Punjab

StateCommission

CC/130/2016

M/s Jay Jay Shirts Pvt. Ltd. - Complainant(s)

Versus

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

Munish Goel

09 Nov 2017

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,         PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

 

                   Consumer Complaint No.130 of 2016

 

                                                          Date of Institution   : 27.04.2016            

                                                         Order Reserved on : 07.11.2017

                                                          Date of Decision     : 09.11.2017

 

 

M/s Jay Jay Shirts P Ltd, 91-A, Industrial Area A, Ludhiana through its Director, Aman Jain.

 

                                                                                       ….Complainant

 

                   Versus

 

1.      The Oriental Insurance Company Limited, Branch II near Clock        Tower, G.T Road, Ludhiana 141008 through authorized signatory.

 

2.      The Oriental Insurance Company Limited, Regd. & Head Office       A-25/27, Asaf Ali Road, New Delhi 110002 through authorized     signatory.

 

                                                                             Opposite parties.

 

Consumer Complaint U/s 17(1)(a) of the Consumer Protection Act, 1986 (as amended up to date).

 

Quorum:-

 

          Shri J. S. Klar, Presiding Judicial Member.

              Smt. Surinder Pal Kaur, Member.

         

Present:-

 

          For the complainant         :  Sh. M.S Sethi Advocate with

                                                   Sh. Munish Goel, Advocate

          For opposite parties         :  Sh. J.P Nahar, Advocate

…………………………………………………………………………………….

 

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                                     

           The complainant has filed this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act) against OPs on the averments that it is a private limited company dealing in manufacturing and trading of shawls and cloth at Ludhiana. Aman Jain Director has been authorized to file this complaint by virtue of resolution dated 10.02.2016. The complainant purchased insurance policy from OPs for insuring its stock of all kinds of yarns, knitted cloth, shawls, loies, ladies suits of all types , finished, unfinished goods and raw materials etc. worth Rs.60,00,000/- and stocks for the period from 04.07.2014 to midnight of 03.07.2015 by paying premium of Rs.9607/-. OPs issued cover note CHD-CS 514044 dated 28.06.2014 to complainant of Standard Fire & Special Perils policy for the period from 04.07.2014 to midnight of 03.07.2015. OPs sent policy document bearing serial no. 234001/11/2015/180 consisting of three pages to complainant. Aman Jain Director of complainant-company received a call from one neighbour regarding smoke and fire in the above factory on 27.04.2015 at about 7.30 pm to 8.30 pm. He reached the factory premises and opened the main gate. In the meantime, fire brigade also reached there on receipt of information by the neighbour, which extinguished the fire within one and half hour. After 2 and 2.1/² hours, neighbour again called the Director Aman Jain with regard to fire in the factory. He reached there about 11.00 pm and called up the fire brigade to extinguish the fire. Lots of raw material finished, semi finished products computer, accounting record including insured materials were burnt in the said fire, which appeared to have been caused due to short circuit. DDR No.14 dated 29.04.2015 was lodged with the police authorities about this incident of fire. The insurance claim was lodged with OPs by the complainant, whereupon Ashok Chawla  was appointed as surveyor to assess the loss. The  complainant presumed the loss between Rs.20-25 lacs, but subsequently on verification, it was found to be Rs.49,67,700/-. Royal Associates of OPs asked the complainant to complete certain formalities and to submit documents within 15 days, vide letter  dated 30.04.2015, which was supplied, vide courier dated 15.05.2015. Authorized Chartered Accountant Tandon & Associates  of OPs submitted the report dated 30.07.2015 under the head 'verification of books of account' stating that closing stock as on 27.04.2015 consisted of raw material of Rs.29.77 lacs and finished goods of Rs.19.90 lacs. Total raw material purchased during the  period from 01.04.2014 to 27.04.2015 were Rs.23.49 lacs. The chartered accountant Tondon & Associates stated in its report that complainant was not doing the manufacturing activity in the year 2014-15 in the factory premises. The manufacturing/processing was being outsourced, as per the report. The complainant submitted its audit report of books as on 31.03.2015, duly certified by CA, A accompanied with balance sheet under the head 'Current Assets' showing loss of Rs.49,67,000/- to this fire incident. The complainant supplied 01.04.2015 to 27.04.2015, wherein opening stock was shown as Rs.49,67,700/- and closing stock was shown as Rs.49,67,700/-. The complainant also obtained cash credit limit from Punjab National Bank Ludhiana and filed monthly stock statements with the bank, which were  found true and correct by the officials of the  bank on their physical verification. The bank issued no due certificate dated 27.01.2016, as complainant paid the dues under CC limit. OP called the Director Tirlok Jain in their office and obtained his signatures on 29.01.2016 on printed discharge voucher without disclosing particular amount on the pretext of final assessment of the claim amount. OP paid a sum of Rs.10,38,000/- directly into the bank account of the complainant without its knowledge. The director of the complainant-firm lodged its protest in writing on behalf of complainant with OP no.1 on 02.02.2016, but no action was taken despite regular visits by the Director with OPs. Legal notice dated 18.02.2016 was served upon OPs. OP sent reply to the legal notice dated 10.03.2016 through registered post dated 11.04.2016 to counsel M.S Sethi Advocate, which was received on 12.04.2016. OPs submitted reply that the directors of the factory wanted to wind up business and working was stopped in December 2014 and thereafter working was not carried out in the factory and most of the machines were sold off and factory was closed since December 2014 and manufacturing work was being outsourced. The complainant alleged malafide action of OPs, as it lodged the insurance claim with OPs immediately on happening of fire incident on 27.04.2015. The complainant has, thus, filed the complaint directing OPs to  pay the balance amount of Rs. 39,29,700/- with interest @ 12% p.a from the date of loss till actual payment. It was prayed that OPs be also directed to pay interest @ 12% on paid amount of Rs.10,38,000/- from the date of loss till actual payment. The complainant also prayed for compensation of Rs.2,00,000/- for mental harassment and Rs.33,000/- as costs of litigation.

2.      Upon notice, OPs appeared and filed written version contesting the  complaint of the  complainant vehemently. Preliminary objections were raised by OPs in written reply that complainant is not consumer of OPs under Section 2(1)(d) of Consumer Protection Act, 1986. Privity of contract or relationship of consumer and service provider between the parties, if any has come to an end as and when complainant accepted the settled amount of insurance claim unconditionally from OPs. No cause of action accrued to complainant to file the  complaint. The complainant received the settled amount voluntarily by signing the discharge voucher on 29.01.2016 bearing office stamp and one witness also attested the discharge voucher. The complainant agreed to accept the amount of Rs.10,38,000/- as lump sum amount for settlement of the claim  and sent discharge voucher, vide his letter dated 29.01.2016.  The complex matter is involved in this case, which cannot be decided in summary manner under the CP Act by Consumer Forum. On merits, OPs admitted this fact that they issued insurance policy in question to complainant covering period from 04.07.2017 to 03.07.2015. It was also averred in the written reply that insurance policy with terms and conditions were sent to the insurer/complainant by OPs. The insurance policy is subject to conditions, clauses, warranties, endorsements, as per form attached. It was further averred that loss was not to the extent of Rs.49,67,700/-, as projected by the complainant, as per survey report dated 19.10.2015 and his addendum report dated 18.12.2015. Moreover, how complainant could arrive at such an accurate figure, when its entire record was burnt in the fire. There is no stock register maintained and no details of amount of Rs.49,67,700/- furnished by the complainant. The complaint of the complainant merits to be dismissed. The investigator submitted his report dated 18.08.2015 after meeting  the insured and other relevant persons by concluding that owner of the factory wanted to wind up business and working was stopped in December 2014. After December 2014, work was not carried out in the factory. Most of the machines were sold off and for some running machine's process of selling was going on. The factory was closed since December 2014. When machines were already sold, so stock was also sold. The insured admitted in his statement that some of the raw material/finished goods, which were lying in the factory were about 10 years old, so, mostly stock was dead stock, which was burnt in fire. This fact was vehemently denied by OPs that discharge voucher was obtained by the  complainant by virtue of misrepresentation, fraud, under influence or coercion.  It was denied that complainant purchased any new material because it had stopped its functioning since December 2014 and sold most of the stock and machinery. The account books submitted by the complainant have been duly taken into account by the surveyor, while assessing the quantum of loss sustained by the complainant in the incident of fire. Even the report of CA has confirmed that stock register has not been maintained and closing stock has been arrived at on just guess work basis. As per report, the VAT-20 and VAT-15 for the year 2014-15 have been tabulated and sales were Rs.1,37,05,402/- against the purchase of Rs.42,94,286/- It also shows that in the quarter ending  March 2015, there were no purchase whatsoever.  Chartered Accountant submitted report that stock has been calculated on estimate basis on the year end and no stock register was maintained by complainant. The CA also commented that stock statements have been submitted on their own without stock registers to cover the credit limit. It is for the complainant to prove by leading positive evidence by way of stock register that it was having a stock of Rs.49,67,700/-. The complainant has taken contradictory stand as on the one hand, OPs compelled it to accept the amount of Rs.10,38,000/- under threat to repudiate the entire claim and on the other hand the investigator had recorded the statement of Sh. Aman Jain Director on 30.04.2015 and this fact was denied by him that he was joined in the survey or investigation, while assessing the loss. OPs controverted the averments of the complainant and prayed for dismissal of the complaint.

3.      The complainant tendered in evidence affidavit of Aman Director Ex.C-A, affidavit of Tirlok Jain  Director M/s Jay Jay Shirts Pvt. Ltd Ex.C-B affidavit Rakesh Mishra son of late Sh. Raj Kumar Mishra Ex.CW-1/C and along with copies of documents Ex.C-A along with copies of documents Ex.C-1 to Ex.C-49 and closed evidence. As against it; OPs tendered in evidence affidavit of Sh. Ashok Chawla proprietor of M/s A.K. Enterprises Surveyors and Loss Assessor Ex.OP-A, affidavit of Sh. B.S. Ahuja, Deputy Manager Oriental Insurance Company Ltd Ex.OP-B, affidavit of Kashmir Singh Proprietor of Royal Associates Investigating and Detective Agency Ex.OP-C along with copies of documents Ex.OP-1 to Ex.OP-8 and closed the evidence.

4.      We have heard learned counsel for the parties and also examined the written notes submitted at the time of arguments and also examined the record of the case. The complainant obtained insurance policy from OPs and insurance policy was supplied to it and this fact is not in dispute in this case. Even otherwise, reference be made to cover note Ex.C-1 of this policy and terms and conditions of the Standard Fire and Special Perils Policy Schedule Ex.C-2 as well. The fact of loss by fire is not in dispute and only quantum of loss is in dispute herien. Aman Jain Director of complainant reported the incident of fire to police, vide DDR dated Ex.C-3,  and to Fire Brigade Authorities, vide Ex.C-4 on the record. OPs have also not disputed this fact. This fact is, thus, decided on the basis of above facts that complainant is a Private Ltd. Company and it obtained Standard Fire and Special Perils Policy from OPs for the period in dispute against the payment of premium amount.

5.      The first limb of controversy in this case is whether complainant issued a valid discharge voucher on receiving the amount of Rs.10,38,000/- from OPs on 29.01.2016 by virtue of discharge voucher Ex.OP-1. OPs pitched their case  on discharge voucher Ex.OP-1 and contended that it has been voluntarily issued through its authorized director on 29.01.2016 after receiving settled amount of Rs.10,38,000/-. The complainant has assailed the discharge voucher having been infagled by coercion. It is settled principle of law that discharge voucher is a valid document unless it is proved to have been vitiated by coercion, undue influence, fraud, misrepresentation and mistake of fact. We have to examine this point on the record as to whether this discharge voucher Ex.OP-1, which is the document of controversy in this case, is vitiated by coercion etc, as projected by the complainant in this case. The pleaded version of the complainant is that OPs wangled the discharge voucher Ex.OP-1 from it on the coercion of not paying the claim amount to it. The evidence on the record led by the complainant, as well as, OPs is required to be examined by us on the file. The complainant relied upon Ex.C-14 legal notice issued by its  counsel Sh. Manjit Singh Sethi Advocate to OPs on 18.02.2016, supported by copy of postal receipt Ex.C-14-A to the effect that complainant immediately lodged protest by sending legal notice to OPs to the effect that complainant-company suffered loss to the extent of Rs.49,67,700/- , but OPs forced  it to receive the amount of Rs.10,38,000/- only and transferred this amount in their bank account against their valid consent. OPs sent reply to legal notice Ex.C-15 dated 10.03.2016 by denying the case of the complainant to the effect that the discharge voucher Ex.OP-1 is vitiated by any coercion. OPs averred that surveyor and loss assessor assessed the loss to the extent of Rs.10,40,297/- only and submitted report to OPs and complainant accepted it and issued discharge voucher through its competent director and thereafter amount was transferred to the account of the complainant only towards the above loss, as full and final settlement of the claim.

6.      Onus is on the part of the complainant to prove that discharge voucher is vitiated by coercion. The pitch of the argument of the complainant is that it suffered loss to the extent of Rs.49,67,700/-  in this fire and there is no question of receiving the less amount by the complainant and these circumstances themselves are a strong pointer to this effect that discharge voucher Ex.OP-1 is vitiated by coercion. The complainant relied upon affidavit of Aman Jain Director Ex.C-A in this regard He stated in his affidavit Ex.C-A that raw material finished, semi finished products, computer, accounting record including insured materials was burnt in the said fire, which was due to short circuit. The authorized Chartered Accountant Tondon & Associates submitted report dated 30.07.2015 under the head 'verification of books of account' stating that closing stock as on 27.04.2015 consisted of raw material of Rs.29.77 lacs and finished goods of Rs.19.90 lacs. Total raw material purchased during the period from 01.04.2014 to 27.04.2015 consisted of raw material of 29.77 lacs and finished goods of Rs.19.90 lacs and total raw material purchased during the period from 01.04.2014 to 27.04.2015. The chartered accountant Tandon & Associates stated in their report that complainant was not doing any manufacturing activity of its own during the year 2014-15 and manufacturing/processing was being outsourced. He further stated that complainant submitted its audit  report of books as on 31.03.2015 duly certified by CA A, Kumar Gupta & Co. accompanying with balance sheet under the head 'current assets' of loss of Rs.49,67,000/-. The complainant also supplied trading account 01.04.2015 to 27.04.2015 in which basic stock was shown as Rs.49,67,700/- with company. This witness further stated that complainant obtained cash credit limit from PNB and the banker of complainant also verified the stock of complainant and banker issued no due certificate dated 27.01.2016. The complainant felt dissatisfied with the amount sent by OPs and sent legal notice through Sh. M.S Sethi Advocate upon OPs in this regard. The complainant also tendered in evidence affidavit of Tarlok Jain its Director to the effect that loss suffered by it in the  fire incident was of Rs.49,67,000/- and OPs under threat of repudiating the entire claim got them apprehended and wangled the discharge voucher, signed in blank from its director and OPs transferred the amount of Rs.10,38,000/- in the account of the complainant at its back. Various documents in this regard have been relied upon by complainant like photographs Ex.C-34 to Ex.C-47 on the record to substantiate their version.

7.      The complainant has not tendered affidavit of any official of PNB who physically verified stock and found it physically correct in this case. The complainant relied upon Ex.C-9 trading account 01.04.2015 to 27.04.2015 showing the total amount of Rs.49,67,000/- with them, which was the loss in the incident of fire. The cash credit limit has been adjusted on 27.01.2016 with the Bank by complainant, vide certificate Ex.C-10 on the record. Ex.C-11 is report of Chartered Accountant Tondon & Associates. It is concluded in it that complainant concern has not maintained any stock register specifying the movement of stock. The stock bifurcation has been provided in the balance sheet. The complainant concern submitted stock statement to PNB with their own specifying the different types of stock to cover the  credit limit. No sales took place from January 2015 to April 2015 of complainant. Tondon Associates also concluded that complainant concern might have planned the shifting of the business premises/business plans, as per market conditions much earlier and sold major of the goods stock during August - December 2014.  There was possibility that stock consists of the old stock also as per the nature of the business. Report of A.K.Gupta & Co. Chartered Accountant is Ex.C-12 regarding report on the financial statements. This is the main document relied upon by complainant.  The complainant also relied upon Ex.C-31 the Wira Textile Data Book on the record in this regard.

8.      To counter this evidence, OPs relied upon discharge voucher Ex.OP-1 dated 20.01.2016  executed by the complainant's director in favour of OPs. Ex.OP-2 is the letter issued by the complainant to Branch Manager of OPs on 29.01.2016 that the complainant is satisfied with the settled amount and payment of the amount be released. Ex.OP-4 is survey report dated 19.10.2015 submitted by A.K. Enterprises with regard to the quantum of loss caused by the incident of fire to complainant. The loss was assessed as Rs.11,99,829.58. The survey report is Ex.OP-5 dated 18.12.2015, the total loss of Rs.10,41,297/- and it was observed in this report that earlier amount in the survey report was calculated by including cost per kg fabrics, whereas it was mentioned as Rs.218/15 per meter. The survey report was revised on account of this clerical error and the surveyor A.K. Enterprises observed quantum of loss as Rs.10,41,297/- only. The report of Royal Associates Investigator is Ex.OP-6 on the record in this case. The investigator can be legally appointed by OPs, where they suspect any case of foul play that the owner of the factory wanted to wind up business, as the work was not carried out in the factory after December 2014. Most of the machines were sold off and for some running machines, process of selling was going on. Factory was closed since December 2014. When factory was closed for the last four months and insured was in process of winding up his business,  so there was no question of stock lying in the factory, as per the report of the investigators. Stocks have already been sold and insured also admitted this fact in his statement that stock which was lying was ten years or six months old, so mostly stock was dead stock, which was burnt in this case. Statement of Director of complainant recorded by the investigator is Ex.OP-8 on the record dully signed by him. The affidavit of Ashok Chawla Proprietor of M/s A.K. Enterprises Ex.OP-A is on the record to prove his survey report. Affidavit of Kashmir Singh proprietor of Royal Associates Investigating and Detective Agency is Ex.OP-6 to prove investigation report in this case.

9.      We rely upon the investigation report, as there is no reason to discard it. Kashmir Singh investigator also filed his affidavit on the record to substantiate it. Investigator came to the conclusion that complainant was winding up the process of the company. Most of the stock was already sold by them and no manufacturing process was carried out in it. Most of the stock, which was lost in the fire, was was old one. Report of A.K. Enterprises Surveyor is aslo relied upon by us. It is settled principle of law that report of surveyor is a valuable piece of evidence and it can be discarded only on proof of strong and contrary evidence on the record. We find that in the presence of report of the surveyor, as referred to above and report of investigator Royal Associates, the loss was rightly assessed to the tune of Rs.10,38,000/- only. The discharge voucher was executed by director of the  complainant concern on 20.01.2016 without any trace of coercion. The discharge voucher permits the complainant to challenge it only if it is vitiated by coercion, misrepresentation etc. It is duly signed in English by the director of the complainant concern and is also witnessed by one Sunil Kumar resident of Civil Lines, Ludhiana. It can not be said to be vitiated by any coercion, when the surveyor also found loss up to the same extent sustained by complainant in the fire. There is no disproportionate quantum of difference of loss assessed by the surveyor and the discharge voucher Ex.OP-1 in this case. Moreover, the complainant wrote letter on 29.01.2016 Ex.OP-2 to Senior Branch Manager of OPs and there is no reference of this fact by them that this discharge voucher was obtained from them under coercion by OPs. The discharge voucher ExOP1 is dated 20.01.2016 and this letter Ex,OP-2 was written by complainant to Senior Branch Manager on 29.01.2016 after nine days therefrom and it did not mention any such fact of coercion exercised by OPs on the complainant in obtaining this discharge voucher against their consent. It goes a long way, in negativing, the case of coercion, as propounded by the complainant. We have strongly relied upon report of surveyor A.K. Enterprises and report of the investigator as well as other evidence on the record, as referred to above in arriving at above finding of fact.

10.    The complainant relied upon numerous authorities in the written submissions contending that discharge voucher is not a conclusive document. It relied upon law laid down in "New India Assurance Company Limited versus Pardeep Kumar" reported in 2009 CTJ 599 (SC) that the survey report is not the last and final word. We do not dispute this proposition of law. There is no evidence on the file that surveyor submitted a wrong report in this case. The complainant forcefully contended that OPs transferred the amount in their account without their knowledge and it is not valid discharge voucher. We reject this submission of the complainant on the basis of document Ex.OP-2. The complainant also relied upon law in Revision Petition no. 3380 of 2016 case titled as "National Insurance Company Ltd versus Lakhveer Singh" decided on 02.01.2017 and other authorities on the record. We do not dispute this legal proposition, but find that it is a proved fact on the record that complainant voluntarily executed the discharge voucher, as established by document Ex.OP-2 lending corroboration to it. Once, insured had received the amount unconditionally, it ceases to be a consumer of Ops. As held by Apex Court in "United India Insurance Vs. Ajmer Singh Cotton & General Mills and others" reported in (1999) 6 Supreme Court Cases 400 that the discharge voucher though signed as 'full and final' may not be treated as final, if the consumer can satisfy the Court that it was obtained through undue influence, fraud or misrepresentation. The contract of insurance is subject to terms and conditions, we find that complainant voluntarily executed the discharge voucher and it is not proved to be vitiated by any alleged coercion. The discharge voucher is proof of final settlement of the claim amount by complainant with OPs. OPs relied upon law laid down in "National Insurance Company Ltd. versus Sehta Shoes", reported in II (2008) CPJ 16 by Apex Court in this regard and law laid down by our State Commission in "Ajaib Singh versus The New India Insurance Company" in First Appeal No. 33 of 2016 decided on 15.12.2016. This fact is, thus, recorded by holding that discharge voucher is in consonance with the report of the surveyor and investigator and it operates validly in this case estopping the complainant from challenging it.

11.    As a result of our above discussion, we find no merit in the complaint and the same is hereby dismissed.

12.    Arguments in this complaint were heard on 07.11.2017 and the order was reserved. Certified copies of the order be communicated to the parties under rules.

13.    The complaint could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                             PRESIDING JUDICIAL MEMBER

 

 

                                                                (SURINDER PAL KAUR)

                                                                                MEMBER

November 9,   2017                                                                 

(ravi)