DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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M/s Jagjeet Readymade Garments, Shop No.2, Chandigarh- Ambala Road, near Anpurna Sweets, Zirakpur, Tehsil Derabassi, District Mohali, through its Partner Sh. Avtar Singh.

                                                                   ---Complainant

Vs

National Insurance Company Limited, Divisional Office No.1, through its Manager, SCO No. 133-135, Sector 17, Chandigarh.

---- Opposite Party

BEFORE:            SH.LAKSHMAN SHARMA                    PRESIDENT

MRS.MADHU MUTNEJA                  MEMBER

                        SH.JASWINDER SINGH SIDHU            MEMBER

Argued By:      Shri Ashwani Arora, Advocate for the Complainant.

Shri Rajesh Verma, Advocate for the Opposite Parties.

PER MADHU MUTNEJA, MEMBER

1.                 The Complainant had taken an insurance policy from the Opposite Party valid from 10.06.2009 to 09.06.2010, for a sum of Rs.10,00,000/-, for the stocks maintained in their business premises. On the intervening night of 3/4.11.2009, there was a burglary at the premises.  A hole had been made in the back wall on the second floor by the burglars. They had entered the premises by removing the bricks from the wall. The incident was reported to the police vide F.I.R. dated 19.11.2009.  As per the Complainant the loss of stock was Rs.5,00,000/-, but due to non-availability of relevant documents, the loss could be counted to Rs.4,10,827/- only (bills at Annexure C-3 to C-7).

                    The matter was brought to the notice of the Opposite Party, who appointed an Investigator and Surveyor for assessment of the burglary loss.  The Surveyor assessed the loss at a net value of Rs.2,55,494/- (Annexure C-8). However, surprisingly, the Complainant received another letter dated 22.12.2010, whereby the claim was assessed by the Surveyor/ Investigator at Rs.1,11,701/-, by stating that one bill amounting to Rs.1,58,880/- was fake, while another bill amounting to Rs.891/- could not be verified. Hence, the earlier assessed loss of Rs.2,55,494/- was reduced to Rs.1,11,701/-.   The Complainant has stated that the fakeness of the said bills is not correct, because dealers approach the Shop and provide goods/garments and give bills in a haste. Often Shopkeepers cannot know the genuineness and authenticity of the bills given by the dealers. 

                    The Complainant eventually received a repudiation letter dated 23.12.2010, wherein the whole claim was repudiated, including the recommended amount of Rs.1,11,701/- (Annexure C-10). Alleging deficiency in service and unfair trade practice by the Opposite Party due to reputation of claim, the Complainant has filed the instant complaint, with a request that the Opposite Party be directed to pay the insurance amount of Rs.5,00,000/- along with interest and compensation.

2.                 After admission of the complaint, notice was sent to the Opposite Party.

3.                 Opposite Party in reply has denied the allegation of loss amounting to Rs.5,00,000/- or even Rs.4,10,827/-. Further, Opposite Party has stated that as per the report of the Surveyor, on physical verification of stock and considering the extent of damages based on the F.I.R., a loss of Rs.2,55,494/- was assessed and recommended, subject to fulfillment of the terms and conditions of the policy and production of final non-traceable report from the competent authority. Thereafter, the Surveyor submitted Addendum report dated 22.12.2010. A bill of Rs.1,58,880/- was found to be fake. Based on the above damages, the net value of stock was quantified as Rs.1,11,701/- and in view of the terms and conditions of policy ‘nil’ liability was recommended. Opposite Party has thus prayed that the claim was rightly repudiated vide letter dated 23.12.2010 and hence, the claim is not maintainable.    

                    On merits, the Opposite party has taken similar submissions. However, it has added that another bill of Rs.891/- could not be confirmed. They have further submitted that a claim is always payable after confirming the genuineness of bills in support of the claim. However, in the present case, the Complainant has submitted fake bills to make a fraudulent claim intentionally  and hence, the claim was repudiated. Opposite Party has therefore, prayed for dismissal of the complaint.

4.                 Parties led evidence in support of their contentions.

5.                 In the rejoinder filed by the Complainant to the written statement, the Complainant has denied all averments made by the Opposite Party and prayed for the relief sought.

6.                 In the additional affidavit of Sh. Avtar Singh Partner of the Complainant, it is mentioned that the bill amounting to Rs.1,58,880/- alleged to be forged is not intentional, but under a bonafide belief that the bill was genuine.

7.                 The Opposite Party has also attached the affidavit of the Surveyor in proof of their denial for payment of insurance claim.

8.                 We have heard the learned counsel for the parties and have perused the record.

9.                 The claim of the Complainant has been denied because some of the bills submitted by it to the Opposite Party have been found to be fake. The Opposite Party in this regard has relied upon the terms and conditions of the policy, to repudiate the claim made. Annexure R-1 is the copy of Shopkeeper’s Insurance Policy.  Clause 7 which refers to fraud, reads as under: -

“7. Fraud: If any claim under this Policy shall be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the Insured’s behalf to obtain any benefit under this Policy all benefits under the Policy shall be forfeited.”

                    The Opposite Party has nowhere alleged that the Complainant has played any fraud on them. Their only submission is that two bills were not found to be genuine. The Complainant has sworn an affidavit that he did not know about the genuineness of the bills, as the bills are received by the Shopkeeper in the Shop from the dealers in good faith. 

10.               In our opinion, the insurance company after having received the insurance premium from the Complainant and undertaking to indemnify the loss caused by burglary, cannot deny the entire claim by taking the plea of one fake bill.  The surveyor has not found any fraud with regard to bills for Rs.1,11,701/-. We feel that this amount at least should have been released by the Opposite Party to the Complainant, even if the antecedents of the other bills were not clear. The repudiation of the claim, in such a situation, by the Opposite Party, in our opinion, is unfair and unjust.

11.               The Complainant has placed on record judgment in case Ayodhya Prasad Vs. United India Insurance Co. Ltd. and Ors., IV (2005) CPJ 93 NC, decided by the Hon’ble National Commission, wherein the orders of the State Commission were upheld. While settling the claim, the bills found to be valid, were allowed and the claim had been allowed accordingly. The Complainant has also placed on record judgment of Hon’ble National Commission in case K.R. Rajashekar Vs. M/s New India Assurance Company Limited, First Appeal No. 442 of 2005, decided on 30.09.2010, wherein the Hon’ble National Commission allowed the appeal on similar grounds by holding that the insurance company cannot disentitle the claim altogether. The rightful claim was thus ordered to be paid. 

12.               In the light of above judgments, as well as the factual position, we deem it appropriate to allow this complaint, in favour of the complaint, and order that a sum of Rs.1,11,701/- against which no fraud/ falsity has been proved, should be paid by the Opposite Party to the Complainant. This amount be paid along with interest @9% p.a. from the date of repudiation, till the date of payment. The Opposite Party shall also pay Rs.10,000/- as costs of litigation. 

13.               The decreed amount be paid by the Opposite Party within 45 days of the receipt of this order, failing which Opposite Party shall be liable for an interest @12% per annum instead of 9% p.a. on the said amount from the date of repudiation, till it is paid, besides the cost of litigation.  

9.                 Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

06^th July,  2012.                                                                        

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER