RESERVED

     STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                                   UTTAR PRADESH, LUCKNOW

                                    COMPLAINT NO. 24 OF 2017

S.R. Chemical & Cosmetics

Situated at C-14, Panki Industrial Area,

Site-II, Kanpur.

Through its Partners Raj Kumar Khemka

S/o Late B P Khemka

R/o 7/188, F-Swaroop Nagar, Kanpur,

Smt. Sharda Devi Khemka

W/o Late B P Khemka

R/o 7/188, F-Swaroop Nagar, Kanpur,

Hitendra Kumar Shah, S/o Late T V Shah

R/o 128/405, H-2 Block

Kidwai Nagar, Kanpur.

                                                                                       … Complainant

                                                          Versus

1. The New India Assurance Co. Ltd.

Regional Office, Situated at Green House

15/60, Civil Lines, Kanpur.

Through its Regional Manager

2. The New India Assurance Co. Ltd.

Claim Hub Civil Lines, Kanpur.

Through its Manager

3. Rajiv Kohli, Chief Regional Manager

The New India Assurance Co. Ltd.

Green House, 15/60 Civil Lines, Kanpur.

4. Rakesh Gupta (ID No. 9772323)

The New India Assurance Co. Ltd.

Claim Hub Civil Lines, Kanpur.

5. Suman Narad (ID No. 9767121)

The New India Assurance Co. Ltd.

Claim Hub Civil Lines, Kanpur.

                                                                                 ....Opposite Parties                               

BEFORE:

HON’BLE MR. JUSTICE A. H. KHAN, PRESIDENT

For the Complainant          :  Sri Sarvesh Kumar Sharma, Advocate.

For the O. P. Nos.1 to 5     :  Sri Asit Srivastava, Advocate.

Dated :  17-07-2019

                                              JUDGMENT

PER MR. JUSTICE AKHTAR HUSAIN KHAN, PRESIDENT

Present complaint has been filed before this State Commission

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by complainant S. R. Chemical & Cosmetics through its Partners Raj Kumar Khemka, Smt. Sharda Devi Khemka and Hitendra Kumar Shah against opposite parties (1) The New India Assurance Company Limited through its Regional Manager, Regional Office, Kanpur, (2) The New India Assurance Company Limited through its Manager, Kanpur (3)  Rajiv Kohli, Chief Regional Manager, New India Assurance Company Limited, Kanpur (4) Rakesh Gupta (ID No. 9772323), The New India Assurance Company Limited, Claim Hub, Civil Lines, Kanpur and (5) Suman Narad (ID No. 9767121), The New India Assurance Company Limited, Claim Hub, Civil Lines, Kanpur under Section-17 of the Consumer Protection Act 1986 seeking following reliefs.

1. Direct the opposite parties to pay an amount of Rs.30,84,563/- carrying interest at the rate of 24% with effect from the date of the claim till the date of the actual payment.
2. Direct the opposite parties to pay an amount of Rs.5 Lakhs towards compensation in view of the negligence and dereliction of the duty owed by them under the Law and in view of the deficiency in services committed by them.
3. Direct the opposite party nos. 3 to 5 to pay an amount of Rs.5 Lakhs towards the compensation and damages in view of the loss occurred by the complainant and in view of the Law laid down by the Hon’ble Apex Court towards the responsibility of the common carrier and public carrier.
4. Direct the opposite parties to collectively as well as severally pay an amount of Rs.5 Lakhs towards the damages, compensation in view of serious deficiency in service as well as Unfair Trade Practice committed by them.
5. Direct the opposite parties to discontinue the Unfair Trade Practice and not to repeat the same in near future.
6. Direct the opposite parties to pay appropriate Punitive Damages to the complainant.
7. Direct the opposite parties to pay an amount of Rs.2 Lakhs towards the cost of this litigation.

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8. Direct the opposite parties to pay interest @ 24% on the aforementioned amount from the date of this complaint case till the date of payment.
9. Direct the opposite parties No. 1 and 2 to recover the amount of compensation as well as cost of this case from the opposite party nos. 3 to 5 in view of the principle of Law enunciated by the Hon’ble Apex Court in Lucknow Development versus M. K. Gupta reported in III(1993) 7 CPJ (20) SC.
10. Any other order which this Hon’ble State Commission may deem fit and proper in the circumstances of the case may also be passed.

As per complaint the version of the complainant is that the complainant S. R. Chemical & Cosmetics is a partnership firm engaged in the manufacturing of flour in the name and style of Shakti Bhog brand. The factory of the complainant is situated at C-14, Panki Industrial Area Site-II Kanpur. Sri Raj Kumar Khemka, Smt. Sharda Devi Khemka and Sri Hitendra Kumar Shah are partners of the complainant firm. The complainant firm was insured by Insurance Company of opposite parties No. 01 and 02 under Standard Fire and Special Peril Policy bearing No. 42020011140100000605 which was effective from 25-01-2015 to 24-01-2016. The building and super structure of the factory of the complainant firm was insured for Rupees One Crore. The plant and machinery of the complainant firm was insured for Rupees Eighty lacs. The total sum insured under the policy was Rs.1,80,00,000/-. Policy document was given to complainant but terms and conditions addendum to the policy were not communicated to complainant.

As per complaint on 12-05-2015 unfortunately there happended earthquake causing damages and cracks to building shed and boundary wall of factory of complainant firm. The complainant company gave intimation of damages caused by earthquake to opposite parties No. 01 and 02 vide leter dated 13-05-2015. Thereafter Sri V K Lamba, Chartered Engineer and Surveyor was appointed by the Insurance Company and photographs of the site were taken on 15-05-2015 by a person deputed by surveyor. The surveyor also visited the site on 27-05-2015. All the

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documents demanded by surveyor were submitted to surveyor with request that the metrological report of earthquake can be obtained by the Insurance Company from the department concerned. Thereafter the surveyor vide letter dated 15-07-2015 demanded estimate with details and the complainant furnished estimate. Even then inordinate delay was caused by the surveyor in assessing loss and settling the claim of the complainant. The surveyor has wrongly vide letter dated 22-08-2015 accused complainant for causing delay in settlement of the claim. Vide this letter dated 22-08-2015 the surveyor told complainant that the report shall be prepared only after completion of the repair work of the factory. Thereafter complainant vide letter dated 28-08-2015 clarified the situation to surveyor and asked him to present himself on 08-09-2015 when the repair work of the damaged factory is to be commenced by the complainant.

As per complaint it has been further stated by the complainant that a claim of Rs.30,84,563/- was made under the policy in question but the surveyor flagrantly violated the provisions of the IRDA and demanded documents from the complainant and when protest was lodged it was stated by the surveyor that the report shall be prepared after the repairing work is completed by the complainant.

In complaint it has been averred that the complainant has submitted all the documents demanded by the surveyor. Even then the complainant received letters dated 15-11-2015 and 16-11-2015 sent by Insurance Company on 19-11-2015 and 20-11-2015 respectively whereby complainant was asked to produce certain documents.  In the meantime without affording opportunity to complainant to produce document the Insurance Company of opposite parties No. 01 and 02 vide letter dated 20-11-2015 repudiated the claim of complainant. The repudiation letter dated 20-11-2015 was sent by Insurance Company on 05-12-2015 which was received by the complainant on 07-12-2015.

As per complaint it has been stated by the complainant that the complainant made request with Insurance Company to provide copy of report of surveyor but the Insurance Company did not provide copy of surveyor report to complainant. Thereafter the complainant obtained

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copies of two letters dated 14-05-2015 and 24-09-2015 mentioned in surveyor report under the Right to Information Act 2005. In complaint it has been averred that these two letters are false and have been fabricated by surveyor. 

Opposite parties No. 01 to 03 have filed joint written statement wherein it has been stated that the policy in question has been issued to the complainant on his request. Insurance Company of opposite parties No. 01 to 03 has appointed surveyor and loss accessor on receiving intimation of alleged damages caused by earthquake occurred on 12-05-2015. Thereafter the surveyor and loss accessor conducted survey and submitted detailed report to the Insurance Company. The claim of the complainant has been repudiated on the basis of surveyor report and complainant has been informed accordingly.

In written statement it has been further stated by opposite parties No. 01 to 03 that the matter was referred to S S Kutumbale, Consultants and Engineers Private Limited through E-mail on 01-03-2016 keeping in view the request of the complainant. Sri S S Kutumbale visited the site on 27^th and 28^th March, 2016. During the visit of Sri S S Kutumbale the technical experts of S S Kutumbale, Consultants and Engineers Private Limited were present at the site. The report was submitted by S S Kutumbale, Consultants and Engineers Private Limited on 30-04-2016 whereby earlier report of surveyor was supported.

Notices were sent to opposite parties No. 04 and 05 through registered post which were not returned unserved. Therefore, after expiry of 30 days service of notice was held sufficient on opposite parties No. 04 and 05. Vakalatnama  was filed by learned Counsel Mr. Asit Srivastava for opposite parties No.04 and 05 also but no written statement was filed by opposite parties No. 04 and 05.

Affidavits of Mithilesh Shah and Raj Kumar Khemka alongwith annexures have been filed in evidence on behalf of complainant.

Opposite parties No. 01 to 03 have annexed with written statement copy of policy in question as annexure-1 as well as Surveyor report dated 20-10-2015 and repudiation letter dated 20-11-2015 as annexure-2. The opposite parties No. 01 to 03 have further annexed with their written

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statement copy of report dated 30-04-2016 submitted by S S Kutumbale, Consultants and Engineers Private Limited as annexure-3 of the written statement.

Learned Counsel Sri Sarvesh Kumar Sharma appeared for complainant.

Learned Counsel Sri Asit Srivastava appeared for opposite parties No. 01 to 05.

I have heard learned Counsel for the parties and gone through records carefully.

In repudiation letter dated 20-11-2015 the Insurance Company of opposite parties No. 01 to 03 has mentioned that it has received report of surveyor with following comments.

1. AC roofing no damages were shown to and observed during course of survey.
2. The cracks on boundary wall appeared old ones as the whole boundary wall was found old, worn out and unmaintained.
3. The wheat flour powder was badly filled in the cracks indicate that loss was very prior to the earth quake. Any loss exaggerating due to peril is fall in the exclusion of the fire policy. So the competent authority is repudiated the claim.

After having gone through pleadings of the parties as well as repudiation letter sent by Insurance Company to complainant it is apparent that the policy in question is admitted by Insurance Company. The repudiation has been made by the Insurance Company on the ground that the alleged damages have not been caused by earthquake and the damages alleged by the complainant are not covered with the policy in question.

Report submitted by surveyor Sri V K Lamba on 20-10-2015 to Insurance Company is annexure-2 of written statement of opposite parties No. 01 to 03. It shows that the surveyor visited factory of complainant on 14-05-2015, 17-05-2015, 01-07-2015 and 08-10-2015. In survey report it has been stated that the surveyor visited site on being deputed by Insurance Company and cracks were shown to him on other portion of building and boundary wall. The surveyor has observed in the report that

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the cracks appeared to be old ones and it was conveyed to insured who insisted that the cracks were formed due to earthquake on 12-05-2015. In survey report it has been mentioned by surveyor that the insured was advised to produce certificate from the government agency for confirmation of formation of cracks due to reported earthquake and to inform surveyor prior to taking up repair work so that same may be surveyed.

In the end of report conclusion recorded by surveyor is extracted below.

“Keeping in view all the above details the reported loss cannot be recommended for payment because:

1. The cracks showns to us appeared old ones.
2. It is suspected that the insured was running the factory even after reported loss,if denied may be investigated.
3. Insured took exceptionally long time to submit estimate of repairs. Thus, not allowing us to verify the damages on the first day.
4. No earthquake damages have been observed to neighboring buildings.
5. Building was not maintained from a long time.
6. Old temporarily, pre treated cracks were shown to us as loss due to earthquake.
7. The certificate submitted by the insured is not from a government ageny.
8. The paper cuttings submitted by the insured have mentioned and given a general statement regarding occurrence of earthquake in various cities. In some of the paper cuttings there is special mention of damages to particular buildings and houses but no mention regarding this particular factory has been found in the news paper.”

Again Kutumbale Consultants and Engineers Private Limited was deputed by Insurance Company to submit report after inspection of site and cracks. Report submitted by Kutumbale Consultants and Engineers Private Limited is dated 30-04-2016 and it has been annexed with written statement of opposite parties No. 01 to 03.

Conclusion recorded by Kutumbale Consultants and Engineers

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Private Limited in their report after inspection of site is extracted below.

“In view of the overall study I am of the opinion that the building, boundary wall and other structures are in good conditions and can be repaired, retrofitted with appropriate techniques. Further the portion dismantled also could have been be repaired, retrofitted with appropriate techniques to make it serviceable.

One issue needs to discussed here that on 25^th April, 2015 there was more devastating earthquake of much higher magnitude and during at almost same distance, it appears unusual and surprising that this earthquake did have any effect on the concerned premises. It is worthwhile to mention here that energy dissipated by EQ with intensity 6 on Richter Scale is 15 kiloton, that in 7 on Richter Scale is 5630 Kiloton and on 8 is 19400 kiloton. In other words the energy dissipated by EQ of 7.3 magnitudes is equivalent of 9671 Kilotons and by 7.0 magnitude is 16646 Kiloton, i.e. 1.7 times more.”

Report submitted by Kutumbale Consultats and Engineers Private Limited confirmed earthquake on 25-04-2015 having higher magnitude and opposite parties No. 01 to 03 have failed to produce any note or photograph to show that the building and boundary wall of factory were having cracks prior to commencement of policy which is effective from 25-01-2015 to 24-01-2016.

Pre insurance survey report was not produced by opposite parties No. 01 to 03 to show condition of building and boundary wall at the time of insurance. Therefore adverse presumption shall arise against Insurance Company.

Surveyor Sri V K Lamba made first visit of site on 14-05-2015 and has submitted report on 20-10-2015. He has not submitted inspection note prepaired on spot on 14-05-2015. Therefore it cannot be believed that on 14-05-2015 he found cracks filled with flour powder.

Letter dated 22-08-2015 sent to complainant firm by surveyor Sri V K Lamba is annuexre-5 of complaint. Relevant part of this letter is extracted below.

“I once again insist that we are always available for monitoring the repair work for assessment of actual work which would be carried out on

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the building. Since the policy issued is on the REINSTATEMENT VALUE BASIS, the report shall be prepared after completion of repair work and receipt of all the bills of repairs alongwith payment receipts. The report shall be forwarded to the insurance company alongwith all the documents which would be submitted by you for their consideration and doing the needful.

However the right of acceptance of liability is exclusively with the insurance company. In any case the company shall not be liable for exaggeration and consequential losses due to delay on your part.”

In view of discussion made above after having gone through reports of surveyors and evidence on record I am of the view that there is sufficient ground to believe that the cracks of building and boundary wall of the factory of complainant are the effect of earthquake and damages caused to building and boundary wall of the factory is covered with insurance policy in question.

Complainant has filed estimate prepared by Navakriti Consultants showing cost of Rs.30,84,563/- for repairing and construction work of building and boundary wall allegedly damaged by earthquake. The estimate should be verified by surveyor of Insurance Company.

In view of conclusion drawn above I am of the view that the repudiation of claim of complainant made by opposite parties is not justified and is tantamount to deficiency in service. As such complaint is allowed and opposite parties are directed to appoint a new surveyor to assess quantum of loss caused by earthquake to building and boundary wall of the factory of complainant and to examine and verify the estimate filed by the complainant and actual cost of said work.

Surveyor shall be appointed within one month from the date of this judgment with diection to file report within two months from the date of appointment.

After obtaining survey report Insurance Company of opposite parties shall pay appropriate compensation to complainant to indemnify it for the loss suffered by earthquake within three months.

Opposite parties No. 01 to 03 shall pay Rs.10,000/- as cost

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of litigation to complainant.

Let copy of this order be made available to the parties positively within 15 days as per rules.

                                                                ( JUSTICE A H KHAN )

                                                                                 PRESIDENT

          Pnt.