BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, JALANDHAR

      Complaint No.378 of 2018

      Date of Instt. 11.09.2018

      Date of Decision: 20.04.2021

 

Mr.Uma Shankar S/o Sh. Ram Shabad sole Proprietor M/s Shankar Shambu Scrap House, 23, Jyoti Nagar, Cool Road, Near Kidney Hospital, Jalandhar.

Second Address:- Mr. Uma Shanker S/o Sh. Ram Shabad R/o 168, Bharat Nagar, Jalandhar.

..........Complainant

Versus

1. Manager of United India Insurance Company Ltd. Branch DO II, Lajpat Nagar Market, Syal House, Jalandhar.

2. M/s United India Insurance Company Ltd, Branch DO II, Lajpat Nagar Market, Syal House, Jalandhar through its Manager.

3. Indian Bank, 922, G.T Road, Near Bus Stand, Jalandhar through its Manager.

….….. Opposite Parties

Complaint Under the Provision of Consumer  Protection Act.

QUORUM:

 

SH. KULJIT SINGH, PRESIDENT

MRS. JYOTSNA, MEMBER

ARGUED BY:

 

For Complainant             : Sh.Gurvinder Arora, Advocate

For OP no.1 &2 : Sh.R.K Sharma, Advocate

For OP no.3 : Ex-parte.

  

ORDER:-

 

Per  KULJIT SINGH, PRESIDENT 

 

1. The present complaint has been filed by the complainant against OPs on the averments that he had got insurance policy no.2013001117P102931797 valid from 04.05.2017 to 03.05.2018 from OPs no.1 and 2 for all kinds of scrap stock worth Rs.13 lakhs and said insurance policy was covering all risks of the scrap stock belonging to the complainant and complainant had paid the premium of Rs.3738/- to OPs for said insurance policy. The complainant is having bank account of his firm M/s Shambhu Scrap House which is proprietorship concern of complainant with OP no.3. Unfortunately, fire broke in the shop of the complainant which was being run by him being proprietor of M/s Shankar Shambhu Scrap Hosue 23, Jyoti Nagar, Cool Road, Near Kidney Hospital Jalandhar in the intervening night of 07.12.2017 /08.12.2017. The intensity of the fire was so severe that the whole scrap of the complainant lying in the shop worth Rs.25 lakhs which was ownership of the complainant was burnt. The information was given to the fire station bearing no.9519, 9709, 0734, 0739 came to the spot on 08.12.2017 and with great labour and hard work controlled the fire but by that time all the goods of scrap lying in the shop of the complainant worth of Rs.25 lakhs had been burnt to ashes. The complainant is having the bank account of his proprietorship concern namely M/s Shankar Shambhu Scrap house with OP no.3 and there was a secured/O.D Limit of Rs.15 lakhs under trade well scheme and on the value of the stock as on 27.02.2017 as per the valuation report of the panel valuer of OP no.2 was between Rs.25 lakhs to Rs.26.44 lakhs and sanction ticket no. 3/2017-2018 dated 26.04.2017 issued by Indian Bank Jalandhar is attached. The complainant had intimated the claim to OPs immediately and requested to give claim as he suffered loss of goods worth of Rs.25 lakhs in the fire. The complainant has submitted all the documents to OPs along with the bills of purchase of the scraps by the complainant, income tax returns, bank statements, rapat no. 27 dated 08.12.2017 under Section 427 IPC registered at P.S Div. No. 6 Jalandhar on behalf of the complainant regarding loss suffered by him in the fire. But till date no claim has been passed and OPs have wrongly rejected the claim of the complainant on false and flimsy grounds. The OPs have also taken the signatures of the complainant on the several blank papers on the pretext of giving the claim but despite taking all documents and signatures on blank papers, no amount has been paid to complainant causing utmost harassment to the complainant. OP no.3 was also aware of the risk involved to the stock and if any other insurance cover was required to the complainant then it was duty of OP no.3 to provide for the same, since OP no.3 themselves got insured the stock with OPs no.1 and 2. Due to above said act of OPs, the complainant has filed the present complaint and prayed that OPs be directed to pay Rs.19 lakh  to the complainant. 

2. Upon notice, OPs no.1 and 2 appeared and filed joint written reply and contested the complaint of the complainant by raising preliminary objections that complaint is not maintainable. There is neither any deficiency in service nor unfair trade practice on the part of OPs.  On merits, it was averred that OPs issued Standard Fire and Special Peril Policy bearing no.2013001117P102931797 for the period 04.05.2017 to 03.05.2018 for sum insured to the tune of Rs.13 lakhs in the name of M/s Shankar Shambhu Scrap House insuring the stock of scrap lying and or stored in the shop cum godown at 23 Jyoti Nagar Near Kidney Hospital Jalandhar subject to terms and conditions of the policy. The incident of fire occurred on the intervening night of 07.12.2017/08.12.2017 at the premises of M/s Shankar Shambhu Scrap. It was wrong that scrap worth 25 lakhs was burnt. On intimation loss due to fire, OPs deputed surveyor and loss assessor namely M/s Protech Insurance Surveyors and Loss Assessor to assess the loss. The bills and invoices issued by M/s MS Trading Co., M/s Manni Trading Co., M/s MK Trading Co. to show that stock were not found to be genuine one.  It has been observed by the police officials after investigation that fire occurred due to inflammable substance lying in the stock of its own which amounts to spontaneous combustion. The insurance company assessing the loss to the tune of Rs.4,89,229/- subject to terms and conditions of the insurance policy. The investigator further gave the observation that the supporting documents such as different invoices as detailed in the investigation report are suspected and not genuine.  The claim of the complainant was repudiated after due application of mind as per terms and conditions of the policy. Rest of the averments made by the complainant in the complaint were denied by OPs no.1 and 2 and they prayed for dismissal of the complaint. 

 

3. Notice served to DK Bangal Manager of OP no.3 on 20.102018 but none has appeared on his behalf despite service. As such, OP no.3 is proceeded against exparte vide order dated 12.11.2018 passed by this Commission.

4. The complainant has tendered in evidence his affidavit Ex.CA along with copies of the documents Ex.C-1 to Ex.C-58. On the other hand, OPs no.1 and 2 tendered in evidence affidavit of Rakesh Sharma Divisional Manager of OPs as Ex.O-A along with copies of the documents Ex.O-B to Ex.O-C and Ex.O-1 to Ex.O-4 and closed the evidence.

5. We have heard learned counsel for the parties and have also gone through the record of the case very carefully.

6. The glance of evidence is required by us for settlement of the case in hand. The complainant has tendered in evidence his affidavit Ex.CA on the record in support of his case. He alleged the repudiation of his claim by OPs is unjustified.  Ex.C-1 is copy of insurance policy which is valid from 04.05.2017 to midnight of 03.05.2018. Ex.C-2 is copy of policy schedule. Ex.C-3 is copy of repudiation letter dated 18.06.2018.  Ex.C-4 is copy incident of fire report.  Ex.C-5 is copy of sanction ticket no.3/2017-18. Ex.C-6 is copy of General Diary Details.  Ex.C-7 is copy of premium challan form no. 2178.  Ex.C-8 is copy of letter dated 08.12.2017. Ex.C-9 is copy of stock position as on 30.11.2017. Ex.C-10 is copy of list of debtors. Ex.C-11 is copy of letter dated 22, January 2018. Ex.C-12 and Ex.C-13 are copies of tax invoice.  Ex.C-14 is copy of handwritten letter dated 20.02.2018. Ex.C-15 is copy of registration certificate. Ex.C-16 is copy of handwritten letter.  Ex.C-17 is copy of Form VAT -2.  Ex.C-19 to Ex.C-22 are copies of vat invoices of different dates.  Ex.C-23 is copy of balance sheet as on 30.11.2017. Ex.C-24 is trading profit & loss accounts for the year ended 30.11.2017.  Ex.C-25 is copy of letter dated 24 April 2018.  Ex.C-26 is copy of Indian income tax return verification.  Ex.C-28 is copy of balance sheet as on 31.03.2016.  Ex.C-30 to Ex.C-35 are copies of tax invoice prepared by S.G Trading Co. of different dates.  Ex.C-38 is copy of letter dated 10.02.2018. Ex.C-39 is copy of tax invoice prepared by MK Trading Company. Ex,C-41 to Ex.C-42 and Ex.C-44 to Ex.C-46 are copies of  tax invoice credit prepared by MS Trading Co. of different dates.  Ex.C-47 to Ex.C-58 are copies of tax invoices prepared by MK Trading Company of different dates.

7. To refute this evidence of the complainant, OPs relied upon affidavit of Rakesh Sharma Divisional Manager of OPs as Ex.O-A on the record. This witness denied any deficiency in service or unfair trade practice on the part of OPs. He stated that repudiation of insurance claim of the complainant is justified. Ex.O-B is e-stamp paper. Ex.O-1 is copy of insurance policy which is valid from 04.05.2017 to midnight 03.05.2018 on the record containing terms and conditions of the policy.  Ex.O-2 is copy of survey report dated 27.02.2018 on the record. 

8. It is an established fact that the complainant had got an insurance policy no.2013001117P102931797 valid from 04.05.2017 to 03.05.2018 from OPs no.1 and 2. This policy was covering all risks of scrap stock and was covering risk of 13 lakhs with premium amount of Rs.3738/-. This fact is clear from copy of insurance policy Ex.C-1 on the record. The complainant running the firm namely M/s Shambhu Scrap House which is proprietorship concern of the complainant with OP no.3.  Unfortunately, fire broke out in the shop of the complainant in the intervening night of 07.12.2017/08.12.2017. He alleged that whole scrap lying in the shop worth of Rs.25 lakhs was burnt in the above incident of fire. He submitted his claim with OPs but OPs repudiated this claim vide letter dated 18.06.2018 Ex.C-3 on the record. The OPs repudiated the claim of the complainant on the following grounds, which are mentioned in the repudiation letter Ex.C-3, which is placed on the record :-

1. As per GD No. 027 dated 08.12.2017 recorded with the police station Division No. 6 wherein it is observed by the police that fire occurred due to inflammable substance lying in the stock of its own which amounts to spontaneous combustion. 

2. At the material time the stock of scrap was lying in open whereas the policy was issued for stock lying in shop cum godown.

3. The rent deed of the location covered under the policy has not been provided. 

4. About authenticity of supporting invoice/bills findings are as under:-

a) M/s Trading o. Loharan Road, Bhogpur – all submitted bills have been found ficitious/fake.

b) Manni Trading Co. V. Bilga – All submitted bills have been found fictitious.

c) S.G Trading Co.- Bills do not bear material information like particular location, mobile number/telephone and similar position is with Sharma Trading Company.

d) M.K Trading Co. Even particulars of desires/key information is intentionally not disclosed even on specific request. 

The complainant further alleged deficiency and unfair trade practice on the part of OPs. 

9. On the other, hand, OPs no.1 and 2 pleaded that they repudiated the claim of the complainant as per terms and conditions of the policy and same is justified. OPs repudiated the claim of the complainant vide letter ExC-3 dated 18.06.2018 which is placed on the record. 

10. From evaluation of above-referred evidence on the record, the main point of controversy in this case is whether the repudiation of insurance claim of the complainant is justified or not?  The complainant purchased the insurance policy from OPs no.1 and 2 which is valid from 04.05.2017 to 03.05.2018. The incident of fire occurred in the shop of the complainant on 07.12.2017/08.12.2017. The incident of fire occurred during the currency period of the policy. The complainant give intimation to Fire Brigade office Jalandhar, this fact is proved from incident of fire report Ex.C-4 dated 12.12.2017, which is placed on the record.  Intimation of fire was also given to the police, this fact is clear from copy of general diary details Ex.C-6 which is placed on the record. The complainant alleged that the whole scrap lying in the shop of the complainant worth Rs.25 lakhs which was burnt. But the complainant has not produced any document to prove that the stock lying in the shop worth of Rs.25 lakhs. As per policy document, the OPs liable to pay the claim. In the insurance policy Ex.C-2 it is specifically mentioned that All kinds of scrap stocks whilst lying and or stored in the shop cum godown. This fact is proved that the incident occurred in the shop of the complainant due to fire, which is proved from copy of general dairy report Ex.C-6 which is placed on the record. Though the fire brigade report states the cause of fire as unknown, but the police report specifically mentioned the cause of loss inflammable substances lying the scrap stock which occurred of its own which amount to spontaneous combustion excluded under the policy. 

11. When the insurance policy is taken by a person and he pays a premium to the insurer for hiring or availing its services then it is duty of the insurance company to pay the insured amount as per terms and conditions of the policy. Premium also paid by the insured to the insurer and not for the extent of the sum insured. The stock of the complainant was insured with OPs no.1 and 2 through OP no.3/bank for insured amount of Rs.13 lakhs, the policy was valid from 04.05.2017 to 03.05.2018. Unfortunately, the fire broke out in the shop/premises of the complainant in the intervening night of 07.12.2017 /08.12.2017 due to fire. Due intimation was given to OPs of this incident of fire and the police. OPs no.1 and 2 on receipt of this intimation, deputed Surveyor Mr. Rohit Gupta  to assess the loss caused by the fire. The complainant has challenged the appointment of  surveyor M/s Protech Insurance Surveyors and Loss Assessors for assessment of the loss and investigated through M/s Swift Investigating Agency.  M/s Protect Insurance Surveyors and Loss Assessor conducted the survey and submitted survey report of loss to the stock due to fire dated 27.02.2018 assessing the loss to the tune of Rs.4,89,229/-. He is licensed surveyor by IRDA and his appointment is under Section 64 MU of Insurance Act 1938 and as such this contention of the complainant is without any substance that his report is not genuine. He is appointed under Insurance Act 1938 and he is licensed surveyor by IRDA and his activities are also regulated by the above authorities. The grievance of the complainant is that he submitted all the documents to the surveyor, but surveyor has not taken them into account like quantity cost rate, purchase bill number, value of total stock, balance sheets and so on. The complainant allegedly sustained total loss of the stock to the tune of Rs.25 lakhs but he has not produced on record the valid document from which it is clear that the lying stock is worth of Rs.25 lakhs. The submission of counsel for OPs is that report of the surveyor has to be relied upon, because there is no evidence on the file to contradict it. Undoubtedly, the report of the surveyor is a valuable piece of evidence and his report is generally to be relied upon, unless there is a strong evidence to the contrary on the record.  The surveyor visited the premises of the complainant and checked the saved stocks and the stocks which were affected by fire. The submission of counsel for OPs is that complainant has not supplied the documents like copy of certificate issued by the sales tax department, stock statement submitted to the bank, copy of letter issued by the bank regarding CC limit and purchase bills of all the items claimed. Since no documents were supplied by the complainant as demanded  by surveyor, hence surveyor assessed the  actual loss and submitted his report in this regard. The surveyor assessed the loss to the tune of Rs.4,89,229/- and value of the total stock was of Rs.7,03,686/-  and, hence average clause was applied by the surveyor for underinsuring the stock as per average clause.  The net claim of  Rs. 4,89,229/- was assessed by the surveyor by applying average clause.

12. This fact is undisputable that stock of factory of complainant was gutted in fire, which was insured with OP nos. 1 and 2 against Standard Fire and Special Perils Policy  for insured amount of Rs.13 lakh.. The complainant stated that he suffered loss of goods worth of Rs.25 lakhs in the fire  whereas surveyor found it as Rs.7,03,686/-  and applied average clause thereon and thereby reduced it further. The survey report  Ex.O-2 has been examined by us with the able assistance of counsel for the parties. 

13. National Commission has held in "New India Assurance Co. Ltd. versus Kamal Nayan" reported in 2006(4) CPJ 84 that complainant is held entitled to loss, as assessed by the surveyor with 10% interest starting from two months after the report till payment. National Commission has also held in "United India Insurance Co. Ltd versus Raj Kumar" reported in 2016(1) CPJ 555 that there is a provision in the Insurance Act  for appointing a surveyor by the insurer to assess the loss based on the  circumstances and evidence in the case and in the presence of report of surveyor, the  reliance should not have been placed on the report of a private garage. There should be cogent reasons and strong evidence to discard the report of the surveyor, otherwise it has to be relied upon being a rebuttable piece of evidence. Apex Court has also examined  this point in "United India Insurance Co. Ltd and others versus Roshal Lal Oil Mills Ltd and others", reported in 2000(10) SCC 19 CPC 340 , wherein it has been held that surveyor is appointed under Section 64 UM(2) of Insurance Act. The surveyor giving detailed amount of factors on the basis of which conclusion was reached.. Similarly, National Commission has held in "New India Insurance Company versus Ashok" reported in 2011(2) CPJ 255  that report by surveyor is an important piece of evidence and it should be relied upon. The appointment of the surveyor is statutory under Insurance Act 1938 and his report can be discarded only on strong evidence to rebut it. We find from perusal of entire evidence of the complainant on the record that there is no reason to discard the report of the surveyor. On the basis of the documents provided by the complainant-insured and actual survey at the spot, the net liability was assessed to the tune of Rs.4,89,229/- only. 

14. In the light of our above discussion, we allowed the complaint of the complainant and OPs no.1 and 2 are directed to pay Rs.4,89,229/- to the complainant as assessed by the surveyor vide his report Ex.O-2 which is placed on the record. The complainant is also entitled Rs.7000/- as compensation for mental harassment including costs of litigation. The opposite parties No. 1 and 2 are also directed to deposit Rs.3000/- as costs in the Consumer legal Aid Account maintained by this Commission. 

15. The compliance of the order be made within 45 days from the date of receipt of copy of this order. 

16. Copies of the order be sent to the parties, as permissible, under the rules. The case could not be decided within the stipulated period due to heavy pendency of work and spread of Covid-19.

17. File be indexed and consigned to the record room after due compliance. 

Announced in open Commission

 

20th of April 2021

 

 

 

 

Kuljit Singh

(President)

 

 

 

Jyotsna

(Member)