Haryana

Panchkula

CC/261/2014

NITIN TYRES. - Complainant(s)

Versus

NATIONAL INSURANCE COMPANY LTD. - Opp.Party(s)

ROHIT GOSWAMI

07 May 2015

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PANCHKULA.

                                                         

Consumer Complaint No.	:	261 of 2014
Date of Institution	:	11.12.2014
Date of Decision	:	07.05.2015

M/s Nitin Tyres, Shop No.3, Village Marranwala, Nalagarh Road, Pinjore, District Panchkula (Haryana) through its Sole Proprietor Nitin Sachdeva, R/o House No.831, Sector-4, Panchkula.                                                                                                                                                  ….Complainant

Versus

1. National Insurance Company Ltd., 106 Railway Road, Ambala Cantt through its Sr. Divisional Manager.

2.       National Insurance Company Ltd., Chandigarh Regional Office, SCO 337-340, Sector 35-B, Chandigarh through its Regional Manager.

 

                                                                        ...Opposite Parties

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

Quorum:               Mr.Dharam Pal, President.

              Mrs.Anita Kapoor, Member.

 

For the Parties:     Mr.Rohit Goswami, Adv., for the complainant.

                             Mr.J.P.Nahar, Adv., for the Ops.

 

ORDER

(Dharam Pal, President)

 

1. The complaint filed by the complainant against the Ops with the averments that he got insured his shop No.3 & 4 with all the stocks of all kinds of tyres/tubes and other goods of the trade as Burglary Floater Policy for a sum of Rs.15,00,000/- which was valid from 06.05.2013 to 05.05.2014 vide cover note No.42111230400 dated 06.05.2013 (Annexure C-1) but the policy documents with terms and conditions were not delivered to the complainant. Thereafter, the complainant shifted all stock of shop No.4 to shop No.3. Unfortunately, on 18.10.2013 theft was taken place by unknown person. The complainant has given written intimation (Annexure C-2) to the police. The complainant lodged the FIR No.223 (Annexure C-3) dated 19.10.2013 under section 458, 380 and 457 IPC and details of stolen thing of Rs.9,85,044/- including taxes/VAT was given to the Police. The complainant has also given the intimation to the Ops on 19.10.2013 (Annexure C-4). The complainant also submitted the claim (Annexure C-4). The Ops deputed surveyor-M/s Duggal Gupta Surveyors (P) Ltd. on 19.10.2013 to assess the loss. The complainant also submitted the requisite documents to the surveyor. The matter was duly published in newspaper (Annexure C-6). The surveyor issued letter dated 19.11.2013 for seeking some clarifications from complainant which was duly replied by the complainant vide letter dated 02.01.2014 alongwith all requisite documents as demanded by the surveyor. During this process, the complainant has received an untraced report passed by Sub-Divisional Judicial Magistrate, Kalka dated 05.03.2014 (Annexure C-10) which was also sent to the Ops. After that, the Ops also appointed one Investigator-cum-Advocate to investigate, who submitted his report with clarification about the estimated value of goods amounting to Rs.9,85,044/-. The Ops-Insurance Company for taking more time, the Op No.l & 2 appointed one Investigating and Detective Agency-M/s Royal Associates to investigate the loss and submit his report. The investigator conducted the inquiry from his neighbours and the dealers also and found the theft to be genuine. The complainant also cooperated with them at the time of investigation and submitted all the requisite documents as demanded by them. The complainant visited and requested the Ops many times to settle the claim but to no avail. The complainant also requested the Ops to provide the copy of all documents including survey report as well as investigation report which the Ops were bound to give under the Policy Holders Protection Rules, 2000 but to no avail. The complainant also demanded the information and documents under the RTI Act (Annexure C-42) which was duly replied by the Ops but the Ops did not settle the claim of the complainant. The Ops were not satisfied with the reports of surveyor & investigator and deputed another Investigator-M/s S.P.Singh & Associates, Panchkula to investigate the theft who submitted his report dated 12.06.2014 and confirmed the loss having taken place by way of theft in the shop of complainant. But still the Ops did not settle the claim of the complainant. The complainant submitted the copy of assessment issued by the Excise & Taxation Authority to the Ops. Further, the complainant submitted his written request to the DGM of Chandigarh Regional Office on 01.12.2014 in order to advise the Ops to settle the claim of the complainant but in vain. This act of the Ops amount to deficiency in service on the part of the Ops. Hence, this complaint.
2. The Ops appeared before this Forum and filed written statement. It is submitted that the complainant’s shop No.3 was insured with the Ops. It is denied that the policy documents were not delivered to the complainant. It is submitted that burglary took place at the premises of complainant on 18/19.10.2013. It is submitted that the loss claimed by the complainant was highly exaggerated and the documents supported by the complainant were not found to be genuine. It is submitted that the surveyor was appointed but the complainant did not cooperate with the surveyor and the required documents were not submitted in time. It is submitted that a letter dated 19.11.2013 was issued by the surveyor for issuing the documents which was replied on 02.01.2014 after a long delay. It is submitted that as per survey report at point 7.4, the Ops requested the complainant to provide books of account and records like sale and purchase bills, ledger & cash book etc. which were provided from the books of accounts. It is submitted that as per survey report at point 7.5, the complainant was advised to submit the required documents and after analyzing the documents, the surveyor found that two purchase bills, Bill No.563 dated 05.10.2013 for Rs.3,83,100/- and Bill No.575 dated 12.10.2013 for Rs.2,98,600/- were very near to the date of loss. It is submitted that the matter was investigated by the investigator-M/s Royal Associates who submitted his report dated 13.02.2014 and concluded that the GRs of those two bills were not issued by A.K.Carrier and that carrier had closed its business four years back so, the purchase bills were just procured and there was no physical movement of goods proved. It is submitted that the items purchased in bill dated 12.10.2013 were unnecessary and the items purchased in bill dated 05.10.2013 were still unsold so the complainant tried to inflate his loss, however, the surveyor had assessed the loss for Rs.6,51,486/- subject to the terms & conditions and subject to admission of liability by the insurer. It is submitted that the claim of the complainant was repudiated by the Ops vide letter dated 10.02.2015 as per condition No.9 of the Burglary & Housebreaking Policy (Business Premises). It is submitted that the complainant submitted the untraced report to the Ops. It is submitted that an investigator was appointed to confirm the facts of burglary. It is submitted that a copy of survey report and investigation report were provided to the complainant by the Ops vide letter dated 14.08.2014 informing that the claim was under process. It is submitted that the survey report was on the basis of settlement but the payment was subject to the satisfaction of the competent authority and as per the terms and conditions of the policy. It is submitted that as per the survey report, certain discrepancies were fund in the bills, records etc. It is submitted that as per survey report dated 16.07.2014 at point 7.7.3-DISCREPENCIES IN RECORDS/VARIATIONS IN RATES AND DEDUCTION ON ACCOUNT OF VARIENCES which mentioned as under:

“During verification of purchase and sale bills of the insured, we have observed certain discrepancies in case of some of the items which were not claimed by the insured. For example

In some cases the stocks have gone negative on a particular day. For example in case of 600.16 Shan, insured has sold two pcs of this tyre on 25.05.2013 and 1 pc on 29.05.2013. However, the first purchase of 600.16 Shan was on 03.06.2013. Therefore, there was negative stock of 3tyres as on 29.05.2013.

Further, in some other cases there was difference in actual physical leftover stock and leftover stocks as per books. For example in case of 13.6.28 San, insured has purchased total 6 tyres since inception till the date of loss and on verification of sale bill 2 pcs of this tyre were observed to be sold. Thus, as per books, insured was having a stock of 4 tyres of these as on date of loss. Further, during our physical verification, we have observed leftover stocks of 2 pcs of this tyre.”

Thus there is no deficiency in service on the part of the Ops and prayed for dismissal of the complaint.

3. Replication to the written statement has been filed by the counsel for the complainant.
4. In order to prove his case, the counsel for the complainant has tendered into evidence by way of affidavits Annexure C-A to C-C alongwith documents Annexure C-1 to C-29 and closed the evidence. On the other hand, counsel for the Ops has tendered into evidence by way of affidavits Annexure R-A to R-C alongwith documents Annexure R-1 to R-6 and closed the evidence.
5. We have heard learned counsel for the parties and has gone through the record carefully and minutely and considered the written arguments submitted by the counsel for the complainant as well as counsel for the Ops.
6. The complainant got insured his shop No.3 & 4 with all the stocks of all kinds of tyres/tubes and other goods of the trade as Burglary Floater Policy for a sum of Rs.15,00,000/- which was valid from 06.05.2013 to 05.05.2014. The cover note of the policy is annexed as Annexure C-1 and the policy is Annexure R-1. Unfortunately, on 18.10.2013 theft was taken place by unknown person. The complainant lodged a complaint with the police (Annexure C-2) and FIR was lodged by the Police Station, Pinjore on 19.10.2013 u/s 458, 380, 457 IPC. The detail of stolen property of Rs.9,85,044/- including taxes/vat was given to the police. The information was given to the Ops on 19.10.2013 (Annexure C-4). The Ops deputed the surveyor-M/s Duggal Gupta Surveyors (P) Ltd. on 19.10.2013 to assess the loss. The complainant submitted the documents to the surveyor. The surveyor issued a letter dated 19.11.2013 (correct is 29.11.2013) and sought some clarifications from the complainant. Reply of which was sent on 02.01.2014 alongwith all the requisite documents/information as demanded by the surveyor. The police submitted the untraced report in the Court of Sub-Divisional Magistrate, Kalka which was accepted on 05.03.2014 (Annexure C-10) Copy of the order dated 05.03.2014 was also sent to the Ops. The ops appointed S.P.Singh & Associates (S.S.P., C.B.I., retired) as investigator to investigate the matter who submitted his report dated 12.06.2014 to the Ops. The Ops also got the matter investigated through Royal Associates who submitted their report dated 13.02.2014 (Annexure R-4). M/s Duggal Gupta Surveyor (P) Ltd. conducted the survey and assessed the loss as under:-

 

 

“9.2        Adequacy of Insurance

The insured has taken sum insured for Rs.15.00 lacs. We have assessed loss to be of Rs.7,36,221.00 as per Annexure II (value including taxes). The value of left over tyres has been assessed for Rs.70,1250.00 as per Annexure III (value including taxes). Thus value at risk (including vat) comes to Rs.8,06,346.00, which is less than the sum insured. Hence sum insured is adequate and average clause is not applicable.

9.3                   Loss Calculation

Based on our observations above, the loss has been assessed for Rs.6,51,486.00 as per Annexure II. The VAT amount involved in above comes to Rs.84,735.00. AS discussed the VAT amount may be paid to the insured after obtaining evidence as to reversal of VAT.”

7. As per report dated 16.07.2014, at the time of assessing the loss of the complainant, the surveyor also considered the report of investigator-M/s Royal Associates and report of S.P.Singh (S.S.P, C.B.I., retired). In para 7.6 of their report, the surveyor observed as under:-

“We supplied relevant documents/information available with us to the investigator.

The investigator after due investigation have submitted their report dated 12.06.2014.

After analysis of the report of the investigator we have observed that the based on various facts observed by the investigator and his investigations he has concluded that the losses reported by the insured were genuine, the GRs of M/s AK Carrier were not found to be fake and were found to be genuine, the transport Co M/s AK Carrier was found to be functional and doing well.

We have observed that along with various facts from the report of the investigator it is apparent that:-

• The dealer M/s Chawla Tyres have confirmed that that they have sold tyres/stocks to insured and arranged transportations of same to premises of the insured. They received majority the payments through cheques and only small amount was pending as credit and yet to be collected.
• All the sales were duly reflected in sales tax returns and records of M/s Chawla Tyres.
• The owner of M/s AK Carrier confirmed that their various GRs issued by M/s Chawla Tyres were in order and they have arranged transportation of goods against these GRs. Some representatives of insurers/investigators have contacted him on 14.12.2014 and at that time he was in hurry and his statements was recorded while he was standing outside his house. Due to some circumstances and being tired as marriage of his daughter was solemnized on 12.12.2013, he could not got his correct statement recorded that he has closed his business/office from 17, HMM, Ambala City and now he was doing business/operating from his house only. He has provided services to M/s Chawla tyres various times. He also told that they have collected their commission in cash from M/s Chawla Tyres.  
• The owner of vehicle in which goods were transported to the insured premises from premises of M/s Chawla Tyres vide GR No.651 dated 05.10.2013 confirmed that he has transported goods vide above said GR to the premises of the insured and have delivered goods to the insured. He has told that he has gone to the premises of the insured via Haryana, Chandigarh and Mullanpur & Siswan.

One Mr. Mir Hassan, owner of vehicle in which goods were transported to the premises of the insured from premises of M/s Chawla Tyres have confirmed that he has taken goods from premises of M/s Chawla Tyres and have delivered to the premises of the insured and he has gone to the premises on different dates via different routes (one via Samgauli, Sangrana, Barwala, Panchkula & Pinjore to Marranwala & other via Panchkula, Mullanpur, Siswan to Marranwala.

The movement of vehicle no.HR 68 A 7214 of above said person has been confirmed from toll barrier at Chandimandir.

• The owner of AK Carrier has used some of the GRs from GR book issued to M/s Chawla Tyres and have dispatched goods to some other parties also vide GRs from the same GR book.
• The investigator has visited premises of some of such parties and found that GRs/transactions were genuine.
• Various people at site has confirmed occurrence of losses in premises of the insured.

8. However, during the pendency of the present complaint, the Ops repudiated the claim of the complainant vide their letter dated 10.02.2015 (Annexure R-5) on the following grounds:-

“01    Mr Ashok Kumar prop of A K Carriers has confirmed in writing vide his statement dated 14/12/2013 given to M/s Royal Associates Company’s Investigator from Kurukshetra, that he has closed his business as a carrier since last four years. GR nos 651 and 652 are not issued by him, hence issuance of GR no 651 and 652 are found as not correct thus, fake. Copy of statement given by Sh. Ashok Kumar dated 14/12/2013 is enclosed for your ready reference. Analysis of the bank statements of M/s A K Carriers for the financial year 2013-14 do not reveal any relationship between M/s A K Carriers and M/s Chawla Tyres that may prove that M/s Chawla Tyres were regular customers of M/s A K Carriers for using their services as a Carrier. There was no evidence that M/s Chawla Tyres were regular customers of M/s A K Carriers prior to the date of this alleged theft.

02      M/s Royal Associates tried to know from Mr. Nirmal Singh driver of vehicle no HR 37C 3943 to verify the details of delivery of stocks of tyres at your premises at Marrahwala from M/s Chawla Tyres Ambala. He was asked to provide proof of journey like toll tax receipts etc, which he failed to do. His statement to the investigator was also not correct. Mr. Nirmal Singh confirmed that he himself carried and delivered stocks at your shop located at Marrahwala whereas a look at the copy of GR no 651 dated 05/10/2013 shows that Mr.Nirmal Singh was not the driver of vehicle no HR 37C 3943, in actual.

03      Purchases made by you vide bill no 563 dated 05/10/2013 and 575 dated 12/10/2013 from M/s Chawla tyres were not proved as transportation of these stocks were physically did not take place. Therefore bill nos 563 and 575 issued by M/s Chawla Tyres in your favor are proved as not genuine, except to the extent that these appear in the books of M/s Chawla tyres as sales made. The reason of Associates, the surveyors has mentioned in their report that you did not supply these documents along with other books of Account to them for a considerable time due to the reasons best known to you.

04      M/s Royal Associates the investigators and M/s Duggal Gupta Associates, the surveyors both have pointed out so many irregularities in the books of account presented to them. Sometimes sales are made without having any physical quantity in hand, and at times when quantity should be in hand, stocks are shown as nil. There were instances when the sale price of the stocks were shown as less than the purchase price. Analysis of the sales memos indicates that at the time of sale of Tyres, the name of purchaser, tyres serial numbers and vehicle no for which the sale is made, is not mentioned at all. These types of irregularities are a normal when the books are prepared in haste and after the happening of an incident.

9. The abovesaid grounds of rejection were considered by Duggal Gupta Survyor and after analyzed the same observed as under:-

“After analysis of the report of the investigator we have observed that the based on various facts observed by the investigator and his investigations he has concluded that the losses reported by the insured were genuine, the GRs of M/s AK Carrier were not found to be fake and were found to be genuine, the transport Co M/s AK Carrier was found to be functional and doing well.”

10. It is evident from the above, the Ops-Insurance Company has based its decision of repudiation entirely on the report of investigators. From a perusal of investigator’s report, we find that it has made strong adverse assessment without being able to support them with the evidence.
11. From the examination above, it is evident that the Ops-Insurance Company has completely ignored the assessment of surveyor appointed by it and has chosen to rely on the reports of investigators which are full of unsubstantiated exemptions. In this case, the Ops-Insurance Company has appointed the surveyor who submitted his report. On the significance of report of surveyor, the Hon’ble Supreme Court of India has held in Sri Venkateshwara Syndicate Vs. Oriental Insurance Company Ltd. and anr., Civil Appeal No.4487 of 2004, decided on 24.08.2009:-

“In our considered view, the Insurance Act only mandates that while settling a claim, assistance of surveyor should be taken but it does not go further and say that the insurer would be bound whatever the surveyor has assessed or quantified, if for any reason, the insurer is of the view that certain material facts ought to have been taken into consideration wile framing a report by the surveyor and if it is not done, it can certainly depute another surveyor for the purpose of conducting a fresh survey to estimate the loss suffered by the insured. In the present case, the insurer has stated in the counter affidavit filed before the National Commission and even before us, why the appointment of second Surveyor was necessitated and also has given valid reasons for appointing second Surveyor and also has assigned valid reason for not accepting the report of Joint Surveyor. The correspondence between the insurer and the Surveyors would indicate the particulars differed by the insurer for differing with the assessment of loss made by the Surveyors. The option to accept or not to accept the report is with the insurer. However, if the rejection of the report is arbitrary and based on no acceptable reasons, the courts or other forms can definitely step in and correct the error committed by the insurer while repudiating the claim of the insured. We hasten to add, if the reports are prepared in good faith due application of mind and in the absence of any error or ill motive, the insurance company is not expected to reject the report of the Surveyors.”

12. It is well settled that the report of surveyor is to get due weightage. There should be some solid reasons for rejecting the same, this was so held in United India Insurance Company Ltd. versus Roshan Lal Oil Mills Ltd. & others (2000) 10 SCC 19 and DN Badoni versus Oriental Insurance Company Ltd. 1 (2012) CPJ 272 NC.  The Hon’ble National Commission in case titled as Kanti Devi versus Oriental Insurance Company Ltd. and others 2011 (3) CPJ 8 held that the Insurance Act permits appointment of surveyors and they are licensed by the Insurance Regulatory Development Authority. Appointment of an investigator is neither backed by any statue nor are they licensed by any Regulatory Authority. Keeping in view of the principal and natural justice and equity report of investigator considered in detail it does not in any way reduce the importance of the observations made by the surveyor and conclusion drawn by him. The Hon’ble National Commission in case titled National Insurance Company Ltd. versus Ganesh Trading Company 2012 (1) CPJ 16 held that the repudiation ignores report of two surveyors and is based on the reports of the investigator, an ex-police officer who visited the scene nearly 6 months after the incident and he could not have the benefit of any first of examination and assessment of situation as obtained when the burglary was first deducted. In the present case also the investigators visited the place of occurrence after 6 months of occurrence.
13. Be that as it may, the Ops cannot wish away the fact of admission on their part in the pleadings that the complainant is entitled to the amount as assessed by the surveyor.
14. For the Ops to repudiate the claim during the pendency of the complaint is not a phenomenon acceptable on the touchstone of legality or propriety. We disapprove of that attitude on the part of the Ops who have, by delaying the settlement of the claim and repudiating it during the pendency of the complaint, have committed deficiency in service.
15. In view of the facts and circumstances discussed above, we come to the conclusion that failure to decide the claim of the complainant under the policy, amounts to deficiency in service on the part of the Ops. The complaint deserves to be allowed and the same is allowed accordingly. The Ops are directed to pay an amount of Rs.7,36,221/- determine by the surveyor together with the simple interest @ 9% per annum from the date of filing the complaint i.e. 11.12.2014 till realization. To pay Rs.20,000/- as compensation for harassment and mental agony. To pay Rs.10,000/- as cost of litigation.
16. Let the order be complied within 30 days from the receipt of the certified copy of the order. A copy of this order be sent to the parties free of costs and file be consigned to the record room after due compliance.

 

Announced

07.05.2015           ANITA KAPOOR                            DHARAM PAL

                             MEMBER                               PRESIDENT

 

Note: Each and every page of this order has been duly signed by me.

         

                                 

                                                         DHARAM PAL

                                                          PRESIDENT