Rajasthan

StateCommission

A/2415/2010

Hotle Jal Mahal Icecream Parlar - Complainant(s)

Versus

New India Insurance Com. Ltd. - Opp.Party(s)

Man Mohan Khetan

03 Mar 2015

ORDER

BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1

 

FIRST APPEAL NO: 279/2011

 

The New India Assurance Co. Ltd., through regional office- 330000, 2^nd floor, Nehru Place, Tonk Road, Jaipur.

Vs.

Hotel Jal Mahal Ice Cream Parlour, Near Panch Batti, M.I.Road, Jaipur through proprietor Smt.Davinder Kaur.

 

FIRST APPEAL NO: 2415/2010

 

Hotel Jal Mahal Ice Cream Parlour, Near Panch Batti, M.I.Road, Jaipur through proprietor Smt.Davinder Kaur.

 

Vs.

New India Assurance Co. Ltd. Through Branch Manager, Br.office Dharma Heights, Motilal Atal Road, Jaipur.

 

Date of Order 03.03.2015

Before:

 

Hon'ble Mr.Vinay Kumar Chawla-Presiding Member

Mr. Kailash Soyal - Member

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Mr.Vizzy Agarwal counsel for the Insurance Company

Mr. Gopal Shastri & Mr. Ayazudeen Khan counsel for the complainant Hotel Jal Mahal Ice Cream Parlour

 

 

BY THE STATE COMMISSION

 

1. Both these appeals have been filed against the order dated 23.11.2010 passed by the learned DCF Jaipur Ist by which it allowed the complaint ordering the Insurance Company to pay an additional sum of Rs.5,38,308/- to the complainant. The Insurance Company by preferring appeal no. 279/2011 has challanged the findings of the District Forum while the complainant has challanged the judgment of the learned DCF on the ground that no compensation for mental agony has been awarded by the DCF and no interest on the balance amount has been awarded. Both these appeals involve common question, hence they are being decided by this common order.

 

2. Brief facts giving rise to these appeals are that the complainant runs an ice cream parlour. The complainant had taken a fire insurance of its furniture, fixture, cables etc. for the insured value of Rs.14 lakhs and second insurance was taken for the Softy

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machine for Rs. 3 lakhs. Two different policies were issued. A fire occurred in the premises of the complainant on 6.5.98 causing losses to the furniture, fixture and softy machine. The Insurance Company was intimated of the incident and it appointed a surveyor Mr.P.P.Tripathi for assessing the loss. Vide his report dated 1.10.98 the surveyor had assessed Rs. 9,54,170/- for the loss caused to the furniture and fixtures and Rs. 3,88,850/- minus depreciation for softy machine. The surveyor had assessed the loss on depreciation basis. The complainant accepted a sum of Rs. 8,62,314/- under Fire Policy No. 11/2634 on 1.12.98 and a sum of Rs. 2,53,500/- under Fire Policy No. 11/2589 on 1.12.98 in full and final discharge of their claims. After payment the complainant raised an objection with the insurance company that the said policies had been issued on re-instatement basis while the payment has been made on depreciative basis. However, the company decided to refer the matter to arbitration as per the policy conditions. Justice Kejriwal was appointed the arbitrator alongwith two other members. Due to death of Justice Kejriwal arbitration proceedings did not mature. The complainant filed a consumer complaint before the learned DCF alleging deficiency in service for making payment on depreciative basis while the policies were on re-instatement basis. The learned DCF allowed the complaiant as above.

 

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3. The learned counsel for the Insurance Company has challanged the judgment of the DCF on the ground that the learned DCF was not right in holding that policies were on re-instatement basis. He submits that in case the policies had been on re-instatement value basis, the re-instatement clause is appended to the policies. He also challanged the findings of the DCF that these policies were not issued on re-instatement value basis despite the complainant had submitted proposal for obtaining policies on re-instatement value basis. He argues that even if the proposal was for re-instatement value basis but the company had option to accept this proposal or to put forth counter proposal for issuing the policies on depreciative value basis which was done in this case. He further argues that the learned DCF was not right in holding that the sum insured was increasing for the last three years and there had been no increase in the value of softy machine. He further argues that the learned DCF was not right in holding that there is a difference in premium on re-instatement basis and depreciative basis. He also argues that the DCF was not right in holding that the Branch Manager of the company had recommended to its Divisional Office for treating the policies on re-instatement value basis as the Divisional Office has the right to reject the suggestion made by the Branch Manager. In the last he has forcefully argued that since the complainant has accepted the amount in full and final

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discharge of its claim, now the complainant cannot raise any further demand.

 

4. The learned counsel has relied on a judgment of Hon'ble National Commission in Original Petition No. 131/2001 ( Swan Energy Ltd. Vs. New India Insurance Co.) and Revision Petition No. 4713/2012 ( Haryana State Co-operative Marketing Ltd. Vs. Ifko Tokio General Insurance Company).

 

5. The learned counsel for the complainant has argued that the surveyor had initially assessed Rs. 13,59,882/- and Rs. 3,34,992/- but the company on its own reduced the amount to Rs.8,62,314/- and Rs. 2,53,500/- without any reason. The learned counsel argues that the complainant was under dire financial constraints which forced it to accept the offer made by the company in order to start its business. Thus, the payment was accepted under pressure. The fire occurred on 6.5.98 and the company was bound to settle the claims within three months but till December no payment was made and the complainant had no option but to accept the amount offered by the company. He has also referred to Ex. R-15 and R-16, two survey reports of the same person. He has argued that the same person has assessed losses at a different amount in both these

 

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reports. This shows the malafide of the company whereas the surveyor was forced to manipulate its initial report. These reports were obtained by the complainant under RTI.

 

6. The learned counsel for the Insurance Company has refuted these argument. However, he has offered no explaination why two reports were obtained from the same surveyor for different amounts. His techenical objection to this argument is that the complainant cannot raise any argument or produce any evidence on the point which was pleaded in its complaint. There is a variance in pleading and evidence produced by the complainant and thus it cannot be accepted. He has submitted before us the judgment of the Hon'ble Supreme Court on this point. He has also argued that there was no pressure, undue influence or coercion on the part of the company forcing the complainant to accept the amount. He has referred to Ex. R-4 and R-5 signed by Jitender S.Arora who happens to be the son of the complainant Smt.Davinder Kaur, proprietor of the parlour. He has argued that both these consent letters are typed and Jitender S.Arora accepted the amount voluntarily on depreciative value basis without any protest. The complainant now cannot say that her son had no authority to accept the amount.

 

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7. We have heard both the counsels and have considered the arguments.

 

8. The first question for determination is whether these policies were issued on re-instatement value basis or depreciative value basis. The policies issued do not contain any note whether the policies were on re-instatement value basis or depreciative value basis. The argument of the learned counsel for the company that if the policy had been on re-instatement value basis then it would bear a declaration of this fact. We cannot accept the argument as the policies do not contain any declaration whether the policies are on re-instatement value basis or depreciative value basis. The fact is that the proposal forms for the insurance were submitted on re-instatement value basis. If the company had not accepted the proposals then it should have informed the complainant of its intention to issue it on depreciative value basis and the policies issued in this regard should have contained a declaration to this fact. Secondly, these policies were continuing for the last three years and sum insured has been increasing every year. Though the sum insured in respect of softy machine had not been increased but in the first policy amount has been continuously increased. It is indicative of fact that the complainant wanted it on re-instatement basis thus insured amount was increased every year. In the facts and

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circumstances of this case and the fact that the original proposal

was for re-instatement value basis, we cannot accept the argument that policies were issued on depreciative value basis with the knowledge of the complainant. We feel that the complainant had no occasion to verify whether the policies were on depreciative value basis. The complainants were under the impression that they had asked for policies on re-instatement value basis and if the policy did not mention anything it was presumed that their proposal had been accepted. We cannot accept the argument that issuing the policies on depreciative value basis by the company was a counter proposal without obtaining acceptance of the complainant, the company could not have issued any policy on depreciative value basis. Offer and acceptance is necessary for forming a valid contract. In view of this we are of the opinion that these policies were issued on re-instatment value basis and the conclusion arrived at by the learned DCF is correct.

 

9. Now the second question is whether the complainant can claim indemnity on the basis of re-instatment value basis despite it has accepted the amount in full and final settlement of its claim.

 

10. The complainant has relied on a judgment of Hon'ble Supreme Court II (1999) CPJ 10 SC ( United India Insurance Co.

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Vs. Ajmer Singh Cotton and General Mills ) arguing that mere execution of discharge voucher and acceptance of insurance claim is no estoppel for making further claim from the insurer while the appellant company has relied on a judgment passed in Swan Energy Ltd. and Harayana State Cooperative Marketing Ltd. We have perused the judgments cited by the learned counsels.

 

11. In the judgments it has been held that if the consumer can show that discharge was obtained by fraud,misrepresentation and undue influence, only in that case the matter can be re-opened. The complainant in his complaint has submitted that due to financial difficulties it accepted the amount offered by the Insurance Company. Thus, it is obvious that the financial difficulties led the complainant to accept the offered amount. It was the pressure of financial constraints on the complainant. It was complainant's decision to accept the amount. There was apparently no pressure from the company to accept this amount, no allegation of any fraud,misrepresentation or undue influence by any officer of the company has been alleged by the complainant. If the complainant voluntarily accepted the amount for coming out of its financial difficulties, it cannot be a case of exerting any undue influence or fraud committed by the company. Once the complainant has given a valid discharge and received the payment,he cannot be allowed to

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agitate for insufficiency of the claim.

 

12. Now with regard to two survey reports Ex. 15 and Ex.16, we feel that the complainant can succeed on this point. As mentioned above no explaination has been given by the company why two survey reports by the same person for the same loss were obtained. We also do not wish to accept the techenical objection that the complainant had not pleaded this fact in its complaint. As these documents were produced before the learned DCF and no objection was raised before the DCF that evidence was being led outside the scope of the pleadings. The learned DCF has discussed about these reports in its judgment and the appeal memo also does not contain any pleadings on this ground. Secondly the Consumer Protection Act provides that provisions of CPC as far as possible should be avoided by the Consumer Foras as proceedings before the Foras are of summary nature. We cannot accept the argument that before producing these reports in evidence the complainant should have amended its complaint. In the report dated 1.10.98 Ex.15 the loss for Italian Shake Machine was assessed at Rs.3,88,850/- minus depreciation of Rs. 93,324/- and in the report dated 23.10.98 the same surveyor vide its report Ex. 16 reduced the assessed amount to Rs. 8,62,314/- for furniture and fixture and a sum of Rs.2,53,500/- was paid for softy machine. These assessments were

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made on depreciative value basis and why the second survey report

was obtained is not explainable and we are of the view that the complainant is entitled for the difference amount since he had accepted the amount of depreciative value basis when the amount assessed in the first report should have been paid to him.

 

13. To sum up our conclusion, we are of the view that these policies were on re-instatment value basis. The proposal form was for obtaining the policies on re-instatment value basis and the insured value was continuously been increased for the last three years. Non mention of the category of policies on the policy document is deficiency on the part of the company and it cannot take any benefit now. Since the complainant had accepted the amount on depreciative value basis in full and final settlement of its claim, now he should not be allowed to agitate it. There is no evidence of any fraud,misrepresentation or undue influence on part of the company. However, the complainant can succeed on the point that the company had obtained two survey reports and the amount paid on the basis of second survey report. The complainant is entitled to receive the difference between the two reports.

 

14. Consequently the appeal of the Insurance Company is partially accepted and the judgment of the learned DCF allowing

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the claim on the basis of re-instatment value basis is set aside. The appeal of the complainant is also partially accepted to the extent that it is entitled to receive the difference between the assessed amount of two survey reports i.e. ( Rs.9,54,170.46 – Rs. 8,62,314/-) and ( Rs.2,95,526/- - Rs.2,53,500/- ) alongwith interest @ 10% p.a. from the date of filing of the complaint. A sum of Rs. 50,000/- (fifty thousand ) shall also be paid to the complainant as compensation for mental agony. Order regarding cost of prosecution at Rs.2000/- is maintained. Order accordingly.

 

 

(Kailash Soyal) (Vinay Kumar Chawla)

Member Presiding Member

 

 

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