Date of Filing: 14.12.2017

Date of Disposal: 28.02.2020

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

THIRUVALLUR-1

PRESENT: THIRU. J. JUSTIN DAVID., M.A., M.L., .…. PRESIDENT

TMT.K.PRAMEELA, M.Com., …….MEMBER-I

THIRU. D.BABU VARADHARAJAN, B.Sc., B.L., ……MEMBER-II

CC No.49/2017

THIS FRIDAY THE 28^th DAY OF FEBRUARY 2020

Asian Die Castings,

Rep. by its Managing Partners 1.Sambath, 2.Vijayalakshmi,

No.181, SIDCO Industrial estate,

Thirumazhisai, Thiruvallur District. ….. Complainant.

//Vs//

1.The Branch Manager,

SBI General Insurance Company Limited,

Greams Dugar building, Ground Floor,

No.64, Greams Road, Chennai -6.

2.The Branch Manager, State Bank of India, SME Branch,

No.5, Jawaharlal Nehru Road,

Ekkattuthangal,Chennai -32. …Opposite parties.

This Complaint is coming upon for final hearing before us on 05.02.2020 in the presence of Mr.S.Muthukumaravel, Counsel for the complainant and Mr.T.V.Suresh, Counsel for the 1^st opposite party and M/s.K.V.Srinivasan, Counsel for the 2^nd opposite party and after perusal of the both side documents and hearing the arguments on both sides, this Forum passed the following:-

ORDER

PRONOUNCED BY THIRU.J.JUSTIN DAVID, PRESIDENT

This complaint has been preferred by the complainant Under Section 12 of the Consumer Protection Act, 1986 against the 1^st opposite party seeking direction to pay a sum of Rs.14,46,079/- being the value of materials washed away on 02.12.2015 because of flood and to pay a sum of Rs.1,00,000/- towards compensation for mental agony and torture and to pay a sum of Rs.1,00,000/- towards unjustified repudiation of the claim and to pay a sum of Rs.1,00,000/- for inordinate delay in handling the claim with interest and to pay a sum Rs.6,000/- towards cost of the proceeding to the complainants.

2.The brief averments in the complaint is as follows:-

The complainant is a small scale industry and their work is based upon aluminum, zinc and other materials and the said aluminum, zinc etc will be in a size of bar. The complainant will use/convert the same in order to make small components and deliver the same to the company which has ordered and the same component will be molded and sold by the purchasing company. There is no scope or chance for the complainant to sell the finished components in the open market or the any other company except to the ordered person. The complainant is doing child parts to the need of medium scale industries. The complainant has availed a standard fire and special perils policy from the 1^st opposite party vide policy No.0000000003022886 from 24.06.2015 to 23.06.2016 for a sum of Rs.55,00,000/-. The complainant has a regular loan /cash credit limit from the 2^nd opposite party which is bank, all the stocks statements and returns are monthly submitted to the 2^nd opposite party without fail then alone the 2^nd opposite party will honor the complainant’s cheque to the extent of DP (Drawing Power of 75% of stock value), so there may not be any bogus stock statement. The complainant’s factory is situated at SIDCO industrial estate. On 02.12.2015 there was a heavy flood the water level has suddenly raised, so the workers of the factory for fully closed the rolling shutters and ran away to safeguard their lives. Thereafter the factory was severely affected by the flood and the water level inside the factory is gone up to 5 to 6 feet. The complainant factory was flooded and the entire outskirts of Chennai, Thiruvallur was severely affected by the flood as witness by the entire people of Tamil Nadu. After the flood the complainant factory at SIDCO entrance was fully guarded by police and they are not allowed to go inside the SIDCO industrial estate till 05.12.2015. On 06.12.2015 the water level was slightly decreased and the complainant has visited the factory (water not fully drained) and on 07.12.2015 the same was duly communicated to the insurance company/1^stopposite party and quoted a rough loss of Rs.12,00,000/-dated 07.12.2015 and even on the day there was no power supply. The surveyor one Mr.Subash Chandra Bose had visited the factory only on 11.12.2015 and in the meantime the complainant had cleaned the premises with the help one customer. On 11.12.2015 when surveyor had visited the factory, the water level is low and after the lapse of 9 days the factory is almost re-assembled, re-gathered most of the scattered components are washed away here and there was seen by surveyor. For the factory machineries the company has availed the insurance from BAJAJ Alienz insurance and they on 08.12.2015 to 25.12.2015 visited the factory and verified the damages to the machines and settled the claim of Rs.3,89 lakh to the complainant on 04.01.2016 for the loss of damages of machines. On 11.12.2015 at the time of surveyor visit the complainant’s company has approximately given the loss and furnished all the documents like working sheet, profit and loss account, stock statement for one year, finished goods semi finished goods and other stock details. So the complainant claimed an amount of Rs.25,95,440/- dated 28.12.2015. The opposite party requested to reduce the value of components to exclude the making charge/workable conversion charge. The complainant has given in fresh claim amount of Rs.14,46,079 /- (by excluding the invoice value) the same was duly communicated to the 1^st opposite party. But on 28.04.2017 the 1^st opposite party has rejected the claim of the complainant for the following reason

“The factory was fully secured / locked with rolling shutters so there is no chance of washed way of stocks.

The flood water is up to 2 feet alone so there is no loss (as seen from photos which was taken on 11.12.2015) according to surveyor.

The total kg lost is taken as 1152 kg but the complainant quoted 13978 has loss, so there is a difference in the stock.

Several products have been sold after flood but the complainant has given incorrect statement that full stocks are washed away.

The complainant has revised the loss value two times, so the complainant has acted male fide (Rs.25,95,440/- to 14,46,079/-) and furnished false statement which is violation of clause 8 of policy.

Density of aluminum and zinc is more than the water so there is no scope for washed away.”

The above rejection of the claim by the 1^st opposite party unjustifiable, gross deficiency in service, non application of mind, the 1^st opposite party has not at all applied his mind while dealing with the rejection order and the rejection of claim by the 1^st opposite party for the reason that the complainant has breached the clause 8 of policy. The contention of the 1^st opposite party to reject the claim under the ground of violation of clause 8 will not arise since the claim is bona fide one and every alteration or revision amount of claim is without the intention of committing fraud or making false statement and alteration and revisions were done under those circumstances. The act of the 1^st opposite party in non-furnishing the surveyor report to the complainant as on date is a gross deficiency in service. The 1^st opposite party ought to have honored the claim of the complainant being the small scale industry. The surveyor never considered the value of semi-finished good at loss (12,174kgs semi finished goods). The 1^st opposite party has taken for much of time and repudiated the claim. The 1^st opposite party has not at all furnished the surveyor report, the surveyor has not finished/assessed his assessment with in time frame in spite of all the relevant documents was duly furnished from time to time, because of which the complainant was put to dark and now the complainant has lost a chance of option to go for a second surveyor. The above acts are in gross violation of IRDA (Protection of policy holder’s interest) Regulation 2002, which is a clear case of deficiency in service. After rejection of claim the complainant has preferred an appeal before the Chairman, Grievance Redressal Committee of the 1^st opposite party dated 15.05.2017 and the appellate authority was also confirmed the rejection order vide a letter dated 05.07.2017. The complainant has no other option to approach before this forum. Hence this complaint.

3. The contention of written version of the 1^st opposite party is as follows:-

The opposite party admits the policy as stated in Para No.4 of the complaint. The opposite party denies that on 02.12.2015, there was heavy flood, that the workers did not close the shutters, ran away and there was water at the premises to a height of 5 to 6 feet and the company was flooded. The complainant framed is also not in accordance with law. There is also no jurisdiction for this Forum to deal with the case. The opposite party on receipt of the claim appointed a surveyor to made survey as per the terms and conditions of the contract of insurance. The surveyor filed report stating that the complainant lodged claim with false, exaggerated values and not on the basis of actual loss. After surveyor’s visit, the complainant drastically reduced the claim from Rs.25,95,440/- to 14,48,079/- and submitted his revised claim. Again the opposite party directed the surveyor to revisit and after his visit, he submitted his final report by stating that the complaint revised. The claim also untenable and on false averments and the opposite party company not liable to pay any claim based on the two reports of the surveyors. The documents submitted by the surveyors and claimant, this opposite party found out that the complainant company made false and frivolous claim to cheat the insurance company on the basis of contract and finally repudiated the claim by sending reply on 28.04.2017. In which the opposite party stated that during the visit of the complainant premises on 11.12.2015, surveyors noticed that the complainant had cleaned the premises and commenced operations and there is no evidence of damage to stocks. Further the photographs furnished by the complainant in which it is noted that there is flooding in his premises up to 2 feet in shop floor and it was observed that tins, drums were very much available on the shop floor, which confirms that stocks were indeed available and not washed away in flood waters. As per analysis carried out by the surveyors, total stock that would have been available at the time of loss is only 11521kg. The density of aluminum and zinc is more than water and there is no scope for stocks made of aluminum and zinc to wash away in flood and the surveyor could not find scattering of materials or any trails of stocks left after flood. The company by making fictitious claim supported by false documents and statements which is a breach of general condition No.8 of the standard fire and special perils policy and therefore there is no deficiency of service and there are no merits in the complaint.

4. The contention of written version of the 2^nd opposite party is as follows:-

The 2^nd opposite party is an unnecessary party and there is no relief claimed against the 2^nd opposite party by the complainant. The allegations in Para No.3 to 5 of complainant are admitted. The statement that bajai alienz insurance settled the claimed is admitted. It is true that there was a joint meeting arranged by the 2^nd opposite party with complainant and 1^st opposite party. As the complainant requested the 2^nd opposite party to arrange for a meeting, the 2^nd opposite party arranged for an immediate meeting. In the meeting, held on April 2015, the 1^st opposite party informed the complainant that since there is inflation regard to claim, there is a problem in settling. The complainant agreed to reassess the value and the 1^st opposite party and complainant accepted to reassess the value. It is true that the 1^st opposite party has reduced the value of the component and gave a fresh claim of Rs.14,46,079/-. The stock statement used to produce by the complainant till the occurrence dated 02.12.2015. The complainant had issued stock statement, till the month of October 2015. The 2^nd opposite party found that the stock statement tallied with complainant is true and admitted. There was no negligence on the part of the 2^nd opposite party. The cause of action is false. There is no claim against the 2^nd opposite party. No relief or claim is sought against the 2^nd opposite party. Hence the complaint against the 2^nd opposite party may be dismissed with costs.

5. In order to prove the case, on the side of the complainant, proof affidavit filed as his evidence and Ex.A1 to Ex.A22 were marked. While so, on the side of the 1^st opposite party proof affidavit filed as his evidence and Ex.B1 to Ex.B3 were marked the 2^nd opposite party proof affidavit filed but no document filed but adduced oral argument on both sides.

6. At this juncture, the point for consideration before this forum is:-

(1) Whether there is any deficiency in service on the part of the 1^st opposite party?

(2)Whether the complainant is entitled for compensation of Rs.1,00,000/- towards mental agony?

(3)Whether the complainant is entitled for Rs.1,00,000/- towards unjustifiable repudiation of the complainant claim by the 1^st opposite party?

(4)Whether the complainant is entitled for Rs.1,00,000/- towards inordinate delay in handling the claim of the complainant by the 1^st opposite party?

(5)Whether the 1^st opposite party is liable to pay Rs.14,46,079/- being the value of materials washed away by flood on 02.12.2015 from the complainant’s premises?

(6)Whether the complainant is entitled for cost from the 1^st opposite party?

(7) To what other relief the complainant is entitled to?

7. Point Nos.1 to 4 & 6:-

The case of the complainant is that the complainant is a small scale industry and he is doing child parts to the need of medium scale industries. The complainant availed a standard fire and special perils policy from the 1^st opposite party vide policy No.0000000003022886 from 24.06.2015 to 23.06.2016 for a sum of Rs.55,00,000/-. The complainant factory is situated at SIDCO industrial estate, Thirumazhisai. There was a heavy flood on 02.12.2015 and the complainant’s factory was severely affected by the flood. On 06.12.2015 the complainant visited the fact and found there was heavy loss and therefore the complainant informed the same to the 1^st opposite party on 07.12.2015. On behalf of the opposite party one surveyor namely Mr.Subash Chandra Bose had visited the factory only on 11.12.2015. Thereafter on 28.12.2015 the complainant claimed an amount of Rs.25,95,440/- from the 1^st opposite party. The surveyor raised some question and also the 1^st opposite party requested to reduce the value of components and hence the complainant has given fresh claim for an amount of Rs.14,46,079/- to the 1^st opposite party. But the 1^st opposite party has taken an inordinate delay in dealing the complaint and finally on 28.04.2017 the 1^st opposite party rejected the claim of the complainant. The rejection of the claim by the 1^st opposite party is unsustainable and the same amounts to deficiency in service.

8. The 1^st opposite party on receipt of the claim, appointed a surveyor to inspect and survey the factory as per the terms and conditions of the contract of insurance. After surveyor’s visit, the complainant reduced the claim from Rs.25,95,440/- to 14,48,079/-. Again the opposite party directed the surveyor to revisit and the surveyor submitted his report by stating that the complainant made false and frivolous claim and therefore the opposite party repudiated the claim on 28.04.2017 and there is no deficiency in service on the part of the opposite party.

9. The complainant namely Asian Die casting is a small scale industry making components to the need of medium scale industries. The complainant’s industry is situated at SIDCO industrial estate, Thirumazhisai and the same has been registered in the department of industries and commerce. Ex.A2 is the copy of registration certificate issued by the Government of Tamil Nadu, Department of Industries and Commerce. The 1^st opposite party is the Branch Manager, SBI General Insurance company Limited, Greams Road, Chennai and the 2^nd opposite party is the Branch Manager, SBI, Ekkattuthangal, Chennai -32. The complainant claimed compensation from the 1^st opposite party and cited the 2^nd opposite party as a formal party.

10. The complainant availed a standard fire and special perils policy from the 1^st opposite party vide police No.0000000003022886 from 24.06.2015 to 23.06.2016 for a sum of Rs.55,00,000/-. The opposite party admitted the same. Ex.A1 is the copy of insurance policy issued by 1^st the opposite party in favour of the complainant. The complainant insured the stocks of the complainant factory with the 1^st opposite party and insured for Rs.55,00,000/-. The insurance coverage was in force 24.06.2015 to 23.06.2016. There was a heavy flood in Chennai, Thiruvallur and Kancheepuram district on 02.12.2015 and the 1^st and 2^nd opposite parties also admitted the same. Further the surveyor of the 1^st opposite party in his final survey report dated 10.03.2017 admitted at page No.3 as follows:-

“There was heavy torrential rainfall in Tamil Nadu and Pondicherry from 11^th November 2015 till 6^th December 2015 because of excessive/abnormal North East Monsoon. This inundated several areas in Chennai and Kanchipuram. The inundation level was more than 4 feet of water in most of the areas in Chennai and Kanchpuram. It was reported in the newspaper that more than 46cm of rainfall was received in Chennai which is above average rainfall of 43 cm recorded previously.”

Therefore there was a heavy rain flow in Chennai and Kancheepuram district from 15.11.2015 to 06.12.2015 and the water level was more than four feet in most of the area in Chennai and Kancheepuram. Hence there is no dispute both the parties that the factory was flooded by water on 02.12.2015.

11. The complainant alleged that on 06.12.2015 the complainants visited the factory and found the loss of complainants’ factory by the flood and they intimated the same to the 1^st opposite party on 07.12.2015. Hence there is no delay in intimating the loss to the complainant’s factory to the 1^st opposite party. The 1^st opposite party also admitted the receipt of the intimation and surveyor appointed by the 1^st opposite party and inspected the complainant’s factory on 11.12.2015. The surveyor of the 1^st opposite party submitted his first report dated 26.12.2015 stating that the date of loss is 01.12.2015 and date of inspection is 11.12.2015 and at the time of inspection 4 feet flood was inside the premises. The surveyor in his 1^st report stated that the several lakh quantity of finished products cannot get washed away in flood and if at all they are washed away, they might be inside the premises as the premises in locked and the machines and storage area is closed with shutters and he further stated that the insured claim of Rs.23,22,140/- worth of finished goods if not tenable and there is no liability to the insurer. The 1^st opposite party enclosed the first survey report of the surveyor in Ex.B3 series.

12. The complainant originally submitted the claim bill for Rs.25,95,440.50/- on 28.12.2015 towards loss estimation for components and labor charges with material with the 1^st opposite party and thereafter revised claim dated 16.09.2016 claiming Rs.14,46,079/-. The Manager, SBI, SME Ekkaduthangal Branch forwarded the revised claim of the complainant to the Manager of the Commercial Claims, SBI, General Insurance Limited, Greams Dugar, Chennai on 19.09.2016 also contains in Ex.B3 series. In the said letter the SBI, SME Ekkaduthangal Branch admitted that during flood in December 2015 the unit was severely affected with loss of stocks and business. Hence due to flood dated 02.12.2015 the complainant’s unit was severely affected now the surveyor of the 1^st opposite party disputed the loss.

13. The complainant insured the stock of the complainant unit with the 1^st opposite party and the insurance was forced at the time of flood. Further as per condition if there is loss due to flood or cyclone or storm, then the insurer is liable to pay the loss. It is admitted by both the parties that there was flood in the premises of the complainant on 02.12.2015 and the complainant informed the loss to the 1^st opposite party on 07.12.2015 but the surveyor appointed by the 1^st opposite party inspected the premises of the complainant only on 11.12.2015. There is delay of 4 days in inspecting the premises of the complainant from the date of receipt of the information. Further the surveyor inspected the complainant’s premises after 9 days from the date of flood. The surveyor in his first report observed that several lakh quantities of finished products cannot get washed away in flood. The surveyor observed on the basis of the photos taken by the complainant after few days from the date of flood. Further this forum unable to understand, how to surveyor calculated the stock and loss of materials and the above survey report is one sided. Further the surveyor issued a final report on 10.03.2017 and the same has been marked as Ex.B1. As per Ex.B1 the surveyor inspected the complainant premises on 11.12.2015, 10.01.2016 and 19.02.2016. The flood occurred on 02.12.2015 and therefore there is delay in inspecting the premises of the complainant. The surveyor in his final report written as follows:-

“The cause of loss is due to unprecedented North East Monsoon rain which created flooding and inundation is a peril insured under the subject policy. However, the following discrepancies were observed in the insured’s claim:

Several lakh numbers of semi finished products cannot get washed away in flood. It is observed from the records that there is huge difference in quantity claimed as lost and quantity of stocks actually available.

There is no scope for washing away of semi finished goods as claimed by the insured as the insured have actually sold semi finished stocks or buckle pad & immaco after the date of loss without any production in the months of December 2015.

The density of Aluminium and Zinc is heavier than water and there is no scope of stocks washed away in flood water.

Further the production scrap of Aluminium and Zinc was found lying in the premises during out inspection.

The insured informed that they have closed the premises soon after receiving the alert from authorities. The insured has locked down soon after the flood with even production area secured with rolling shutters.

During out inspection we did not observe any scattering of materials or any trails of stocks left after the flood.

Therefore the insured’s claim on the semi finished stocks as washed away in floods is not tenable. Hence there is no liability to the insurer.”

The above reason stated by the surveyor is an imaginary one without valid any proof and therefore the report given by the surveyor is not acceptable. The 1^st opposite party also rejected the claim of the complainant on the basis of the surveyor report.

14. The 1^st opposite party by its order dated 28.04.2017 rejected the claim of the complainant. Thereafter the complainant made an appeal before the Chairman Grievance Redressal Committee, Mumbai and the same was dismissed by the Chairman Grievance Redressal Committee. The 1^st opposite party repudiated the claim of the complainant on the basis of the surveyor report. The complainant submitted his first claim form on 28.12.2015 and also submitted revised claim from on 16.09.2015 but the 1^st opposite party rejected the claim of the complainant only on 28.04.2017 and there was enormous delay in disposing of the claim petition. As per policy condition the 1^st opposite party will settle the claim under this policy within 30 days from the date of receipt of necessary documents required for assessing the claim. In the event that the 1^st opposite party decides to reject a claim made under this policy, the company shall do so within a period of thirty days of the survey report or the additional survey report as may be. In this case, the surveyor submitted the 2^nd report on 10.03.2017 but the 1^st opposite party rejected the claim on 28.04.2017. Therefore there is delay by the 1^st opposite party in rejection of the claim of the complainant. The 1^st opposite party violated the condition of the policy.

15. The 1^st opposite party rejected the claim of the complainant on the basis of the surveyor report and the surveyor report is one sided and not based on valid reasons. The above attitude of the 1^st opposite party amounts to deficiency in service. Hence due to deficiency in service, the complainant suffered mental agony and financial loss. Under these circumstances there is deficiency in service on the part of the 1^st opposite party, the complainant is entitled for compensation, damages and costs from the 1^st opposite party. Thus these points are answered accordingly.

16. Point No.5:-

The complainant submitted revised claim form along with relevant documents to the 1^st opposite party on 16.09.2016. The 2^nd opposite party also admitted in his letter dated 19.09.2016 that the complainant’s unit was severely affected with loss of stock and business. But the 1^st opposite party rejected the claim of the complainant. At the same time this forum unable to assess the loss with available materials. It is the duty of the 1^st opposite party to assess the damage as per documents submitted by the complainant along with revised claim submitted by the complainant dated 16.09.2016. Under these circumstances the 1^st opposite party is liable to pay the value of loss of materials. Hence the 1^st opposite party is hereby directed to assess the value of materials washed away on 02.12.2015 from the complainant’s premises and pay the amount based on the revised claim form submitted by the complainant dated 16.09.2016 as per law. Thus the point No.5 is answered accordingly.

17. Point No.7:-

In the result, this complaint is allowed in part. Accordingly, the 1^st opposite Party is hereby directed to pay the amount on the basis of the revised claim submitted by the complainant dated 16.09.2016 after valuing the cost of stocks and materials washed away on 02.12.2015 as per law within two months from the date of receipt of the copy of this order.

The 1^st opposite party further directed to pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards compensation for causing mental agony due to the deficiency in service on the part the 1^st opposite party and to pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards unjustified repudiation of the claim and to pay a sum of Rs.25,000/- (Rupees twenty five thousand only) towards inordinate delay in handling the claim of the complainant and also to pay a sum of Rs.5,000/- (Rupees five thousand only) towards cost of proceeding to the complainant. This complaint against the 2^nd opposite party is dismissed.

The above amount shall be payable by the 1^stopposite party within two months from the date of receipt of the copy of this order, failing which, the said amount shall carry interest at the rate of 9% per annum till the date of payment.

Dictated by the president to the steno-typist, transcribed and computerized by him, corrected by the president and pronounced by us in the open forum of this 28^th day of February 2020.

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MEMBER-I                     MEMBER-II                         PRESIDENT

List of document filed by the complainant:-

List of document filed by the 1^st opposite party:-

List of document filed by the 2^nd opposite party:-

-Nil-

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MEMBER-I                            MEMBER-II                           PRESIDENT