Punjab

Ludhiana

CC/21/250

M/s Cool Breeze - Complainant(s)

Versus

National insurance company limited - Opp.Party(s)

P.S.Chawla

21 Aug 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:  250 dated 05.05.2021.                                       Date of decision: 21.08.2024. 

 

M/s. Cool Breeze Resorts, through its Partner Gurmeet Singh, aged about 42 years, S/o. Late S. Gurdev Singh, r/o. V.P.O. Kamalpura, Tehsil Jagraon, Distt. Ludhiana.

                                                                                      ..…Complainant

                                                Versus

1. National Insurance Company Ltd. Branch Office Lajpat Rai Road, Jagraon-142026, Distt. Ludhiana, through its Manager/Authorized Person.
2. National Insurance Company Ltd., Head office-3, Middleton Street, Parfulla Chandrasen Sarani, Kolkata, West Bengal-700071 through its Manager/Authorized person.                                                                                                                                           …..Opposite parties 

Complaint Under Section 35 of the Consumer Protection Act, 2020 (as amended) for deficiency in services by repudiating the Insurance claim of Rs.42,70,230/- of the complainant vide repudiation letter bearing reference No.404001/Fire loss/2020-21 dated 18.09.2020.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. P.S. Chawla, Advocate.

For OPs                          :         Sh. Rajeev Abhi, Advocate.

 

 

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that Sh. Gurmeet Singh along with his mother Smt. Sukhminder Singh are the partners of M/s. Cool Breeze Resorts which was built by them in the year 2012 with their joint funds by spending approximately Rs.5 Crore on its construction. The complainant stated that to enhance the furnishing and appearance of a resort, the construction of elevation by making civil work as well as Fabrication of Glass Work, Aluminium, ACP sheets, steel Canopy, Toughened Glass, POP Work, Concealeds and LED lights etc. is essential. As such, for making construction of elevation of the resort, approx. Rs.1 Crore was spent for the erection of elevation which is approx. 220 feet in length, 2.5 feet in width and approx. 70-80 feet in height. Further to avoid any untoward incident, the complainant used to take insurance policies/Fire policies from OP1 regularly including policy No.404001111910000009  w.e.f. 29.04.2019 to midnight of 28.04.2020.

                   The complainant further stated that on 30.06.2019 at about 09.00/09.30 AM due to heavy rain and storm, the elevation of the resort consisting of aluminium glazing fitted with glass, ACP Cladding, Canopy, Toughen Glass, LED lights, Wiring, MCB’s etc. tore down, which also caused damage to the interior work done in the hall including VIP lounge, portion of Dining Area consisting of Down Sealing, A.C. Ducting, 2 Aluminium doors, Entrance Doors consisting of Toughen Glasses including its supporting machinery, Granite Stone duly affixed at entrance approx measuring 20feet X 40feet and costly plants. Even in said incident, one employee of the complainant namely Darshan Singh S/o. S. Tilak Singh, r/o. Village Kamalpura was died. A DDR No.12 dated 01.07.2019 was registered at P.S. Hathur. According to the complainant, it suffered huge loss having estimated to Rs.42,70,230/- as assessed by Metal Zone Corporation (India). Intimation was given to OP1 who visited the spot and took photographs of incident and also took one video clip recorded in CCTV camera. The complainant vide application dated 01.07.2020 lodged claim of Rs.42,70,230/- with OP1, who after receipt of the application appointed M/s. A.K. Enterprises, Surveyors for calculating the loss. The technical team of Engineers made repeated visits and the surveyor M/s. A.K. Enterprises assessed the loss of Rs.28 Lakh + 5%. The complainant further stated that the Metal Zone Corporation (India), who deals in Fabricated Aluminium composite panel, structure glazing, toughen glass doors etc. gave his certificate and accessed the cost of reconstruction of front elevation glass work, ACP cladding and ceiling work to the tune of Rs.32,37,620/-. Even the cost of civil work elevation was approximately Rs.10 Lakh and in all Rs.42 Lakh were to be spent on reconstruction of the elevation. According to the complainant, it started renovation just after a week from the incident and the same was to be completed in October 2019 but the surveyor objected the construction as the same was of quite different design than the earlier one and started raising objections on the constructed site and cunningly started saying that it would cause delay in providing claim to the complainant. However, the complainant regularly fulfilled all the requirements as demanded by OP1 time to time from the complainant. The complainant further stated that till date it had spent huge amount on the renovation of the elevation of the resort but despite the repeated requests made to the OPs for the reimbursement of claim amount was not disbursed in favor of the complainant. However, the surveyor personally visited the resort along with his technical staff, but instead of relying upon his report in which the surveyor i.e. M/S. A.K. Enterprises and assessed Rs.28 lakh + 5% as loss accrued to the resort's elevation, interior work of the hall including VIP lounge, portion of Dining Area consisting of Down Sealing, A.C. Ducting, 2 Aluminium doors, Entrance Doors consisting of Toughen Glasses including its supporting machinery, Granite Stone duly affixed at entrance approx. measuring 20feet X 40feet and costly plants, later on started harassing the complainant on one pretext or the other and started saying that the complainant is only entitled for Rs.20-21 Lakh not for Rs.42 Lakh. The complainant submitted the entire invoices/bills in original with OP1 regarding renovation work of elevation but the OPs raised objections in order to reject the claim. Even the OPs remained adamant on their calculation to pay Rs.20-21 Lakh on lower side but the complainant requested them that he has received much higher loss than the amount calculated by the OPs. However, in order to avoid any complication, the complainant hesitantly agreed with the surveyor and the surveyor assured the complainant that the claim shall be finalize soon and took cancelled cheque from the complainant with assurance to transfer the passed claim amount in account of firm. The complainant further stated that it approached the surveyor and OP1 time to time but they lingered on the matter on one account or the other. However, after more than 1 year from the incident, the complainant received letters dated 22.08.2020 and 04.09.2020 from OP1 seeking explanation regarding the allegations of shortcomings and non-compliances. The complainant replied these letters vide reply dated 23.09.2020 and also sent affidavits of Babu Lal Maurya, Balwinder Singh @ Binder, Vijay & their Aadhar Cards to OP1 in order to satisfy the shortcomings/allegations so claimed by the OPs. But despite receiving said reply/affidavits, OP1 repudiated the genuine claim vide repudiation letter dated 18.09.2020. According to the complainant, the repudiation made by the OPs is illegal and contrary and the same is liable to be set aside on the reasons, which are reproduced as under:-

• The said repudiation letter was an arbitrary act of the OPs which has no valid reason to repudiate the claim and the said repudiation letter itself shows that the OP1 were eager to repudiate the claim of the complainant from beginning.
• The surveyor has not performed his duty in bonafide manner as the surveyor has only to calculate the losses accrued to the resort due to the heavy rain, wind and storm arrived on 30.06.2019. The surveyor has assessed loss to the tune of Rs.28 lakh + 5% initially, but instead of relying upon his own report and thereafter of final assessment of Rs.21,93,221/-, the OP1 has turned down the claim of the complainant on investigation report regarding the incident conducted by Sh. Mandeep Sharma Advocate. Rather, the report dated 18.07.2020 given by the surveyor M/s. A.K. Enterprise has verified the bills and even found that accordance to work bills amounting to Rs.12,24,600/- have not been issued and termed the same as concealment of fact. However, it is neither the case of the insurance company nor it is report of the investigating officer as well as the surveyor that loss has not been accrued to the resort Cool Breeze and they all have found the claim of the complainant as genuine one. Moreover, the calculation on the basis of new construction was a baseless and has only been demanded from the complainant to divert the basic contention and in order to take undue benefit from any shortcomings from the side of the complainant.
• The report of the surveyor is not authenticated as the surveyor has to give total loss report and investigation regarding the truthfulness of facts of the incident to the OP1 but instead of giving such reports, the surveyor has given false report in arbitrary manner which is liable to be sidelined.
• Moreover, the only reason of refusal of the claim of the complainant are the receipts issued by the respective contractors, masons and other which were said to be forged and fabricated. The said receipts/bills has only been declared as forged and fabricated on the basis of statements taken by the surveyor, rather lieu in of the applications given by the OP1 regarding seeking explanation of said statements and forging of receipts, the complainant has got furnished affidavit of the respective contractors/masons regarding the truthfulness of their respective receipts, but the OP1 has not re-verified the facts by appointing any other surveyor or by making visit to the resort at their own but eager to repudiate the genuine claim of the complainant. Moreover, it is not a case of the OPs that no incident has taken place and if the same said to be genuine by the OPs then the assessment of the labour work as well as other material used in reconstruction can be assessed by the OPs and repudiation of claim in such like manner is arbitrary one.
• It is fact that the incident has taken place and losses has been occurred and reconstruction was made and there is no any rule for the OPs to calculate the losses accrued from the construction to be done by the complainant afresh. Moreover, the reports given by the M/s. A.K. Enterprises time to time regarding the accrued loss are annexed herewith for ready reference of this Hon'ble court which made the crystal clear that assessment of Rs.28 lakh approx. was initially made which decreased to Rs.22 lakh approx. and lastly turned down on the basis of concealment of facts, rather the said fact does not come under the purview of concealment of facts and OPs has used the same as a tool to for repudiating the claim.”

In the end, the complainant has prayed for setting aside the repudiation letter dated 18.09.2020 and for reimbursement of claim of Rs.42,70,230/- along with interest. The complainant further prayed for granting compensation of Rs.5 Lakh and litigation expenses of Rs.33,000/-.

2.                Upon notice, the OPs appeared and filed written statement assailed by complaint by taking preliminary objections on the grounds of maintainability; the complainant being estopped by his own act and conduct; suppression of material facts; the complainant has not come with clean hands; lack of jurisdiction; Gurmeet Singh has no locus standi to file the present complaint; the complainant is not a consumer etc. The OPs stated that immediately on receipt of the claim, it was duly registered, entertained and processed. The complainant obtained Standard Fire and Special Perils policy No.404001111910000009 valid from 09.04.2019 to mid-night of 18.04.2020. According to the OPs, insurance policy is a contract in itself and parties are bound by terms and conditions of the policy. Nothing can be added or subtracted out of it. Further it is one of the conditions No.8 in the policy that:

"If the claim be in any respect fraudulent, or if any false declaration be made or used in support therefore or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under the policy shall be forfeited."

The complainant lodged the claim regarding the damage caused to the building structure and fittings of M/s. Cool Breeze Resorts, Kamalpura, Tehsil Jagraon, District Ludhiana on account of stormy winds upon which M/s. A.K. Enterprises, Ludhiana, an IRDA approved and licensed Surveyor and Loss Assessor was appointed for the assessment of loss if any. The said surveyor personally inspected the spot, took the photographs and other documents and prepared his report dated 24.12.2019. M/s A.K. Enterprises vide their mail dated 01.02.2020 submitted the revised assessment, which is reproduced as under:-

"This has reference to your letter as above regarding difference in loss calculation on page No.14, we have checked & we give our revised assessment as under:-

1. R.I. Bills Total                              114286.00

Less Salvage 46125.00

                                                     68161.00

 

But already assd.113161.00

Less corrected above 68161.00

                                                      45000.00

The above difference amount Rs.45000/- may be deducted from the assessment of Rs.2193221.40 & net amount comes out to be Rs.2148221.40.

2.Regarding the lump sum amount given for Rs.75000/- for centre design of pipes etc. & others at top on page No.11. The tax invoices of Krishna Iron Stores are enclosed for Rs.289031/- out of which we have allowed only 55% - 158967/- & out of balance of Rs.130063.95 materials have been utilized from this materials & extra labour vouchers are already enclosed in the file. (The lump sum amount Rs.75000/- (Material = 50000/- + labour = Rs.25000/-).”

The OPs further stated that they vide their email dated 05.03.2020 called upon M/s. A.K. Enterprises to reply to some queries arisen after going through their survey report dated 24.12.2019 and mail dated 01.02.2020, which is reproduced as under:-

"Ref. above we find some queries as under:-

1.Ownership proof of land and building required.

2.As per report, the resort was established during the year 2012-13:

Purchase record of materials used at initial construction / fabrication stage must be purchase record of ascertain / compare type and quality of material being used while re- instating the risk after loss.

3. The rates of construction including fabrication mentioned by Mr. Pardeep Kumar Jain of M/s Jain Associates appear much on the lower side. Break up in rate per square feet must be obtained i.e.:-

(a)Normal construction basis rate per sq. ft.

(b)Rate towards pop work / decorative ceiling etc.

(c)Rates for elevation, canopy fabrication, glasses etc.

(d)Dimensions of boundary wall, construction details and exact valuation.

(e)Min gate & water tank specification details and valuation of current rates.

4. Losses assessed for flooring and boundary wall but no clear snaps depicting damaged flooring and the wall. Further no under repair/re instatement photograph of the same.

Please give the reply immediately for settle the claim."

M/s. A.K. Enterprises received the above said mail and then send the reply to the mail dated 05.03.2020 vide their letter dated 17.03.2020. The OPs further stated that thereafter. Sh. Mandeep Sharma, Advocate, Chamber No.1032, First Floor, Lawyers Chamber Complex, Part-II, District Courts, Ludhiana was appointed as Investigator to investigate the loss account M/s. Cool Breeze Resort's policy No.4040011119100000009. The said investigator had made thorough investigation, took the documents, recorded the  statements and thereafter prepared his report dated 04.07.2020 and submitted the same with the OPs clearly stating that "In my opinion although the incident seems to be genuine and DDR No.12 dated 1.7.2019 is also lodged with the police and that Darshan Singh died in the incident is correct. However, the above mentioned bills are found forged and fabricated. It is against the terms and conditions of the policy since the insured misrepresented the company and concealed the truth."

                   The OPs further stated that after the receipt of report of Sh. Mandeep Sharma, Advocate dated 04.07.2020 wherein he had stated that the labor bills amounting to Rs.12,24,600/- are found to be forged and fabricated and as such M/s. A.K. Enterprises, the surveyor was called upon for discussions on 18.07.2020 in respect to the above. M/s A.Κ. Enterprises has submitted their reply dated 18.07.2020 with the OPs. After going through the survey report, their replies and addendum reports, report of the investigator and after scrutinizing the documents placed in the claim file in accordance with the terms and conditions of the policy and after due application of mind by the officials of the OPs, the complainant was called upon vide their letter dated 07.08.2020 to submit their comments within a fortnight of the receipt of the letter to the effect that there is a violation of terms and conditions of the policy as the labor bills given by the complainant are forged and fabricated and on account of the said fact the claim does not fall within the purview of consideration for settlement. The said letter was followed with the reminder dated 27.08.2020 and final reminder dated 14.09.2020 but the complainant failed to send any reply to the aforesaid letters. After waiting for the sufficient time and after scrutinizing the documents placed in the claim file again and after due application of the mind by the officials of the OPs in terms of the insurance policy the claim of the complainant was repudiated as no claim vide letter dated 28.09.2020 on the ground of violation of condition No.8 of the fire policy obtained by the complainant as the complainant has used fraudulent means and devices to get the claim and had misrepresented the material facts and as such the company has no liability to pay the same. After the repudiation of the claim vide letter dated 18.09.2020, the complainant had sent the reply dated 23.09.2020 to the letter dated 22.08.2020 and 04.09.2020 which was received by National Insurance Co. Ltd., Branch Office Jagraon on 24.09.2020 and 28.09.2020. The OPs after going through the above said reply dated 23.09.2020 had sent the rejoinder dated 16.10.2020 to the reply by informing the complainant that "The rejoinder to the reply is that the loss was occurred on 30.06.2019 due to heavy rain and cyclone in which our building was badly damaged and one worker also died in the incident. After receiving the intimate of the damage, the company has deputed A.Κ. Enterprises surveyor and loss assessor who visited the spot along with officials of the company and the surveyor submitted his report along the photographs taken at the spot. The matter was also reported to the local police and DDR No.12 dated 01.07.2019 was also registered regarding the said incident. After the receipt of the report of the surveyor the company again deputed Shri Mandeep Sharma, investigator for verification of invoices and the bills furnished by you to the surveyor. Accordingly the investigator personally visited the concerned persons / firms who issued the bills, verified the bills and recorded their statements. The statements of Thakedar Balwinder Singh alias Binder, Vijay Singh painter and Babu Ram Tile fixer were recorded after verifying their record. The alleged affidavits are procured one which are vague and these are also not having any figure of the amount received by them, which cannot be relied upon. It is wrong that the surveyor called you that your claims should between Rs.20 to 21 lakhs. It is also pertinent to mention here that the insurance company already repudiated your claim vide letter 404001/fire/loss/2020-21/266 on dated 18/09/2020. It is wrong that your claim is much higher than Rs.21 lakhs or that the surveyor remained strict to the amount of claim. The insurance company repudiated your claim as per the clause No.8 of the terms and conditions of the insurance policy. The clause No.8 is reproduced at under:-

          If the claim be in any respect fraudulent, or if any false declaration be made or used in support therefore or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under the policy shall be forfeited."

The OPs further stated that the they have rightly repudiated the claim of the complainant as No Claim on legal, valid, enforceable grounds in accordance with the terms and conditions of the policy.

                   On merits, the OPs reiterated the crux of averments made in the preliminary objections. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                In evidence, Sh. Gurmeet Singh, partner of M/s. Cool Breeze Resorts tendered his affidavit as Ex. CA and reiterated the averments of the complaint and also tendered affidavit Ex. CB of Sh. Balwinder Singh @ Binder, affidavit Ex. CC of Sh. Vijay Singh as well as affidavit Ex. CD of Sh. Babu Lal Maurya. The complainant also placed on record documents Ex. C1 to Ex. C153 and closed the evidence.

4.                On the other hand, the counsel for the OPs tendered affidavit  Ex. RA of Ms. Kanchan Bansal, Divisional Manager of OP1 as well as affidavit Ex. RB of Sh. Mandeep Sharma, Advocate as well as affidavit Ex. RC of Sh. Ashok Chawla of M/s. A.K. Enterprises along with documents Ex. R1 to Ex. R228 and closed the evidence.                    

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavits and annexed documents and written statement along with affidavits and documents produced on record by both the parties.                 

6.                The complainant firm obtained Standard Fire & Special Perils Policy from the OPs vide policy Ex. C2 = Ex. R227 having validity from 29.04.2019 to 28.04.2020. Ex. C2 = Ex. R227 is the policy schedule where the detailed particulars of building, stock of raw material and finished goods along with respective sum assured has also been mentioned. Ex. R228 is the document which contains terms and conditions of the policy. It’s Section II at Sheet No.18 contains a Condition No.8 which is relevant for the purpose of adjudication of this case. The said condition No.8 is reproduced as under:-

"If the claim be in any respect fraudulent, or if any false declaration be made or used in support therefore or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under the policy shall be forfeited."

Undisputably, on 30.06.2019 at about 09.00/09.30 AM, due to heavy rain and storm, the damage was caused to the fixtures and part of the building of the complainant resulting into death of one worker Darshan Singh. A DDR No.12 dated 01.07.2019 at P.S. Hathur was lodged. On the receipt of intimation Ex. R33 of the incident, M/s. A.K. Enterprises, an IRDA approved and licensed Surveyor and Loss Assessor was appointed. Although the complainant submitted an estimate of loss of Rs.42,70,230/- but the valuer and loss assessor assessed the initial loss to be Rs.21,93,221.40 as per report dated 24.12.2019 Ex. R38. Further Sh. Mandeep Sharma, Advocate was appointed as investigator who recorded the statement of Babu Ram, a Tile Fixer, Balwinder Singh, Contractor, Vijay Singh, Painter and he vide his report Ex. R24 found that the invoices issued by them of total amount of Rs.12,24,600/- are forged and fabricated. Needless to say that these invoices were submitted by the complainant during the process of settlement of the claim. It is also apposite to mention that the complainant started the renovation work even before the preliminary assessment of loss/damage by the surveyor could be completed despite specific objections by the surveyor. The OPs further referred the matter regarding the genuineness of the bills as highlighted by the investigator Sh. Mandeep Sharma, Advocate and asked M/s. A.K. Enterprises to append the comments. The surveyor M/s. A.K. Enterprises after due verification found that the bills amounting to Rs.12,24,600/- have not been issued by the parties and further recommended that there is a concealment on the part of the insured and the OP may deal the claim in terms of the policy conditions. After pursuing the reports and the statement of the aforesaid persons, the OPs repudiated the claim vide repudiation letter dated 18.09.2020 Ex. C149. The operative part of Ex. C149 is reproduced as under:-

“With reference to the above we have already send the letter on dated 07.08.2020, 27.08.2020, 04.09.2020 on the above subject by regd. Post. You have not any reply tell date. We have received the investigation report from Sh. Mandeep Sharma advocate and addendum report of A.K. enterprises surveyor. We have observed that you have mis-represent the material facts. As per terms and conditions no.8 of the fire policy, which reads as under:-

          If the claim be in any respect fraudulent, or if any false declaration be made or used in support therefore or if any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under the policy shall be forfeited.

So, as per terms and conditions of the fire poicy, you are not entitled to any compensations due to violated the terms and conditions of the fire policy. Your case was also minutely securitized by the competent authority and it is found that you have mis-represented the facts of the loss. This is for your kindly information and the company has no liability to pay the claim and your claim file shall be closed as repudiated the claim. Which please note.”

 

7.                At the time of leading evidence, the complainant tendered affidavit of Babu Lal Maurya as Ex. CD = Ex. C137, affidavit of Balwinder Singh @ Binder as Ex. CB = Ex. C140, affidavit of Vijay as Ex. CC = Ex. C143 and tried to prove that the reports of the investigator qua non-genuineness of the bills and receipts of these persons is false. Perusal of these affidavits shows that all these affidavits are identically worded and are vague and ambiguous. It does not specify when and how long they executed the work and what was the exact amount they received qua rendering their services. Rather their statements recorded by the investigator are categoric and specific as it has further submitted in these statements that they do not possess any GST number and even aware of the language in these are written. Report of the investigator Sh. Mandeep Sharma, Advocate Ex. R24 also refers to certain bills of other traders which were found genuine. So no bias or lack of bonafides can be attributed against the investigator nor the same has been pleaded and proved by the complainant. The complainant had an opportunity to cross examine the investigator qua genuineness of the aforesaid bills which was not availed by the complainant. So this Commission is convinced that the report of the investigator Ex. R24 is genuine and carries a truthful version. The observations of the investigator also stands verified by the independent loss assessor as well. So the OPs were justified in repudiating the claim of the complainant. As such the complaint is not maintainable and the same deserves dismissal.

8.                As a result of above discussion, the complaint is hereby dismissed being devoid of any merits. However, there shall be no order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.    

9.                Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

 

Announced in Open Commission.

Dated:21.08.2024.

Gobind Ram.