JUSTICE DEEPA SHARMA (ORAL) THROUGH VIDEO CONFERENCING

1.      The present appeal has been filed by the appellant challenging the order dated 14.2.2020 of the State Commission in complaint case no. 310/2015. 

2.      Caveator is present, the application stands disposed of.

3.      Final arguments on behalf of both the parties are heard.

4.      The brief facts of the case are that the respondent/complainant is carrying on the business of selling and trading of jewellery and gems as proprietor of M/s Ankit Overseas, B-3, First Floor, Shopping Centre, Tagore garden, Delhi.  His business has been expended till Dubai and USA where he is doing his business for the last fourteen years.  He has also been in jewellery and gems export council and had been visiting Dubai and USA for selling his jewellery and gems.  He arranged a trip for USA via Dubai from 16.6.2012 to 25.7.2012 and for that he had also obtained approval from the jewellery and gems export council and the article which has to be carried were identified and its weight was taken.  He was carrying total 332 articles of Diamond jewellery weighing 1566.53 gms, the value of which was Rs.59,48,412.34.  He had also submitted list of invoice to the custom department alongwith the colored photographs of articles he was exporting to USA.  Thereafter, on the verification of the jewellery items, the jewellery was sealed in a box and a shipping bill was also prepared alongwith exchange control declaration (GR).  The sealed boxes then were handed over to the complainant which to carry to the destination.  The appellant was also issued a cover note dated 15.6.2012 which was valid for the period  16.6.2012 to 25.7.2012 covering the risk of the value of the jewellery and gems which were to be carried by the complainant to USA via Dubai.  On 22.6.2012, the complainant reached to Dubai and stayed there till 1.7.2012.  He sold some of the articles and gems worth US$ 5,484.48 in Dubai UAE and also paid duty and thereafter he went reached New York on 1.7.2012 with the remaining articles of the jewellery.   He declared those articles/jewellery in USA to the Customs & Border Protection and also paid custom duties on those articles which were of the value of US $ 1,03,262.  He failed to sell any article in New York.  He then went to Atlanta on 7.7.2012 and took a car from airport and checked in at Super 8 Motel there.   At about 7.30 on 7.7.2012 when he returned to the Motel after visiting Zaveri Bazar, Legacy, Malani and Macy’s Malls, he parked his car in the Motel’s parking area and walked over to the front passenger side of the Car to get his black leather Jaguar Bag containing the jewellery articles.  Suddenly a silver van pulled up behind the car when he was in the process of removing the briefcase from the front passenger side of the vehicle.  Two persons from that van came out and one of them grabbed the complainant from behind in a choke hold and threw him to the ground.  Thereafter, they looted the jewellery from him.  Injuries were also caused to him.  Hearing the turmoil of this fight, the Motel staff immediately called the police and FIR was registered.  The incident of loot was also recorded in CCTV cameras of the motel.  Due to this robbery, the complainant had suffered a loss of US$ 1,03,262.  He informed the appellant on 8.7.2012 about the incident and the loss.  He returned to India on 19.7.2012.  Mr.S.S. Soni & Company was appointed as surveyor by the appellant to assess the loss.  All the relevant documents were provided which included custom entry/exit certificate of Dubai custom, entry summary and invoices of US custom, purchase invoices of the articles and the packing list of the jewellery, to the surveyor on 3.8.2012.  Whatever documents demanded by the surveyor were duly provided to him including CD of CCTV footage of the incident.  The surveyor had confirmed on the basis of documents supplied to him, that the complainant had carried 332 piece of diamond stud gold jewellery and also verified the contentions of the complainant in the claim submitted by him to the insurance company in violation of the IRDA Regulations 2002 since he took more than six months in submitting its report.  The appellant however repudiated the claim of the complainant vide letter dated 29.3.2014 on the ground that the stock was held on trust basis by the complainant and not covered under the insurance policy.

5.      The complaint was filed wherein the complainant had stated all the above mentioned facts and has further contended that the surveyor had wrongly accessed the loss at Rs.43,22,270.42 while the actual loss suffered by the complainant was Rs.59,78,661.37.  It was contended that the surveyor had made unjustified deductions.  It is further contended that surveyor had wrongly deducted an amount of Rs.5,28,312/- on the pretext that the bills of Sh. Mahesh Mathur, from  whom the complainant had purchased certain articles, were fake and that the complainant was holding the jewellery articles in trust.

6.      The opposite party in the written version has submitted that the articles were purchased from Sh. Mahesh Mathur and the bill was found fake and 31 articles which purchased from Ciemme Jewells Ltd., Valentine Jewellery and KGK creations, the bills were containing wrong TIN number.

7.      Parties led their evidences before the State Commission.  The complainant had filed affidavit of himself, Mr. Hiten Harshdrai Mehta and Naresh Wadhwa from M/s Uni Design Jewellers India Pvt. Ltd.  The complainant had also filed the invoices of the jewellery items which he purchased and the photographs of all the articles which he had carried, copy of packing of the lot, certificate of registration, copy of the custom entry record in Dubai & USA, copy of the FIR, relating to the robbery in USA, copy of the incident report recorded by the police in USA, copy of the bills, copy of chart showing the purchase of 332 articles, copy of Central Sale Tax (CST) deposit receipt of M/s  Uni Design Jewellers India Pvt. Ltd., copy of the bills matching the CST deposited by M/s  Uni Design Jewellers India Pvt. Ltd., copy of e-mails, a certificate issued by M/s  Uni Design Jewellers India Pvt. Ltd. , account confirmation report by M/s  Uni Design Jewellers India Pvt. Ltd. 

8.      The opposite party had filed the surveyor report and the repudiation letter and the copy of the policy alongwith the terms and conditions before the State Commission.  The State Commission after perusing the evidences on record and going through the documents on record reached to the conclusion that the repudiation was improper and amounted to deficiency in service and issued the following directions :

“27.     In view of the above discussion I find that OP is guilty of deficiency in service. Repudiation by OP is not justified. However the policy letter at page-50 of the documents filed by OP alongwith the WS show that in clause 4 it is mentioned that 10% of the sum insured is deductable as excess in each and every claim subject to minimum of Rs.1 lakh. Thus Op is

entitled to deduction of Rs.5,97,866/- on account of excess deduction. After deducting the same, the claim remains Rs.53,80,795/-.

28.       As regards interest it may be observed that the interest claimed by the complainant @ of 12% p.a. seems to be excessive. In the present scenario the grant of interest @9% p.a. would be moderate. Similarly grant of compensation separately is not justified. The reason being that there is no provision for grant of interest in Consumer Protection Act. Interest is always granted as compensation.

29.       To sum up the OP is directed to pay Rs.53,80,795/- alongwith interest @9% p.a. from 07.07.12 till date of payment.”

9.      The present appeal has been filed by the insurance company.  The only contention that has been raised and pressed is that the repudiation of the claim of the respondent/complainant (hereinafter called the complainant) is justified since the policy, including its terms and conditions, does not cover the articles held in trust.  It is submitted that the articles which had been robbed from the complainant were the articles which were held in trust.  Learned counsel for the appellant submits that the surveyor after perusing the purchase bills, submitted his report and reached to the conclusion that the articles in question were not purchased by the complainant but in fact he was holding them in trust.

10.    Learned counsel for the complainant has submitted that the conclusion of the surveyor is incorrect.  The TIN number on the purchase bills/invoices had been inadvertently mentioned wrongly by the seller.  He has also relied on the CST deposit receipt, showing that the sale tax had been duly paid by the seller on these articles.  It is submitted that there is enough evidences on record to prove that the articles in question had been purchased by the complainant.  Simply because, it is argued, that a wrong TIN number had been mentioned by the seller on the invoice, does not invalidate the sale specially when the sales tax had duly been paid for this sale.  It is also argued that to prove that these articles had duly been purchased by the complainant and were not held in trust by him, the complainant had examined the Director and the Chief Financing Officer of the seller company before the State Commission  by way of their affidavits and the opposite party has accepted their affidavit of evidence because no request for cross-examine of these witnesses have been made before the State Commission nor any interrogatories were submitted to the witnesses.  It is submitted that the findings of the State Commission are based on cogent evidences and the appeal has no merit and the same is liable to be dismissed. 

11.    I have heard the arguments and perused the relevant record.

12.    The only ground for repudiation of the claim is that the article in questions were held by the complainant in trust and he was not the owner of the same and thus the articles were not covered under the insurance policy.  The issue therefore is whether the complainant was holding these articles in trust or he was the owner of these articles.  The State Commission has discussed the evidences on record in the following manner and has held as under :

 “20.          Counsel for the complainant went on to add that at the most the complainant can be a purchaser on credit basis or purchaser on approval basis. But he was holding the goods in his own right as a purchaser. He was not holding the goods for and on behalf of Uni Design Jewellers India Pvt. Ltd. or Shri Mohit Mathur. The argument appears to be quite convincing.

21.             The other defence taken by the OP is that bills from Uni Design Jewellers India Pvt. Ltd. are fake because they contained wrong TIN number of the complainant. The counsel for the complainant refuted the said argument by submitting that copy of the bill is Ex. C-1/21 which is at page-27 of the bunch of documents filed by the complainant. The same contains correct CST TIN number in a top left column. Same is the position of invoice copy of which is at page-43 of the bunch of documents filed by complainant. There is some discrepancy in VAT TIN number in the upper right portion of the invoice. For that M/s. Uni Design Jewellers had issued a certificate dated 28.09.13 copy of which is EX. C-1/27 at page 53 of the bunch of documents filed by the complainant. The same explained that due to clerical error VAT TIN number of Ankit Overseas (complainant) was wrongly mentioned as 0500391323 instead of 0750234845 in the invoice raised on the complainant.

22.             The counsel for complainant also drew my attention towards letter dated 28.09.13 issued by Uni Design Jewellers copy of which is Ex.C-1/28 at page-54 of the bunch of documents filed by complainant. It certified that said firm received payments mentioned therein from Ankit Overseas. Uni Design Jewellers India Pvt. Ltd. also gave confirmation of account which is Ex. C-1/29 at page-55 of the bunch of documents filed by the complainant. Another confirmation of account is Ex. C-1/30 at page-56 of the bunch of documents filed by the complainant. All these include the bills in question. So the objection of the bill being fake falls to the ground.

23.             Another objection of the OP is that address of Shri Mahesh Mathur mentioned on the invoice is 24/361 Moti Nagar, New Delhi. There was no such address, as is mentioned in the surveyor report. The counsel for complainant suitably replied the same by stating that the address is 24/361 New Moti Nagar, New Delhi. The only difference is that word ‘New’ before ‘Moti Nagar’ is missing. To err is human. It happens so many times that dates, numerical, minor discrepancies in the address like the present one. He submitted that complainant supplied the correct address to the surveyor itself. There is no reason why the surveyor did not visit the correct address. Only inference that can be drawn is that surveyor of the OP must have confirmed the correct address of Shri Mahesh Mathur. That is why he remained silent about the correct address. Otherwise he would have mentioned that correct address is also wrong.

24.             Yet another submission of counsel for the complainant is that the bills of Uni Design Jewellers and Shri Mahesh Mathur are not relevant in the present case. The reason being that

goods covered under the present claim are not part of those invoices. The complainant has specifically pleaded so in para-13 and 16 (b) which have not been specifically denied by the OP in corresponding paras of WS. Thus the same tantamount to admission. Again the argument is attractive.

25.             The counsel for complainant further submitted that report of the surveyor is not binding on the complainant or Consumer Commission. The report of surveyor is not sacrosanct in the words of Hon’ble Supreme Court in decision in New India Assurance vs. Pradip Kumar and Sikka Papers Ltd vs. NIC (2009) 7 SCC 777.

26.             It may be mentioned that IRDA provides limit of six months for completing investigation and giving the report. In the instant case the surveyor took 14 months which goes to show that surveyor was busy in finding lame excuses. It was held by State Commission Punjab in LIC vs. Mohinderjeet Kaur 1998 (1) CPJ 159 Pb and by State Commission West Bengal in LIC vs. Mahabir Prasad Hansaria 2003 (3) CPJ 419 WB that mere factum of delay in giving the survey report is persee evidence of deficiency in service.”

13.    The existence of the evidences discussed in the above paragraphs by the State Commission are denied. These evidences form part of the trial court record. Even the surveyor has examined all the documents and found them authentic.  He has concluded as under :

14.0 Conclusion :

On the basis of the above we now conclude as under :

1. M/s Ankit Overseas got the approval from the Gems & Jewellery Export Promotion Council for Export Promotion Council for Export Promotion Tours for the period 16.06.2012 to 25.7.2012 for the invoice value of USD 1,50,000 gold studded jewellery.

2. The Insured carried the Gold Jewellery as per the Invoice and the Packing List through their authorized representative Mr. Deepak Sethi.

3. The Insured made sales at Export Promotion Tour and the sales proceeds vide money transfer to their Bank.

4. After visiting Dubai the insured flown to New York on his Export Promotion Tours and after residing at New York for six days he had been flown to Atlanta and robbery took place at Atlanta.

5. The Police was informed accordingly.The Police during the investigations confirmed having seen in the CCTV tapes that a two unknown guys had snatched his bag of Jewellery by overpowering him.

6. The Police registered the case and also issued their Incident report and final report.This confirmed the genuinity of the incident.

7. Baed on verifications of Documents regarding earlier tours, it has been concluded the sales made at abroad was without issuing sales bills and the balance stock had not been entered in the stock register properly and the sales are found to be entered after the tour in case of previous tours as it was held on trust basis only.

8. The statement of the insured that at New York in his six days stay he had not made any sale which is doubtful whereas on verification of documents the maximum sale had been made at New York.

9. From the queries made with insured it seems that the insured is hiding some facts which prove non-cooperation of the insured.

10. On verification of the purchase bills of M/s Mahesh Mathur have been found fake as explained at para 7.11 which prove that the insured is misrepresenting and misdescription of the material facts.Further to this the insured has been failed to provide us documents of M/s  Uni Design Jewellers India Pvt. Ltd. in support to verify the authenticity of purchase bills issued by them.  The non-submission of the documents proves that the stock may be supplied on ‘held in trust’ basis and as the loss had been occurred that was converted into purchase as this practice was followed and proved in the past.

14.    The only ground for the rejection of the claim is that for the verification of the authenticity of the purchase bills, no document was provided to him.  The ground for rejection was failure to supply corroborative or verifying evidence before him. The complainant has examined the Director and the Chief Financing Officer of the seller company i.e. M/s Uni Design Jewellers India Ltd., who have verified the correctness of the invoices and have also proved supporting documents i.e. payment of the sale tax with the sale tax department etc.  These witnesses were not cross-examined, so their testimony remains uncontradicted.  There is no reason to doubt the veracity of their statements, that the articles were sold by them to complainant, specially when it stands corroborated by the documents showing payment of sales tax by their company on these articles.   

15.    From the above discussion, it is apparent that the rejection of the justifiable claim of the complainant, by the appellant was wrong and amounted to deficiency in service.  The appeal has no merit, the same is dismissed with no order as to cost.