ORDER Mrs. Rajyalakshmi Rao, Member — This First Appeal is filed against the order dated 26th October, 1999 of the U.P. State Commission in complaint No. 82/SC/1992. Brief facts of the case are as follows : 2. The Respondent/Original Complainant, Sqd. Ldr. (Retd.) V.K. Mittal is the proprietor of M/s. Veekay Industries. To set up the industry, he obtained a plot in October 1990 from the UP State Industrial Development Corporation, Plot No.G-36 in Industrial Area, Naini, Allahabad. For putting up the building and the machinery, he obtained a term loan from the UP Financial Corporation in November, 1990. One of the conditions of the sanction of the loan is that the building under construction should be got insured right from the beginning, i.e. during the construction stage onwards. Accordingly, he submitted a proposal for insuring the building under construction and the machinery on 12.12.1990 to the Appellants, the Oriental Insurance Company Ltd. The Appellant, Insurance Company issued two cover notes, first one covering the building on 12.12.1990 for an amount of Rs.5 lakhs and the another one covering the machinery on 19.12.1990 for Rs.6.5 lakhs. However, on 29.3.1991 the concrete roof of the building completely collapsed and in the process damaged the machinery also. On the same day a claim was submitted to the Insurance Company which appointed a Surveyor, one Shri B.S. Chawla. However, nothing was heard from the Insurance Company regarding the settlement of the claim. 3. The Complainant issued a legal notice on 2.12.1991. The legal notice mentioned that the Insurance Company is under legal obligation to issue the insurance policy within two months from the date of the cover note and that no such insurance policies were issued till the date of the legal notice. The legal notice also demanded the settlement of the claim. However, as there was no reply, the Complainant filed his complaint with the State Commission in March, 1992. 4. The only issue before the State Commission was whether the insurance policy was issued for a building under construction as pleaded by the Complainant or it was issued only for a completed building as averred by the Insurance Company. The plea taken by the Insurance Company was that the Complainant had suppressed the fact that the building is still under construction when the insurance cover was issued and stated that it was for a completed building. The plea taken by the Insurance Company was that the Complainant had suppressed the fact that the building is still under construction when the insurance cover was issued and stated that it was for a completed building. The Insurance Company issued Fire policy - C for building under construction for which an extra payment has to be paid and Fire policy - A for completed buildings. In this case, Fire policy - A was issued. According to the Insurance Company this clearly shows that at the time of taking the policy, the Complainant misrepresented that it was for a completed building. As there was suppression and misrepresentation of facts, while submitting the proposal, the policy cannot be invoked and no claim is payable. The Insurance Company also argued that the Surveyor had also pointed out that the collapse of the RCC roof was due to faulty design and material failure. 5. Based on the evidence on record, the State Commission held that there was no misrepresentation of facts by the Complainant, that the insurance asked for was for a building under construction and that there was no evidence to show that the collapse of the roof was due to faulty design. Partially allowing the complaint, the State Commission ordered payment of the settlement of the claim of Rs.2,19,000/- with 18% interest per annum from 1.9.1991. They also awarded a compensation of Rs. 30,000/- and costs of Rs.5,000/-. The Insurance Company has come up in an appeal before us. 6. We have carefully gone through the record and heard the arguments of both the parties. There is not an iota of doubt in our minds that the Complainant had proposed insurance cover on 12.12.1990 for a building under construction. There are number of factors in support of this. Annexure - 4/11 (page No.63) is the possession receipt issued by the U.P. State Industrial Development Corporation Ltd. It dearly states that possession of vacant plot No.G-36 was handed over to the Complainant on 27.10.1990. Annexure 4/12 (Page 64) is a copy of the sanction dated 5.11.1990 of term loan by the U.P. Financial Corporation. It indicates that the cost of the proposed factory building would be Rs.4.1 lakhs. Annexure 4/20 (page 72) is a report of the Auditors of the Complainant addressed to UP Financial Corporation showing the investment made by the Complainant during the period 1.5.1990 to 11.12.1990. It indicates that the cost of the proposed factory building would be Rs.4.1 lakhs. Annexure 4/20 (page 72) is a report of the Auditors of the Complainant addressed to UP Financial Corporation showing the investment made by the Complainant during the period 1.5.1990 to 11.12.1990. It shows an expenditure of Rs.1,37,623/- on the building under the construction. Annexure 4/21 shows similar audited expenditure upto 13.1.1991. It says that the cost of the building construction on 13.1.1991 was Rs. 3,57,513/-. Annexure 4/21(a) shows similar expenditure on the building under construction upto 25.2.1991 as Rs. 5,80,166/-. 7. These above documents clearly show that most of the construction took place after December 1990 and upto February, 1991. In addition to all these, the cover note issued on 12.12.1990 (LR No. 45876) shows “Fire insurance of the building, boundary wall, to be constructed at the above address “(Page 62) The cover note (LR N.45877) issued on 17.12.1990 mentions “Fire insurance of machines, tools and other items to be installed in the above factory” (Page 63). In the light of the above documents, it is clear that the building could not have been completed on 12.12.1990 when the insurance policy cover was issued same day (when the proposal was made). 8. Secondly, as correctly observed by the State Commission, before issuing the insurance cover/policy, representatives of the Insurance Company are required to inspect the property and the risks to be insured and satisfy themselves about the condition of the same. If someone on behalf of the Insurance Company has inspected the premises on or immediately after 12.12.1990, they would have clearly seen that there was no completed building on the site. Therefore, it is clear to us that either no inspection was made by the Insurance Company at the time of issuing the cover note, or the plea being taken that the cover note issued was for a completed building is false. 9. Thirdly, the Insurance Company has not issued the policies in question. The Complainant has argued that the Insurance Company is under legal obligation to issue the policies within two months from the date of the cover note. This has not been challenged by the Appellants. Obviously the Appellants were remised in not issuing the insurance policies. 10. Fourthly, the Complainant’s version that the Branch Manager of the Appellants Mr. The Complainant has argued that the Insurance Company is under legal obligation to issue the policies within two months from the date of the cover note. This has not been challenged by the Appellants. Obviously the Appellants were remised in not issuing the insurance policies. 10. Fourthly, the Complainant’s version that the Branch Manager of the Appellants Mr. Malhotra was physically present on the occasion of havan and puja on 17.2.1991 in the roofless incomplete factory alongwith a good number of prominent citizens of the town. This has not been challenged by the Appellants Since only cover note was issued and the policy was never issued, the details of the policy were not made available to the Complainant. The Complainant only knew about the type of policy he demanded vide the proposal form and the total premium which was paid by him as asked by the Appellants. 11. Finally, the report of the Surveyor Shri B.S. Chawla is on record. He states that he visited the site on the day of the collapse of the roof, i.e. on 29.3.1991 and also subsequently, though no details have been given about his subsequent visits. But his report is dated 28.9.1991, i.e. six months after the incident. We do not see any reasons as to why he should have taken so much of time. In addition, no decision was taken by the Insurance Company even after receipt of the report of the Surveyor and till the date of filing of the complaint in March 1992. In the written statement of the Appellant, it is mentioned that the repudiation letter was sent on 14.2.1992. This has been challenged by the Complainant who in his written statement mentions that such a letter was issued only in January 1993. 12. The Complainant filed a claim for Rs. 1,12,000/- as damages to the building and Rs.1,07,000/- as damages to the machinery. The Surveyor has however put the said damages at Rs.85,125/- and Rs. 10,800/- respectively. However, as observed by the State Commission, the Surveyor has not given any cogent reasons as to why the rest of the claim was rejected. The amount claimed by the Complainant is covered by the insurance taken and the allegations made by the Appellants of concealment of fact cannot be believed as evidence on record is in favour of the Complainant. 13. The amount claimed by the Complainant is covered by the insurance taken and the allegations made by the Appellants of concealment of fact cannot be believed as evidence on record is in favour of the Complainant. 13. Under the circumstances, we hold that there is no merit in the appeal. By an order dated 27.1.2000, we have stayed the payment of interest of 18% p.a. and payment of compensation of Rs.30,000/-. We think that the ends of justice would be met if the rate of interest is reduced to 15% p.a. and compensation awarded is increased to Rs.50,000/- for the mental agony caused to the Complainant and the costs incurred to pursue the claim. The Complainant is a retired air force pilot who borrowed money at high costs from the State Financial Institution to put up an industry. However, unfortunately for him, the newly constructed factory building collapsed and as observed by the Surveyor himself, there is a total collapse of the building. If the Insurance Company had cleared the claim in time, the ex-serviceman could have taken some measures to revive his industry. However, due to failure of the Insurance Company, the Complainant has been put to great financial strain. We, therefore, think the above award is reasonable. 14. In view of the above discussion, the appeal is dismissed and the order of the State Commission is modified to the extent that the Appellants will pay interest at 15% p.a. and compensation and costs of Rs.50,000/- within two months from the date of receipt of this order. Appeal dismissed. *******