DR.INDER JIT SINGH, MEMBER

1. The present Consumer Complaint (CC) has been filed by the Complainant against Opposite Parties (OPs) as detailed above, inter alia praying for following:-

a. declaring that the Opposite Party No.1 & 2 has committed a deficiency of services and/or is guilty of unfair trade practice by not honoring its commitment under Policy No.285200/44/13/5050000002 dated 13.10.2013;

b. direct the Opposite Parties to pay Rs.1,40,69,221/-, the assessed amount accepted by the Surveyor appointed by the Opposite Party No. 1 & 2 alongwith interest @ 12%;

c. direct Opposite Parties pay compensation to the tune of Rs1,40,000/- towards mental agony, harassment;

d. grant Rs.10 lakhs on account of  legal expenses;

e. pending the hearing and final disposal of this complaint, the Opposite Party be ordered and directed to pay to the Complainant, an interim payment of Rs.93,07,135/- as admitted by the Opposite party with pendent lite interest @12% till the date of actual payment/realisation.

2. Notice was issued to the OP(s).  Parties filed Written Statement/Reply, Rejoinder, Evidence by way of an Affidavit and Written Arguments/Synopsis etc. as per details given in the Table at Annexure-A. 

3. Brief facts of the case, as emerged from the pleadings of the parties and other case records are that: -

1. The Complainant purchased CNC Horizontal Machining Center Model-     HMC 1200 BP with fanuc Oi MD CNC Controller & Standard Accessories for an amount of Rs$3,55,000/- on 08.02.2013 from M/s. You Ji Machine Industrial Company Ltd., address 92, Huanqiu Rd, Zhuyuan Vil, Luzhu Dist Kaohsiung City 82142 Taiwan (R.O.C.) On 11.10.2013 the Complainant obtained a Marine cum Erection Policy for a sum of $ 355000  from the Opposite Party No.1 being Policy No. 285200744/13/5050000002 valid for the period 11.10.2013 to 10.01.2014 insuring the fixed assets and stock of the Complainant insured lying at the insured premises as mentioned in the policy.

2. The above machine was kept in 4 containers to be delivered to the Complainant and the Consignment was handed over to the Complainant appointed Freight Forwarder, Navigator Logistics Pvt. Ltd.,Vadodara who have shipped the consignment from Kaohsiung Taiwan Port to Nava Sheva Port, Mumbai, out of the above 4 containers, one container fell down due to toppling of the Trailer in which it was loaded and main parts of the machine got damaged. On 18.10.2013 the Complainant informed the Opposite Parties that the trailer which was carrying the Flat Rack Container with two wooden crates overturned while turning into the lane where CFS entrance was located. After getting the information from the Complainant about the accident, the Opposite Parties immediately appointed Ashok Chopra & Company as a Surveyor to survey and inspect the cause of accident and the damages took place. The Supplier M/s You Ji Machine Industrial Company Ltd. re-exported the machine parts on 11.12.2014 to the Complainant after repairing the damaged machine.

3. On the basis of the information provided by the Complainant, the Surveyor submitted its report on 05.01.2016 assessing the loss to the tune of Rs.1,40,69,211/-. The Opposite Party on noticing that certain claims are not payable to the Complainant and after deducting those items from the assessment made by the Surveyor, the amount payable was fixed at Rs1,32,95,907/-. It was also observed by the Opposite Party that the Complainant had not applied for any compensation from the shippers within the prescribed time frame and had also failed to disclose the date of sailing of vessel. Hence, the Opposite Party assessed the claim amount on non-standard basis and accordingly, deducted 30% from the amount of Rs1,32,95,907/- and informed the complainant on 22.08.2017 that their claim is recommended for Rs.93,07,135/- subject to compliance mentioned in the communication dated 22.08.2017. On 24.11.2017 the Opposite Party requested the Complainant to comply with the aforesaid requisition within a week failing which their claim will be treated as 'No claim'. On 01.12.2017, the Complainant declined to accept the amount offered by the Opposite Party. On 04.12.2017 the Opposite Party closed the claim of the Complainant as 'No claim'.

4.       Heard counsels of both sides. 

5.       It was argued by the OPs that despite requests, the complainant did not provide all information to the Surveyor, based on the information provided by the Complainant, the Surveyor submitted its report on 05.01.2016 assessing the loss at Rs.1,40,69,211/-. As complainant had not applied for any compensation from the Shippers within the prescribed time frame and had also failed to disclose the date of sailing the vessel, OP assessed the claim amount as Rs.93,07,135/- on non-standard basis, deducting 30% from the amount of Rs.1,32,95,907/- which was arrived at by deducting certain claim items from the amount assessed by the Surveyor (Rs.1,40,69,211/-), which were found by OP as not payable.  The amount of Rs.93,07,135/- was payable to complainant subject to compliance mentioned in OP’s mail dated 22.08.2017.  As complainant failed to ensure complainant, the OP closed the claim as ‘No Claim’.  OP further argued that Section 64 UM(4) of the Insurance Act, 1938 authorizes Insurance Company to settle the claim at any amount different from the amount assessed by the approved Surveyor.  In the present case, OP on thoroughly examining the Surveyor’s report found that Complainant had failed to provide certain invoices in order to substantiate its claim, due to which the claim was recommended for Rs.93,07,135/-.

6.       The Complainant on the other hand argued that vide its letter dated 05.09.2017 and 26.10.2017, it requested OP to provide the calculations and working as to how the amount of Rs.93,07,135/- has been arrived at while the gross loss as assessed by the Surveyor is Rs.1,40,69,211/-.  OP vide its letter dated 01.11.2017 sent the complainant detailed calculations in two sheets.  The action of OP in rejecting the claim of complainant as ‘No Claim’ vide letter dated 04.12.2017 is arbitrary and amounts to deficiency of service and unfair trade practice.  Complainant contended that it submitted all the necessary documents as required by the Surveyor from time to time.  The contention of OP that complainant failed to provide certain invoices to substantiate the claim is baseless and contrary to facts.  In this regard, an e-mail was received from the OP on 21.07.2017.  Detailed reply with all the supporting documents was submitted by the complainant vide letter dated 21.07.2017 which was recorded by the branch office of OP at Bhillai on 24.07.2017.  The OPs failed and neglected to pay even the loss assessed by Surveyor in full.

7.       We have gone through various documents provided by the parties.  Vide e-mail dated 22.08.2017. OP has conveyed to complainant that their claim is recommended for Rs.93,07,135/- subject to certain compliance listed in this mail, which are basically production of two invoices and 9 receipts. Vide its letter dated 05.09.2017, complainant sought calculation and working as to how the amount of Rs.93,07,135/- has been arrived at from the gross loss and loss as payable of Rs.1,40,69,211/- as assessed by the Surveyor.  This was followed by a reminder letter dated 26.10.2017 from the complainant to OP.  The requisite details were supplied by OP to complainant vide e-mail dated 01.11.2017 in the form of two sheets along with an internal communication dated 25.07.2017 from Head Office of OP to Regional Office Raipur of OP, relevant portion of which is reproduced below:-

“In terms of the recommendation, the Competent Authority has approved the following:

 1. Raipur RO may be authorized to settle the claim for Rs.93,07,135/- (Rupees Ninety three lacs Seven thousand One hundred Thirty five only) on Non Standard basis as well as applying 5% penalty for non disclosure of Vessel sailing date subject to verification of the invoices and incurrences which are as under for final proof of payment.

a)Point No. 17 & 19 - Invoice required.

b)Point no.18, 21, 22, 25, 37, 38, 39, 43, 44 & 45 Receipt for

       expenses incurred.

2. The RO is also authorized for rectification in the policy regarding the endorsement mentioned under RO's note Recommendation (2nd Para).

3. For the sake of good order, the RO is requested to obtain a acceptance letter for the amount before making payment after compliance of point 1 and 2 above.

The Claim Calculation Sheet is enclosed.”

8.       Based on above, an e-mail dated 22.08.2017 cited above was issued to the complainant.  This e-mail dated 22.08.2017 was followed by an e-mail dated 22.09.2017 and letter dated 24.11.2017 from Bhillai office of OP to complainant, retreating its demand to provide 11 No. of Invoices/receipts.  Complainant vide its e-mail dated 01.12.2017 informed the OP that since the admitted claim of Rs.93,07,135/- is not in agreement with their claim, they are seeking other legal options and that a legal notice dated 18.11.2017 has also been sent to OP.  It was specifically stated in this communication that this is not a ‘No Claim’, but complainant is in disagreement with OP’s admitted claim amount.  This led to issuance of e-mail dated 04.12.2017 from OP’s Bhillai office to complainant stating inter alia that compliances are still pending at complainant’s end, OP has presumed that complainant is not interested to get the claim settled, hence OP has closed their claim as ‘No Claim’.

9.       Here it is important to note that OP has repeatedly stated in its correspondence cited above regarding non-compliance viz submission of 11 number of invoices/receipts.  To this complainant has responded that detailed reply with all supporting documents were submitted by complainant vide letter dated 21.07.2017, received by branch office of OP at Bhillai on 24.07.2017.  This document has been produced by the complainant alongwith their rejoinder.  We have carefully gone through this reply dated 21.07.2017 from complainant to OP’s Bhillai office, which bears receipt stamp dated 24.07.2017 of Bhillai office of OP.  In this communication dated 21.07.2017, complainant has given a detailed para wise response, covering inter alia queries raised in mail dated 21.07.2017 under various points.  Copies of relevant Invoices/receipts etc. were also enclosed with this letter dated 21.07.2017 from complainant to OP.  Hence, we find that contention of the OP that complainant did not do the compliances in terms of supply of 11 invoices/receipts as stated in this e-mail dated 22.08.2017 and subsequent communications is not correct and hence rejected.  We find that complainant made all the compliances vide their letter dated 21.07.2017 cited.  Hence, the action of OP in not accepting the claim of complainant on this ground is not valid.  The contention of OPs that Section 64 UM(4) of Insurance Act, 1938 authorizes Insurance Company to settle the claim at any amount different from the amount assessed by the approved Surveyor is untenable.  The enabling provision of this section does not give arbitrary or unbridled powers to the insurance company.  The use of powers under this Section has to be based on valid and sustainable reasons.  In the present case, in view of the above discussion, the reasons for reducing the claim from the one assessed by the approved Surveyor are not found justified.  The complainant has not challenged the loss assessed by the Surveyor.  Hence, we find it a fit case to set aside the decision/communication dated 04.12.2017 of OP vide which OP has closed the claim of complainant as ‘No Claim’.  We find that complainant is entitled to have his claim as assessed by the Surveyor vide his report dated 05.01.2016 viz Rs.1,40,69,211/- , subject to only permissible deduction under the policy.

10. As regards OP’s contentions regarding maintainability of the complaint on the ground that it involves disputed question of facts and require detailed evidence and NCDRC is not appropriate forum, Hon’ble Suprme Court in Dr. J.J. Merchant & Ors vs Shrinath Chaturvedi (2002) 6 SC 635 observed that “….under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. .....legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground (that it involves complicated questions of fact)…... The Act provides sufficient safeguards.  Regarding contention of the OP that complainant is a commercial organization carrying on business for profit and gain and hence not a consumer under Consumer Protection Act, it was observed by this Commission in Harsolia Motors Vs. M/s National Insurance Co. Ltd. & Ors. (2005) 1 CPJ 27 (NC) observed that “an insured who takes the insurance policy cannot trade or carry on any commercial activity with regard to the insurance policy taken by him. Under Sec.3 of the Insurance Act, 1938, no person is permitted to carry on business of insurance unless he obtains a certificate of registration from the Insurance Regularly and Development Authority.”  “hiring of services of the Insurance Company by taking insurance policy by Complainants who are carrying on commercial activities cannot be held to be a commercial purpose. The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured.”

11.     For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -

1. OPs  are directed to pay the claim to complainant as assessed by Surveyor viz Rs.1,40,69,211/- subject to only permissible deductions under the policy alongwith interest @9% p.a. from 18.04.2014 (six months from the date of incident) till the date of actual payment.  In case complainant has got any claim/compensation from the supplier/any other sources with respect to loss in question with respect to loss in question, the same shall be liable to be deducted from the total amount payable to the complainant as per the order.  Complainant shall file a requisite declaration on affidavit with the OP in this regard within 30 days of this order.

2. Payment under this order shall be paid by OPs within 60 days of this order.

3. OPs shall also pay a litigation cost of Rs.1.00 lakh to complainant.

4. Liability of OPs shall be joint and several.

5. In case complainant has taken any loan against the said machinery/items and some/any portion of the same is still outstanding, payments under this order shall be first used to satisfy such loan and balance shall be paid to complainant.  Complainant shall produce a requisite declaration on affidavit/NOC from the Bank/Financial Institution in this regard before OPs within 30 days of this order.

12.     The pending IAs, in any of the Consumer Complaints, if any, also stand disposed off.