Pothani Laxmi & Ors. vs The Oriental Insurance Co. Ltd. & Ors.

1-A khalla stock certificate from the DFO;

P-B Transit Bags;

P-S Transportation;

Permit copies;

Panchanama;

DRO/DFO consolidated report;

Weather report;

Claim of rain; and

other relevant documents A list which, it is significant to note, does not include the filing of any separate "claim form" as a condition for processing the claim. By letter dated 19.02.2001 (Ex.A20), the Complainant's father submitted claim forms in respect of 9 of the 24 policies, clarifying that certain of the required certificates were common documents applicable across all the units.

the complaint was barred by limitation;

the Complainant was not competent to claim the value of the tendu leaves, title to which vested in the forest department;

no material was placed to assess the damage;

the Dy. Conservator of Forest, Allapally Division, had by a letter dated 25.02.2009 stated that the loss to Unit Nos. 51 & 52 was not attributable to rain or flood.

since the matter formed part of a batch of 24 cases, it would consider the documents filed in a connected matter, C.C. No. 197 of 2007 (F.A. No. 635 of 2023), as a common basis for its discussion.

no claim report or survey report was filed by the Complainant in the present case.

Ex.B2 itself showed that the Complainant could not demonstrate the entire extent of the damage to the Surveyor, and there was a complete lack of material to assess the damage.

the amounts already paid and received under protest before 24.08.2002 rendered the complaint, filed on 24.12.2007, barred by limitation, since issuance of a legal notice cannot extend the period of limitation. The State Commission accordingly set aside the order of the District Commission and dismissed the complaint.

A. That the impugned order passed by the Ld. State commission is contrary to law and material on record. It is submitted that the complainant never received the amount from insurance company as observed by the state commission in para no.22&25. No receipts have been filed by the insurance company, The amount of Rs. 65,000/- and Rs.3,26,000/- pertains to Elchil Unit and Yarminar Unit.

B. That the observation that the complainant has not provided any documents in support of his claim for the loss suffered is not correct. The policy risk details are that stock in open Beedi leaves in open Kallas worth Rs.63.45 lacs situated at 48, Udera Allapalli Division, Garchiroli MS EQ risk covered. The complainant submitted all papers required for settlement of the claim.

C. The Ld. Commission failed to appreciate that the insurance company appointed 3 surveyors and the said surveyors assessed the loss and submitted the report to the insurance company for payment of the claim amount. But the insurance company failed to file the survey reports neither before the District forum nor before the state commission.

D. That the complainant has pleaded that the amounts paid and received by them if any, under protest before 24-8-2002 as the entire original documents were with the insurance company. Hence, after receipt of the original documents from the insurance company, the complaint was filed on 24-12-2007.

E. That the Ld. State commission being fact finding court without discussing the documents filed by the parties has set aside the order of the Id. Dist. Forum

F. Non arraying the Dy. Commissioner of Forest as a party to the proceedings is a technical flaw and it can be cured. The complainant filed an application I.A.no.66/2008 for impleadment of the Dy. Commissioner of Forest and the same was allowed vide order dt. 02.01.2009.

G. The Ld. State commission failed to appreciate that the insurance company having appointed 3 surveyors failed to file their reports. Hence, there is an apprehension and presumption that the insurance company is concealing to furnish from crucial information.

H. It is submitted that collection and supplying the Tendu leaves is for a short period and the policy was only for one month and during the subsistence of the policy the complainant sustained the loss due to cyclone effect.

I. The Ld. State commission was not correct in observing that the complaint was barred by limitation and issuance of legal notice cannot extend the period of limitation. In fact, delay has been condoned by the District forum, against the said order the insurance company filed revision petition and the same was dismissed, hence, the insurance company can't raise this issue again.

Business & Policy Details: The complainant engaged in the Tendu leaves contract business and purchased Standard Fire and Special Peril policies to cover risks for stocks kept in open kallas across 24 units.

Occurrence of Loss: Severe cyclones on 21.05.2000, 31.05.2000, and 05.06.2000 damaged the Tendu leaves stored in open kallas, causing significant stock losses.

Surveyor Reports Non-Production: The insurance company appointed three separate surveyors (Laxman Rao, B. Nageshwar Rao, and Mohan) who inspected and assessed the losses. However, the insurer failed to file these surveyor reports before the District Forum or the State Commission, suppressing crucial material evidence.

Submission of Documents: All necessary documents, photos, rainfall certificates issued by MROs, and claim forms were duly submitted to the insurer.

Limitation Issue: The complaint is not time-barred because the delay was already condoned by the District Forum, and a revision petition filed against that condonation order by the insurance company was dismissed. Moreover, the claims were never formally repudiated by the insurer.

Barred by Limitation: The complaints are barred by limitation. The cause of action accrued on or before 27.09.2002 when payments/offers were made/received under protest, whereas the complaints were filed over 5 years later in December 2007. Condonation granted by the District Forum covered only a period of 168 days, leaving an un-condoned delay of 1,750 days.

Non-Filing of Claim Forms & Documents: Out of 24 claims, claim forms were filed in only 9 cases; no claim forms were submitted for the remaining 15 cases. Furthermore, core proof-of-loss documents (e.g., stock certificates, transit bags, transport permits, Panchanama, DFO reports) were never placed on record across the proceedings.

Cause of Loss Outside Policy Scope: Standard Fire and Special Peril policies cover flood/rain damage, but not loss due to fungal infection. Letters from the Dy. Conservator of Forests revealed that the damage in affected units was primarily due to severe fungus attack rather than stocks being washed away by rain/floods.

Limited Revisional Jurisdiction: Under Section 58(1)(b) of the Consumer Protection Act, 2019, revisional jurisdiction cannot be used to re-appreciate facts or re-evaluate evidence when the State Commission's order contains no jurisdictional error or material irregularity.

I. Whether the State Commission erred in reopening and re-determining the question of limitation when the same had already attained finality between the parties?

II. Whether the non-production of the survey reports of the three surveyors appointed by Opposite Parties No. 1 & 2 warranted an adverse inference against them, and whether the State Commission erred in failing to draw such inference?

III. Whether the absence of a separately titled "claim form" in respect of Policy No. 224/2001 was fatal to the claim, in the facts of the present case?

IV. Whether the State Commission erred in placing reliance upon the letter of the Dy. Conservator of Forest dated 25.02.2009 in preference to the contemporaneous documentary evidence, including Ex.B2 and the newspaper reports?

V. Whether the impugned order of the State Commission suffers from any illegality or material irregularity or jurisdictional error within the meaning of Section 58(1)(b) of the Consumer Protection Act, 2019, warranting interference in revision?

It is trite that the revisional jurisdiction of this Commission is confined to cases where the State Commission has exercised jurisdiction not vested in it, failed to exercise jurisdiction vested in it, or acted illegally or with material irregularity. This Commission is equally mindful that a State Commission, exercising first appellate jurisdiction, is duty-bound to address all issues of fact and law that arise before it. However, the said duty must be discharged consistently with the record, and cannot be exercised so as to reopen a question that has already been concluded between the very same parties.

In the present case, the District Commission has, at paragraph 11 of its order dated 20.07.2023, recorded in terms that the delay in approaching it had been condoned, and that the challenge carried by Opposite Parties No. 1 & 2 against the said condonation, in revision before the State Commission itself, was dismissed. This finding has not been shown to be incorrect. Once the question of limitation/delay stood concluded inter partes and had attained finality by dismissal of the Insurance Company's own challenge thereto, it was not open to the State Commission, while examining the substantive appeal against the final order on merits, to collaterally reopen and re-determine the very same question so as to non-suit the Complainant afresh on that ground. The proposition by the State Commission that a legal notice cannot extend limitation, does not assist the Respondents, since the question here is not one of extension of limitation by notice, but of the binding effect of a prior, unsuccessfully challenged, finding of condonation.

It is further relevant that the claim of the Complainant remained neither settled nor repudiated by Opposite Parties No. 1 & 2 at any point of time; correspondence between the parties continued down to the legal notice dated 14.07.2005 demanding early settlement. A deficiency in service arising from failure to settle or repudiate a claim is in the nature of a continuing cause of action, and in the absence of a clear and unequivocal repudiation on record, the complaint filed on 24.12.2007 cannot be said to be so hopelessly time-barred as to warrant interference with a considered finding of the fact-finding District Commission, more particularly one that had already been tested and had survived a revisional challenge. Question No. I is accordingly answered in favour of the Complainant.

It is an admitted position that Opposite Parties No. 1 & 2 appointed not one but three surveyors — Sri Laxman Rao, Sri B. Nageshwar Rao and Sri Mohan — each of whom visited the site and assessed the loss caused to the beedi leaves. Section 64UM of the Insurance Act, 1938, contemplates that a claim of this magnitude be assessed by a licensed surveyor, whose report ordinarily forms the very foundation of the insurer's decision on the claim. Despite this, none of the three survey reports was ever produced by Opposite Parties No. 1 & 2 before the District Commission or the State Commission, notwithstanding that production of the same lay squarely within their power and not that of the Complainant.

The Hon'ble Supreme Court in Sri Venkateswara Syndicate v. Oriental Insurance Co. Ltd., (2009) 8 SCC 507, has held that "an insurer cannot appoint a second surveyor as a matter of course", and, an insurer, cannot appoint multiple surveyors and thereafter withhold the reports of all of them without explanation. The withholding of survey reports by an insurer, particularly where three surveyors were engaged over a period of time, gives rise to an adverse inference under the general principle underlying. Section 114, Illustration (g), of the Indian Evidence Act, 1872 that evidence withheld by a party, if produced, would go against that very party. The District Commission correctly drew such an inference in the present case; the State Commission's approach of penalising the Complainant for the insurer's own failure to produce the survey reports amounts to a material irregularity. Question No. II is accordingly answered in favour of the Complainant.

The requirements communicated by Opposite Parties No. 1 & 2 to the Complainant vide Ex.A15 to A19 comprised nine specific items — khalla stock certificate, transit bags particulars, transportation particulars, permit copies, panchanama, DRO/DFO consolidated report, weather report, claim of rain, and other relevant documents — none of which is a separately titled "claim form". The intimation of loss dated 16.06.2000 (Ex.A6/B2) itself set out the requisite particulars of the loss, and it was on the strength of that very intimation that Opposite Parties No. 1 & 2 proceeded to appoint three surveyors in succession. The decision in Sonell Clocks and Gifts Ltd. v. New India Assurance Co. Ltd., (2018) 9 SCC 784, relied upon by the Respondents, in fact recognises two requirements — timely intimation of loss, and furnishing of particulars reasonably required — both of which stand substantially satisfied on the facts of the present case, unlike a case of complete silence or non-response by the insured.

In these circumstances, the absence of a separately captioned "claim form", a requirement never specifically communicated to the Complainant as a condition for processing this particular claim, cannot by itself be treated as fatal, especially when Opposite Parties No. 1 & 2 continued to correspond with, and process the claim of, the Complainant for years thereafter without ever rejecting it on this specific ground. Question No. III is accordingly answered in favour of the Complainant.

The letter of the Dy. Conservator of Forest, Allapally Division, dated 25.02.2009 — filed as Annexure P-11 to the Revision Petition — was issued nearly nine years after the event of loss and over a year after institution of the complaint. Its author was never examined, nor was the letter proved in accordance with law, nor was the Complainant afforded any opportunity to test its correctness. It is also significant that the complaint against Respondent No. 3, the very author of the said letter, was dismissed by the District Commission for want of any deficiency in service on his part, a finding that has never been assailed by either side and has attained finality. An unproved, untested communication from a third party cannot, in these circumstances, be permitted to outweigh the cogent, contemporaneous documentary record consisting of the newspaper reports (Ex.A2 to A5) of cyclonic rains during the very period in question, and according to para 14 of the District commission order who while relying on Ex.B2 quantified the loss at Rs. 12,75,000/-.

It is further material that Opposite Parties No. 1 & 2 themselves offered part-settlement amounts in respect of two other units — Elchil and Yarminar covered under policies issued for the very same period and the very same cyclonic event, which conduct is difficult to reconcile with a case that no cyclonic damage occurred at all. The State Commission, in placing undue and disproportionate weight on the solitary, unproved letter of the Dy. Conservator of Forest while disregarding this contemporaneous and largely unrebutted material, fell into a perverse appreciation of the evidence on record.

The letter dated 25.02.2009 issued by the Deputy Conservator of Forests, Allapally Division, filed as Annexure P-11, is a reply to the notice issued by the District Commission. It is pertinent to note that the Deputy Conservator of Forests is himself arrayed as Opposite Party No. 3 before the District Commission. As the said letter/reply was furnished in response to a notice issued by District Commission does not constitute a documentary evidence upon which other OP's can rely upon.

Accordingly, Question No. IV is answered in favour of the Complainant.

For the reasons discussed under Questions I to IV above, this Commission is satisfied that the impugned order of the State Commission does not merely reflect a different possible view on re-appreciation of evidence, but rests upon:

an impermissible reopening of a concluded question of limitation.

a failure to draw the adverse inference warranted by the insurer's own suppression of survey reports.

an erroneous premise that a formal claim form was mandatory when the record shows otherwise.

a perverse and disproportionate reliance on an unproved, belated communication from a third party over cogent contemporaneous evidence. Each of these constitutes a material irregularity and a jurisdictional error going to the root of the matter, squarely attracting the exercise of revisional jurisdiction under Section 58(1)(b) of the Consumer Protection Act, 2019, as distinct from a mere re-appreciation of facts.

For the foregoing reasons, this Commission is of the firm view that the impugned order dated 09.10.2025 passed by the Telangana State Consumer Disputes Redressal Commission, Hyderabad, in First Appeal No. 640 of 2023, cannot be sustained and is liable to be set aside, and the order dated 20.07.2023 passed by the District Consumer Disputes Redressal Commission, Karimnagar, in C.C. No. 187 of 2007, is liable to be restored.