STATE CONSUMER DISPUTES REDRESSAL COMMISSION
OF TELANGANA : AT HYDERABAD
C.D.NO. 73 OF 2003
Between :
Ambuja Laboratories Limited,
Regd. & Admn. Office at D.No.5-9-1112,
Church Road, Gunfoundry, Hyderabad.
Rep. by its Director, Dr. S.Prakash Reddy. …..Complainant
And
- United India Insurance Co. Ltd.,
24, Whites Road, Chennai,
Rep. by its Chairman and Managing Director.
- Divisional Manager, United India Insurance Co., Ltd.,
Divisional Office IV, Posnett Bhavan,
Church Buildings, Tilak Road, Hyderabad – 500001.
- Sr. Branch manager,
United India Insurance Co., Ltd.,
Branch Office, IInd Floor, Church Buildings,
Tilak Road, Hyderabad – 500001. ….Opposite parties
Counsel for the Complainant : Sri K.Sitaram & K.Appadhara Reddy
Counsel for the Opposite parties : Sri V.Sambasiva Rao
Coram :
Hon’ble Sri Justice B.N.Rao Nalla, President
&
Sri Patil Vithal Rao, Member
Tuesday, the Twenty Fifth day of October
Two thousand Sixteen
Oral Order : (per Hon’ble Sri Patil Vithal Rao, Member)
***
The complainant is a Limited Company managed by three Board of Directors. The present case has been filed through one of its directors by contending, in brief, that the company obtained an insurance policy from the opposite parties for a period of one year from 11.10.2000 to 10.10.2001 for a sum of Rs.72,00,000/- covering its building, machinery with accessories and stocks. On 25.03.2001 at about 2-00 a.m., the complainant company suffered a huge loss to the tune of Rs.54,96,575-30 ps., on account of a fire accident due to short circuit. The police, MRO., and fire services department investigated into the matter of issued certificates showing the cause of fire was of electrical origin. When the complainant company submitted a claim for the above noted amount, the opposite party no.3 appointed a surveyor and he assessed the loss to the tune of Rs.43,67,317/-. The further case of the complainant company is that when it’s Managing Director Sri P.V. Krishna Reddy was bedridden due to psychotic depression during the second week of March, 2002, the officers of the opposite parties obtained his signature on a typed letter by misrepresentation as if on account of his personal reasons he intended to withdraw the claim with regard to the fire accident. Thereafter, basing on the said letter dated 11.03.2002, the opposite parties closed the claim by marking a copy to the Chief Manager, SBI., Saifabad Branch, Hyderabad with which the machinery and stock of the complainant company were under hypothecation. The complainant company has further contended that when the other Directors of it came to know about the said fact, they held a meeting on 09.09.2002 and condemned the action of the Managing Director and took steps to reopen the claim by addressing a letter to the opposite party no.2 on 12.09.2002 and also informed about it to the bank. As the opposite parties did not reopen the file and failed to settle the claim, the complainants have filed the present complaint to declare the letter of repudiation dated 19.03.2002 of the opposite party no.3 as arbitratary, illegal and void and to direct the opposite parties to pay a sum of Rs.18,52,482.30 ps., towards compensation with interest and costs.
2. The opposite parties resisted the case by way of filing counter on the grounds, interalia, that on receipt of the claim of policy from the complainant company, they appointed Mr. Zuber, a surveyor to investigate into the matter and that as per his report the complainant company had created fake and fabricated bills of purchase of machinery and also created documents as if they supplied material to the companies which were non existing. As per condition no.8 of the fire “C” policy the opposite parties are not liable for such fraudulent claims and that the complainant company accepted the same and withdrew the claim by the letter dated 12.03.2002 voluntarily. Therefore, the claim was rightly repudiated. The alleged ill-health of Sri P.V.Krishna Reddy, the Managing Director of the complainant company, is also incorrect. For all these reasons, the complainant company cannot attribute deficiency in service on the part of the opposite parties and that as such they prayed to dismiss the complaint with costs.
3. During the course of enquiry the complainant company has filed evidence affidavit of its Commercial Director and relied on Ex.A1 to A46 to substantiate the claim. The opposite parties ,in defense, filed affidavits of evidence of their Senior Divisional Manager, Senior Branch Manager and the Surveyor, Mr. Zuber Alikhan and Exs.B1 to B14.
4. After due enquiry into the matter this Commission by the order dated 03.11.2006 allowed the complaint by setting aside the repudiation letter dated 19.03.2002 of the opposite parties and directed them to pay a sum of Rs.43,67,317/- with interest @ 9% p.a., from 19.03.2002 till the date of realization with costs of Rs.10,000/-.
5. Aggrieved by the said order the opposite parties preferred F.A.No.81/2007 and the Complainant Company preferred F.A.No.338/2007 before the Hon’ble National Consumers Disputes Redressal Commission, New Delhi. By the order dated 17.02.2016, the Hon’ble National Commission allowed both the appeals by setting aside the order dated 03.11.2006 passed by this Commission and remanded back the matter to decide the amount of compensation by a speaking order after hearing both the parties. This is how the matter came up before this Commission for fresh disposal with regard to the quantum of compensation.
6. We have perused the written arguments filed by both the parties and heard the learned counsel.
7. It is not in dispute that the complainant company obtained a fire policy for an amount of Rs.72,00,000/- on 11.10.2000 vide Ex.A1(=B13) for a period of one year from 11.10.2000 to 10.10.2001 and that a fire broke out on 25.03.2001 at about 2-00 a.m., causing extensive damage to the stocks and machinery of the complainant company. As per the certificates issued by the Police, MRO., Fire service Department and A.P.TRANSCO., the cause of the fire was of electrical origin. It is to be noted that, the stocks and machinery of the complainant company were hypothecated with the SBI, Saifabad, Hyderabad.
8. When the complainant company submitted a claim with the opposite parties for a sum of Rs.54,96,575.30 ps., the opposite parties appointed one M/s. Teccons and Co., as a surveyor to assess the damage. Evidently the said agency visited the premises of the complainant company on several occasions and assessed the net loss at Rs.43,67,317/- after deducting the depreciation of Rs.3,34,452/- under insurance of Rs.4,52,348/- and worked out salvage value at Rs.41,600/-. This agency also confirmed the cause of fire accident as electrical short circuit. Ex.A46 is the said survey report dated 18.06.2001. But surprisingly the opposite parties, in their written version, did not whisper anything about this fact.
9. It is to be noted that, without considering the survey report stated above, the opposite parties have appointed one Mr. Zuber, as an investigator to investigate into the matter. The complainant company has specifically stated that the said investigator submitted his report after the alleged investigation without notice to them. The opposite parties did not adduce any evidence to rebut this claim. As per the said investigation report dated 08.03.2002 under Ex.B14, the claim of the complainant company was based on false and fabricated documents and that actual value of the damaged raw material was only worth Rs.10,00,000/- but the complainant company claimed the same at Rs.35,00,000/- and that the invoices and bills pertaining to the transactions between the complainant company and one Ridhi Siddhi Enterprises, M/s. Pramnik Traders Co., M/s. Vipul Trading Co., M/s. R.V.Chem., Progress Shipping Centre, M/s. Arunodaya Enterprises and Beta Engineers were not genuine. To rebut this allegation and to be establish the claim, the complainant company has filed necessary affidavits of the competent persons under Exs.A41 to A45 with regard to the said transactions. It is also to be noted that the amounts covered by some of the bills were paid through the bankers of the complainant company. This fact is evident from some of the letters addressed by the bank under Exs.A34, A35, A38 to A40. No doubt, the opposite parties have filed copies of letters from the Sale Tax Department, Mumbai and Daman under Exs. B1 to B5, B8, B9 & B12 but, no any affidavits of evidence of the personnel concerned of the said department have been placed on record. It is also significant to note that, the opposite parties did not assign any reason which necessitated to them to appoint an investigator without discarding their own surveyors report already on record. On the other hand they suppressed the said surveyor’s report, which is a material piece of evidence. All these facts and circumstances certainly caste a doubt about the attitude and conduct of the opposite parties in discarding a valid claim of the complainant company. In this view of the matter we find no reason to accept the documentary evidence under Ex.B1 to B12 filed and relied on by the opposite parties but the same have to be discarded.
10. The Surveyor M/s. Teccons & Co., in its report, Ex.A6 has given all the necessary particulars with regard to the value of damage and came to a conclusion with sound reasons. Therefore, the same has to be accepted and relied on. As per the said report, the complainant company has sustained a damage and loss to the tune of Rs.43,67,317/-. When the same was covered by the valid Insurance Policy repudiating the same, in our considered opinion, certainly amounts to deficiency in service. With regard to the letter of withdrawal of claim addressed by Mr. P.V.Krishna Reddy, Managing Director of the complainant company this commission has already held as unsustainable under Section 291 of the Companies Act and the same was also confirmed by the Hon’ble National Commission. Therefore, the same need not be adjudicated, once again. For all these reasons the closing of the claim of the complainant company by the opposite parties through the letter, Ex.A30 is an act of illegality. In view of the afore discussion we hold that the complainant is entitled for a sum of Rs.43,67,317/- with a reasonable interest thereon towards compensation.
11. In the result, the complaint is allowed directing the opposite parties jointly and severally to pay to the complainant company a sum of Rs.43,67,317/- with interest @ 9% p.a., from the date of closure of the claim i.e., 19.03.2002 till the date of realization with costs of Rs.10,000/-.
Time for compliance Four weeks.
PRESIDENT MEMBER
…10.2016
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Complainant : For Opposite parties :
Affidavit evidence of, Affidavit evidence of
Dr.S.Prakash Reddy, Commercial 1.Sri K.Muralikrishna,
Director of the complainant company Senior Divisional Manager
2. Sri L.Narayana,
Senior Branch Manager,
3. Mr. Zuber Alikhan , Investigator by M/s. Ambuja Laboratories Ltd.,
EXHIBITS MARKED
For Complainant :
Ex.A1 is the copy of fire policy schedule no.050405/11/13/16/1156-2000, dt.11-10-2000.
Ex.A2 is the copy of First Information Report of Cr.No.87/2001 along with Panchanama, dt.25.03.2001.
Ex.A3 is copy of Request made by M/s. Teccons & Co., to the complainant company, dt.25.03.2001.
Ex.A4 is the copy of Letter addressed to opposite party No.3by the complainant, dt.25.03.2001.
Ex.A5 is the copy of letter addressed to Inspector of Factories, dt.26.03.2001.
Ex.A6 is the copy of letter addressed by S.O., of Police to Dy. Chief Electrical Inspector, dt.27.03.2001.
Ex.A7 is the copy of Certificate issued by the Fire Service Department, dt.29.03.2001.
Ex.A8 is the copy of Extracts of the Board of Directors meeting held on 30.03.2001.
Ex.A9 is the copy of Information furnished to the M/s. Teccons & Co., by the complainant, dt.29.03.2001.
Ex.A10 is the copy of Fire Insurance Claim form, dt.30.03.2001.
Ex.A11 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.02.04.2001.
Ex.A12 is the copy of letter addressed to M/s. Teccons & Co., - copy to the opposite party dt.03.04.2001.
Ex.A13 Certificate issued by the Mandal Revenue Officer, dt.04.04.2001.
Ex.A14 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.06.04.2001.
Ex.A15 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.07.04.2001.
Ex.A16 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.11.04.2001.
Ex.A17 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.16.04.2001.
Ex.A18 is the copy of Requisition by the Police Department to APTRANSCTO, dt.17.04.2001.
Ex.A19 is the copy of letter addressed by M/s. Teccons & Co., by the complainant, dt.19.04.2001.
Ex.A20 is the copy of letter written by APTANSCO to the Inspector P.S. Abids Road, dt.28.04.2011.
Ex.A21 is the copy of Investigation Certificate by the S.I of Police, P.S. Abids Road, dt.29.05.2011.
Ex.A22 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.21.06.2011.
Ex.A23 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.20.07.2011.
Ex.A24 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.8-8-2011.
Ex.A25 is the copy of letter by the opposite party no.3 to the complainant, dt.21.08.2011.
Ex.A26 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.21.08.2011.
Ex.A27 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.23.08.2011.
Ex.A28 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.11.10.2011.
Ex.A29 is the copy of letter addressed to the opposite party no.3 by the complainant, dt.11.03.2011.
Ex.A30 is the copy of letter addressed to the opposite party no.2 by the complainant, dt.19.03.2011.
Ex.A31 is the copy of letter addressed to the opposite party no.2 by the Asst., General Manager, State Bank of India, dt.4.04.2002.
Ex.A32 is the copy of Explanation statement submitted by Sri P.V.Krishna Reddy to the Board of Directors, dt.30.06.2002.
Ex.A33 is the copy of Medical certificate along with medication of Sri P.V. Krishna Reddy by Dr. N.Bhuvaneswari, dt.05.07.2002.
Ex.A34 is the copy of letter addressed to the Regional Manager, United India Insurance Co., Ltd., by the Asst. General Manger, State Bank of India, dt.07.08.2002.
Ex.A35 is the copy of letter addressed to the opposite party no.3 by the Asst., General Manager, State Bank of India, dt.9.08.2012.
Ex.A36 is the copy of the Board Resolution of the board meeting, dt. 09.09.2002.
Ex.A37 is the copy of letter addressed to the opposite party no.2 by the complainant along with postal receipts and acknowledgments, dt.12.09.2002.
Ex.A38 is the copy of letter addressed to the opposite party no.2 by the Asst., General Manager, State Bank of India, dt.25.01.2003.
Ex.A39 is the copy of letter addressed to the opposite party no.2 by the complainant along with postal receipts and acknowledgments, dt.20.06.2003.
Ex.A40 is the copy of letter of the SBI to M/s. Beta Engineers, dt.29.08.1998.
Ex.A41 is the copy of Affidavit-cum-declaration of Bhaskar Datatrey, partner of M/s. Beta Engineers, dt.29.06.2005.
Ex.A42 is the copy of Affidavit-cum-declaration of V.Bhaskara Rao proprietor of M/s. S.L. Drugs & Pharmaceuticals, dt.21.06.2005.
Ex.A43 is the copy of Affidavit-cum-declaration of Sri Raj Kumar, Manager of Classic Commercial Corporation (supplier of products of Shri Riddhi & Siddhi Enterprises, Mumbai), dt.22.06.2005.
Ex.A44 is the copy of Affidavit-cum-declaration of K.Raghavendra Rao, supplier of R.V.Chem, dt.21.06.2005.
Ex.A45 is the copy of Affidavit-cum-declaration of JV Rao, Proprietor of Bio-Win Agencies (suppliers of Vipul Trading Co., Mumbai), dt.22.06.2005.
Ex.A46 is the copy of Final Survey report of M/s. Teccons and Co., Secunderabad, dt.18.06.2001.
For Opposite parties :
Ex.B1 is the copy of letter of Sales Tax Officer dt.23.08.2002.
Ex.B2 is the copy of letter addressed to the Sale Tax Officer dt.20.03.2002.
Ex.B3 is the copy of letter addressed to the Sale Tax Officer dt.07.08.2002.
Ex.B4 is the copy of letter addressed to the Sale Tax Officer dt.20.03.2002.
Ex.B5 is the copy of letter addressed to the Asst. Sale Tax Officer dt.05.08.2002.
Ex.B6 is the copy of letter Form S T IV of Prasad Plastic Industries issued by the Asst. Commissioner of Sales Tax.
Ex.B7 is the copy of letter Form B of Prasad Plastic Industries issued by the Asst. Commissioner of Sales Tax.
Ex.B8 is the copy of letter addressed to the Asst. Sale Tax Officer dt.20.03.2002.
Ex.B9 is the copy of letter addressed to the Asst. Sale Tax Officer dt.05.08.2002.
Ex.B10 is the copy of letter Form S T IV of Prasad Plastic Industries issued by the Asst. Commissioner of Sales Tax.
Ex.B11 is the copy of letter Form B of R.V.Chem. issued by the Asst. Sales Tax Officer.
Ex.B12 is the copy of letter addressed to the Sales Tax Officer dt.20.03.2002.
Ex.B13 is the copy of Fire Policy Schedule along with conditions.
Ex.B14 is the copy of Investigation report.
PRESIDENT MEMBER
25.10 .2016
