Decided on July 16,2020

Mohak Carpets Pvt. Ltd. Appellant

Referred Judgements :-



V.K. Jain, J. - (1.) The complainant company is engaged in the business of the manufacturing of carpets. The company obtained a Standard Fire & Special Perils Policy from the opposite party, for the period from 08.10.2014 to 07.10.2015, for a sum assured of Rs.23,75,00,000/-. A fire broke out in the factory of the complainant on 20.2.2015 and the complainants claims to have suffered huge losses, on account of the said fire. A claim of Rs.13,62,74,059/- was submitted by the complainant to the insurer. A surveyor was appointed by the insurer, who assessed the loss at Rs.3,13,76,526/- . The surveyor also reported that the insured had violated condition No.1 and 8 of the insurance policy.
(2.) The insurer vide its letter dated 20.4.2017 repudiated the claim. The aforesaid letter, to the extent it is relevant, reads as under: "The surveyor has examined the auditor report in respect of the relevant period. It was noticed by the surveyor that in the auditor reports it has been specifically mentioned that insured has over valued their current assets and there are number of doubtful debits which had arisen due to over billing and invoices. The said report was submitted by him after examining the balance sheet dated 31.3.2014. It was further noticed that you had even not submitted the stock statement after 31.04.2014 to the financier M/s. Central Bank of India. Mr. V.K. Madan, Chief Manager has visited the insured premises and it was noticed that although stock of Rs. 2 crores was lying in the factory but many machines were lying ideal. The surveyor even made detailed analysis of purchase and sales made out by you from 01.4.2014 to 20.2.2015 and lots of variation as noticed. The surveyor has concluded that the figures given by you relating to stock available is based upon wrong consideration and wrong motives. The said assessment was made upon the valid basis as the company was not making much profit accordingly there was no occasion for holding large inventory of stock and raw material. Even as per the reports of the statutory auditors the stocks were overvalued on 31.3.2014 for a sum of Rs.3.32 crore. The report along with all the documents as submitted by the surveyor was examined by the company. The company after minutely examining the entire record has reached the conclusion that the coverage was obtained by misrepresentation. The overvaluation as carried out in respect of stock was apparent. The condition No. 1 of the policy under the heading of General Conditions states :- 'This policy shall be voidable in the event of misrepresentation, mis-description or nondisclosure of any material particular. Similarly Condition No.8 of the policy states as under: 'If the claim be in any respect fraudulent or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under this policy shall be forfeited." Since the breach which was committed by you was fundamental in nature accordingly no benefits under the policy are payable and the claim stands repudiated."
(3.) The complainant sent a letter dated 01.5.2018 to the insurer seeking reconsideration of the claim. Vide a detailed letter dated 27.6.2018, the insurer rejected the representation and reiterated the repudiation already made vide its letter dated 20.4.2017. Being aggrieved from the rejection of the claim, the complainant is before this Commission by way of this consumer complaint.;

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