Chandigarh

DF-I

CC/517/2023

M/S VERMA ENTERPRISES - Complainant(s)

Versus

PUNJAB NATIONAL BANK - Opp.Party(s)

KARAN KUMAR JUND

02 Aug 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

 

                                     

Consumer Complaint No.	:	CC/517/2023
Date of Institution	:	30/10/2023
Date of Decision	:	02/08/2024

 

M/s Verma Enterprises through its Proprietor Arvind Kumar Aged 56 Years s/o Shiv Ram, resident of Village & Post Office Mullanpur Garibdass, Tehsil Kharar, District SAS Nagar (Mohali). 140901

… Complainant

V E R S U S

1. Punjab National Bank through its Zonal Manager, Chandigarh Zone, 1^st Floor, PNB House, Bank Square, Sector-17B, Chandigarh 160017
2. Punjab National Bank through its Branch Manager, Branch Mullanpur Garibdass, Kurali Chandigarh Road, District SAS Nagar, Punjab 140901.
3. Cholamandalam MS General Insurance Company Limited having its registered office at 2^nd Floor "Dare House", 2, N.S.C. Bose Road, Chennai, 600001.
4. Cholamandalam MS General Insurance Company Limited through its Branch Manager, Chandigarh Branch, SCO 2463-2464, 2^nd Floor, Sector 22-C, Chandigarh 160022

5. Indemnity Insurance Surveyors & Loss Assessors Pvt. Ltd., through its Director, CA Rachit Gupta, having registered office at 925/5, Gali No.7, Patel Nagar, Jharsa Road, Gurugram 122001.

… Opposite Parties

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                       

ARGUED BY	:	Sh. Karan Jund Mullanpur, Advocate for complainant
	:	Sh. B.S. Walia, Advocate for OPs 1 & 2
	:	Sh. Rajneesh Malhotra, Advocate for OPs 3 & 4 (thr.VC)
	:	OP-5 ex-parte

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by M/s Verma Enterprises through its proprietor, Arvind Kumar, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that the complainant is running his business of computer/laptop and electronic goods shop in the name and style of M/s Verma Enterprises since the year 1995 near bus stop at Mullanpur Garibdas, New Chandigarh (hereinafter referred to as “subject shop”).  Initially the complainant had obtained CC limit of ₹5.00 lacs from OP-2/bank which was gradually got enhanced to ₹10.00 lacs thereafter to ₹ 15.00 lacs and finally from ₹30.00 lacs to ₹70.00 lacs and every time the complainant got the inspection of the site and stock conducted and got the valuation report prepared from the bank and the last valuation report is Annexure C-1.  At the time of enhancement of the CC limit to ₹70.00 lacs, bank had mortgaged the property of complainant and against the equitable mortgage of the property, stock of the complainant firm was got insured from the insurance company previously with Bajaj Allianz General Insurance Company Limited vide policy (Annexure C-2) and later on the same was got insured by the OPs 1 &2/bank with OPs 3 & 4/insurer vide policy (Annexure C-3) valid w.e.f. 17.2.2023 to 16.2.2024 (hereinafter referred to as “subject policy”). Prior to the issuance of subject policy, bank official alongwith the surveyor and other officials of OPs 3 & 4 had visited the shop of the complainant and conducted proper and thorough survey inspection of the stock lying in the entire building i.e. basement, ground floor, first floor and second floor and on being satisfied, OPs 3 & 4 had issued the subject policy.  The complainant has been regularly updating OPs 1&2/ bank about the stock of his firm and the latest stock statement submitted by the complainant to OPs 1 & 2 on 9.6.2023 is Annexure C-4.  Unfortunately, on account of heavy rain on 8.7.2023 and 9.7.2023, entire basement of complainant’s shop was filled with water due to flood in the entire area and the entire stock lying in the basement was submerged in water.  Immediately on 9.7.2023, complainant contacted Parveen, employee of the OP bank on telephone and apprised him about the entire situation by sending videos also. As it was Sunday on 9.7.2023, complainant was asked to remind him on 10.7.2023.  However, on 10.7.2023, complainant personally visited the OP bank and submitted application (Annexure C-5) intimating about the loss caused to the stock. On 13.7.2023, complainant again submitted representation dated 12.7.2023 (Annexure C-6) alongwith itemized detail of the damaged goods with the bank with the request to process the claim.  On 13.7.2023, two surveyors of the OPs/insurer visited the shop of the complainant to assess the loss around 6:00 p.m. and after inspecting the entire stock they left the premises.  At that time, the surveyor had informed the complainant that CA Rachit Gupta could not come, but, will visit the spot and will submit his report with respect to the damaged stock.   Since 13.7.2023, the complainant continuously visited the OPs, but, nothing has been done by them.  On 25.7.2023, complainant received a letter dated 15.7.2023 (Annexure C-7) from the surveyor/CA Rachit Gupta intimating that basement is not covered under the subject policy, hence no claim can be paid to him.  Thereafter, complainant received another email dated  28.7.2023 (Annexure C-8) from CA Rachit Gupta who informed the complainant that he had arranged a buyer’s visit and obtained quotation for lifting of damaged stock (salvage) for ₹2,03,390/- and further asked the complainant to revert within 7 days failing, which the claim would be closed. However, complainant was not ready to accede to the same and he accordingly informed CA Rachit Gupta through email (Annexure C-9). On 9.8.2023 complainant again received an email (Annexure C-11) from CA Rachit Gupta intimating that “no coverage of the basement and contents stored therein” and the claim of the complainant was rejected and closed at their end.  In this manner, the aforesaid act of the OPs amount to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result. Hence, the present consumer complaint.
2. OPs 1 & 2 and OPs 3 & 4 resisted the consumer complaint and filed their separate written versions.
3. In their written version OPs 1 & 2, inter alia, took preliminary objection of maintainability by alleging that the answering OPs have only acted as intermediator between the complainant and the insurance company and there is no liability on the part of the answering OPs. On merits, admitted that the CC limit was sanctioned in favour of the complainant and the stock lying in the shop of the complainant was insured by OPs 3 & 4.  It is further alleged that the answering OPs had never forced the complainant to get the insurance policy from OPs 3 & 4.  Further, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
4. In their written version OPs 3 & 4, inter alia, took preliminary objection of maintainability, cause of action, jurisdiction, mis-joinder and non-joinder of parties.  On merits, denied for want of knowledge about the CC limit, valuation report and loan amount by the OP bank.  However, it is admitted that the subject policy (Annexure R-1) was issued with respect to the shop of the complainant, but, the basement area of the shop was not covered under the risk of the policy.  It is further alleged that, in fact, after receiving intimation about the said loss due to rain, answering OPs had deputed surveyors and loss assessors who visited the spot and during investigation found that the basement of the building was not covered under the risk of policy and accordingly claim of the complainant was closed, being not covered under the policy.  In pursuance to the final survey report dated 9.8.2023 (Annexure R-3), claim of the complainant was repudiated vide repudiation letter (Annexure R-4).  It is stated that as the claim of the complainant was not covered under the subject policy, the same was rightly repudiated.  Further, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
5. OP-5 did not turn up before this Commission, despite proper service, hence it was proceeded against ex-parte vide order dated 9.2.2024.
6. Despite grant of sufficient opportunity, rejoinder was not filed by the complainant to rebut the stand of the OP.

2. In order to prove their case, contesting parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the contesting parties and also gone through the file carefully, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the subject shop of the complainant situated at Mullanpur Garibdas with stock was insured by OPs 3 & 4/ insurer w.e.f. 17.2.2023 to 16.2.2024, as is also evident from the subject policy (Annexure C-3) and the stock was found damaged/submerged in the flood on the relevant day, time and place, in the basement of the subject shop/building, the case is reduced to a narrow compass as it is to be determined if OPs 3 & 4 have wrongly repudiated the genuine claim of the complainant on the ground that the basement was not covered under the risk of subject policy and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if OPs 3 & 4 have rightly repudiated the claim of the complainant and the consumer complaint of the complainant, being false and frivolous, deserves to be dismissed, as is the defence of OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms & conditions of the subject policy, repudiation letter and final survey report and the same are required to be scanned carefully for determining the real controversy between the parties.
   3. Perusal of the policy schedule (Annexure C-3) clearly indicates that the subject policy was valid w.e.f. 17.2.2023 to 16.2.2024 with sum insured of ₹80.00 lacs. The details of property insured and location of the risk covered, as mentioned in the subject policy, are required to be scrutinized more cautiously as the same will determine the real controversy between the parties.  The relevant portion of the subject policy is reproduced below for ready reference :-

8. DETAILS OF PROPERTY INSURED & LOCATION OF RISK COVERED
Location No.	1
Location Address	CHANDIGARH SISWAN ROAD MAIN BAZAAR MULLANPUR, MULLANPUR S.O. MOHALI, PUNJAB-140901
Age of Building	0
Number of Floors	0
Construction Type	Pucca
Occupancy	3032-computer/Laptop and electronic goods shop

 

Description		Sum Insured (Rs.)
Stocks		80,00,000
Total Sum Insured (Rs.)		80,00,000
xxx                    xxx                    xxx
Stock is stored in open		No
xxx                    xxx                    xxx
ANNEXURE Location No.1
LOCATION ADDRESS	CHANDIGARH SISWAN ROAD MAIN BAZAAR MULLANPUR, MULLANPUR S.O. MOHALI, PUNJAB-140901
Occupancy	3032-computer/Laptop and electronic goods shop

 

S.No.	Description of Item	Sum Insured (Rs.)
1	Stocks	80,00,000”

 

4. Thus, one thing is clear from the aforesaid details of the property mentioned in the policy schedule that basement of the subject shop/building was not excluded from the risk of the policy, rather it clearly indicates that the pucca construction of the shop was fully covered under the policy alongwith stocks lying in the building situated at Chandigarh Siswan Road, Main Bazar, Mullanpur.  Admittedly, basement of the subject shop is also pucca one and is part of the building/subject shop, being run by the complainant.
5. Not only this, when the surveyor himself has found the damaged stock in the pucca basement and even the subject policy schedule also says no stock is stored in open, it is safe to hold that the basement of the subject shop was covered under the risk of the subject policy and OPs 3 & 4/insurer in pursuance to the report of the surveyor have wrongly repudiated/rejected the genuine claim of the  complainant vide letter dated 26.10.2023 (Annexure R-4), by holding that the policy does not cover basement wherein stocks were found damaged. The relevant portion of the repudiation letter  is reproduced below for ready reference :-

“On scrutiny of the claim file and surveyor report and we observed as follows:-

• Policy is not covering basement floor wherein stocks were lying hence damaged stocks does not stands covered under policy. Hence, there will be no liability of insurers in said claim.

Your claim does not qualify for claim under Chola MS Bharat Sookshma Udyam Suraksha Policy due to non-coverage of loss location.

Based on the above, we regret to inform you that as per policy terms and conditions, claim is not tenable and we are closing your claim as NO CLAIM in our books of accounts.”

6. In view of the foregoing discussion, it is unsafe to hold that OPs 3 & 4/insurers were justified in repudiating the claim of the complainant and the present consumer complaint deserves to succeed. 
7. Now coming to the quantum of amount, as per the case of the complainant he suffered loss to the tune of ₹8,99,746/- as the stock to that extent was damaged in the flood.  However, OPs 3 & 4 have got the loss assessed through surveyor who vide report (Annexure R-3) has minutely assessed the loss and deductions as per the terms and conditions of the subject policy and finally found the actual loss to the extent of ₹4,66,430/-. As the complainant has not led any cogent evidence to prove that the loss suffered by the complainant was not assessed properly, as per the terms & conditions of the subject policy and even otherwise nothing has come on record showing any infirmity or perversity in the final report (Annexure R-3), it is safe to hold that the same has to be considered and OPs 3 & 4/insurers are liable to pay the amount assessed therein to the complainant alongwith interest and compensation etc.
8. It is pertinent to mention here that surveyor report is an important piece of evidence and has to be given due weightage and can only be ignored if there is any other cogent evidence to the contrary.  Here we are strengthened by the judgment of Hon’ble Apex Court in Khatema Fibres Ltd. Vs. New India Assurance Company Ltd. & Anr., Civil Appeal No.9050 of 2018 decided on 28.9.2021 in which it was held as under:-

        “38.  A Consumer Forum which is primarily concerned with an allegation of deficiency in service cannot subject the surveyor’s report to forensic examination of its anatomy, just as a civil court could do. Once it is found that there was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the surveyor, in a manner prescribed by the Regulations as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop.”

 

Further, the Hon’ble National Commission in New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) held as under:-

“The Report submitted by the Surveyor is an important piece of evidence and has to be given due weight and relied upon until and unless it is proved by some cogent and reliable evidence that the Report submitted could not be relied upon.”

Further the Hon’ble National Commission in Oriental Insurance Co. Ltd vs. Arss Infrastructure Project Ltd., II (2023) CPJ 468 (NC) held as under:-

            “Insurance — Surveyors’ report — Survey and investigation are one of fundamentals in settling claim, and cannot and should not be disregarded or dismissed without cogent reasons, though it also goes concomitantly that survey or investigation should be convincing and pass test of credence in scrutiny — State Commission has not gone into contents of surveyors’ reports at all on ground that reports were filed belatedly before it — Reports were in any case available before State Commission and as such it ought to have examined their contents rather than dismissing them outright — Depending upon circumstances State Commission could have even imposed terms including cost for belatedly filing reports but to treat them as suspicious and to perfunctorily dismiss them outright merely because they were filed belatedly was not approach either justified or called for — No need to examine surveyors’ reports at this stage at any great length since both parties agree that settlement may be made on basis of respective surveyor’s assessment of actual loss in each case.”

The Hon’ble National Commission in Detco Textiles Pvt. Ltd. Vs. New India Assurance Company Ltd. & Anr., II (2023) CPJ 535 (NC) held as under:-

        “The Surveyor conducted a very detailed inspection of the premises and assessed the loss after due verification of documents. He assessed the total loss to the building, plant & machinery and furniture etc. at Rs.11,21,18,099/- after making necessary deductions of Rs.5,605,905/- towards excess clause and taking care of the process charges, debris removal, architects fee and goods held in trust arrived at the net adjusted loss of Rs.10,65,12,194/-. For every item, the Surveyor had explained the basis of arriving at the amount. The Complainant on the other hand had not placed any evidence to establish that the assessment made by the Surveyor was incorrect. The Complainant, therefore, cannot be allowed the amount beyond the assessment of the Surveyor. We see no reason not to agree with the assessment made by the Surveyor.”

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and  OPs 3 & 4 are directed as under :-

1. to pay ₹4,66,430/- to the complainant alongwith interest @ 9% per annum (simple) from the date of repudiation of the claim i.e. 26.10.2023 onwards.
2. to pay ₹50,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by OPs 3 & 4, jointly and severally, within a period of 45 days from the date of receipt of certified copy thereof, failing which the amounts mentioned at Sr.No.(i) & (ii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation, over and above payment of ligation expenses.
6. Since no deficiency in service or unfair trade practice has been proved against OPs 1 & 2 and OP-5, the consumer complaint against them stands dismissed with no order as to costs.
7. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
8. Certified copies of this order be sent to the parties free of charge. The file be consigned.

02/08/2024	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member
	Sd/- [Suresh Kumar Sardana] Member