RESERVED
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
UTTAR PRADESH, LUCKNOW
COMPLAINT NO. 45 OF 2014
- M/s. Tarai Constructions
Lakhimpur Kheri
Through its Proprietor Mohd. Asif Khan
S/o Mohd. Qasim Khan, R/o 171 Mohalla Idgah
Lakhimpur Kheri
- Mohd. Asif Khan
S/o Mohd. Qasim Khan
R/o 171 Mohalla Idgah, Lakhimpur Kheri
...Complainants
Vs.
- State Bank of India
Lakhimpur Kheri
Through its Senior Branch Manager
- SBI General Insurance Company Limited
Registered and Corporate Office situated at
Natraj 101, 201 and 301 Junction of Western
Express Highway
Andheri Kurla Road Andheri (East), Mumbai
Through its Director
- SBI General Insurance Company Limited
7B Ground Floor, Rajendra Park Pusa Road
New Delhi, Through its Branch Manager.
- SBI General Insurance Company Limited
2nd Floor Ks Trident 10, Rana Pratap Marg
Hazratganj, Lucknow, Through its Branch Manager.
- Pankaj Verma, General Manager
7B Ground Floor, Rajendra Park Pusa Road
New Delhi, Through its Branch Manager.
- Piyush Parikh
7B Ground Floor, Rajendra Park Pusa Road
New Delhi, Through its Branch Manager.
- Afroz Jamal, SBI Senior Manager General
2nd Floor Ks Trident 10, Rana Pratap Marg
Hazratganj, Lucknow
Through its Branch Manager
... Opposite Parties
BEFORE:
HON'BLE MR. JUSTICE VIRENDRA SINGH, PRESIDENT
HON’BLE MR. RAM CHARAN CHAUDHARY, MEMBER
HON’BLE MR. SANJAI KUMAR, MEMBER
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For the Complainants : Sri Sarvesh Kumar Gupta, Advocate.
For the Opposite Parties : Sri Ansumali Sood, Sri Chandra Bhushan Pandey
and Sri Rohit Tripathi, Advocate
Dated : 06-04-2015
JUDGMENT
PER MR. JUSTICE VIRENDRA SINGH, PRESIDENT
This complaint under Section 17 (a) of the Consumer Protection Act, 1986 has been filed by M/s. Tarai Constructions and Mohd. Asif Khan against State Bank of India and others with the following prayers:-
- Direct the opposite parties to pay an amount of Rs.59,00,000/- alongwith interest @ 24% from the date of the claim till the date of the payment.
- Direct the opposite party no.1 not to claim any interest on the loan amount of the complainant from the date of incident of the fire till the date of payment of the insured sum by the Insurance Company.
- Direct the opposite parties to pay a sum of Rs.10,00,000/- as damages for committing deficiency in service and for the harassment and mental agony caused to the complainant.
- Direct the opposite parties to pay appropriate sum as compensation to the complainants on account of Unfair Trade Practice.
- Award appropriate punitive damages on the opposite parties and its erring officers for violating the provisions of the Insurance Act and in complete violation of the principle of law laid down by various courts and tribunals.
- Direct the opposite parties to make good loss of the income which the complainant was deprived on account of the non payment of the insured sum.
- Direct the opposite parties not to adopt such kind of Unfair Trade Practice in near future.
- Allow the complaint and direct the opposite parties to pay a sum of Rs.1,00,000/- towards cost of the case.
- Any other order which this Hon’ble Commission may deem fit and proper in the circumstances of the case may also be passed.
The facts of the case stated in brief are that M/s. Tarai Constructions, the complainant no.1 is a proprietorship firm and is duly registered with the Irrigation
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Department. Mohd. Asif Khan, the complainant no.2 is the proprietor of the said firm, who is earning his livelihood by virtue of self employment. The opposite parties contacted the complainants and demonstrated themselves to be a pioneer in the field of the insurance sector and insisted the complainant to opt for the policy from them. Since the opposite party no.1 is having a Cash Credit Account of the complainants, therefore, they insisted that policy of insurance should be taken by them and also assured that in an event of miss-happening, the indemnification shall be done within a short span of 30 days from the date of claim. The complainant on persuasion of the opposite parties opted to purchase insurance policy from them. The opposite parties/insurance company demonstrated themselves to be a sister concern of the State Bank of India. The opposite parties deputed their engineers to visit the premises of the complainants where the stocks were kept and after satisfying themselves regarding feasibility of the coverage of insurance and after verifying the stocks which were to be insured, calculated the premium and thereafter the complainant was informed about the premium to be paid in order to purchase the policy. The opposite parties issued a Policy effective from 31-03-2013 to 30-03-2014 covering the risk to the tune of Rs.59,00,000/-. The opposite party no.1/bank also retained the policy for their official use. The policy schedule bears the name of the financier also. The insurance company inspected the entire documents pertaining to position of stock in accordance with the loan sanctioned by the bank prior to issuing policy and after satisfying itself covered the risk. Physical verification of the godown was done by the insurance company on the behest of the bank and coverage was granted after satisfying themselves regarding physical situation of the godown. All the opposite parties were well aware about the business and the position of the available stock of the complainant.
Unfortunately on 15-07-2013 the premises, where the entire stock of the complainant was kept, caught fire and the entire stock available in the premises was gutted into fire. The complainants immediately called the fire brigade who extinguished the fire and also informed the police station concerned along with the officers of the Bank and the Insurance Company. The complainant was left bare hand and came on the verge of starvation along with his family members since the complainant is burdened with the finance of the bank and his business was ruined by fire. The complainant lodged claim with the opposite parties and the entire
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evidences including the statement of stock given by the bank was also submitted. The fire brigade submitted its report dated 24-07-2013 and assessed a loss of Rs.40,00,000/- and Rs.38,50,000/- respectively. The report was submitted on the basis of the actual physical verification of the fire brigade personnel available on the site. The surveyor deputed by the insurance company demanded 15 documents for processing of the claim. The complainant by virtue of e-mail submitted the entire documents as demanded by the surveyor. The surveyor submitted its report dated 08-10-2013 with the insurance company assessing a loss of Rs.46,74,812/- while illegally deducting 5%. The opposite parties has committed grave deficiency in service while failing to pay the insured sum to the complainants and the opposite parties are also involved in Unfair Trade Practice while keeping the claim pending for disposals till date even after receiving the report of the surveyor dated 08-10-2013. The complainant is a consumer of the opposite parties and the aforesaid complaint is maintainable before this Hon’ble Commission under the provisions of the Consumer Protection Act, 1986.
The opposite party no.1 State Bank of India filed the written statement stating therein that the complainant is the borrower of the opposite party and has not claimed any relief against the opposite party in the complaint. It is further stated that the Cash Credit account being an account for commercial purposes is beyond the jurisdiction of the Consumer Protection Act, as such the complainant is not a consumer of the opposite party. It is stated that the SBI General Insurance Company Limited and the State Bank of India are separate body Corporate and the State Bank of India the opposite party no.1 is not responsible for the acts of the other opposite parties. It is also pleaded that the instant complaint has not been filed with clean hands and the claimed amount is not fixed by the complainant which may be beyond the pecuniary jurisdiction of this Commission, hence the instant complaint is liable to be dismissed with costs.
The opposite parties no. 2 to 7 SBI General Insurance Company Limited have also filed written statement stating therein that the complainant is seeking to invoke the original jurisdiction of this Commission with wrong, incomplete and misleading information and as such, the complaint is liable to be dismissed with costs. The complainant has abused the process of law and is indulging in wasting
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the precious time of this Commission by filing this false and wrong complaint. State Bank of India and its officers and agents have been impleaded as defendants despite the fact that the said bank does not have any role in the instant matter. The cause of action, if any, does not even remotely touch the complainants’ dealings with the bank. They are neither necessary parties nor their impleadment is warranted in the instant matter. Therefore, the instant complaint is liable to be dismissed solely on the ground of mis-joinder of parties. The State Bank of India has been impleaded in the case with the sole purpose of exerting pressure on it so as to prevent it from recovering its legitimate financial dues from the complainant. There is not even a single averment in the complaint wherein the complainants have categorically given the details of the stock alleged to have been destroyed in the incident of fire/sabotage and the claim on this count is based on very general and sweeping allegations, which no judicial forum would rely upon. It is also pleaded that the complainants have not produced any cogent material to substantiate their claimed about purchase of stock as averred in the complaint. On the contrary, the surveyor engaged by the opposite parties has categorically observed that the transportation bills and the cash memo/vouchers were found to be fake and the suppliers were also found to be fictitious. The surveyor’s report unequivocally points out that the claim of losses etc. is fictitious and a design to siphon of public money. It is a case of fraud being played by the complainants. The complaint is, therefore, liable to be dismissed with exemplary and deterring costs. The insured has failed to provide existence/contract details of the supplier from whom material claimed as damaged has been reportedly purchased. Further the insured failed also to provide the proof/existence of Transporter despite of repeated request and that all the payment has been purportedly made in cash with no supporting banking entry. It is submitted that the opposite parties had ever contracted/persuaded to the complainants for insurance. The complainant himself put a proposal for insurance before the opposite parties, who accepted the same subject to terms and conditions of the policy. No engineer or any other person was ever deputed for verification of stock of the complainant and no verification was ever done by the opposite parties. Further under Section 64 UM of Insurance Act, the surveyor has to be engaged for assessing and quantifying the loss and further it is to be noted that the complainant did not produce all the required documents to
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the surveyors for the proper assessment of loss and the surveyors were constrained to accompany their assessment based only on the basis of scanty materials and guesstimates. Further under Section 64 UM of the Insurance Act, it is up to the insurance company to accept the surveyor report or settle or reject the claim and thus the ultimate right is on the insurer based on the policy terms and conditions. It has further been submitted that the IRDA protection of policy holders regulations also state unequivocally about the truthfulness of the consumer. It is settled consumer jurisprudence as settled down by Hon’ble Supreme Court and Hon’ble National Commission that the terms and conditions of the policy have to be construed strictly and that there cannot be extra liberalism in construction of policy in favour of the consumer which would amount to pre-writing of policy terms and conditions which the parties were insurance contract have not bargained for.
It is further submitted that the opposite parties issued the policy after confirming that the complainants have the cash credit limit with the State Bank of India. The opposite parties have not made any physical verification of godown/availability of stock before issuing the policy since contract of insurance is based on the principle of UTMOST GOOD FAITH. The surveyor has not assessed the loss, but, he has presumed the loss based on such volumetric analysis subject to the assumption that the godown was totally filled up with nylon ropes and PVC bags. The surveyor also visited the address mentioned on the bills of V. S. Traders in Dadri but no such firm was found existing at the mentioned address. The surveyor has also obtained the VAT returns filed by M/s. V S Traders for the month of April and June 2013 from the Vat Department, Greater Noida and it is was found that the returns were for NIL amount. The allegedly destroyed goods were transported to the godown by certain transport companies, whose bills were supplied to the surveyor/opposite parties, the surveyor cross checked the genuineness of the bills. The revelation was shocking as all the three bills supplied by the complainants were found to be fake and forged. Upon verification by the insurer, it was found that M/s. Mahavir Transport Company did not exist and the truck nos. Mentioned on G.R. are not registered with the respective transport authorities. The above facts unequivocally establish that highest degree of fraud has been attempted by the complainants with the view to extract money. The policy is providing coverage/occupancy as Retail Shop/Retail sale of building
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material such as bricks, wood, sanitary equipments while the said location was occupied as Godown. The complainants have filed a grievance before Company’s Grievance Redressal Committee and GRC has also disposed off the complaint on 16-01-2014. It has also been submitted that this case requires the detailed oral evidence and many complex questions are involved in this case and in the summary proceedings this complaint cannot be decided and this Commission has no jurisdiction to entertain this complaint. Only the Civil Court is competent to adjudicate this dispute. The opposite parties have rightly repudiated the claim as per terms and conditions of the policy and there is no deficiency of services/unfair trade practice on the part of insurer.
Evidence by complainants
An affidavit in support of the complaint case has been filed by Mohd. Asif Khan, the complainant. The following documents have also been filed on behalf of the complainants as annexure with the affidavit.
Photocopies of the Statement of Account and the Receipt of Premium issued by the opposite party no. 2 to 7 in favour of the opposite party no.1.
Photocopies of the news items and other evidences in support of involvement of State Bank of India in the affairs of SBI General Insurance Company Limited.
Photocopy of prescription of Dr. A M Kar dated 06-01-2014 regarding treatment of complainant on account of extreme harassment by the opposite parties.
Photocopy of letter dated 19-07-2013 issued by Mehta and Padamsey Pvt. Ltd., International Loss Adjusters to Tarai Constructions.
Evidence by State Bank of India, O.P. No.1
An affidavit in support of the written statement has been filed by Sri Amaresh Kumar Mauriya, Chief Manager, State Bank of India thereby stating that the contents of paras 1 to 16 of the written statement which he has read and understood are true to the knowledge and belief of the deponent and the complaint
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of the complainant is not maintainable as the loan is for commercial purposes.
Evidence by SBI General Insurance Company Limited, O.P. No. 2 to 7
An affidavit in support of the evidence has been filed by Sri Rajesh Shankar Dhane, Senior Manager, National Litigation & Recoveries, SBI General Insurance Company Limited. The following documents have also been filed on behalf of the opposite parties no. 2 to 7 as annexure with the affidavit.
- Photo copy of Insurance Policy.
02. Photocopies of mails dated 12-08-2013, 05-08-2013 and 19-07-2013 sent by Mehta & Padamsey, Delhi to the complainant.
03. Photocopies of the survey report and covering letter dated 08-10-2013 issued by Mehta and Padamsey Pvt. Ltd. to SBI General Insurance Co. Ltd.
04.Photocopy of bills of M/s. V S Traders regarding supply of materials.
05. Photocopy of envelop of the returned letter to M/s. V S Traders.
06. Photocopy of VAT returns of M/s. V S Traders.
07. Photocopy of bills of M/s. Mahavir Transport Company and investigation report regarding the verification of transport company.
08. Photocopy of letters/mails dated 16-01-2014 from the complainant.
09. Photocopy of claim letter dated 31-10-2013.
10.Photocopy of letter dated 16-01-2014 of Grievance Redressal Committee to M/s. Tarai Construction.
We have heard Sri Sarvesh Kumar Sharma, learned Counsel for the complainants, Sri Anshumali Sood, learned Counsel for the opposite party no.1 and Sri Chandra Bhushan Pandey as well as Sri Rohit Tripathi, learned Counsel for the opposite parties no. 2 to 7 and perused the entire record.
It has been argued by the learned Counsel for the complainant that the opposite parties, in not settling the claim of the complainant, committed deficiency in service coupled with Unfair Trade Practice. The complainant by virtue of self
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employment and exclusively for earning his livelihood obtained a financial assistance from State Bank of India and the bank is pivotal in selling the policy of insurance to its customers under a common roof, to this effect State Bank of India is under corporate agency arrangement with the SBI General Insurance Company Limited. It is submitted that the policy of insurance had been granted and issued after the physical verification of the stock and after obtaining the internal report of the engineer of the Insurance Company. The opposite parties even did not explain as to under what authority they are using the Logo of the State Bank of India. On 15-07-2013 the godown of the complainant caught fire and the entire insured stock was gutted in fire and was burnt to ashes. The said incident was immediately reported to the Fire Brigade as well as the bank. The bank stock statement as well as the verified and audited balance sheet and CST and VAT returns was given to the surveyor of the Insurance Company. The loss was to the tune of Rs.59 lakhs. The surveyor vide its report dated 08-10-2013 estimated the loss to the tune of Rs.46,74,812/- and after deduction assessed Rs.38,50,000/-. This report had been challenged to the extent that the complainant is entitled for the total loss on account of the fact that the position of the stock is authenticated by the audited balance sheet as well as authentic certified copies of the Taxing Authorities. It is further argued by the learned Counsel that despite submission of all the requisite documents as well as satisfying all the queries of the Insurance Company, the officers of the company did not bother to settle the claim of the complainant and keep on sending vague and illegal letters. It is also submitted that the emphasis was given to the existence of M/s. V S Traders and the truck which unloaded the goods, the complainant repeatedly submitted and filed the proof of the existence of M/s. V S Traders and also submitted that no contractor shall go to verify the authenticity of the truck delivering the goods and only then down load the good. The objection taken in this regard by the Insurance Company is not only vague but lacks corroboration. Learned Counsel further argued that the opposite parties have deputed the surveyor, who himself have recorded that ‘But there was a fire and stocks were burnt’, ‘the Fire had taken place in the godown is evident from the extent of damage caused to the building’, ‘The fire brigade mentions the estimated loss at Rs.38,50,000’, the surveyor assessed the loss but doubted the genuineness of the existence of M/s. V S Traders. It is submitted that the loss occurred to the
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complainant is to the tune of Rs.59,00,000/- and the same is corroborated by virtue of the documentary evidence which are on record. The policy specifically provide that the claim arising under the policy shall be decided within a period of 30 days from the date of the surveyor report, but this mandatory provision has not been followed by the Insurance Company. It has been further submitted that the bank statement and the stock was duly verified by the insurance company prior to issuing the policy and the stocks hypothecated to the bank which is dated 25-06-2013 signed and verified by the bank and the incidence of fire occurred on 15-07-2014, just after 19 days thus the stock which was gutted in fire was accordingly rightly quantified to Rs.59,00,000/-. The report of Fire Brigade dated 24-07-2013 discloses that cause of fire as Electric Short Circuit and loss was estimated by them to the tune of Rs.38,50,000/-. This report of the Fire Brigade has significant value as the same is the creation of statute under the provisions of Uttar Pradesh Fire Service Act 1944 and the surveyor has also accepted the same in his report dated 08-10-2013. The opposite parties failed to place any material evidence to substantiate their stand that there was no firm title as M/s. V S Traders and the bills and vouchers are fabricated. It has further been argued by the learned Counsel for the complainant that the burden to prove that fraud and forgery had been committed by the complainant rests on the Insurance Company who alleged that the claim had been repudiated. The complainant had submitted entire documentary evidences to substantiate his loss and the responsible officer of the Insurance Company who had been vested to appoint investigator failed to follow the Regulations and Rules framed under the Law of Insurance, thus gross deficiency in services as well as Unfair Trade Practice had been committed by the opposite parties.
Learned Counsel for the State Bank of India, opposite party no.1 has argued that the instant complaint is not maintainable as the Cash Credit Limited of Rs.40,00,000/- availed by the complainant was for commercial purpose and not for earning his livelihood by means of self employment. The complaint deserves to be dismissed on this ground alone against the bank. The complainant has not raised any grievance against the bank and has unnecessarily dragged the bank in the complaint to harass the opposite party no.1 and avoid paying the legitimate dues of the bank. It is further submitted that the matter at hand pertains to the issues
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between the Insurance Company and the complainant and the opposite party no.1 State Bank of India does not and cannot indemnify the complainant for any alleged loss if any, because the contract of insurance is between the complainant and the insurance company.
Learned Counsel for the Insurance Company opposite parties no. 2 to 7 has argued that the instant case is one, which necessarily involves adjudication on highly complicated and intricate facts, which have been disputed by the respondents. Under these circumstances, this Commission, which is ordained to decide complaints following a summary procedure, may not be in a position to adjudicate the instant case. More so, when most of the documents relied upon by the complainants are found to have been forged, as per the investigation duly conducted by the opposite parties. The Hon’ble National Commission in a judgment delivered on 30-08-2000 in the case of Bombay Dyeing & Manufacturing Co. Ltd. V/s Union Bank of India, clearly observed that the consumer court is not the appropriate forum for cases involving sifting of intricate facts, which could otherwise be dealt with only by regular courts. Therefore, the complainants are liable to be relegated to the general remedy before the competent Civil Court. It is contended that the complainants have not only miserably failed to prove the losses claimed to have been suffered by them, but have also made an attempt to defraud the opposite parties and to siphon of public money by placing false and forged documents in support of their claim. The complainants have based their claim firstly, on the survey report, secondly, on the special fire report of the Fire Station, Lakhimpur Khiri, lastly on the bank statement of the account maintained by them with the State Bank of India. The entire claim is misplaced and miss-founded inasmuch as the survey report itself stated that the complainants’ claim are required to be verified. The survey report is neither the final authority on the justification of complainant’s claim, nor in the present case, it has given any finding in support of the said claim. The surveyor himself had found that the source of claimed stock was fictitious and that the alleged transporters were also found to be non-existent. The surveyor has also recorded a finding that from the audited balance sheet from the financial year 2010-11 and 2011-12 and trading account for the period 01-04-2013 to 15-07-2013, it is evident that the complainants had been buying material and there was no sale and that the material
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so procured was used in executing different projects for which payment was received from the irrigation department of the govt. The surveyor has given a hypothetical figure of the loss presuming that godown was stocked with goods claim to have been procured by the complainants. Learned Counsel submitted that the source of supply to the complainants was found to be fictitious. Not only this, the vehicles by which the stock was claimed to have been transported, were found to be non-existent and the transporter itself was non-existent. The registration numbers of the vehicles, which were provided by the complainant, were also found to be fictitious and non-existent. It is stated that the bills of M/s VS Traders were found to be forged and the firm M/s VS Traders were not traceable as per the address mentioned on the bill. Even if it is presumed that the complainants had submitted genuine bills, that by itself do not discharge their responsibility to establish the fact that the goods burnt in the incident of fire were actually lying in the godown at the relevant time. It is submitted that the loss has to be established and proved by strong and cogent evidence, which in the instant case is thoroughly lacking. The goods said to have been burnt were certainly not building material for which the insurance policy was subscribed and no evidence has been brought forth about existence of goods in terms of the insurance policy. The matter was again considered by the grievance department, which vide order dated 16-01-2014 refused to interfere with the closure. Thereafter, as an act of grace, the matter was once again considered by the Company’s Grievance Redressal Committee, which too, in absence of any additional material having brought to their notice, rejected the claim vide letter dated 16-01-2014. While refusing to interfere with the decision of closure, the Grievance Redressal Committee, gave the option to the complainants to re-approach the company after complying with the requirements made by the latter in respect of proof of loss. However, instead of availing the option left open by the opposite parties, the complainants have chosen to file the instant case on the basis of false claim and forged documents. For the reliance placed on the special fire report, it is submitted that such a report can never be the basis for an insurance claim. The fire report is based on the uncontroverted version of the occupier/insured. The fire fighting authorities neither have the competence nor have the means to determine the actual loss in terms of money. The reliance placed on the bank statement is thoroughly misconceived and misplaced. It is
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submitted that the complainants’ bank issues the statement on the basis of declaration made by the complainant himself. There is no independent finding regarding the extent of stock in the godown. The account statements does not reflect anything upon the stock of the firm, especially that stock which is said to have been kept in the godown at the time of the incident of fire. It is submitted that the insurance companies are custodians of public money and any attempt to defraud and siphon of such money has to be resisted and repelled. The instant complaint is liable to be rejected with exemplary cost and further they deserve to be fastened with appropriate liability for showing the audacity of staking a false claim based on forged documents.
First of all we will like to deal with jurisdiction of this commission to deal with this case as It has been argued by the learned Counsel for the Insurer that this complaint involves adjudication on highly complicated and intricate facts, which have been disputed by the respondents, therefore, this Commission , which is ordained to decide complaints following a summary procedure, may not be in a position to adjudicate the instant case, being most of the documents relied upon by the complainants are found to have been forged, as per the investigation duly conducted by the opposite parties. Reliance has been placed on Bombay Dyeing & Manufacturing Co. Ltd. V/s Union Bank of India, where in Hon’ble National Commission in the judgment delivered on 30-08-2000 observed that the consumer court is not the appropriate forum for cases involving sifting of intricate facts, which could otherwise be dealt with only by regular courts. We are not inclined with the submission of the insurer in this regard as the Hon'ble Supreme court with regard that the matter should be relegated to the civil court has held in the case of CCI Chambers Coop. Hsg. Society Ltd. v. Development Credit Bank Ltd., (2003) 7 SCC 233 at page 236 as follows;
6. It cannot be denied that fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of the fora established under the Act. These fora have been established and conferred with the jurisdiction in addition to the conventional courts. The principal object sought to be achieved by establishing such fora is to relieve the conventional
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courts of their burden which is ever-increasing with the mounting arrears and whereat the disposal is delayed because of the complicated and detailed procedure which at times is accompanied by technicalities. Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any forum under the Act to the person aggrieved.
Hon'ble Supreme court with regard that the matter should be relegated to the civil court has held in the case of Nizam's Institute of Medical Sciences v. Prasanth S. Dhananka, (2009) 6 SCC 1 at page 34 as follows:
70. This Court in J.J. Merchant (Dr.) v. Shrinath Chaturvedi [(2002) 6 SCC 635] while dealing with the argument that the matter should be relegated to the civil court observed: (SCC p. 640, para 7)
“7. In the present case, there is inordinate delay of about nine years in disposal of complaint. However, if this contention raised by the learned counsel for the appellants is accepted, apart from the fact that it would be unjust, the whole purpose and object of enacting the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’) would be frustrated. One of the main objects of the Act is to provide speedy and simple redressal to consumer disputes and for that a quasi-judicial machinery is sought to be set up at the district, State and Central level. These quasi-judicial bodies are required to observe the principles of natural justice and have been empowered to give relief of a specific nature and to award, wherever appropriate, compensation to consumers. Penalties for non-compliance with the orders given by the quasi-judicial bodies have also been provided. The object and purpose of enacting the Act is to render simple, inexpensive and speedy remedy to the consumers with complaints against defective goods and deficient services and the benevolent piece of legislation intended to protect a large body of consumers from exploitation would be defeated. Prior to the Act, consumers were required to approach the civil court for securing justice for the wrong done to them and it is a known fact that decision in a suit takes years. Under the Act, consumers are provided with an alternative, efficacious and speedy remedy. As such, the Consumer Forum is an alternative forum established under the Act to discharge
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the functions of a civil court. Therefore, delay in disposal of the complaint would not be a ground for rejecting the complaint and directing the complainant to approach the civil court.”
So far the question of this contention raised by the insurer is concerned that the complainants have based their claim firstly, on the survey report, secondly, on the special fire report of the Fire Station, Lakhimpur Khiri, lastly on the bank statement of the account maintained by them with the State Bank of India is concerned which is said miss-founded being survey report itself stating that the complainants’ claim are required to be verified as the surveyor himself had found that the source of claimed stock was fictitious and that the alleged transporters were also found to be non-existent, we are not convinced with this contention too contended on behalf of insurer because it is evidenced on record that On 15-07-2013 the godown of the complainant caught fire and the entire insured stock was gutted in fire and was burnt to ashes. The said incident was immediately reported to the Fire Brigade as well as the bank. The bank stock statement as well as the verified and audited balance sheet and CST and VAT returns was given to the surveyor of the Insurance Company. The surveyor vide its report dated 08-10-2013 estimated the loss to the tune of Rs.46,74,812/- and after deduction assessed Rs.38,50,000/-. This report had been challenged to the extent that the complainant is entitled for the total loss on account of the fact that the position of the stock is authenticated by the audited balance sheet as well as authentic certified copies of the Taxing Authorities. The complainant has filed the proof of the existence of M/s. V S Traders as the trader is registered in trade tax Department. So far the question of non existence of truck & transporter is concerned, we are convinced to the contention of complainant that no contractor shall go to verify the authenticity of the truck delivering the goods first and only then down load the goods. The objection taken in this regard by the Insurance Company is vague. Surveyor himself has recorded that ‘But there was a fire and stocks were burnt’, ‘the Fire had taken place in the godown is evident from the extent of damage caused to the building’, ‘The fire brigade mentions the estimated loss at Rs.38,50,000’. The bank statement and the stock was duly verified by the insurance company prior to issuing the policy and the stocks hypothecated to the bank which is dated 25-06-2013 signed and verified by the bank and the incidence of fire occurred on 15-07-2014, just after 19 days. The stock which was gutted in fire was accordingly
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quantified to Rs.59,00,000/- though by the contractor but the report of Fire Brigade too is estimating loss to the tune of Rs.38,50,000/-. There is the significant value of that report being it in corroborating the loss to the complainant as the same is the creation of statute under the provisions of Uttar Pradesh Fire Service Act 1944 and further more the surveyor has also accepted the same in his report dated 08-10-2013. The burden to prove that fraud and forgery had been committed by the complainant rests on the Insurance Company who failed to place any material evidence to substantiate their stand that there was no firm titled as M/s. V S Traders and the bills and vouchers are fabricated while complainant submitted entire documentary evidences to substantiate his loss.
Furthermore the surveyor has himself recorded a finding that from the audited balance sheet from the financial year 2010-11 and 2011-12 and trading account for the period 01-04-2013 to 15-07-2013, it is evident that the complainants had been buying material and there was no sale and that the material so procured was used in executing different projects for which payment was received from the irrigation department of the govt. In these circumstances, how it can be contended that the surveyor has given a hypothetical figure of the loss presuming that godown was stocked with goods claimed to have been procured by the complainants and how the source of supply to the complainants may be said to have been found to be fictitious. The vehicles by which the stock was claimed to have been transported, are said to have been found to be non-existent but this much fact cannot be so much material in the entire scenario of the facts that the stock was insured by the insurer and it stood duly verified by the bank granting loan, as well as that no contractor shall go to verify first the authenticity of the truck delivering the goods and only then down load the goods. The fact that the firm M/s VS Traders were not traceable as per the address mentioned on the bill is not established on record being there the registration of such firm in the salse tax department.
The contention raised on behalf of insurer that even if it is presumed that the complainants had submitted genuine bills, that by itself does not discharge their responsibility to establish the fact that the goods burnt in the incident of fire were actually lying in the godown at the relevant time, is not convincing . No doubt the loss has to be established and proved by strong and cogent evidence, but in our
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view, in the instant case it is not thoroughly lacking rather is fully proved.
So far the question of this submission of the complainant is concerned that the State Bank of India is a statutory authority established under State Bank of India Act, 1955 and under Section 5(b) of the Banking Regulation Act, 1949 the bank has been entrusted a task of lending or investment of deposits of money from the public repayable on demand or otherwise, but gradually in the course of time the Banking Companies also got involved in playing active role in Insurance Sector and thus the objection of commercialization of service raised by the State Bank of India is baseless for which reliance is also placed on Standard Chartered Bank Limited versus Dr. B.N.Raman reported in (2006) 5 SCC at page 727 and Harsolia Motors versus National Insurance Company Limited reported in I (2005) CPJ 27 (NC) and that the logo of the State Bank of India is used by the SBI General Insurance Company Limited and this name is derived by the State Bank of India from Section 3(1) of the State Bank of India Act, 1955 and the logo is duly registered under the Copyright Act, 1957 and that the State Bank of India is permitting the SBI General Insurance Company to use its Logo in order to believe the consumers that the SBI General Insurance Company is a sister concern of the State Bank of India, no doubt, such facts and circumstances are available on record but looking into these facts too on record that the disputes on record are pertaining to the loss by fire for the goods alleged to have been insured to be deal with the insurer and not with the bank and complainant’s counsel too conceded that complainant does not seek any relief against the bank and there is no controversy on these facts that the opposite parties/insurer have insured the business of the complainant, we found no need to consider the above facts for any finding on above facts being irrelevant for the purpose of deciding the controversy of loss to the complainant and compensation to be paid by the insurer, despite the facts on record stated that the premium amount was debited directly from the complainant account and the premium of Rs.12840/- was remitted the bank to that effect the insurance company also issued receipt to the bank.
The real controversy in between the parties revolves around the facts that the surveyor in its report has endorsed that “but there was a fire and stocks were burnt”, “the fire had taken place in the godown is evident from the extent of damage caused to the building”, “The fire brigade mentions the estimate loss at
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Rs.38,50,000/-”, the certificate issued by the Taxing Authority which enjoins the statutory status, the Tin Number as well as the certificate issued by the Uttar Pradesh Sales Tax Department dated 22.08.2013 mentioning the name of M/s V.S.Traders situated at Surajpur, Sain Bazar Dadri Road, GBN as well as the details of the dealer from Uttar Pradesh Commercial Tax Department which mentions Tin Number 09366110473C, name of the dealer Vishal Sharma Firm Name M/s V.S.Traders and address 0490 F/3F Surajpur Sani Bazar Gali Main Dadri Road, Surajpur GR NOIDA and the status shown is active. The insurance company has not disputed these certificates nor have they produced any cogent material evidence with respect to the non existence of M/s V.S.Traders in comparison to the above facts showing existence of the said trader. The insurance company if doubted the authenticity of the address of the M/s V.S.Traders then the insurer was free to appoint investigator in view of Section 64 UM of the Insurance Act. Insurer did not do so, the reason best known to them. The allegation of fraud and misrepresentation has been denied by the complainant and the insurance company in support of the allegation of fraud has not placed on record any cogent material against the evidence lead by complainant pertaining to record of the certificate issued by the Taxing Authority, the Tin Number as well as the certificate issued by the Uttar Pradesh Sales Tax Department and even the affidavit of the surveyor, who proclaims to have visited the place and alleged to have been found that there is no firm named as V.S.Traders in existence, has been brought on record. Thus the certificate issued by the statutory authorities cannot be disbelieved. Merely on the basis of mails dated 12.08.2013, 05.082013 and 19.07.2013, by which the insurer seems to have demanded VAT returns filed by the supplier and the payment received by him from the complainant, which are said not to have been provided by the complainant is not sufficient to hold by the investigator/surveyor who concluded his investigation alleging on the basis of spot inspection too that no such firm in the name of M/s V.S.Traders exists as there is no affidavit of investigator to prove the spot inspection nor any other cogent evidence in this regard is brought on record by the insurer. The VAT Returns for the month of April and June, 2013 alleged to have been found Nil is itself shows the existence of the alleged trader. The three bills dated 14.06.2013, 18.06.2013
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and 12.06.2013 alleged to have been found to be forged and fabricated cannot be said forged merely for the fact that the truck which unloaded the goods is not registered with the Registration Authorities.
The complainant provided relevant particulars to the surveyor and since the bank was instrumental in purchasing the policy for the loan granted to the complainant and the same contains the hypothecation clause to and the bank statement and the stock was supposed to be duly verified by the insurance company prior to issuing the policy, page 87 annexed to the complaint case contains the statement of stocks hypothecated to the bank which is dated 25.06.2013 signed and verified by the bank and the incidence of fire was occurred on 15.7.2014, just after issued by Uttar Pradesh Commercial Tax Department which certified the name and address of the V.S.Traders. Thus, the stock which was gutted in fire stands accordingly to be considered for quantifying the loss taking in to consideration the entire other facts and circumstances on record.
Report submitted by the Fire Brigade dated 24.07.2013 is on record discloses that cause of Fire as Electric Short Circuit and loss was estimated by them to the tune of Rs.38,50,000/- the surveyor also accepted the same in his report dated 08.10.2013.After the incidence of Fire the surveyor demanded 15 documents by means of letter dated 18.7.2013, these documents were duly supplied to the surveyor by the complainant, report of the surveyor discloses description of insured property. Admittedly fire in the godown damaged/destroyed the entire stocks that were stored in the godown. It was observed that during their visit the entire stocks had been melted and converted to lumps and cemented to floor upto 3 feet and were very difficult to remove, thus the surveyor has physically verified the fire and it’s the extent of damage caused, even in the remarks made at the end of the report the surveyor also agreed with the estimate arrived at by the Fire Brigade, merely creating doubt on location of M/s V.S.Traders and the authenticity of the truck but the fact remains that it has been observed by the surveyor that there was Fire and stocks were burnt. It has been submitted by the insurance company in paragraph 26 (a) of the written statement that the surveyor has only presumed the loss and did not assessed the loss. This submission has no force as the report of the
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surveyor under clause 8.01 says:
“The fire was serious in nature and had damaged/destroyed the entire stocks that were stored in the godown. During our visit we observed that the entire stocks had been melted and converted to lumps. These lumps had cemented to the floor (up to about 3 feet) and were very difficult to remove.”
Hence in the entire scenario of facts as above we are of this view that the insurer cannot deny the loss which is assessed by the surveyor for which this complaint we found deserving to be allowed for direction to the insurer to make a payment of Rs 46,74,812/- with no deductions as is made by the surveyor for which there is no justification being the occurrence of fire within 19 days of the insurance of the stock. This amount shall carry interest @ 9% P.A. from the date of this complaint to the date of payment. A sum of Rs 15000.00 shall also be payable to the complainant as litigation charges by the insurer.
ORDER
The complaint case is allowed. The complainant shall be entitled for the amount of Rs. 46,74,812/- to be paid by the opposite party nos. 2 to 7 (Insurance Company) within a period of 30 days, carrying interest at the rate of 9% per annum from the date of this complaint up to the date of payment with cost of Rs.15000/-.
( JUSTICE VIRENDRA SINGH )
PRESIDENT
( R C CHAUDHARY )
MEMBER
( SANJAI KUMAR )
MEMBER
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