APPEARED AT THE TIME OF ARGUMENTS

In F.A. No. 385/2010 

PRONOUNCED ON:__21^st April  2017

ORDER

PER DR. B.C. GUPTA, PRESIDING MEMBER

          These two appeals have been filed under section 19, read with Section 21(a)(ii) of the Consumer Protection Act, 1986, against the impugned order dated 27.09.2010, passed by the Himachal Pradesh State Consumer Disputes Redressal Commission, Shimla (hereinafter referred to as “the State Commission”) in Consumer Complaint No. 01/2007, filed by the present respondent no. 1, M/s Jayanti Computer Systems & Ors., allowing the said complaint.  M/s Jayanti Computer Systems and its sole proprietor Amit Verma are the complainants in the said complaint, while the New India Assurance Company are the opposite parties (OPs 1 & 2) and the Punjab National Bank are the  opposite parties (OPs 3 & 4) respectively.  The present appeals have been filed against the impugned orders separately by the New India Assurance Company and the Punjab National Bank. 

2.      The facts of the case are that M/s Jayanti Computer Systems, which is a sole proprietary concern of Amit Verma, is carrying on business of computers, spare parts thereof and other items/commodities related to such trade.  The said concern had availed of cash credit facility of Rs. 40,00,000/- (Rupees Forty Lakhs) against hypothecation of stocks from the branch of the Punjab National Bank at Kangra.  The complainant had taken two insurance policies for their stocks-in-trade - one for a sum of Rs. 25 lakhs for the goods lying in their godown at Tanda road and another for a sum of Rs. 14 lakhs for the showroom situated near Bazar.  The said policies were obtained in the name of the Punjab National Bank.  For the purpose of the present complaint, the policy for a sum insured of Rs. 25 lakhs taken for the goods in stock is relevant, because the incident of fire took place in the godown situated at Tanda road.

3.      It is stated that the said fire broke out in the godown in the intervening night of 22 and 23 January, 2006.  Intimation about the incident was given by the complainant to the insurer as well as the Bank.  As per the version of the complainant, the actual loss of stocks on account of fire was Rs. 26,13,323/- and a claim was lodged with the Insurance Company.  The Insurance Company, upon receipt of information, appointed a spot surveyor Manmohan Sharma to carry out the preliminary survey.  Later on, another surveyor S. K. Soni was appointed, who after carrying out a detailed assessment of the loss, submitted his final survey report, saying that the loss on account of fire was Rs. 6,49,350/- only.  The Insurance Company also appointed an investigator D. S. Chadha, who is a retired police officer of the rank of Additional Deputy Inspector General.  The Insurance Company offered payment of amount of Rs. 6,49,350/- to the complainant in accordance with the report of the surveyor as full and final settlement of the claim.  However, the complainant refused to accept the same and chose to file the consumer complaint in question.  During proceedings before the State Commission in the consumer complaint, an interim order was passed on 12.01.2007, as per which the Insurance Company was directed to pay an amount of Rs. 6,49,350/- to the Bank for being appropriated in the account of the complainant, after taking an appropriate undertaking from the complainant.  The said amount has since been paid by the Insurance Company to the Bank.

4.      After taking into account the averments of the parties, the State Commission upheld the version of the complainants that they had suffered a loss of Rs. 26 lakhs in the fire.  Vide impugned order dated 27.09.2010, the State Commission stated that since the policy had been obtained for a sum assured of Rs. 25 lakhs, the said sum shall be payable to the complainant after deduction of amount of Rs. 6,49,350/- already paid.  The interest @ 6% per annum shall also be admissible on the amount payable.  At the same time, the State Commission directed the Bank not to charge interest on the amount of loan taken from them w.e.f. the date of the incident i.e. 23.01.2006.  They directed the Bank to recast its statement of account and work out the outstanding balance amount accordingly.  The State Commission also held the Bank liable to compensate the complainants for a sum of Rs. 2 lakhs, due to their act of negligence, omission and commission etc. in not pursuing the claim with the Insurance Company.  The present two appeals have been filed by the Bank as well as the Insurance Company, challenging the validity of the impugned order passed by the State Commission. 

5.      During the course of arguments, the learned counsel for the Punjab National Bank vehemently argued that the State Commission made an erroneous judgment that the Bank had made any negligence in the matter or showed any deficiency in service to the complainant.  The Bank was not duty bound in any manner to play any role in the settlement of claim made by the complainant with the Insurance Company.  The learned counsel has drawn attention to the ‘agreement for hypothecation of goods to secure a demand cash credit’ entered between the Bank and the complainant, in which it had been categorically stated as follows:-

          “The Bank shall not be considered responsible or liable for the non-admission of the claims of the Bank or their non-payment wholly or partly by such insurance company for the omission to insure or deficiency of insurance and the ultimate liability of the Borrowers of the Bank shall continue notwithstanding such failure or non admission as foresaid.”

6.      The learned counsel argued that regardless of the incident of fire or any consequential loss, the Bank was fully competent to charge interest on the loan amount as per the terms and conditions of the agreement.  Moreover, even if the policy was taken in the name of the Bank, it was the duty of the complainant alone to follow up the matter with the Insurance Company and to ensure that all necessary documents were provided to them.  The order of the State Commission, therefore, in so far as it relates to directing the Bank to pay compensation, or to stop levying of interest should be set aside.  The learned counsel stated that the only responsibility of the Bank was to provide any stock statement or verification report etc. to the Insurance Company and the Bank had not been found deficient in any manner on that account. 

7.      The learned counsel for the appellant Insurance Company argued that the insurance policy in question was in the name of, ‘Punjab National Bank, Kangra, account Jayanti Computers’.  The complainant did not fall within the category of ‘consumer’ vis-a-vis the Insurance Company, because the policy was in the name of the Bank.  Moreover, on receipt of intimation about the fire incident, the Insurance Company had immediately appointed a preliminary surveyor, who visited the spot and made inventory of goods in the presence of complainant.  The final surveyor was also appointed, who visited the spot and the inventory of the items was again made.  The said surveyors had assessed the loss for all the items stated in the inventory and also added appropriate sum for the items that might have been burnt to ashes.  The learned counsel argued that the surveyor had submitted a detailed report in which he brought out that the space available inside the godown for storage and the size of the cartons in question showed that the size of the godown was not adequate to keep the stocks worth Rs. 25 lakhs.  The State Commission had, therefore, taken an erroneous view that goods worth Rs. 26 lakhs had been destroyed in fire.  Further, the State Commission relied heavily on a certificate dated 03.07.2006 given by the Bank in which, it was stated that the monthly checking of stocks was being made as per the Banking norms and stock statement was regular.  However, the Bank had stated in their written statement before the State Commission that the insured did not maintain any stock register or records.  The Bank had, therefore, denied having verified the stocks, because it was not possible to verify the same, if the stock register and records were not there.  The certificate given by the Bank was not correct therefore.  The learned counsel has further drawn attention to a copy of the stock statement placed on record, showing the month-wise stock position from March, 2005 to January, 2006.  It has been stated in the said statement that for the month of April, 2005, the pending stock was Rs. 13,72,982.00 and the stock in hand at the end of the month was Rs. 1494306.00.  However, as per the stock statement submitted to the Bank, the said amount was Rs. 35,35,000/-.  A perusal of all the entries in the stock statement showed that there was a wide variation between the actual stocks and the stocks as per the statement submitted.  It was, therefore, wrong to place reliance on the stock statement, while working out the liability of the Insurance Company.  It had been stated in the FIR lodged by the complainant that certain goods had been received on 21.01.2006, and those were also kept in that very godown.  The surveyor had, however, brought out in his survey report that as per record, no purchase from the LG computers was made after 19.12.2005.  The contention of the complainant in the FIR about the receipt of stocks on 21.01.2006 was, therefore, incorrect.  The surveyor had correctly brought out that the stocks shown by the complainant were highly inflated.  The surveyor also stated that it was quite illogical that huge purchases of Rs. 41,75,314/- had been made in the last quarter of the year 2005, when there was fall in the sales.  The learned counsel further stated that the State Commission referred to a purchase of Rs. 15 lakhs vide bill number 1043 dated 21.01.2006.  However, the said bill had been arranged, although no such transaction had taken place.  The State Commission had, therefore, showed non-application of mind in placing reliance on the said bill.  The learned counsel also pointed out that while allowing the claim, the State Commission had not taking into account the excess clause as well as the value of the salvage, which showed that the order passed by them was not in accordance with law.  The learned counsel asserted that the assessment made by the surveyor reflected a correct appreciation of the facts and material on record and the Insurance Company had rightly decided to allow the claim, as per the report of the surveyor. 

8.      The learned counsel for the complainant stated per contra, that as per the admitted facts, the Punjab National Bank had obtained the insurance policies in question in their own name from the Insurance Company.  It was, therefore, their duty to take up the matter with the Insurance Company and ensure its follow up, so that the claim was duly paid by the Insurance Company.  On the other hand, the Bank had rather taken an opposite stance in not supporting the claim, which reflected deficiency in service on their part.  It was the duty of the Bank to obtain the stock statements regularly and then to verify the same.  The reply to the complaint submitted by the Bank shows, however, that they had opposed the version given by the complainants, which was not expected from the Bank under any circumstances.  The learned counsel further stated that the Bank had been levying compound interest on the amount due from the complainant, as a result of which, the complainant had suffered huge loss in their business.  The learned counsel vehemently argued that the State Commission had rightly directed the Bank, not to charge interest on the outstanding loan from the date of the incident and also imposed penalty on the Bank, in a rightful manner.  The Bank should have recast their account statement as per the orders made by the State Commission and tried to help their own client i.e. the complainant. 

9.      The learned counsel for the complainants further argued that it was a usual practice to purchase stocks, during the later period of the year, because as per usual practice, many government departments and other agencies, obtain their budgetary allocations towards the later part of the year and then, they try to make purchase of stocks, towards the end of the year.  The finding given in the report of the surveyor that there could not be increase in stocks during the later part of the year, was, therefore, incorrect.  Regarding the purchase bill of Rs. 15 lakhs, the learned counsel stated that there was a typographical error in the same, because of which, the amount had been mentioned as Rs. 1.5 lakhs instead of Rs. 15 lakhs.  The learned counsel further argued that the report made by the preliminary surveyor, Manmohan Sharma reflected a correct position, as per the situation on the spot.  The said surveyor Manmohan Sharma was a licensed surveyor, whereas the main surveyor appointed by the Insurance Company, S. K. Soni did not have proper expertise/qualification to conduct the survey, neither he was in possession of a proper licence to carry out the exercise.  The report of S. K. Soni, surveyor had been prepared with malafide intentions.  There was no licence number etc. given by S. K. Soni, surveyor, whereas such number for Manmohan Sharma had been mentioned in the report.  Further, the report of the surveyor had also been filed after a long time after the incident.  Referring to the contention of the Insurance Company that the complainant did not come in the category of ‘consumer’, the learned counsel stated that the policy was in the name of the Bank in the account of the complainant and hence, the complainant was very much a consumer.

10.    I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

11.    Following the fire incident at the insured premises, the complainant raised a claim of Rs. 26,13,323/- with the Insurance Company.  As per the final survey report given by the surveyor appointed by the Insurance Company, the liability of the Insurance Company was for Rs. 6,49,350/- and the said amount has already been paid by the Insurance Company to the complainant.  A perusal of the impugned order passed by the State Commission reveals that they allowed the claim of the complainant in totality, but restricted the same to Rs. 25 lakhs, saying that since the sum assured under the policy was Rs. 25 lakhs, the said sum was payable by the Insurance Company.  The State Commission has nowhere gone into the question, how and in what manner, the computation of such loss of Rs. 26,13,323/- had been made, and whether there was any rational basis for arriving at the said figure.  In addition, the State Commission, directed the Punjab National Bank not to charge any interest on the outstanding loan w.e.f. the date of the fire incident and also to pay Rs. 2 lakhs as compensation to the complainant.  It is to be examined, therefore, whether the directions given in the order of the State Commission are in accordance with law or not. 

12.    In so far as the role of Punjab National Bank in the whole affair is concerned, it is no doubt true that the policy in question had been obtained in the name of the Bank on the account of the complainant.  The complainant has vehemently argued that the Bank was legally obliged and duty bound to pursue the claim of the complainant vigorously with the Insurance Company to ensure settlement within reasonable time.  The Bank has taken the plea that under the agreement between them and the complainant, the Bank was not to be held liable in any manner, if the claim was not entertained fully or partially by the Insurance Company.  Going by the letter and spirit of the agreement and also considering the usual banking practices, the stand taken by the Bank that they have to charge interest on the outstanding loan amount as per the conditions of agreement, is based on sound, logical reasoning.  I have no reasons to differ with the arguments taken by the learned counsel for the Bank that regardless of the incident of fire, resulting in loss of stocks, the Bank is not duty bound to grant remission of interest, chargeable under the cash credit facility, or to provide any concession or rebate on the same.  It may be acknowledged that the Bank should help the insured by providing the necessary documents etc. in their possession, if any, for facilitation of the settlement of the claim by the Insurance Company.  There is nothing on record in this case to say that the Bank ever refused to provide any information or material available with them to the Insurance Company, which would have helped in the settlement of the claim.  The view taken by the State Commission, therefore, that the Bank acted in a negligent manner or showed any deficiency in service is without any basis whatsoever, and the same is ordered to be rejected.  It is held that there is no fault or shortcoming in the role played by the Bank in any manner.  The direction given to the Bank not to charge any interest w.e.f. the date of the incident or to pay any compensation etc. to the complainant, is ordered to be set aside. 

13.    The next issue for consideration in the matter is with regard to the quantum of compensation allowed to the complainant by the Insurance Company.  The complainants have placed heavy reliance on the report given by Manmohan Sharma, the preliminary surveyor in this regard.  As per the usual practice in such cases, adopted by the Insurance Companies, a preliminary surveyor or spot surveyor is usually appointed to carry out a preliminary assessment of the situation and projections about the loss/damage etc.  A regular surveyor is then appointed by the Insurance Company to carry out a detailed assessment of the loss/damage, after giving an opportunity to the insured to present the necessary documents in support of its claim.  In the present case, the Insurance Company got an additional investigation done by appointing an investigator also.  As per the report made by the preliminary surveyor Manmohan Sharma, he reached the place of the incident in the morning hours of 23.01.2006 itself.  He prepared a list of goods in the presence of the proprietor and took photographs as well.  He advised the insured to submit estimate of loss alongwith desired claim papers.  After a few days, he again visited the spot alongwith the final surveyor, S. K. Soni.  The preliminary surveyor stated in his report that as per the list submitted by the insured of different locations, there was stock of Rs. 44,52,936.00, including a stock of Rs. 25,12,811/- at the godown at Tanda road, which is the premises in question in the present case.  The preliminary surveyor remarked that the insured had stated loss of Rs. 25,12,811/- in the godown at Tanda road, in the fire.  The preliminary surveyor also mentioned about the size of the card boards as taken from the goods lying in the showroom.  On the other hand, the final surveyor S. K. Soni submitted his detailed survey report, in which he brought out that the size of the godown was not adequate to keep the stocks of Rs. 25 lakhs.  The said surveyor also brought out that there was no record of purchase the LG computers after 19.12.2005, although the complainant stated in the FIR that certain stocks were received on 21.01.2006.  While making the assessment of loss, the final surveyor took into account the income tax reports and the sales tax assessment and VAT returns of the insured.  Referring to the purchase bill no. 1043 dated 21.01.2006, the surveyor stated that the said bill was for Rs. 1.5 lakhs only from M/s Laxmi Computers & Peripherals, Palampur.  However, the ledger account of the said firm, Laxmi Computers & Peripherals, Palampur was examined and it was noticed that there was no transaction with the said party on account of the purchase etc.  The surveyor stated, therefore, that the said purchase had been wrongly arranged to support the claim.  It is made out from the factual position stated in the report of the final surveyor that the report had been prepared after taking into account all necessary material on record, including the income tax/sales tax/VAT returns, the books of accounts, the purchase bills etc.  The State Commission have not advanced any reasons to disbelieve the version given in the report of the surveyor and relied only on the claim filed by the complainant.  The complainant have also not been able to provide any cogent reasons for disbelieving the report of the surveyor.  It was the duty of the State Commission, therefore, to have given convincing reasons to believe the version of the complainant about the quantum of loss projected by them.

14.    The complainants have tried to make out a case that the preliminary surveyor Manmohan Sharma is a licenced surveyor and his licence number is mentioned in the report, whereas there is no licence number given in the case of the main surveyor.  It is, however, very clear from the facts on record that Manmohan Sharma carried out a preliminary assessment only and the figure of loss mentioned in his report is based on the report given by the insured itself.  The final survey report of the main surveyor, however, carries out a detailed analysis of the entire factual position on record and the analysis of the concerned documents.  In the absence of any convincing explanation to the contrary, it is not possible to brush aside the said report.  The legal proposition in this regard has been enunciated in a judgment passed by the Hon’ble Supreme Court in Sri Venkateswara Syndicate vs. Oriental Insurance Co. Ltd. & Anr., Civil Appeal No. 4487/2004, decided on 24.08.2009.  It has been stated in the said judgment as follows:-

      “If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for not accepting the report of the first Surveyor and the need to appoint second Surveyor.”

15.    Based on the discussion above, it is held that the order passed by the State Commission is not based on any logical analysis and interpretation of the facts on record and the same is ordered to be set aside.  Since the amount assessed by the surveyor already stands paid to the complainant, it is held that they are not liable for payment of any further amount from the Insurance Company.  The consumer complaint is, therefore, ordered to be dismissed.  There shall be no order as to costs.