Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.13 dated 16.05.2019
Ashok Kumar Jain, Proprietor, A.K. Traders,
1344, Ground Floor, Katra Lehshwan,
Chandni Chowk, Delhi-110040 ...Complainant
Versus
The National Insurance Company Limited,
3rd Floor, Deen Dayal Upadhyay Bhawan,
7E, Jhandewalan Extension,
New Delhi 110055 ...Opposite Party
Senior Citizen Case
Order Reserved on: 12.01.2023
Date of Order: 01.03.2023
Coram: Shri Inder Jeet Singh, President
Shri Vyas Muni Rai, Member
Ms. Shahina, Member -Female
Inder Jeet Singh
ORDER
1. (Introduction to dispute of parties) : The complainant had taken insurance Policy for risks against fire, storm, burglary etc. for sum assured of Rs.25,00,000/- vide policy no. 35020111610000266 for period 27.05.2016 to 26.05.2017 for Location-1307-Second Floor, Katra Dhuliyan, Chandni Chowk, Delhi, the policy was issued for the same address . He had also another insurance policy for sum assured of Rs.5,00,000/- vide no. 35020111610000267 for period 23.06.2016 to 22.06.2017 for other Location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi, policy issued was also for this address [the present complaint relates to subject matter of this second policy]. There was fire loss to the stocks in both locations by single episode of fire in the area around, however, OP settled the claim in respect of insured stocks damaged and lying in premises under first policy but declined the claim it in respect of damage to insured stock lying in location/premises under other policy no. 35020111610000267. There is deficiency of services and complainant is making claim Rs. 3,72,730/- of losses as assessed by surveyor against complainant's estimated loss of Rs.6,40,580/-.
Whereas, OP opposed it that complainant could not substantiate that the insured location i.e. First floor 1308, Katra Leshwan, Chandni Chowk, Delhi and the location mentioned in the FIR i.e. Katra Dhuliyan are the same as well as relied upon the Surveyor's report, that the location '1308, Katra Leshwan, Chandni Chowk, Delhi, has been treated as unaffected by the fire' and no claim is payable.
2.1 (Case of complainant ) : The Complainant is a self-employed businessman, he is operating cloth shop in the name and style of A.K.Traders, a proprietorship firm, and he deals on a wholesale basis in Delhi. The Complainant firm is engaged in the wholesale business of different varieties of cloth, dress material, and fabrics and similar articles. The complainant firm carries on its business operations successfully for the last so many years from premises at 1308, 1344 and 1307, Katra Leshwan, Chandni Delhi. The complainant firm has been insuring its business assets through a policy of insurance against risks such as fire, riots, storm, burglary, etc. from OP, being a Company incorporated, engaged in business of general insurance..
2.2. The complainant/Insured firm took two fire insurance policies for the period 2016-2017 from OP/Insurer, who issued documents of insurance of "Standard fire and special perils policy". Both policies cover the stock of dress material including held in trust against risks on payment of advance premium. The first Policy (1) was for sum assured of Rs.25,00,000/- vide policy no. 35020111610000266 for period 27.05.2016 to 26.05.2017 for Location-1307-Second Floor, Katra Dhuliyan, Chandni Chowk, Delhi and (2) the second policy was for sum assured of Rs.5,00,000/- vide no. 35020111610000267 for period 23.06.2016 to 22.06.2017 for Location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi [the present dispute/complaint relates to subject matter of this second policy]. The two polices were taken from OP for covering risks at two premises as per the prevailing parameters, otherwise both premises were contiguous to each other. The premises (in respect of first policy) were communicating to the other area/premises (covered under second policy).
2.3: Unfortunately, there was a fire accident involving both the properties of the complainant. The shops were closed as usual at 08:25pm on 22.05.2017. At about 9pm the complaint received information on his telephone that there was a fire in the area, where the above properties were situated. The complainant rushed back to the shops and on reaching there it was discovered that about 80 shops in the area were engulfed in fire, which started apparently from some unseen source. The fire had spread around rapidly, since most shops were containing material cloth and clothes, which are inflammable in nature. Fire brigade authorities tried to extinguish the fire with help of 27 fire tenders, but they were successful by next morning. The two buildings adjacent to the insured's premises collapsed and debris fell on the godown on 1st floor at 1308, Katra Leshwan, Chandni Chowk, Delhi and water (used by fire brigade) had damaged the stocks lying at 1st floor at 1308, Katra Lehswan, Chandni Chowk, Delhi.
Consequently, the Complainant suffered loss to its entire establishment including furniture, fixtures and more principally to the stocks lying at both premises covered by the subject two policies. The complainant's firm's stock of material lying at premises were badly burnt and some of the stocks were reduced into ashes. The fire was intense and had engulfed the entire first floor and the second floor, where insured material stock was lying, apart from the loss to the stock was caused by water used to control the fire.
2.4. Immediately after incident, the intimation of fire loss was forwarded to the OP. The complainant meticulously prepared its own estimate of losses as Rs.6,40,580/- in Policy No 35020111610000267 and estimated loss of Rs. 3,72,730/- in other policy no. 35020111610000266.
The OP appointed Mr. R. N. Sharma as its Surveyor, to carry out the survey and assess the loss. The surveyor collected number of documents including accounts, income tax record of the complainant and after detailed exercise, the Surveyor carried out assessed the losses of Rs. 3,93,461/- for stocks covered in policy no. 35020111610000267 and Rs. 2,70,881/- for stocks under policy no. 35020111610000266. The Complainant received payment of the loss for policy N35020111610000266. However OP has rejected the claim of loss assessed to the tune of Rs.3,93,461/- in respect of policy no.35020111610000267, vide letter of the dated 19th Nov 2018, its operating part reads "As per findings of surveyor, yourself could not provide any documentary evidence to substantiate location 1308, Katra Leshwan, Chandni Chowk and the location given in FIR i.e. Katra Dhuliyan are same. In view surveyor opined that location 1308, Katra Leshwan has been treated as unaffected by the fire and therefore no loss is payable for the location covered in the policy mentioned as Katra Leshwan. Hence, your claim is being repudiated".
2.5. However, the rejection of the claim by the OP is contrary to the insurance policy contract. The premises at First floor, 1308 Katra Lahswan, being used by the complainant as tenant, which was also clarified to the surveyor in no uncertain terms. Mere fact that the tenancy exists under no formal document does not in itself an illegality or to prejudice to the OP in any manner.
The surveyor has personally verified that the premises occupied by the complainant and it contained goods belonging only to the complainant. The documents of stock at the premises of 1308, Katra Lahswan, were also furnished to the surveyor, who examined them and carried out assessment. The insurance policy was also taken for the same premises. No claim was raised for the building but all claims were is in respect of loss of the stocks lying there. Thus, reasons given by OP for rejection of claim are flimsy and mischievous. Thus, complainant requested Insurer/OP to re-visit its stand as there was no legal justification for the view taken by it, however, despite repeated requests, the OP had refused to revise its stand.
That is why complaint was filed for an award against the OP for Rs.3,72,730/- (along-with interest @ 9% as from three months after the date of loss until its final payment) in respect of the loss suffered & assessed by the Surveyor (b) apart from Rs.25,000/- towards cost of litigation and (c) 50,000/- towards harassment and mental agony suffered by the Complainant.
2.6: The complaint is supported by documentary record (pages 11-93) consisting copies of insurance policies, Fire Report by Delhi Fire Service, FIR no.0138/17, letters written by complainant to SHO PS Kotwali, Fire Officer, Opposite Party, list of damaged and saved stock, claim bills, electricity bills, cash memo/credit memos, income tax return, quotations by interested persons to buy damaged material, in duplicate rent receipt of other premises, survey report, OP's letter dated 19.11.2018 rejecting complainant's claim. Later, this record was also proved in evidence.
3.1 (Case of OP) : OP opposes it. The complaint is not maintainable. It is liable to be dismissed as there is no deficiency in service on the part of opposite party in rejecting the claim of the complainant. The complainant had obtained the insurance policy in question from opposite party and during the currency of the policy period complainant raised claim, consequently M/s R.N. Sharma & Co. Surveyors and Loss Assessors, was appointed to survey and assess the loss. Surveyor submitted his final survey report dated 24. 10.2017 (Annexure-B). The OP after examining the policy terms and conditions, documents available on the file and the contents of the said survey report observed that as per findings of the surveyor the complainant could not provide any documentary evidence to substantiate that the insured location i.e. First floor 1308, Katra Leshwan, Chandni Chowk, Delhi and the location mentioned in the FIR i.e. Katra Dhuliyan are the same. Moreover, as per the Surveyor's report, the location 1308, Katra Leshwan, Chandni Chowk, Delhi, has been treated as unaffected by the fire and no loss is payable for the said location.
The Surveyor had also sent numerous letters to the complainant to substantiate the coverage of the location 1308, 1st Floor, Katra Leshwan, Chandni Chowk, Delhi, under the policy, but there was no response from the complainant. Accordingly, the claim was repudiated by the opposite party vide letter dated 19.11.2018. Under these circumstances, there was no deficiency in service by OP and complaint is liable to be dismissed on this ground alone.
The claim was rightly repudiated, which was informed to complainant vide letter dated 19.11.2018 (Annexure-A). Since there are disputed and complicated question of facts are involved, which cannot be determined in a summary proceeding and can only be decided by leading detailed evidences and cross-examination, as held in Synco Industries Vs. State Bank of Bikaner (2002) 2 SCC1 accordingly complainant's claim under the Consumer Protection Act is not maintainable and is liable to be dismissed on this ground also. Since services availed of by the complainant from the opposite party were for commercial purposes, being commercial activities, the complaint is barred under consumer Law. OP denies that the premises at 1308 1st Floor Katra Lahswan is under occupation of complainant as tenants or the complainant had furnished documents to the surveyor relating to stock at the premises of 1308 1st Floor Katra Lahswan . OP also denies other allegations including the reasons for rejection were utterly flimsy and mischievous.
3.2 The reply is supported by OP's repudiation letter 19.11.2018 and final survey report dated 24.10.2017. This record was also proved in evidence by OP.
4.1 (Replication of complainant) : The Complainant reaffirms the complaint correct in his replication and he also denies the allegations of reply that since complainant is not carrying any business of insurance, therefore, there is no scope for OP to alleges the policy of insurance is for commercial purpose. Moreover, the Insurance was taken against the various kinds of risks. Hence the present Complaint falls perfectly under the ambit of Consumer Protection Act. The case law cited by OP does not apply to the situation of this case.
5.1 (Evidence) : Complainant Shri Ashok Kumar Jain, filed his affidavit of evidence fortified with the record which was filed in support of complainant.
5.2: Shri Raghunath Pawar, an Officer/AR of OP1 and Shri Ram Narayan Sharma, Surveyor filed their affidavits as evidence for OP, their affidavits are supported by survey report dated 24.10.2017, apart from copy of letter dated 19.11.2018 in the affidavit former to establish the stand taken in the reply as well as to justify repudiation of complainant’s claim.
6.1 (Submission of Parties) : The written arguments were filed by both the parties to demonstrate their contentions besides Shri Amit Kumar Advocate for complainant and Shri Shaumik Majumdar, Advocate for OP also made oral submissions.
6.2: It does not require to reproduce the contentions of the parties, in this paragraph but their contentions will be referred and discussed appropriately.
7.1 (Findings) : The contentions of both the sides are analysed, assessed and considered keeping in view their evidence, documents and circumstances spelling out there-from.
7.2: At the outset, there are certain admitted facts & documents, like the complainant obtained two insurance policy in respect of risk of fire, riots, storm, burglary etc. and there was a formal FIR no. 0138/2017 P.S. Kotwali in respect of episode of fire on 22.05.2017 in the area, Delhi Fire Service report on the eve of its visiting and extinguishing the fire, appointment of the surveyor, conduct of personal survey by him and filing of the report. It is also not disputed that the claim in respect of insurance policy no. 35020111610000266 for Location-1307-Second Floor, Katra Dhuliyan, Chandni Chowk, Delhi was settled pertaining to same incident of fire took place in the area.
However, the dispute pertains to the claim in respect of policy no. 35020111610000267 for Location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi. The present findings are being rendered in respect of this dispute.
7.3. There are two other legal issued also raised, first of all they are to be determined and thence it would lead to next course.
8.1. (Whether case needs to be adjudicated by Civil Court?)- OP has reservation and it refers Synco Industries Vs. State Bank of Bikaner, (2002) 2 SCC1 that because of controversy involved in the present case,, it can be solved by the civil court since it involves detailed evidence and cross examination and that is why the consumer Forum/Commission has no jurisdiction on the subject matter of this complaint. Whereas, the complainant opposed case law relied upon does not apply to this case, subject matter can be dealt and decided by the present Commission.
8.2A: By comparing the submissions of both sides, OP has raised a question and it is to be seen, whether it needs detailed evidence inclusive of cross examination of witness or in its absence, the issue cannot be determined. In Synco Industries Vs. State Bank of Bikaner, (2002) 2 SCC 1, the dispute was in respect of bank loan and there were many aspects involved freezing of sanction, interest component and additional loan etc., therefore, at the out-set features of this case are different from the facts & circumstances of this case. In this case, there survey of area by surveyor, collection of evidence and also evidence of this case. Thus, the ratio of that case does not apply to this case.
Otherwise, the case is based on enough documents on record which itself suffice to decide the issues, hence there is no requirement of other detailed evidence or cross examination. The complaint can be easily dealt by summary procedure under the Consumer Protection Act, 1986 (as the complaint pertains to Act 2016) Therefore, this contentions of OP is dismissed and it held that this Consumer Forum/ Commission can adjudicate the issue arisen.
8.3: (Whether Insurance policy is for commercial purposes): The OP raised an issue that since the complainant is a cloth merchant and policy was obtained in respect of his business establishment, consequently the complainant is not a consumer for the purposes of the Consumer Protection Act, 1986 and Consumer Forum/Commission lacks the jurisdiction. Whereas, complainant protests it that complainant is not doing business of insurance, the contentions of OP are not tenable. The complainant is a consumer.
8.3A: The act of obtaining insurance policy to cover the risks against perils to stock and business establishment does not amount to make gains or profits, it is shield from losses, it is not a commercial activity to be excluded from the consumer law. Moreover, obtaining the insurance cover is covered under the definition of 'services' for covering the risk of stocks etc., reliance can be placed on M/s Harsolia Motors vs M/s National Insurance Co. Ltd. (2005) 1 CPJ 27 (NC).
8.4: (other features on merits) – The case of the parties is clear from the matrix of their plea already referred, which was also contended during argument. In the letter of repudiation, OP has relied upon the report of surveyor, who concluded "as per findings of surveyor, yourself could not provide any documentary evidence to substantiate location 1308, Katra Leshwan, Chandni Chowk and the location given in FIR i.e. Katra Dhuliyan are same. In view surveyor opined that location 1308, Katra Leshwan has been treated as unaffected by the fire and therefore no loss is payable for location covered in the policy" It is an opinion of the surveyor and it needs to refer the documentary record as well as other component of the surveyor’s report to decide the sole controversy opined by the surveyor.
8.5. The following relevant and material aspects are culled out from the documentary record:-
(i). The complainant had furnished documentary records to the surveyor and the record is also not disputed, however, the surveyor has reported that documentary record of tenancy and electricity bill were not furnished, to this query complainant wrote to the surveyor that it was under oral tenancy, the oral tenancy would not demerit his rights of tenancy. However, the electricity bill has also been filed on record (page no. 31 of paper-book).
(ii). The surveyor in his report dated 24.10.2017 (pages no. 87-93) has gathered many material aspects at the spot, firstly, he has specifically mentioned in the beginning of his record (at page no. 87) that he had visited both the locations which also include location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi. Further, at page 3 of his report, has given report under the title "Extent of Damage and Our bservations", its Part-A is in respect of location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi and other Part-B is in respect of location 1307, Second floor, Katra Dhuliyan, Chandni Chowk, Delhi. Moreover, his report on page no. 3 also mentions that photograph were also taken in respect of fire damage to stocks at both the locations. Similarly, on page no. 4 of his report (at page no. 90 of paper-book) the valuation of inventory was also for both locations in two parts viz. (Part A) - 1308 First Floor, Katra Leshwan, Chandni Chowk, Delhi and (Part B) - 1307, Second floor, Katra Dhuliyan, Chandni Chowk, Delhi. Lastly, final assessment of loss was also done separately for both locations (at page no. 6 & 7 of the report).
To say, the surveyor himself visited the locations inclusive of the subject location 1308 First Floor, Katra Leshwan, Chandni Chowk, Delhi and simultaneously, opinion was formed by the surveyor that this location is treated as unaffected by fire for want of documentary record of tenancy and electricity bill. The surveyor wants to satisfy his quest by securing the document of tenancy and electricity bill, despite his personal observations and verification at the spot. Moreover, there need not to be always a written lease deed or all tenancy are not compulsory registration and oral tenancy is a valid contract and there may be protected tenancy. Otherwise, complainant has filed available old rent receipt but in respect of other premises.
(iii). The formal FIR no. 138/2017 (at page no. 16 of the paper-book) was registered, the place of occurrence mentioned is of Katra Dhuliyan, Main Chandi Chowk, Delhi and as per narration in the FIR, there was initially DD no. 39A dated 22.05.2017 with an information that there is fire at shop no. 1315, Katra Dhuliyan, Main Chandi Chowk, Delhi, which was original point. The report Delhi Fire Service Report (at page no. 15 of the paper-book), clearly mentions that the fire was at shop no. 1315 Katra Dhuliyan, Main Chandi Chowk, Delhi and it was serious category of fire and approximate 80 shops of cloth material and other items in the approximate area of 1500 sq. yards was affected in such fire, the building affected was comprising, the ground floor plus three upper floors, some part of the building also collapsed during fire. The contents of FIR and the Delhi Fire Service Report are reconciling each other.
The DD entry, FIR and Fire Service report are of initial stage, they are not conclusive proof, further aspects are discovered and unfolded during investigation or inquiry or survey. However, surveyor is rendering conclusive opinion that since FIR mentions about original of fire in area of Katra Dhuliyan, Main Chandi Chowk, Delhi, and complainant could not establish that area of Katra Leshwan, Chandni Chowk, Delhi is same area for policy cover.
(iv). The complainant obtained the insurance policy against risk of fire etc. for this location separately and there was another insurance policy against risk of fire for other location in respect of business stock etc. The insurance policy in respect of this location has been clearly mentioned in the policy document (at page no. 13-14 of the paper-book). The other supporting invoices/bills of purchases are in favour of complainant in respect of this location.
(v). By taking stock of all these material, concluding in paragraphs (i) to (iv) above, it clearly establish that there is existence of location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi, being separate location from 1307-Second Floor, Katra Dhuliyan, Chandni Chowk, Delhi, on the basis of documentary record either of invoices/ bills, electricity bill, insurance policy issued by the OP, apart from personal visit of the surveyor during survey of the spot. Thus, surveyor’s reasons that location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi was treated as unaffected by the fire is not justified from any quarter nor there was any justification for the OP to consider the same. Otherwise, the surveyor mentions 'the expression that said location was treated as unaffected by the fire' is an intentional expression instead of factual position that there was fire at the said location, even photographs of damages were also taken by the surveyor and he himself had inspected the spot.
However, the reasons of OP or of its surveyor are misplaced. Surveyor had gone to conduct inquiry and survey under the authority of OP, there was no bar for the surveyor make inquiry in the area, if there was any issue to be addressed, he had not reported so (otherwise surveyor had reported his visits and inspection of the location). There is also no report by surveyor that location inspected by him is not the actual location mentioned in the policy document. The reasons in the report that FIR does not name area Katra Leshwan, Chandni Chowk, Delhi, would not mean the location was not existing. Otherwise, FIR was registered on the basis of first information received by DD entry but FIR further leads that area leading to Gali was curtain off because of safe reasons as well as no eye witness was available at that time.
(vi). When insurance policy is obtained, proposal forms are filled in and it is but natural that impugned insurance policy for this location was also issued subject to compliance of proposal form, acceptance of premium and then insurance policy was affected. But in the surveyor report as well as the stand of OP is as if the no documentary evidence of tenancy of subject location by complainant. However, the surveyor had visited the location and also reported his observation, it is not the case of OP or surveyor, the surveyor could not locate the address to reach there. Thus, the complainant has proved his case against the OP but his valid claim of damages of the subject location was declined under the garb of as if it was not an affected area, whereas as Delhi Fire Service report, there were 80 shops affected by fire in approx. area of 1500 square yards.
(vii). The surveyor has assessed the damages and opined losses in respect of this location covered under the policy, The complainant is praying/claims amount of Rs. 3,72,730/- as estimated/ assessed by the complainant, which is lesser than the as losses assessed as Rs. 3,93,461/- by surveyor of OP.
9.1 The circumstances established by complainant against OP are of deficiency in services by declining him valid fire loss claim on fancy reasons. Thus, complainant is held entitled for his valid claim of Rs.3,72,730/- proved by him and in fact this amount of loss of Rs. 3,72,730/- is lesser than the loss of Rs. 3,93,461/- assessed by OP's own surveyor. The complainant has sought interest @9% pa, however, considering the nature business, income tax return and other features of case, interest @ 6%pa from the date complainant till realisation of amount would justified both the ends.
Accordingly, the complainant is held entitled for amount of Rs.3,72,730/- [in in respect of loss by fire to stocks on 22.5.2017 lying at location 1308- First Floor, Katra Leshwan, Chandni Chowk, Delhi under policy no. 35020111610000267, which was for period 23.06.2016 to 22.06.2017] along-with simple interest @ 6%pa from the date of complaint till realisation of amount against the OP.
9.2.:The complainant has also sought amount of Rs.50,000/- towards harassment, inconvenience, mental pain & agony, to and for expenses and mental agony for this cause; considering the circumstances the damages are quantified as Rs. 20,000/- in his favour and against the OP apart from cost of litigation of Rs.5000/-..
10: Accordingly, the complaint is allowed in favour of complainant and against the OP to pay Rs.3,72,730/- along-with simple interest @ 6%pa from the date of complaint till realisation of amount against the OP, apart from Rs.20,000/- as damages & litigation cost of Rs.5,000/- and OP is also directed to pay the amount within 30 days from the date of receipt of this order.
11. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.
12: Announced on this 1st March, 2023 [फागुन 10, साका 1944].
[Vyas Muni Rai] [ Shahina] [Inder Jeet Singh]
Member Member (Female) President
