DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

[Complaint Case No: 299 of 2010]

                                                           Date of Institution : 13.05.2010

                                                           Date of Decision     :19.04.2011

M/s. Sunrise Fragrances Pvt. Ltd., Village Saidpura, Tehsil Derabassi, District Mohali through its Managing Director.

                                                                   ---Complainant.

V E R S U S

1.      New India Assurance Company Limited, Divisional Office, SCO No.804, NAC, Manimajra, U.T., Chandigarh through its Divisional Manager.

2.      New India Assurance Company Limited, Regional Office, SCO No.37-38, Sector 17-A, Chandigarh through its Regional Manager.

---Opposite Parties.

BEFORE:   SHRI LAKSHMAN SHARMA        PRESIDENT

                SHRI ASHOK RAJ BHANDARI     MEMBER

                SMT. MADHU MUTNEJA            MEMBER

Argued By:Sh. Parmod Jain, Advocate for the complainant.

                   Sh. Sukaam Gupta, Advocate for the OPs.

PER LAKSHMAN SHARMA, PRESIDENT

                   M/s. Sunrise Fragrances Pvt. Ltd., which is a partnership concern, has filed this complaint under Section 12 of the Consumer Protection Act, 1986 praying for the following reliefs:-

(i)       To pay Rs.26,185/- with interest @12% per annum from the date of loss i.e.31.05.2006 onwards with pendentelite and future interest from the date of filing of this complaint till realization.

(ii)      To pay Rs.1,00,000/- for inconvenience, harassment and mental agony caused to the complainant on account of illegal and unlawful repudiation of the claim.

(iii)     To pay Rs.11,000/- towards lump-sum costs of notice and litigation expenses and;

2.                In brief the case of the complainant is that it got its finished and raw material insured  from the OPs vide Standard Fire and Special Perils (Policy Perils) (Material Damage) No.353000/11/05/11/00000454. The said policy was effective from 23.2.2006 to 22.2.2007 vide Policy (Annexure C-2). On 31.5.2006, due to heavy rains, the material lying in the godown was badly damaged and the complainant suffered a loss of Rs.26,185/-. So, the complainant lodged a claim (Annexure C-3) with the OPs. The surveyor was appointed by the OPs who inspected the spot. The information/documents sought by the OPs for settling the claim were duly supplied by the complainant vide letters dated 19.7.2006 and 31.7.2008 (Annexures C-4 and C-5). Despite it, the claim of the complainant was repudiated by the OPs vide letter dated 18/26.9.2008 (Annexure C-6). Thereafter, the complainant wrote letter dated 29.9.2008 and 4.12.2008 (Annexures C-7 and C-8) but to no effect. The complainant also served a legal notice (Annexure C-9), which was replied by OPs vide letter dated 15.2.2010  (Annexure C-10) but to no avail. 

                   In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.

3.                In the reply filed by OPs, it has been admitted that the complainant got its finished goods and raw material insured vide Standard Fire and Special Perils (Policy Perils) (Material Damage) No.353000/11/05/11/00000454. It has also been admitted that the loss was caused to the said material due to rains. It has also been admitted that the surveyor was appointed and he assessed the loss.

                   The case of the OPs is that the loss took place on 31.5.2006 and thereafter, the claim was lodged on the same day. The OPs wrote letters dated 19.6.2006, 30.6.2006 and 7.7.2006 requiring the complainant to furnish the information mentioned in those letters but the required information was not furnished. It is averred that the surveyor assessed the loss to the tune of Rs.6,134/- only and after applying the excess clause of Rs.10,000/-, the claim was falling below the excess limit and thus the file was closed as ‘No Claim’ and intimation to this effect was given to the complainant. It has further been averred that the present complaint was filed in the year 2010, so, the same is barred by limitation. Otherwise also, according to the OPs, as the required information was supplied after expiry of two years, the claim was rightly not entertained. In these circumstances, the complaint deserves dismissal.

4.                We have heard the learned counsel for the parties and have gone through the entire record including documents, annexures, affidavits etc and the written arguments filed by the OPs.

5.                It is the admitted case of the parties that the complainant got its finished goods and raw material insured vide Standard Fire and Special Perils Policy No.353000/11/05/11/  00000454. It is also admitted case of the parties that due to rains, the said material was damaged and the complainant suffered a loss. Vide letter dated 19.6.2006 (Annexure R1-2/D), the OPs asked the complainant to supply the following documents: -

1.      Media coverage report/meteorological office report.

2.      Audited Balance Sheet as on 30-05-2006 and 31-03-2006.

3.      Copy of purchase and sale account in ledger from 01-04-2006 to 30-05-2006.

4.      Stock Records along with detail of stock as on 30-5-2006.

5.      Purchase bills/cost sheets of damaged stock.

6.      Detailed statement of insured regarding damages.

7.      Three quotations of salvage.

8.      Stock statement for the month of April & May, 2006 submitted to SBP, duly receipted by bank.

6.                Out of the above said documents, four documents were sent to the OPs vide letter dated 19.7.2006 (Annexure C-4). Thereafter, six documents were sent vide letter dated 31.7.2008 (Annexure C-5).  Thus, the complainant submitted all the documents, which were demanded by the OPs for settling the claim.

7.             The first argument advanced by the learned counsel for the OPs is that the complaint is barred by limitation.  It is the case of OPs that vide letter dated 29.9.2006 (Annexure R1-2/C), the complainant was informed about the closure of the case and the final cause of action took place on that date. It is pertinent to mention here that the complainant in its affidavit has stated categorically that he had received the information regarding the closure of the case for the first time vide letter dated 18/26.9.2008 (Annexure C-6). Despite the fact that on letter Annexure R1-2/C, it has been mentioned that it is a Registered A.D letter. Neither the receipt issued by the Post Office has been placed on record nor its acknowledgement has been placed on record. The Despatch Register is a document of the OPs itself. In these circumstances, in the absence of the receipt issued by the Postal Department, it is not proved that the said letter was duly dispatched. Thus, the last letter intimating about the closure of the case is dated 18/26.9.2008. The complaint was filed on 13.5.2010. Thus, it is within two years. So, it is not barred by limitation.

8.             The claim has been rejected vide letter (Annexure C-6) on the following ground: -

“        This has reference to your letter dated 31-7-2008 along with its enclosures in regard to the above.

            As informed earlier to you on 29-9-06, we have closed the file since the claim falls within excess limit, which please note.”

9.                Annexure R1-2/A is the Final Survey Report dated 11.8.2006. The surveyor has assessed the loss, after deducting 20% profit margin and salvage, to the tune of Rs.6,134/-  in the case of Unperfumed Aggarbatties. From the report of the surveyor, it is apparent that he has not paid any claim qua the loss/damage caused to the raw material i.e. Agarbatti raw-sticks and W.I.P (Agarbatti semi finished and in process) though the claimant has assessed the loss for these two things as Rs.5,510/- and Rs.10,675/-, totaling Rs.16,185/- respectively. The surveyor in its report has stated that the loss regarding damage to the raw-material and W.I.P was not assessed as the complainant later on settled for loss of 248 Kg of unperfumed agarbattis only. It is pertinent to mention here that neither the OPs have taken any stand in their reply to corroborate this plea taken by the surveyor in his survey report nor the surveyor has filed his affidavit. Thus, in the absence of any evidence on record to prove this contention of the surveyor, the complainant is also entitled to a sum of Rs.16,185/- less 20% profit margin i.e. Rs.3,237/- in addition to the amount already recommended by the surveyor.

10.              The surveyor has also relied upon the excess clause to deduct a sum of Rs.10,000/- and making the claim payable to be NIL as the loss assessed to the tune of Rs.6,134/- was falling below the excess limit. The policy, which has been placed on record, has not been marked as annexure. Nor it is signed by any of the parties. We have marked the same as Annexure OP-Z. Relevant General Exclusions Clause as contained in the policy reads as under: -

“The first 5% of each and every claim subject to a minimum of Rs.10,000 in respect of each and every loss arising out of “Act of God perils” such as Lightning, STFI, Subsidence, Landslide and Rock slide covered under the policy.

The first Rs.10,000 for each and every loss arising out of other perils in respect of which the Insured is identified by this policy. The Excess shall apply per event per insured.

……………………………..

Loss, destruction or damage to bullion or unset precious stones, any curios or works of art for an amount exceeding Rs.10,000/-, manuscripts, plans, drawings, securities, obligations or documents of any kind, stamps, coins or paper money, cheques, books of accounts or other business books, computer systems records, explosives unless otherwise expressly stated in the policy.”

11.              From perusal of this clause, it is apparent that the loss to the extent of Rs.10,000/- is not payable on the articles such as bullion, unset precious stones, any curios or works of art. In the present case, the material, which was damaged, is different from the articles mentioned in the aforementioned clause. So, this exclusion clause is not applicable in this case. Thus, the surveyor has arbitrarily applied the excess clause. As such, the complainant is entitled to a total amount of Rs.19,082/- [Rs.12,948 + Rs.6,134] for the loss caused to it.

12.              In view of the above discussion, the present complaint is allowed and the OPs are directed as under: -

(i)       to pay an amount of Rs.19,082/- to the complainant for the loss caused to it due to heavy rains in view of the terms and conditions of the Standard Fire and Special Perils (Policy Perils) (Material Damage) No.353000/11/05/11/ 00000454;

(ii)      to pay an amount of Rs.10,000/- as damages on account of deficiency in service on the part of OPs;

(iii)     to pay an amount of Rs.7,000/- as litigation costs.

13.              The above order be complied with by the OPs within a period of 30 days from the date of receipt of its certified copy, failing which OPs shall pay the aforementioned amounts as at (i) & (ii) in the foregoing along with interest @18% per annum from the date of filing of the complaint i.e.13.5.2010 till the date of actual payment besides costs of litigation of Rs.7,000/-.

14.              Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

19^th April 2011.

Sd/-

 (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(ASHOK RAJ BHANDARI)

MEMBER

Sd/-

(MADHU MUTNEJA)

MEMBER

Ad/-

C.C.No.299 of   2010

Argued By: None.

                                                ---

                   Arguments heard on 07.04.2011.  The case was reserved for orders. As per separate detailed order of even date, this complaint has been allowed. After compliance file be consigned.

Announced.

19.04.2011          Member              President             Member