BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:
HYDERABAD.
FA.NO.416 OF 2005 AGAINST C.D.NO.291 OF 2002 District Forum-I, HYDERABAD
Between:
M/s.Krishna Sales Corporation
4-6-14 & 15, Subash Road, Secunderabad.
Rep. by its partner Brij Gopal Asawa,
S/o.Srinivas Asawa, aged 45 years,
Occ:Business, R/o.Feelkhana,
Hyderabad. Appellant/
Complainant
And
National Insurance Company Limited
Begum Bazar Branch, 5-5-677/678-101,
Sama Plaza, 1st floor, Near Gosha Mahal,
Police Lines, Hyderabad, rep. by its
Sr.Branch Manager. Respondent/
Opp.party
Counsel for the Appellant: M/s.Suresh Kumar Bang
Counsel for the Respondent: Smt.S.A.V.Ratnam
QUORUM: THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
AND
SMT.M.SHREESHA, MEMBER
TUESDAY, THE EIGHTH DAY OF JULY
TWO THOUSAND EIGHT
Oral Order : (Per Smt.M.Shreesha, Hon’ble Member)
***
Aggrieved by the order in C.D.No.291/2002 on the file of District Forum-I, Hyderabad, the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant insured their stocks of cloth with opposite party vide policies No.551703/98/3100430 and 7500169/98 against Fire and Burglary and paid the premium amounts of Rs.15,711/- and Rs.12,469/- respectively to the opposite party and the policies are valid from 18-7-1998 to 17-7-1999. On 20-5-1999 a fire broke out in the premises of the complainant. The Fire Service Department controlled the fire and panchanama was conducted and a police report was given vide F.I.R.No.141/99. The complainant also informed opposite party that 216 thans of cloth worth Rs.3,47,725.40 was damaged. Opposite party deputed their surveyor, who inspected the surveyed area on 20th and 21st May, 1999 for assessing the loss and damage. The Divisional Manager of the opposite party convened a meeting on 20-3-1999 for examination of the claim of the complainant and the staff of the opposite party visited and inspected and damaged stocks and promised to settle the claim. The surveyor also sought some clarification and the information was furnished to him. On 8-7-2000 they again inspected the premises and damaged stock and the surveyor opined that the claim will be settled for more than Rs.2,50,000/- but opposite party issued a letter dated 5-12-2000 informing the complainant that they have settled the claim for Rs.33,034/-. The complainant submitted that the opposite party did not furnish assessment report of the surveyor and therefore he refused to accept the said settlement and demanded for review and got issued a legal notice on 5-9-2001 demanding the opposite party for appointing an arbitrator but the opposite party vide letter dated 12-10-2001 refused to refer the matter to an arbitrator. Therefore, the complainant got issued another notice on 16-2-2002 demanding the claim amount and to furnish copy of assessment report of the survey but there was no response. Hence the complaint for a direction to the opposite party to pay a sum of Rs.2,64,645/- with interest @ 21% p.a. from 20-5-1999 till the date of payment along with compensation of Rs.15,000/- towards mental agony.
Opposite party filed counter and admitted that the complainant had taken policies from the opposite party and that there was a fire accident in the premises of the complainant on 20-5-1999 wherein a police complaint was also given. The edges of the than were partially burnt and blackened and the Station Fire Officer, who inspected the store found that there was no heavy fire or damage to the cloth except burning partially. There are no burning marks on walls, windows etc. and the estimate given by him is about Rs.10,000/- regarding the damage. They submitted that the fire accident is a pre planned effort made by the complainant to claim a sum of Rs.3.5 lakhs by fraudulently creating a scene and calling the Fire officer, Police Officials, surveyor and the opposite party. They submitted that they appointed a surveyor on the same day and the police also conducted panchanama and dropped further action as undetected. The complainant made a claim for Rs.3,47,325.40 but the surveyor submitted his report on 7-7-2999 assessing the value of the damage at Rs.35,034/- along with photographs and negatives observe that the cause of fire accident is not properly established. They submitted that the insured stated that the cause of fire is careless smoking but the customers are not permitted to smoke in the premises where cloth is stocked and the complainant failed to establish the cause of loss according to conditions 1 and 6. They submit that in a meeting conducted across the table on 23-9-1999 at the office of opposite party, they agreed to pay a sum of Rs.33,034/- as suggested by the surveyor but the complainant did not accept the same. They further submitted that the complainant requested for referring the matter to arbitration which was not accepted by them and submitted that there is no deficiency in service on their part and prayed for dismissal of the complaint.
Based on the evidence adduced i.e. Exs.A1 to A33 and B1 to B20 and the pleadings put forward, the District Forum dismissed the complaint with a direction to the opposite party to refer the matter to the arbitrator, who shall finalize the issue of compensation within 3 months from the date of the order.
Aggrieved by the said order, the complainant preferred this appeal.
The learned counsel for the appellant contended that the District Forum erred in coming to the conclusion that there is no record to show and confirm that the estimated loss is more than 2.50 lakhs and failed to consider Ex.B7 and 8 surveyor’s report, which categorically shows that the estimated loss arrived by him is at Rs.2,41,061.77. he further submitted that the District Forum failed to appreciate that the respondent has not disputed/challenged the said surveyor report under Ex.B7 and therefore ought to have directed the respondent to pay the said amount of Rs.2,41,061.77 to the appellant together with costs. He further submitted that though the District Forum held that the claim of the appellant cannot be set aside but has erroneously dismissed the complaint and erred in deciding to refer the matter to the Arbitrator. He also submitted that the District Forum also did not refer to the citations filed by the appellant and prayed to allow the appeal.
The learned counsel for the respondent submitted that on 8-7-2000, they along with the surveyor inspected the said premises and issued a letter dated 5-12-2000 informing the appellant that they are ready and willing to settle the claim for Rs.33,034/-. The learned counsel for the appellant contended that it was suspected that some unknown person might have smoken a cigar and thrown it aside due to whose carelessness, the cloth bundles have caught fire. The Station Fire Officer, who inspected the premises found that there was no heavy fire or damage and since the respondent failed to establish the cause of loss and misled the facts. Therefore, a letter was addressed to him on 16-7-1999 repudiating the claim for which the respondent replied on 12-8-1999 and the respondent did not accept the offered amount of Rs.33,034/- and therefore they were justified in repudiating the claim.
We have perused the material on record. It is not in dispute that the appellant taken policies from the respondent and also that there was a fire accident in the premises of the respondent on 20-5-1999. It is the case of the appellant that he made a claim for Rs.3.5 lakhs since 216 thans of cloth worth Rs.3,47,725.40 ps. was damaged.
The learned counsel for the appellant submitted that the District Forum has observed that the matter be referred to an arbitrator and the learned counsel for the appellant drew our attention to the citations of the National Commission reported in II(2006) CPJ 259 (NC) in YASHPAL MARWAHA v. PUSHPA BUILDERS LTD., & ANR. wherein the National Commission while discussing the jurisdiction of the Consumer Fora held that:
Even if there are pending arbitration proceedings, it is not a bar for
entertaining a consumer complaint.
The National Commission in UDAIPUR CEMENT WORKS v. PUNJAB WATER SUPPLY & SEWAGE BOARD reported in I (1999) CPJ 67 (NC) also held that:
Mere existence of an arbitration clause does not oust the jurisdiction
of Consumer Forum.
We rely on the judgement of the Apex court in the case of FAIR AIR ENGINEERS PVT. LTD. AND ANOTHER v. N.K.MODI reported in II (1996) CPJ 13 (SC) wherein the Apex court held as follows:
Though the District Forum, State Commission and National Commission
are judicial authorities, for the purpose of Section 34 of the Arbitration
Act, in view of the object of the Act and by operation of Section 3 thereof,
we are of the considered view that it would be appropriate that these
forums created under the Act are at liberty to proceed with the matter
in accordance with the provisions of the Act rather than relegating the
parties to an arbitration proceedings pursuant to a contract entered into
between the parties. The reason is that the Act intends to relieve the
consumer of the cumbersome arbitration proceedings or civil action
unless the forums on their own and on the peculiar facts and circumstances
of a particular case, come to the conclusion that the appropriate forum for
adjudication of the disputes would be otherwise than those given in the
Act.”
Therefore, we are of the view that this Commission has jurisdiction to entertain the complaint. Section 3 of the Consumer Protection Act, 1986 states that ‘The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force’.
Keeping in view the aforementioned judgements and Section 3 of Consumer Protection Act, 1986, we are of the considered view that the ‘Consumer Forum’ and ‘State Commission’ have jurisdiction to entertain the complaint and the District Forum has erred in referring the matter to an arbitrator. Now we address ourselves to the question whether there is deficiency in service on behalf of the respondent in settling the claim for Rs.33,034/- when the claim of the appellant is Rs. 3,47,725.40 ps.
Admittedly the respondent had deputed their surveyor, who inspected and surveyed the area on 20th and 21st May, 1999 and thereafter issued a letter dated 5-12-2000 informing the appellant that they would settle the claim for Rs.33,034/- towards full and final settlement. It is the case of the appellant that the respondent did not furnish the reasons as to how they arrived at the figure of Rs.33,034/- and got issued a legal notice on 5-9-2001 demanding the respondent to appoint an arbitrator to decide the issue. Again on 16-2-2002, the appellant got issued a legal notice demanding for settlement of the claim and also to furnish the copy of the survey report but there was no response.
It is pertinent to note from the record that no substantial reasons, grounds or documentary evidence were filed by the respondent as to how the surveyor arrived at Rs.33,034/-. On perusal of Exs.B7 and B8 which are the assessment of loss reports dated 09-8-2000 by Anur Naveen for FINTEQ to the insurance company, we are of the view that the respondent, insurance company did not give any substantial reasons for disallowing the reviewed assessment of loss of Rs.2,41,061.77 ps.
The Reviewed Assessment of loss is as follows:
---------------------------------------------------------------------------------------------------------------------Sl.No. Description Amount in Rs.
---------------------------------------------------------------------------------------------------------------------
1. Total value of 216 Thans 3,47,724-85
2. Less Average value for 12 Thans
Deemed to be in good condition.
(Average rate Rs.1609=84/Than) 0,19,318.08
3. Less Salvage value for 148 Thans
sold by the insured 0,63,368.00
-----------------
2,65,038.77
4. LESS Salvage value for 56 Thans
Leftover 0,23,977.00
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2,41,061.77
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THE ASSESSED LOSS IS RUPEES TWO LAKHS FORTY ONE
THOUSAND AND SIXTY ONE, PAISE SEVENTY SEVEN ONLY.
We see no substantial reason for the respondent, insurance company to have disallowed Rs.2,41,061.77 and trying to force the appellant/complainant to accept the claim amount of Rs.33,034/0.
In the result this appeal is allowed and the order of the District Forum is set aside directing the respondent to pay Rs.2,41,061.77 ps. together with interest at 9% p.a. from the date of date of issue of legal notice i.e. 16-2-2002 till the date of realization together with costs of Rs.3,000/-. Time for compliance four weeks.
PRESIDENT. LADY MEMBER.
JM Dated 08-7-2008
