered the incident as a General Diary (GD) entry, recorded as GD Entry No. 052 dated 02.11.2019. The entry in General Police Diary, dated 01.11.2019, regarding fire has also been duly proved and tendered as Ex.PW1/6.
52. The further relevant facts pertaining to the issue is that email/letter dated 04.11.2019, regarding appointment of surveyor has been proved and tendered as Ex.PW1/8, pursuant to which, a CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 58 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:24:10 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 surveyor report was prepared by the surveyor, which has been relied upon as surveyor report dated 30.12.2019 vide Ex. Ex.DW1/2 as relied upon by defendant/insurance company. In the meanwhile, there were alleged communications between the plaintiff and the surveyor and the insurance company, whereby the surveyor demanded the plaintiff to segregate the damaged material from the sound/saved material and issued letters of requests(LOR) dated 11.12.2019 and 26.12.2019. It was informed to the plaintiff that the surveyor had provisionally limited the claim of the plaintiff as per the observations in his initial site survey done/conducted on 05.11.2019 and assessed the provisional loss caused to the plaintiff after deducting the salvage value @5%. As per the initial survey report, the provisional loss was assessed on behalf of insurer at Rs.9,80,650/-. After deduction of the salvage value, the provisional loss adjustment was computed to Rs.9,31,617/-. However, the subject matter remained unresolved by the insurance company as the surveyor continued to dispute the claim of the plaintiff on the ground that he was yet to physically verify the salvage, after compliance by the plaintiff, in regard to segregation of stocks into the destroyed material and the saved/sound material.
53. In the meanwhile, plaintiff was constrained to dispose of the burnt goods lying at his premises/godown, in view of the police directions proved vide police memo dated 10.11.2019 vide Ex.PW1/9, which as discussed herein-above in the judgment, remains undisputed and unchallenged. There has been no case put forth by the defendant, denying any such police directions issued to the plaintiff or justified any action taken by the insurance company CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 59 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:24:20 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 police authorities offering to collect the entire goods lying at the premises of the plaintiff, in order to ascertain the damage.
54. The plaintiff, through its witness PW1, has further duly proved newspaper clipping vide Ex.PW1/10, certificate of stocks statement prepared by CA from April 2019 to October 2019 as Ex.PW1/20 and has furnished its provisional balance-sheet, as on the date of loss i.e. 31.10.2019 as Ex.PW1/19. It is further relevant to consider the other financial documents relied upon by the plaintiff, which are its GST Returns submitted periodically during the year 2019 vide Ex.PW1/11, Ex.PW1/12 and Ex.PW1/13. The intimation given to the Assistant Commissioner GST dated 06.11.2019 relied upon as Ex.PW1/15 and is again, not a disputed document. The balance-sheets of plaintiff for two preceding years and the relevant year ending 31.03.2019 have been relied upon as Ex.PW1/16 to Ex.PW1/18. The plaintiff, through its witness PW1 has further furnished ledger accounts of all clients of the plaintiff for the period 01.04.2019 to 30.10.2019 as Ex.PW1/24; summary of monthly purchases done during the same period as Ex.PW1/25 and its Ledger account regarding purchases as Ex.PW1/26 alongwith Summary of monthly sales done by the plaintiff for the same period Ex.PW1/27. Ledger account of sales done by the plaintiff for the same period is relied upon as Ex.PW1/28. The plaintiff has further relied upon the certificate regarding damage of complete stocks Ex.PW1/37 and his ITRs for the Assessment Years 2017-2018, 2018-2019 and 2019-2020 are exhibited as Ex.PW1/42, Ex.PW1/43 and Ex.PW1/44.
55. PW1 was cross-examined on behalf of ld. Counsel for CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 60 of /73 by PREETI PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:24:26 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 defendant no.1/defendant no.2 and none of the documents, which have been herein-above relied upon by the plaintiff witness, were challenged during the entire cross-examination. PW1 was cross examined on two dates of hearing, when none of the documents herein-above relied upon by the plaintiff witness, have been confronted or challenged or sought explanation of, from the witness. As such, the documents of stockholdings, GST, IT Returns, Invoices of purchases and ledger account of the plaintiff, remained undisputed and are duly proved on record. PW1 has been cross-examined on limited aspect about value of stocks of the goods and the time of registration of his business with CST in the year 2014 to which the witness duly explained the value of approximately Rs.30 lakhs. Some cross-examination has been done on the aspect of rental value of the premises, which is not relevant for discussion here. The important aspect of cross-examination that emerges is the question put on behalf of insurance company regarding the insurance cover of the premises of the plaintiff, which was answered by PW1 as to have taken for the first time in the year 2018. This answer has not been disputed, which implies that the insurance cover of the policy in question issued by the insurer from 09.08.2019 to 08.08.2020 was not first insurance cover taken by the plaintiff in respect of his stocks/valuables at the business premises.
56. PW1 has been further cross-examined as to why all the documents relied upon by the plaintiff, were not produced and submitted to the insurance company, at the first instance to which the plaintiff duly replied that there was difficulty due to suspension Digitally CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. signed by PREETI Page 61 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:24:33 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 of internet connection and also further that there was some time consumed in obtaining the relevant documents from the authorities and administrative offices. The insurance company has raised dispute to the photographs Ex.PW1/29 filed by the plaintiff in respect of the damaged goods, which aspect the Court has already dealt with, in the former issue. At at the sake of repetition, it is observed that as per the comprehensive surveyor and assessment report dated 30.12.2019 relied upon by he defendant as Ex.DW1/2, the photographs taken on site by the surveyor of the insurance company when he visited the site on 05.11.2019, are enclosed and have been perused. The bare perusal of the photographs of the surveyor report relied upon by the defendants itself demonstrates glaring damage caused to the entire stocks lying at the premises, particularly, in view of the nature of the stocks, comprising of glass bangles substantially. It is worth considering by the Court that the very photographs relied upon by the surveyor on its site visit on 05.11.2019, leaves behind telltale marks of how the surveyor of insurance company deemed it appropriate to seek segregation of stocks from the plaintiff and expect that any usable goods could be salvaged from the burnt stock lying at the premises in a pitiable condition. The very documents relied upon by defendants itself reveals the frivolous and irresponsible attitude of the insurance company, in putting the responsibility upon the plaintiff and pressurising him continuously, to submit the stocks segregation report, which forms basis of rejection of claim of the plaintiff.
57. The Court has further considered the aspect of the defence raised by the defendant in light of the non availability of CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 62 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:24:38 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 the damaged goods for inspection of the surveyor, as the earlier visit of the surveyor on 05.11.2019 was allegedly done provisionally and the assessment of the surveyor was not complete, as per the case of the defendant. In this light the relevant emails issued on behalf of plaintiff by its broker on 10.12.2019, clearly proves the case of the plaintiff that the damaged material lying at the premises emanating a foul and unbearable stinking smell and there were complaints from the neighbourers which escalated to the level of unrest and confrontation. It is perhaps in this backdrop, that the direction was issued by the police authority vide Ex.PW1/9, asking the plaintiff to immediately remove the entire stagnant stocks from the premises, in order to save the environmental conditions, where the premises were located. The plaintiff, has testified that he was left with no choice but to comply and accordingly, removed the entire stocks from the premises for which affidavits of neighbourers regarding occurrence of fire and total loss, have been relied upon as Ex.PW1/22. The same have also not been denied or confronted to the witness, during cross-examination by the defendant. The other relevant document in this regard is an invoice/receipt dated 11.11.2019 issued by the Tractor Owner for disposing of the debris, relied upon as Ex.PW1/32, which is again not a disputed invoice. The perusal of the same infact reveals that the plaintiff had to incur additional costs of paying Rs.1,500/- per round to the Tractor owner and the volume of even the destroyed stocks was so high that the tractor had to be make four rounds and charged total sum of Rs.6,000/- against the removal of debris. It is no one's case before the Court that the debris has any sellable value CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 63 of /73 Digitally signed PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:24:46 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 and it is apparent that the removal of debris in itself was a challenging and cost bearing task upon the plaintiff. It is further not the case before the Court that the insurer surveyor on his visit on 05.11.2019, made any communication to the plaintiff regarding any provision for removal of damaged goods or deposit of the same with the insurance company. No such case has been setup by the defendant before the Court. As per common parlance, insurance company has any right or claim only to the extent of such stocks, which may have been mortgaged with it, which is not the case here. PW1 in his testimony has further relied upon a Certificate Ex.PW1/37 certifying that the entire stocks were damaged by fire, with details of its employees and running of the business timings. This document has also not been confronted to the witness in his cross-examination by defendant.
58. It is case of the plaintiff that defendants made no efforts to collect the requisite documents from the administrative authorities pertaining to the business of the plaintiff from public bodies or tax authorities, at their ends. It is alleged that instead, the defendants were hell bent upon rejecting the claim of the plaintiff and hurriedly relied upon the half baked report of surveyor dated 30.12.2019 relied upon as Ex.DW1/2 and the final recommendation letter of the surveyor dated 29.02.2020 Ex.DW1/4 by which the claim of he plaintiff was negated. The letter of rejection dated 03.03.2020 vide Ex.DW1/5 was unilaterally conveyed to the plaintiff, without assessing the claim of the plaintiff, as per the insurance policy, as alleged.
Digitally signed by PREETICS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI AGRAWAL GUPTA Page 64 of /73 AGRAWAL Date:
GUPTA 2024.10.18 16:24:52 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024
59. It has been the case contended on behalf of plaintiff that defendants, as a service provider, have failed to fulfill their obligations as promised when issuing the policy and further contended that approach of the defendant alongwith the appointed surveyor remained non-responsive and adamant with a pre-
determined to reject the claim of the plaintiff. It is contended that despite repeated communications, they failed to reply to the plaintiff's letters or emails, instead employing delay tactics that led to an unjust claim rejection. This rejection appears to be a deliberate attempt to harass the plaintiff and deny the legitimate payment owed. The defendants have denied the legitimate claim of the plaintiff and have have attempted to repudiate the entire policy by using unfair trade practices. It has been contended that there is no justification in rejecting the claim of the plaintiff as "No Claim"
based on premeditated and autocratic attitude.
60. During further contentions, ld. Counsel for the plaintiff has placed heavy reliance on various well settled authorities of Hon'ble Apex Court to bring home the fact that the burden of proof to establish the claim of the plaintiff lies upon the plaintiff and further that the defence raised by the defendant is rebuttable. This contention needs no further discussion in view of the adjudication herein. During further contentions, the surveyor report has been strongly challenged as unreliable and based on hearsay evidence. It is the case assailed for the plaintiff that the surveyor did not present himself in the witness box and also did not file any affidavit explaining any genuine and bonafide reasons for rejection of claim of the plaintiff. It is prayed that an adverse inference is liable to be CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 65 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:24:59 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 drawn against the defendant for failure to tender evidence of its best witness, as per law provided U/S 114 of the Indian Evidence Act. There is a similar provision under Section 119 of the new Act (Bharatiya Sakshya Adhiniyam, 2023).
61. The claim of the plaintiff has been resisted by defendant on two accounts. Firstly, heavy reliance has been placed on the aspect of failure of the plaintiff to segregate and submit the report of the damaged goods and saved/sound goods and has submitted that the loss quantification was provisionally restricted, as per the initial survey report to the amount to Rs.9,31,617/-, It has been strongly contended on behalf of defendant that the plaintiff has tried to mislead the Court and has tried to cover up his own misdeeds with unauthorised and illegal acts in disposing of and removing the material without any inspection or verification by the surveyor of the segregated damaged material and sound/saved material. A further contention has been submitted in respect of email of the insurer dated 11.12.2019 suggesting that a re-demand was made on behalf of surveyor to the plaintiff for submitting LOR of the physical segregation of stocks. It has been repeatedly considered in the judgment, that an earlier email by the insurer agent on behalf of plaintiff was sent on 10.12.2019 which is an admitted fact on behalf of defendant, clearly conveying the circumstances under which, the damaged goods were constrained to be disposed of by the plaintiff as per the police directions vide Ex.PW1/9. The second aspect that has been raised on behalf of the defendant is non-submission of complete set of documents /information sought by LORs issued by the surveyor. Here are may CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed Page 66 of /73 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:25:06 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 unexplained aspects on the conduct of the insurance company in this light. On perusal of the detailed surveyor report and the email relied upon vide Ex.DW1/3, there is no explanation to the fact as to how the entire claim of the plaintiff was rejected as 'No Claim'. This stand of the defendant is in contradiction to its own initial survey report, who provisionally computed and assessed the loss of the plaintiff, even after deduction of 5% remained salvage, to a sum of Rs.9,31,617/-. The defendant in itself has shown its unreasonable rejection of claim of the plaintiff, in the most autocratic, irresponsible manner, by atleast not limiting the grant of claim of the plaintiff to the amount, that was admitted, as per the own case of the defendant. The Court has considered the detailed documents of the defendant including survey and assessment report Ex.DW1/2, final recommendation report Ex.DW1/4 and letter of rejection dated 03.03.2020 Ex.DW1/5. The facts and circumstances in which the insurance claim of the plaintiff has been dealt with, from the date of fire on the intervening night of 31.10.2019 and 01.11.2019, leading to letter of rejection issued on 03.03.2020 by defendant in itself shows the hasty manner in which the insurance claim of the plaintiff has been dealt with by the defendants. During course of arguments, defendant Counsel has placed reliance upon the necessity of 'time-line' in processing the pending claims with the insurance company. To the mind of this Court, the very submission is contrary to the experience and process that is followed by the Insurance Company when they are dealing with genuine claims and takes substantial time for due assessment and reasonable quantization of compensation against insurance policy CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 67 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:25:11 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 of the insurer. Moreover, in the facts of the present case, the reason of rejection of claim by the insurance company pertaining to loss caused by fire duly covered in the insurance cover in question, is not due to non-submission of documents but primarily due to the persistent demand of the surveyor of the insurer to levy the burden upon the plaintiff for segregation of bad and good stocks, which was impossible, due to the widespread fire and nature of goods involved.
62. Issue no. 1 has already been decided against defendant no.1 to the fact that the defendant has failed to satisfy the Court how any terms and conditions of the insurance policy or facts and circumstances or operation of law, which disentitles the plaintiff to get the claim as per the insurance cover/insurance policy issued vide Ex.PW1/4, issued by the insurance company in favour of plaintiff. As considered, the insurance policy pertaining of Standard Fire and Special Peril Insurance Policy Ex.PW1/4, was issued by defendant in favour of the plaintiff against goods/stocks and ancillary damage that may be caused to his business premises by several factors including standard fire, which is the case herein.
It has already been considered that neither by way of averments or by way of cross-examination of the plaintiff witness or by way of its affirmative testimony, defendant has put any case before the court about challenge to the cause of fire at the premises of the plaintiff. There have been no communications between the parties in respect of cause of fire, no investigation by the insurance company regarding any alleged sabotage and the proved facts remain that the unfortunate fire brokeout at the premises of the CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 68 of /73 PREETI AGRAWAL GUPTA AGRAWAL Date:
GUPTA 2024.10.18 16:25:17 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 plaintiff, for causes beyond the power and control of the plaintiff. It is also proved that there was a valid insurance policy cover of the business loss that may be incurred by way of fire during the relevant period to the extent of the policy capped at Rs.60 Lakhs. It may be further pertinent to observe the mannerism in which any insurance policy is issued, inherently involves due diligence regarding the stocks statement and extent of business, of any business enterprises, before an insurance cover policy is issued by the insurance company. It shall not be in place for the defendant to challenge that the plaintiff at the relevant time, has been making any exorbitant claim or that the stocks to the tune as claimed by plaintiff, were not found on the premises of the plaintiff or destroyed by Fire, in the relevant fire. Furthermore, Court has meticulously considered all the documents of the plaintiff pertaining to its stocks statements, GST registration, IT returns, Vendor Invoices and balance-sheets. The perusal of finance documents reveal a consistent/sustained increase in business of the plaintiff since its inception, every year and the plaintiff has also been submitting requisite GST as per the sales figures, which reflect that the plaintiff was engaged in a well settled voluminous business to glass bangles as a well settled business enterprise, at the location having special fame of such type of business, for manufacturing of glass bangles and the decoration thereupon. It has also been considered by the Court that the nature of goods of the plaintiff involving glass bangles and ornamental decoration thereupon, are not such, where they could be saved products in the wake of widespread fire, smoke and sludge, consequent to the fire Digitally signed by CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI Page 69 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:25:23 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 broke-out at the premises of the plaintiff. There are no facts and circumstances that can justify denial of the claim of the plaintiff which was duly covered as per the insurance policy bearing no.31280011190100000225, from 09.08.2019 till 08.08.2020, vide Policy Ex.PW1/4. The plaintiff has been successful in proving its entitlement to claim as per the insurance cover issued by defendant no.1/2. Admittedly the insurance cover was issued for a sum of Rs.60,00,000/- and it has been the case of the insurance company that it is a case of 'under cover' which is in itself an arguments which goes against the defendant's case. The plaintiff has duly proved its case by preponderance of probabilities, as per law, to prove the issue in its favour for entitlement to payment of Rs.60,00,000/- as the insurance compensation payable, by defendant no.1 in favour of the plaintiff.
63. Accordingly, issue no.2 is decided in favour of the plaintiff and against defendant no.1.
64. The adjudication on the aspect of claim of issue of shall stand merged with the next issue i.e. Issue no.3.
ISSUE NO.3
3. Whether plaintiff is entitled to interest pendent lite and future and if so, at what rate ? OPP.
65. Plaintiff has claimed that defendants are jointly and severally liable to pay to the Plaintiff the amount of Rs.60,00,000/- as principal amount plus Rs.7,20,000/- as interest @ 12% p.a. w.e.f.
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 70 of /73
Digitally signed by
PREETI PREETI
AGRAWAL AGRAWAL GUPTA
Date: 2024.10.18
GUPTA 16:25:30 +0530
(PREETI AGRAWAL GUPTA)
District Judge (Commercial Court)-01
North-West/Rohini/New Delhi.
18.10.2024
29.02.2020 till filing of the Suit, totaling to Rs. 67,20,000/-. A further interest @18% p.a. has been claimed from the date of filing of the Suit till its realization.
66. Defendant has denied the entitlement of the plaintiff, if any, regarding any interest amount. It is admitted that the sum insured under the policy was Rs.60,00,000/-. It is contended that an interest component of 12% has been added to this amount, bringing the claimed total to Rs.67,20,000/-. It is further contended that the plaintiff is seeking unjust enrichment by adding an additional interest rate of 18% on the already inflated claim of Rs.67,20,000/-. Furthermore, it is submitted that indemnification for loss of earnings is beyond the scope of coverage, provided by the policy in question. Additionally, the request for further interest @ 18% would effectively compound the interest on the sum insured of Rs.60,00,000/-, resulting in unjust enrichment for the claimant. Therefore, it is submitted that the plaintiff is not entitled to any interest on claimed amount, as his claim has already been rejected, on valid grounds.
67. the plaintiff has not supported its claimed interest @12% per annum from the defendant on the principal amount of Rs. 60,00,000/- by any contractual obligations or precedent. There is no specific stipulation/clause of accrued interest in favour of the plaintiff and against the defendant, to bind the defendant, without any intending contractual term qua interest between the parties, as proved by plaintiff. However, it shall be justified to allow the plaintiff to claim reasonable interest to compensate the non receipt of a valid insurance claim, despite due insurance cover of the peril Digitally signed by CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. PREETI Page 71 of /73 PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date:
2024.10.18 16:25:35 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 and loss suffered by him. The Court is to take a pragmatic and equitable view depending upon the facts and circumstances of each case.
68. It is considered that Defendant is in the business of Insurance and the present claimed interest is due to failure of the defendant to honour the insurance cover of the plaintiff, as per policy. It is considered that fire broke out on intervening night of 31.10.2019 and 01.11.2019 and there was total rejection of claim of the plaintiff by the insurance company vide Surveyor Report dated 30.12.2019 (Ex.DW1/2), Final Recommendation letter of Surveyor dated 29.02.2020 (Ex.DW1/4 and Final letter of rejection 03.03.2020 (Ex.DW1/5). A period of more than 4 ½ years has been have lapsed, since the rejection of the claim and the very purpose of procuring the insurance from the Insurance Company may get frustrated to a businessman for want of necessary funds to run the business forthwith. It is case of the plaintiff that the defendant unreasonably withheld the outstanding amount to gain monetarily from the withheld amount.
69. In the fact and circumstances of the case, it shall be just and reasonable to allow the plaintiff an interest @ 9% per annum, in terms of section 34 CPC, in synchrony with the prevailing business rate of interests and in the facts and circumstances of the case, from the date of filing of the suit till the date of realisation.
70. Accordingly, Issue no.3 is decided in favour of the plaintiff and against defendant no1.
CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Digitally signed by PREETI Page 72 of /73 PREETI AGRAWAL AGRAWAL GUPTA Date:
GUPTA 2024.10.18 16:25:42 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 ISSUE NO.5
5. Relief.
71. Keeping in view the above findings, suit of the plaintiff is decreed in favour of the plaintiff and against the defendant no.1 for a sum of Rs.60,00,000/- alongwith interest @ 9% per annum, in terms of Section 34 of CPC, from the date of filing of the Suit till its realisation.
72. Plaintiff shall be entitled to costs of the suit as per law.
73. Decree sheet be drawn accordingly.
74. File be consigned to record room, after due completion.
Announced in the open Court today Digitally signed on this 18th day of October, 2024 PREETI by PREETI AGRAWAL AGRAWAL GUPTA GUPTA Date: 2024.10.18 16:25:56 +0530 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024 CS (Comm.) No.46/2021 Sh. Udai Veer Singh Vs. s New India Assurance Company Ltd. & Anr. Page 73 of /73 (PREETI AGRAWAL GUPTA) District Judge (Commercial Court)-01 North-West/Rohini/New Delhi.
18.10.2024