Chandigarh

StateCommission

CC/551/2016

Sai Battery House - Complainant(s)

Versus

National Insurance Company Ltd. - Opp.Party(s)

Ashwani Arora & Devinder Kumar, Adv.

25 Aug 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Complaint case No.	:	551 of 2016
Date of Institution	:	06.09.2016
Date of Decision	:	25.08.2017

 

Sai Battery House, situated at Gali No.4, Shaheed Bhagat Singh Nagar, Barwala Road, Derabassi, District SAS Nagar, Mohali, through its Sole Proprietor Sh. Neeraj Sharma.

……Complainant

V e r s u s

1. National Insurance Company Ltd., SCO No.332-333-334, Regional Office, Sector 34, Chandigarh, through Chief Regional Manager.
2. Bank of Baroda, Raipur Khurd Branch, UT, Chandigarh, through its Branch Manager.
3. Surveyors Rakesh Kapoor & Co. through Mr.Rakesh Kapoor, A-91, Sector 27, Noida (Uttar Pradesh).

                                                    .... Opposite Parties

BEFORE:         JUSTICE JASBIR SINGH (RETD.), PRESIDENT

                        MR. DEV RAJ, MEMBER.

                        MRS. PADMA PANDEY, MEMBER

 

Argued by:      

 

Sh.  Ashwani Arora, Advocate for the complainant.

Sh.  J.P.Nahar, Advocate for Opposite Parties No.1 and 3.

Sh. Neelam Singh, Advocate for Opposite Party No.2.

 

PER PADMA PANDEY, MEMBER

 

               The facts, in brief, are that the complainant had undertaken an insurance policy bearing No.420101/11/14/3100000754 (earthquake, fire and shock policy) with sum insured of Rs.70 lacs against the premium of Rs.8312/- effective from 23.01.2015 to 22.01.2016 (Annexure C-1), against the location of the goods insured at Gali No.4, Shaheed Bhagat Singh Nagar, Derabassi, Mohali, Block No.4, Sector 48-C, Motor Market and at Sai Battery House, Chowkiwala Nalagarh. It was stated that the complainant was having bank account/cash credit limit of Rs.50 lacs with Opposite Party No.2 and the said policy was purchased from Opposite Party No.2 through its agent. As per the aforesaid policy, goods described in the policy were insured i.e. batteries, investors (in fact invertors) and mobil oil, insuring goods worth Rs.70 lacs.  It was further stated that on 03.05.2015 the complainant kept the shop closed but he had gone to the shop at Derabassi for sometime to take a battery and invertor from there and, as such, he went there at about 6.00 PM and came back after duly locking the said premises. On the next day morning of 04.05.2015 at about 7.30 AM, the complainant was informed through telephone by the owner of the building from where the complainant is operating his small business, that a fire had occurred at insured premises at Gali No.4, Shaheed Bhagat Singh Nagar Road, Barwala Road, Derabassi, District SAS Nagar, Mohali. Thereafter, the complainant reached at the spot and found that his shop had been engulfed by fire. The fire brigade was called and it took 3-4 hours to control the fire. A Fire Event Report was prepared on 05.05.2015 by the office of Fire Station, Derabassi, which is attached as Annexure C-2/A alongwith affidavit of the complainant. It was further stated that the fire was so huge and due to intense fire, the fire brigade personnel broke down the portion of the back wall of the premises to control the fire and in the fire, insured stocks i.e. batteries, invertors etc. were damaged. It was revealed by the fire brigade personnel that the fire was due to short circuit in the shop premises. The complainant also lodged DDR bearing No.22 dated 04.05.2015 regarding the incident of fire. The police reached the spot and investigated the same and found that huge quantity of batteries, mobil oils, invertors were lying and due to short circuit the same were damaged. It was also mentioned in the DDR that goods worth Rs.74 lacs to Rs.75 lacs were damaged.

2.           Thereafter, the claim was lodged on 04.05.2015 to Opposite Party No.1, who appointed M/s Duggal and Gupta, Surveyors of Chandigarh, to assess the loss. The said surveyor visited the spot for preliminary survey on 04.05.2015. After that, Surveyor and Loss Assessor namely Sh.Rakesh Kapoor & Company from Noida was appointed by the Insurance Company to assess the loss, who sent an email dated 07.05.2015. Perusal of the email shows that loss assessor had acknowledged the receipt of the inventory of the stocks and also advised the complainant to submit various documents, as mentioned in the email, to make the assessment of the estimate of the loss. The said surveyor visited the site on 05.05.2015 for spot survey and verification of the stocks. It was further stated that the stock lying in the front portion of the insured premises was counted by the surveyor but the stock lying in the rear portion of the insured premises, which were damaged in the fire, could not be counted due to extreme heat and even the labourer refused to  enter the rear portion on the insured premises. The statement of the complainant was recorded on 06.05.2015 by the surveyor (Annexure C-3). It was further stated that the surveyor did not record the complete statement of the complainant and in the midway stopped the statement. However, physical stock damaged in the fire lying in the front portion were acknowledged by the surveyor on 05.05.2015 (Annexure C-4). It was further stated that during the proceedings of the claim, the complainant sent an email dated 03.06.2015 to the surveyor mentioning that maximum number of batteries have been burnt in the fire, whose serial numbers were not readable and the complainant mentioned that serial number of only 97 batteries were readable out of approximate 1140 batteries in stock.

3.           It was further stated that statement of stocks as on 30.04.2015 in Derabassi and Chandigarh amounting to Rs.74,56,844.46 attached as Annexure C-6 and the same was physically verified by Opposite Party No.1. It was further stated that after bifurcating the stocks on 30.04.2015 in the shop at Derabassi amounting to Rs.71,08,320.44 is attached as Annexure C-7. The audited sheet for the financial year 2014-15 of the firm of the complainant of the insured premises as on 31.03.2015 showed the stocks amounting to Rs.89,48,990/-. Copy of the same duly certified by Chartered Accountant is attached as Annexure C-8. It was further stated that the complainant had given to the Opposite Parties complete details of number of batteries i.e. 1073 in number, invertors 21 in number and mobil oil 5324 in numbers, which were damaged in the incident of fire and submitted fire claim form claiming the value of insured goods amounting to Rs.70,03,768/- (Annexure C-9). On receipt of the claim, the claim was duly investigated and all the required information and documents were promptly supplied by the complainant, as and when demanded by the surveyor. Copy of survey and assessment report dated 21.12.2015 is attached as Annexure C-10. The surveyor has mentioned in the report that the claim of fire has been exaggerated by the complainant. It was further stated that the insured goods were insured by the Bank (Opposite Party No.2) after physical verification of the stocks, so it cannot be said that the complainant had exaggerated the claim, as mentioned in the survey report. It was further stated that when the fire incident took place on 04.05.2015, the surveyor was deputed to assess the loss on the same day i.e. 04.05.2015 and on the advice and suggestion of the loss assessor and surveyor, the material was placed in the adjoining shop.

4.           It was further stated that on 02.08.2017 the complainant had informed that a theft has taken place in his shop and DDR No.52 dated 03.08.2015 (Annexure C-11) was lodged with Police Station Derabassi. It was informed to the police that on 02.08.2015 some unknown persons had stolen the batteries worth 1000 in number. The police investigated the matter and found that the application has been given on correct facts and DDR was tagged with FIR No.179 dated 09.08.2015 (Annexure C-12) was registered. Copy of the certificate of policy No.420101/46/14/7500000359 w.e.f. 23.01.2015 to 22.01.2016 covering the risk of theft is attached as Annexure C-14. The said Surveyor Sh.Rakesh Kapoor – Opposite Party No.3 that the complainant had shifted the batteries to a different and safe location and stacked properly with make and model wise. It was further stated that from the date of fire i.e. 04.05.2015 and the date of theft i.e. 02.08.2015, nearby three months had passed but the surveyor i.e. Opposite Party No.3 failed to make any efforts to conclude the survey report. It was further stated that the claim of theft has not been considered by the Opposite Parties on false grounds that there is no forcible entry and on the ground that the possibility of theft of such large number of batteries is ruled out. It was further stated that after physically verifying the records, the surveyor assessed gross loss to the tune of Rs.17,63,131/- and net loss assessed is Rs.12,45,292/-, which    has  been   paid through  RTGS   in   the   account   of   the complainant against  the  claim  of Rs.70,03,876/-.   Ultimately,  legal                

 

notice (Annexure C-16) was sent to Opposite Party No.1 through registered post but no action was taken, despite receipt of the said legal notice.  It was further stated that the aforesaid acts, on the part of the Opposite Parties, amounted to deficiency, in rendering service, and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (in short the ‘Act’ only), was filed.

5.           Opposite Party No.1, in its written version, has stated that the present complaint is defective due to misjoinder of issues, as the cause of action arose under fire policy, when the fire occurred on 04.05.2015 and in the other, cause of action arose under burglary policy, when theft occurred on 02.08.2015 and, as such two claims have arisen under different policies, for different causes and on different dates and, thus, two separate complaints should have been lodged for proper adjudication of the complaint. It was further stated that the claim pertaining to fire loss has already been paid, and the alleged loss due to burglary was repudiated, after due investigation. It was admitted that fire occurred on 04.05.2015 ; back wall was broken down to control the fire ; DDR was lodged ; deputed the surveyor, who gave report dated 11.05.2015 (Annexure OP-1/1). It was denied that there was loss about Rs.74 lacs to 75 lacs. It was admitted that M/s Rakesh Kapoor & Company was deputed for conducting the final assessment of loss. It was denied that the surveyor visited the site on 05.05.2015 for spot survey. The surveyor had discussed the claim, counted the stock lying at the premises and the statement was also signed by the complainant. After prolonged discussions, exchange of emails/letters, the surveyor submitted the survey report dated 21.12.2015 (Annexure OP-1/2). It was denied that the surveyor did not inspect the stock lying at the rear side of the premises and did not record the complete statement of the complainant. It was further stated that even the email dated 19.06.2015 (Annexure C-14A) was not replied pointing out any such thing and the complainant did not comply with the requirements as detailed in the email. It was further stated that the alleged stock as on 30.04.2015 as Annexure C-6 is for Derabassi and Chandigarh combined and hence did not reflect the true picture of the stock lying at Derabassi. The bifurcation of stock on 30.04.2015 for Derabassi alone is not authentic because the complainant used to prepare a combined statement. It was further stated that the audited balance sheet has been prepared on 07.09.2015, whereas, the date of alleged fire is 04.05.2015 and the date of alleged burglary is 02.08.2015 and the same has been prepared with an intention of claiming the maximum amount of loss. It was denied that the stock as on 31.03.2015 tallied with the insured stock. The value of the insured stock of all the three locations mentioned in the insurance policy is Rs.70 lacs, whereas, the complainant claimed that the stock was Rs.89,48,990/- at Derabassi alone. Copy of the insurance policy bearing No.42010111143100000754 alongwith terms and conditions is Annexure OP-1/3. It was further stated that the loss was assessed for Rs.12,45,292/- and the same stood paid on 29.03.2016 (Annexure OP-1/4). It was denied that goods have been insured after physical verification of the stock. It was further stated that the goods insured were under hypothecation of the Bank and not pledged. Even no certificate of any official of the Bank has been annexed confirming having physically verified the stock. The bare perusal of the survey report dated 21.12.2015 annexed as Annexure C-10 reveals that the surveyor had given a detailed assessment of loss. It was denied that at the suggestion of the surveyor, the damaged goods were placed at a different place, rather the complainant expressed his desire to repair the damaged shop to restart his business. It was further stated that the premises where the damaged stock was shifted is not adjoining shop, rather away from the insured location. Moreover, the complainant did not approach Opposite Party No.1 to include the location subsequently taken for storing the damaged goods and there is no insurance coverage for these so called damaged stock, as no endorsement was got passed on the policy. On receipt of the information for the alleged theft, Opposite Party No.1 deputed Sh.R.N.Sharma as investigator, who submitted his report dated 03.10.2015 after investigation and found that the alleged theft is not genuine. Copy of the report and his subsequent clarification dated 16.11.2015 is Annexure OP-1/5 (Colly.). It was denied that the loss due to alleged theft is covered under the policy of burglary annexed as Annexure C-14. It was an admitted fact that the complainant has shifted the stock at a different location other than insured under the policy. The complainant has not requested for insurance coverage pertaining to the new location and, therefore, the policy was not endorsed to cover the loss under the policy taken for the period from 23.01.2015 to 22.01.2016 for the sum insured of Rs.70 lacs for three locations combined. Secondly, the burglary policy does not cover theft but covers burglary or house breaking. Copy of the burglary policy is Annexure OP-1/6. It was further stated that batteries were taken out in the open and were counted and a detailed inventory was prepared. It was further stated that the alleged theft is a stage managed event just to deprive an opportunity to the surveyor to check the alleged stock with a view to make a claim showing the old salvage of the used batteries as new batteries. It was denied that any investigation was conducted by the police, rather even an FIR was not lodged and DDR lodged by the complainant was tagged with another FIR. It was also denied that there was any forcible entry. It was further stated that the physical investigation done by the investigator and the surveyor and photographs taken clearly bear it out that there was no burglary rather it was a stage managed event. It was further stated that the complainant was requested vide letter dated 19.05.2016 (Annexure OP-1/7) to offer his comments on four points contained in the letter but the complainant did not reply. It was further stated that since the complainant did not reply to the letter, the replying Opposite Party repudiated the claim vide letter dated 02.06.2016 (Annexure OP-1/8).  It was further stated that neither there was any deficiency, in rendering service, on the part of the replying Opposite Party, nor it indulged into unfair trade practice.

6.           Sh.J.P.Nahar, Advocate, Counsel for Opposite Party No.1 also put in appearance on behalf of Opposite Party No.3 on 25.10.2016 and adopted the reply & evidence, as filed by Opposite Party No.1, on behalf of Opposite Party No.3.

7.           In its written statement, Opposite Party No.2 has stated that replying Opposite Party is maintaining cash credit account of the complainant’s firm through its proprietor Mr.Neeraj Sharma. The replying Opposite Party had granted cash credit limit of Rs.40 lacs on 05.03.2013 and the said limit was further enhanced from Rs.40 lacs to Rs.50 lacs on 07.07.2014. It was further stated that    the    replying     Opposite    Party     had granted   cash    credit      limit    to   the    complainant and,   therefore,   the      items          were           insured from Opposite Party No.1 through   their  representative

who was regularly visiting the Bank for the purpose of insurance business. It was further stated that no cause of action has arisen against Opposite Party No.2 and no relief is claimed against Opposite Party No.2 by the complainant and, therefore, the complaint is liable to be dismissed qua Opposite Party No.2.

8.           The Parties led evidence, in support of their case.

9.           We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

10.         It is an admitted fact that the complainant had taken an insurance policy bearing No.420101/11/14/3100000754 (earthquake Fire & Shock Policy) with sum insured of Rs.7 lacs effective from 23.01.2015 to 22.01.2016. Opposite Party No.1 i.e. National Insurance Company has credited the account of the complainant with Rs.12,45,291/- towards his claim against aforesaid insurance policy due to the loss incurred by him on account of fire which took place in his shop at Derabassi. Opposite Party No.1 relied on the survey report of Rakesh Kapoor & company, who are the Surveyor’s/Loss Assessors/Valuers of Opposite Party No.1. The Surveyors in their report at Annexure OP-1/2 had given the following observation :-

• The proprietor of the complainant Company Mr.Neeraj Sharma and his employees assisted the surveyors in conducting the inspection of loss on 5^th May, 2015. The fire broke out on the intervening night of 3^rd and 4^th May, 2015 and it was noticed by the complainant in the morning of 4^th May, 2015.
• The shop premises of complainant at Derabassi was found to have two portions and both these portions were affected by fire. The rear portion was having storage of batteries, which appeared as if they were kept almost dumped one over the other and also a table with battery charger and the rear wall of this portion was found broken reportedly by fire crew for fire fighting.
• The complainant prepared an inventory of stocks by taking the batteries out in the near portion of the premises and segregated them as per make and type.
• The complainant informed that the stock movement detail was in the computer system which was kept in the shop and was also effected in fire. Later on it was found that even after recovery of the said data from the computer no such detail was maintained by the complainant in the computer.
• The complainant was unable to provide the serial numbers of the batteries out of the inventory prepared by him but later on he was able to provide the serial number for only brand of batteries.
• The complainant make a request to the surveyor for allowing him to shift the stock to some other place so that he could carry out his repairs to his shop for restart of his business, which was accepted by the surveyor.
• The complainant/insured informed that he had segregated some okay batteries and are under the process of charging them. The surveyor mentioned that they would visit the complainant on 2^nd August, 2015 for physical verification of the serial number of batteries, which was never confirmed to the surveyors. However, to much surprise of the surveyors they were informed on the morning of 2^nd August, 2015 that a theft has been committed in the premises during night where the stocks had been kept and which were to be verified by the surveyors, next morning thereby depriving the surveyors for any verification of the serial numbers.
• Surveyor observed that the complainant’s shop Derabassi is situated at Gali No.4, Shaheed Bhagat Singh Nagar, Derabassi, Punjab in a single storeyed building having an area of around 28/9 feet and partition throughout wall between, both sections communicating through a door.
• Front portion of the shop measuring about 18/9 feet had a small office with storage rack on the left hand side for display and storage and a small table for computer and a chair & an almirah. Rear portion of about 9 x 9 feet was used for storage of batteries, the battery charger and inverter for emergency lighting. In the front portion, few batteries were lying on the floor while some other stocks displayed and store. CCTV Camera & recorder was also kept but destroyed in fire. In the rear section, batteries were kept on the floor in a stack of three batteries but in a very unusual way, without any packing and their caps missing.  This proved that there was storage of old and new batteries at the same place.
• Batteries in the rear room being not possible to quantify were effected, few burnt also, and in order to see their condition & modification the surveyor decided to take out the batteries in open, which was arranged by the complainant and also on segregation of the same, the surveyor observed that lot of batteries were old and used also. The complainant, though much experienced in this trade, feigned ignorance about such old batteries being kept alongwith the new batteries. The surveyor while referring to the financial data of the company for the period January,2014 to March, 2014 observed that the purchases were much less than sales, as compared to the previous years when the purchases were much high, as compared to the sales. In the month of February/March, 2015, the sales were even less than 10% of the purchases. The same trend continued in April, 2015 also.
•  The surveyor observed that on the date of loss, stocks worked out to Rs.63.62 lacs and Rs.23.83 lacs, at Derabassi and Chandigarh respectively with negligible sales at Derabassi but very high at Chandigarh.  The complainant, however, has provided the stock statement reflecting stock at Chandigarh for Rs.3.42 lacs and Derabassi Rs.71.08 lacs, totaling Rs.74.50 lacs. The surveyor however felt that going by the above observations, the record produced by the insured cannot be accepted authentic for the purpose of loss.
• A very vital point worth our attention is that the surveyor had fixed 2^nd August, 2015 with prior confirmation from the complainant for arranging the verification of batteries but on the very day the surveyors were informed that a theft has taken place during the night and that all the bigger batteries were stolen and only small (motor cycle batteries) and inverters are left behind, which left no opportunity for a final verification by the surveyor.   
• The complainant had provided information to the police reporting theft of 1000 batteries. However, on the physical inventory of stocks of batteries in the shop by the surveyor reveals that there were total 368 batteries which included old and the new batteries.

11.         The surveyor against the complainant’s claim for damage to 1073 number of batteries, 21 number of inverters, 5324 number of cans of mobil oil                   for Rs.70,03,768/- , had assessed the loss to the tune of Rs.17,63,131/- (gross assessed loss) out of which, the net adjusted loss worked out to be Rs.12,45,292/-, which was paid by Opposite Party No.1 to the complainant, as discussed above. The surveyor had allowed 20% of the cost of the motor cycle batteries, 20% of the cost of inverters, 65% of the cost of mobil oil cans, full value of new batteries and 25% of the cost of old batteries and accordingly arrived at the said amount of Rs.12,45,292/-. In our opinion, the said assessment and the amount paid by the Opposite Party No.1 to the complainant seems to be appropriate.

12.         As regards the complainant’s claim for theft of 1000 batteries, against burglary policy No.420101/46/14/75/359, Opposite Party No.1 repudiated the claim of the complainant on the following grounds :-

“With reference to above, we are in receipt of investigation report of Sh.R.N.Sharma, Investigator. We would like to have your point-wise comments on the observations given by the investigator which are as under :

1. Location of the burglary is not covered under the policy as we have issued the policy for the following locations :

1. Gali no.4, Shaheed Bhagat Singh Nagar, Derabassi, Distt. Mohali.
2. Block No.4, Sector 48-C, Motor Market, Chandigarh.
3. Showkiwala Nalagarh.

Whereas the alleged theft has taken place at Street No.4, Barwala Road, Derabassi.

2. Alleged quantity of batteries cannot be accommodated in such small shop, even so, there are no marks of storage of burnt goods therein.
3. There is no possibility of theft of such stocks to take place in such short span.
4. There was no sign of forcible entry in the shop found.”

13.         The surveyor Sh.R.N.Sharma, approved investigator of the General Insurance Corporation of India made observation that the theft of the effected stocks belonging to the complainant which consisted of batteries and inverters was stated to have occurred in the intervening night of 1^st and 2^nd August, 2015. The location was at Gali No.4, Shaheed Bhagat Singh Nagar, Barwala Road, Derabassi. The complainant informed that he shifted his stocks from his shop on main road to this location after the fire, which occurred three months ago. The shop is located in a residential area with a mandir nearby. Size of shop if 7 x 19 foot. Investigations proved that there was no sign of breaking central lock, as claimed by the complainant. Further, the most important and the vital piece of information is that the alleged amount of batteries lost cannot be accommodated in such a small shop. Further, keeping in view the locality, there is public movement upto 11.00 PM, which again resumes by 4.00 AM because of the mandir. There are only five hours left in between during which such heavy batteries cannot be shifted in a large truck, which cannot even enter the said gali. The batteries would have to be carried to the main road, which needs 6 to 7 hours with considerable labour. Therefore, in the opinion of the surveyor, such an incident of theft could not have taken place. The enquiries from the neighbors also proved that such theft did not take place during the said intervening night. Further, the place of burglary is not covered under the burglary insurance policy due to change of address and the insured did not produce endorsement regarding change of address.

14.         Going by the above observations, we are of the firmed opinion that the repudiation letter issued by Opposite Party No.1 declining the claim of the complainant towards theft is as per their guidelines and accordingly, the complaint stands dismissed, with no order as to costs.

15.         Certified copies of this order be sent to the parties, free of charge.

16.         The file be consigned to Record Room, after completion.

Pronounced.

25.08.2017

Sd/-

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

Sd/-

(DEV RAJ)

MEMBER

 

Sd/-

 

(PADMA PANDEY)

        MEMBER

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