R.Vijayakumar, Member
This is a complaint filed Under Section 12 of the Consumer Protection Act for getting claim amount Rs.16, 87,000/- along with interest at the rate 18%. The complainant further prayed for compensation Rs.100000/- and cost.
The complainant’s case is that the first opposite party denied the genuine claim for the damages sustained to his fishing boat, arbitrarily fixed the claim amount, cut short the
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claim amount and without giving any information to him the first opposite party transferred the claim amount to the second opposite party from where the complainant had availed loan pledging his trauling vessel.
The case of the first opposite party is that the claim of complainant had been already settled by first opposite party towards full and final settlement of the claim for a sum of Rs.4,42,7,00/- on the basis of the discharge voucher duly signed by the second opposite party being the full and final settlement. The complainant is fully aware of the of settlement arrived at between first and second opposite parties on the basis of the terms and conditions of the policy.
The case of second opposite party is that the second opposite party is not a necessary party in this case. The facts that the complainant had availed a loan from second opposite party and that an amount of Rs.4,42,700/- was deposited with the second opposite party by the first opposite party as the full and final settlement amount of the claim preferred by the complainant for the damages sustained to his vehicle on 20/09/06. The second opposite party is unaware whether the amount deposited by the first opposite party is reasonable or not.
From the side of the complainant PW1 was examined. Exts.P1 to P5 marked. From the side of opposite parties DW1 examined. Exts.D1 marked.
Heard both sides
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The points that would arise for consideration are:
1. Whether there is any deficiency in service from the part of opposite party?
2. Compensation and cost
Points (1) and (2)
The case of the complainant is that the fishing trawler namely ‘Ancymol’ owned by the complainant having Reg.No.ALP 3969 was insured with first opposite party on 1.8.2006 vide policy No.100705/22/06/01/00000001. The hull machinery, accessories and fishing equipments were totally insured and premium was fixed at 150,850. The said vessel was anchored at Kolachal after deep sea fishing .Due to the heavy storm and rough waves the boat was swept away towards the sea shore and fixed in the sand at sea coast. The major parts of the boat including propeller, engine and gear box were irreparably damaged. As informed the matter to the officers of first opposite party a surveyor was appointed by them. The surveyor had inspected the vehicle.The damages sustained to the boat was serious and it was reported in newspapers with photographs. Reseue boats and khalasis were used for tiding the damaged boat to Kollam and heavy expenses incurred by the complainant. All the rescue operations and repairing works were done under this supervision and control and as per the first opposite party’s advice. A statement was prepared by the complainant as per direction of the first opposite party accompanied with bills, vouchers etc. The total claim for the damage was Rs.1687000/-. The complainant approached the first opposite party on several occasions and the first opposite party assured that the claims will be settled shortly. Subsequently it
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was learnt from reliable source that first opposite party had arbitrarily fixed the claim amount and transferred the same to second opposite party. The act of opposite party is deficiency in service and the opposite party is liable to compensate the damages sustained by the complainant.
The case of the first opposite party is that the complainant’s fishing boat was insured by the first opposite party on the basis of the proposal form submitted by the second opposite party. The first opposite party after collecting the premium amount from the second opposite party issued a provisional policy with the implied bank clause attached with the policy. The first opposite party is liable to settle the claim only with the second opposite party, the financier who had insured the vessel and remitted the premium amount of policy. The complainant had no manner right to question the legality and genuinity of the settlement arrived in between the opposite parties. During the provisional period of the policy the incident was happened. After getting information from the complainant, the first opposite party appointed a Surveyor and loss Assessor to assess the loss and damages sustained to the complainant. Considering all the damages and expenses including all other incidental expenses and labour charges the surveyor assessed the extent of loss to a sum of Rs.491700/- after deducting salvage value to the sum of Rs.350/-. The opposite party thereafter arrived the settlement to a sum of Rs.4,42,700/- deducting 10% policy excess. On the basis of the discharge voucher signed by the second opposite party, the first opposite party disbursed the amount to the second opposite party.
(5)
The allegation made by the complainant that the opposite party had arbitrarily fixed the claim amount and transferred the same to the second opposite party is false. The complainant was fully aware of the quantum of settlement and how the settlement was arrived at. The claim amount was fixed on the basis of survey report. The opposite party is liable to settle the claim only with the second opposite party as per agreed bank clause attached with the policy. There is no statutory obligation to give reply for the legal notice sent by the complainant and the first opposite party is not liable to furnish the details of the survey report and mode of assessment made by the surveyor which are strictly confidential. There is no justification in attributing any manner of deficiency in service against first opposite party.
The case of second opposite party is that the second opposite party is to be exonerated as the second opposite party is not a necessary party in this litigation and not known whether the claim amount allowed by the first opposite party is reasonable or not.
Admittedly the complainant’s fishing vessel ‘Ancymol’ was insured with the first opposite party on 01/08/06 vide policy no.100705/22/06/01/000000 by which Hull, Machinery accessories and fishing equipments were completely insured for a total sum assured Rs.22,000,00/- and the premium amount also was paid. Provisional policy was issued by the first opposite party. It is also admitted that the complaint had availed loan from second opposite party. It is further admitted that the complainant’s fishing vessel
was met with an accident and claim for Rs.16,87,000/- was preferred by the complainant. The surveyor conducted inspection and as per the report submitted by the surveyor, the
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first opposite party had disbursed Rs.4,42,700/- in the second opposite party Bank as the full and final settlement amount after deducting 10% compulsory policy excess.
The main contention of the complainant is that the opposite party had arbitrarily fixed the claim amount as Rs.4,42,700/- and transferred the same to the second opposite party Bank from where the complainant had availed loan pledging the vessel.
Another contention of the complainant is that the claim amount disbursed by the first opposite party is not in tune with the actual loss. The first opposite party had not informed the complainant as to why his genuine claim was cut short. The act of first opposite party is against the terms and conditions of the policy.
The Learned counsel for the opposite party argued that as per the Bank clause attached with policy the first opposite party is legally liable to settle the claim with the second opposite party Bank only. The full and final settlement amount was released to the second opposite party bank on the basis of Ext.D2 discharge voucher signed by the second opposite party. As the complainant availed loan facility from the second opposite party Bank, for his fishing vessel, the bank has submitted the proposal form and paid the premium amount to the second opposite party only. It is up to the second opposite party Bank to inform the complainant about the amount arrived for full and final settlement and that the settlement is to be made with first and second opposite parties. The second opposite party had got sufficient time to take a final decision in consultation with the complainant. If the complainant wanted to give any instruction to the Bank, it ought to have given before the Insurance Company paid the amount to the Bank. The Learned counsel for the opposite parties relied on the decision of Hon’ble National Commission
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reported in 1996 CPJ Volume II page 95 in which it is held that when the complainant taken loan from the Bank, the bank has got the right to settle the claim with the insurance company on the basis of the discharge voucher signed by the bank towards full and final settlement of the claim. The National Commission further held that when settlement amount was tenders to the bankers of the complainant after execution of discharge voucher and the bank has accepted the amount without any objection there cannot be said that Insurance Company has committed any deficiency in service excepted to be rendered under contract of Insurance.
It is further argued that Ext.D2 is a cogent proof that the discharge voucher executed by the second opposite party is voluntarily and freely and on full knowledge of its content and without any undue influence, coercion or compulsion from any external source. The complainant or second opposite party never made any protest about the manner in which the discharge voucher was executed towards full and final settlement of claim. In this regard the learned counsel take the attention of the Forum to the Law settled in the matter on the basis of Apex court decision reported in 2008 CPJ Volume 2 page 16 in which the Hon’ble Supreme Court held that in the absence of any pleadings that the discharge voucher executed by the complainant are under fraud, undue influence, mis representation or the like, it is quite justified in dismissing the complaint holding that discharge vouchers were admittedly voluntarily. As per the cited decision it is the burden of
the complainant to prove that the discharge voucher was executed by the complainant under coercion or by any fraudulent manner.
(8)
After considering the arguments of the learned counsel of the opposite parties and decision cited by the counsel we are of the opinion that these decisions are not relevant in this case. The facts and circumstances of the cited cases are entirely different from the present case. The decision of Hon: NCDRC in first appeal November 189 and 313 of 1993 reported in CPJ II 1996 NC it is held that from the record it is clear that at one stage the complainant had agreed to accept the sum of Rs.50472/- and amount had been duly paid to the banker of the complainant after the latter had discharged the voucher which is at page 18 of the paper book no.189 of 1993 without any objection and therefore it cannot be said that insurance company has committed any deficiency in rendering the service”.
From these finding it is clear that the policy holder had got chance to express his opinion regarding the claim amount and it is stated that at one stage the complainant had agreed to accept the claim amount. In the present case, the main allegation of the complainant is that the first opposite party had not conducted any discussion with the complainant regarding the claim amount and the opposite party fixed the claim amount arbitrarily. The amount allowed by the first opposite party as compensation also was intimated only to the second opposite party bank. He had not agreed to accept the amount Rs.442700/- which was arbitrarily declared by first opposite party. No information was given to the complainant regarding the issuance of discharge voucher for the claim amount. The second opposite party signed the discharge voucher without the knowledge and consent of the complainant. The dealings were proceeded and the settlement was arrived at
only between first and second opposite parties. Here in this case, the attitude of the first opposite party that the complainant had no manner right to question the legality and
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genuinity of the settlement arrived at between first and second opposite parties.
Since the circumstances and facts of cited cases and the present case is entirely different in nature we are of the opinion that the Apex Court decision cited by the opposite parties had no relevance in this case and hence those decision cannot be relied on in this case.
As a matter of fact the complainant had availed a loan from the second opposite party pledging his fishing vessel and on the basis of the proposal form submitted before the first opposite party by second opposite party. Bank clause attached with the policy. Even though the second opposite party had remitted the premium amount, it was paid in favour of the complainant. Ext.D1 shows that the provisional policy was issued in the name of the complainant. While in cross examination, the complainant had stated that the premium amount was remitted by the second opposite party from his account. He had further stated that the claim form also was submitted by him.
As a policy holder, the complainant is having every right to express his opinion about the claim amount allowed by the first opposite party. The full and final settlement of the claim would be made only with the consent and full satisfaction of the complainant. The stand point of first opposite party that the complainant had no right to question the legality or genuity of settlement and no right to say anything about the claim amount
allowed by the first opposite party in favour of his policy is against natural justice and such a stand point is not admissible.
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The Learned counsel for the opposite party further argued that the settlement was made by the first opposite party as per the report and recommendations of the surveyor. No deficiency in service can be attributed against the first opposite party.
DW1, the surveyor was appointed for the definite purpose of preparing a survey report and after cubersome effort he had submitted his final report. The report was marked as D1. As per D1 the surveyor has assessed the loss and proposed compensation to the extent of a sum of Rs.4,91,700/-. The report submitted by the surveyor who is a license holder which issued by the IRDA for assessing the damages payable under an Insurance contract. Relaying on the decision of Hon’ble SC reported in 2000 (10) SC C page (19) the learned counsel argued that the claim settled on the basis of the survey report and no service deficiency can be attributed against first opposite party.
The Apex court in the above mentioned decision held that the survey report which is required to be made u/s. 64 UM (2) of Insurance Act 1938 is an important document and its non – consideration results serious miscarriage of justice and vitiates the judgments rendered by court.
The learned counsel for the first opposite party further cited another decision reported in 2008 CPJ Volume 3 at Page 93 in which it is held that survey report to be given due weightage Consumer Forum cannot adjudicate into the dispute regarding the quantum of compensation ignoring survey report and for this purpose the complainant is free to approach the civil court due to the reason that the dispute regarding the quantum is not a
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matter falling under the purview of the deficiency in service envisaged under Consumer Protection Act.
In another decision reported in 1998 CPJ Volume II page 15 the Hon’ble National Commission held that it is not possible for the Consumer Forum to sit in judgment on the report of the surveyor.
In the above said decision, the Apex court has considered the survey reports which were properly proved.Here in this case the surveyor was examined as DW1. While in cross – examination he had admitted that Ext.P2 is the statement of expenditure supported with bills and vouchers. He had further admitted that he had not noted that there is having any mistake, error or discrepancies in cash receipts or vouchers contained in Ext.P2. The Learned counsel for the complainant put the question that “ Ext.P2 ‡ñ¤ estimate …¼ ›¢ò𮴡î D1 report Äà¡ú¡´¢ðÄ® ? DW1 answered that “•¨Ä” .The Leaned counsel further put the question that D1 ý page 9, 10 estimate …¼ column ý ˆ¡Ã¢µ¢ñ¢´¤¼Ä® Ext.P2 ¨ò actual expenditure ð¢ claim ¨ð®Ä¢ñ¢´¤¼Ä®. (a) ôñ¢ð¡Ã®. DW1 admitted that he had not assessed the amount in the receipts attached with Ext.P2. The reason for the non-assessment of receipts and bills pointed out by DW1 is that the amounts were exorbitant. But this reason was not recorded anywhere in the report.
The pertinent point to be noted here is that the surveyor had not conducted any enquiry regarding the authenticity of reports. He had admitted this facts while in cross
examination. It is also pertinent that he had not stated the labour charges and costs prevailing at that period in Ext.D1. Even though he had stated that the assessment was made considering all these aspects he failed to produce any document to prove the same.
(12)
While in cross examination, DW1 stated that “ …¨üú assessment actual amount î. Reasonable •¿.DW1 also admitted that he knows the difference between actual and reasonable. He had further stated that “Actual ƒ« reasonable ƒ« Ľ¢ò¤¾ ó¬Ä¬¡ö« •ú¢ð¡«. Ext.D1 ý claim amount ©›´¡þ ˆ¤úº amount ý assess ¨ð®ÄÄ¢¨üú ˆ¡ñë œúº¢¶¤Ù®. …›¢´® ö§É»¡ð¢ reasonable 𢠩ġ¼¢ð amount î.
In the circumstances that there is no clear explanation for the assessment made for a lower amount than the claim amount preferred by the complainant and no enquiry was made by the surveyor regarding the authenticity of the bills and vouchers and from the above mentioned statements of DW1 it is clear that the assessment was made only according to his whims and fancies. The evidence given by DW1 itself proves that it is not prepared on the basis of any reliable records or proper enquiry. The surveyor failed to convince as to why the claim amount was reduced to a lower amount. It is also pertinent to note here that the surveyor assessed the claim amount assuming that Ext.P2 is an estimate only. He had admitted this fact in cross examination also. In fact Ext.P2 is an actual expenditure supported with proper bills and vouchers. DW1 further stated that estimate amount is an anticipatory amount before the actual expenses were incurred. Considering all these circumstances we have arrived at the conclusion that the D1 report cannot be considered as an authentic proof and D1 is not at all sustainable and cannot be safely relied on. The first opposite party failed to prove the authenticity and genuinity of Ext.D1 before the Forum.
DW1 claimed that he was physically present throughout the riscue operations were going on. He had got much time and opportunity to make proper assessment based on authentic records and documents. He had not mentioned anything in his report or nothing
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was stated while his oral testimony before the Forum as to why he had not made any enquiry regarding the authenticity of Ext.P2 produced by the complainant. On verification we find that Ext.P2 is the expenditure statement supported with bills and vouchers.
As an expert independent surveyor and loss assessor DW1 is duty bound to make enquiry in detail regarding the genuinity of expenditure statement and supporting documents produced by the complainant. The genuinity of Ext.P2 is easily and clearly proved by the statement of DW1 while in cross examination itself that he had not noted any mistake or discrepancy in Ext.P2. The opposite party failed to disprove the authenticity and genuinity of Ext.P2 and the claim preferred by the complainant.
It is also pertinent that even though the first opposite party is claiming that the amount disbursed in the second opposite party Bank as the full and final settlement amount, the second opposite party had stated in their version that it is not known to them whether the disbursed amount towards claim preferred by the complainant is reasonable or not. The second opposite party is not an interested party. The interested party, the
complainant was avoided from the claim settlement process intentionally. More over all these the second opposite party has no knowledge about the actual damages sustained to the fishing vessel and the actual loss sustained to the complainant. We feel surprise that
as to how the first opposite party can arrived at the full and final settlement with the second opposite party who has no knowledge regarding the damages sustained to the fishing vessel and repairing works done by the complainant.
(14)
The learned counsel for the complainant argued that the subsequent conduct of the first opposite party is not informing the insured about the amount assessed by the surveyor is a gross deficiency in service. The first opposite party had arbitrarily assessed the claim amount and deposited in the second opposite party bank without giving information to the complainant. They did not care to reply for the legal notice sent by the complainant as on 05/06/07. The stance of the opposite party is that they are not legally bound to give reply to the complainant.
Regarding this aspect we are of the opinion that the attitude of the first opposite party is not admissible and it is to be dishearted. Ultimately the policy holder is the complainant. Even though the premium was paid by the second opposite party bank the fact that the amount was paid from the account of the complainant was not challenged by both the opposite parties. The first opposite party had issued policy is favour of the complainant. The first opposite party has no right to fix the claim amount arbitrarily and to settle the claim with second opposite party without the knowledge and consent of the complainant. The owner of the vehicle is the complainant and hence the first opposite party is bound to arrive at full and final settlement with the complainant. As the policy was issued with the Bank clause the amount can be disbursed only though the bank and complainant also well of that fact. He has not raised any objection regarding this aspect.
According to the first opposite party survey report is a confidential document and need not conduct any discussion with the policy holder or to serve copy of the report to the policy holder. The first opposite party had stated in their version that there is no statutory obligation to give reply for the legal notice sent by the complainant and not liable
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to furnish the details of the survey report and mode of assessment made by the surveyor which is strictly confidential. The complainant contented that there is no such terms and conditions in the policy document. It is argued by the complainant that making such claims of confidentially of a survey report in this era of Right to information Act is nothing but lack of obedience to law of the land which also is a deficiency in service where by the basic right of an insured is denied by the insurer.
As the complainant has argued there is no such terms and conditions in the policy document and the submission of first opposite party reveals that there is no transparency in the act of first opposite party. The statements of first opposite party itself reveals the defiant, negative and forbidding attitude of first opposite party. The surveyor is expected to act in a highly responsible manner and he has to assess actual loss exactly and he is liable to substantiate his findings. He should perform his duty with due care, consciousness and righteous.
In the present case even though the surveyor was present during the whole time of rescue operations and the complainant has produced all the relevant records, vouchers and bills the surveyor has not cared to assess those documents properly or to enquire the authenticity or genuinity of those documents and claim preferred by complainant. We feel
that he had taken irresponsible and negligent attitude towards the claim of the complainant. Hence there is no way to consider the survey report as an authentic proof in this case. The opposite parties failed to convince the Forum as to why the claim of the complainant was cut short and where by failed to establish their case.
(16)
As per Section 64 (UM) (2) of Insurance Act 1938 “ No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the (Authority), be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as “approved surveyor or loss assessor”). Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor./Section 64 (UM) of Insurance Act 1938 provide for licensing of surveyor and loss assessor.
As per section 64 (UM) 5 (IA) “ every surveyor and loss assessor shall comply with the code of conduct in respect of their duties, responsibilities and other professional requirements as may be specified by the Regulations made by the Authority.
Section 64 (UM) (3) provides that the (Authority) may at any time in respect of any claim of the native referred to in such section (2) call for independent report from any
other approved surveyor or loss assessor specified by him and such surveyor or loss assessor shall furnish such report to the (Authority) within such time as may be specified by him within a reasonable time and cost or incidental to such report shall be borne by the insurer.
(17)
The duties and responsibilities of a surveyor and loss assessor were fixed as per Insurance surveyors and loss assessors (licensing, professional requirements and code of conduct) Regulations 2000. As per Chapter IV 13 (ii) of this Regulation, the surveyor be responsible to maintain confidentiality and neutrality without jeopardizing the liability of the insurer and claim of the insured.
It is further provided as per Chapter (VI) 15 (3) that the surveyor and loss assessor shall act impartially when acting on instructions from an insurer in relation to a policy holder’s claim under a policy issued by that insurer.
It is clear from Section 64 (UM) (2) and 64 (UM) (3) of Insurance Act 1938 and Chapter 13 (ii) and Chapter VI (15) (3) of the Regulation that the surveyor shall act impartially and bound to submit an independent report without putting at risk of loss of the liability of the insurer and the claim of the insured. He is equally bound to safeguard
the interest of the insurer and insured. The words responsible to maintain confidentiality does not mean that report is a confidential document and the insured has no right to get information about the details of survey report. The only meaning of these working is that confidential information which were acquired or received should be kept as confidential.
It is further stated in Chapter VI 15 (14) (code of conduct) that every (code of conduct) surveyor or loss assessor shall neither use nor appear to use any confidential information acquired or received by him in the course of his professional work, to his personal advantage or for the advantage of a 3rd party.
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These provisions in the Regulations were wrongly interpreted by the first opposite party to deny the right of the complainant to get information regarding the denial of his genuine claim.
We have carefully perused the documents adduced by both parties. The claim preferred by the complainant is Rs.16,87,000/-. On perusal of Ext.P2 we find that all the items in the document was supported with vouchers and bills. But on perusal of Ext.P1 it is seen that the complainant had insured hull, machinery, accessories of the vessel and fishing equipments. Item No.VII (other charges) was not included in the policy. Hence the opposite party is not liable to pay that amount to the complainant. The complainant is entitled to get the insurance claim amount only as per the policy documents. Hence the complainant is entitled to get claim amount deducting item No.7. The first opposite party had disbursed Rs.4,42,700/- to the second opposite party after deducting 10% policy excess and salvage value Rs.350/-. The surveyor assessed actual loss to the extent of Rs.4,91,700/-. On perusal of Ext.P2 we find that there is no such provision for the deduction of policy excess from the claim amount. The opposite party had not produced any document to prove that there is a provision for deducting 10% policy excess. Both the parties had not produced the terms and conditions of policy.
As the opposite parties argued the Forum has no jurisdiction to adjudicate quantum dispute. But the present case is not a case based on quantum dispute. The allegation of the complainant is based on deficiency in service committed by the opposite parties and the complainant could safely prove his allegations. Hence the contention of the first opposite party that the Forum has no jurisdiction to entertain the case will not sustain.
(19)
Considering all facts, circumstances and the entire evidence before us and on the basis of above discussed points we are of the opinion that there is deficiency in service from the part of first opposite party. The points found accordingly. After deducting item No.7 in Ext.P2 and salvage value Rs.350/-. the complainant is entitled to get Rs.13,37,000/-. As the first opposite party had disbursed Rs.4,42,700/- with the second opposite party, the complainant is entitled to get balance amount Rs.8,94,000/-.
In the result, the complaint is allowed in part. The first opposite party is directed to pay Rs. 8,94,000/- to the complainant along with interest at the rate of 9% from 20/09/06 till the date of this order. The first opposite party is further directed to pay compensation Rs.25000/- and cost Rs.2000/-
The order is to be complied with within one month of the date of receipt of the order, in default it will carry interest at the rate of 9% per annum from the date of order.
Dated this the 27th day of August 2012.
G.Vasanthakumari:Sd/-
Adv.Ravi Susha :Sd/-
R.Vijayakumar :Sd/-
(20)
INDEX
List of witness for the complainant
PW1 - Jude Mascreen
List of documents for the complainant
P1 - Provisional policy
P2 - Statement of expenditure
P3 - Newspaper publications
P4 - Legal Notice
P5 - Acknowledgment card
List of witness for the opposite party
DW1 - P.Soundara Rajan
List of document for the opposite party
D1 - survey report with photograph
