Roxy Color Lab, through its Partner Shri Praveen Gupta, aged about 46 years S/o Late Shri Nand Lal Gupta, SCO No. 1026-1027, 1st floor, Sector 22, Chandigarh U.T. 160 022 .…complainant Vs. 1. The National Insurance Company Ltd., Regional Office-II, through its Regional Manager, SCO Nos. 337-340, Sector 35-B, Chandigarh UT
160 036. 2. The National Insurance Company Ltd., Direct Agents Branch, through its Branch Manager, SCO No. 57, 2nd floor, Sector 26, Madhya Marg, Chandigarh. …. Opposite Parties BEFORE: JUSTICE SHAM SUNDER, PRESIDENT MRS. NEENA SANDHU, MEMBER S. JAGROOP SINGH MAHAL, MEMBER Present: Sh. Neeraj Pal Sharma, Adv. for the complainant. Sh. B.S. Taunque, Adv. for the OPs. MRS. NEENA SANDHU, MEMBER In brief, the facts of the case are that the Insured got covered his Digital Colour Laboratory, including the Plant & Machinery, Office Equipment, raw materials, goods held in trust and trade, and all allied natural stock in trade by virtue of two separate and distinct Standard Fire & Special Insurance Polices, bearing distinct nos. 420102/11/08/3100000052 & 420102/11/08/3100000182, for a period commencing from 08.07.2008 to 07.07.2009 & 06.01.2009 to 05.1.2010 respectively, for a consolidated risk coverage of Rs.96,00,000/-, issued by the OPs. It was stated that the Insurance Policy bearing no. 420102/11/08/3100000052 which was earlier being serviced by another Branch Office of the Opposite Parties, was renewed by Opposite Party No. 2. However while renewing the same, no fresh proposal form was utilized by the Opposite Parties, or got signed, from the Insured for the reasons known best to the them. It was further stated that the nature of loss assessment for the policy, abovesaid, was unilaterally changed, by them, from the earlier "Reinstatement Basis" to "Market Value" basis, without the approval or knowledge of the complainant. It was further stated that on 09.04.2009, a major Fire incident took place, at the insured premises and the Opposite Parties were duly informed on telephone on 09.04.2009. Thereafter they were informed vide letter dated 10.04.2009. It was further stated that the Opposite Parties appointed Cunningham Lindsey International Private Limited. New Delhi, a Loss Assessment Company, to assess the loss suffered by the complainant. It was further stated that the complainant informed the Opposite Parties vide letter dated 08.07.2009, that the Policy, in question, bearing no. 420102/11/08/3100000052, bore the Reinstatement Basis Clause, since long, and that the same had never been changed by him, for the last 15 years of its renewal. It was further stated that on 13.08.2009, the complainant informed the Opposite Parties that all the necessary documents, as demanded, by the Surveyors of the Opposite Parties, had been sent by him, to them, and that the Opposite Parties had already received the Preliminary Survey Report. The complainant requested the Opposite Parties that Account Interim Payment may be released, to him, but they failed to do so. Thereafter, the complainant wrote letters dated 20.08.2009 and 28.08.2009 to the Opposite Parties, but to no effect. It was further stated that the complainant submitted all the documents as required by the Opposite Parties vide their letters dated 22.09.2009, 25.09.2009 and 29.09.2009. It was further stated that the complainant requested the Opposite Parties to release the claim, as soon as possible. It was further stated that the Opposite Parties Inter Office Memo dated 14.10.2009, proved that the release of ad-Interim relief of Rs. 30,00.000/- to the Complainant stood approved, and the same was liable to be disbursed. It was further stated that the Opposite Parties released Ad Interim Relief of Rs. 30,00,000/- to the complainant about 6 months, after the accrual of claim. It was further stated that thereafter the complainant sought the final settlement of its Fire Claim vide letter dated 05.11.2009. However he was shocked to receive a letter dated 17.11.2009, issued by the Surveyors, seeking certain other documents, and tabulated information about 7 months after the accrual of claim. It was further stated that the complainant requested the Opposite Parties a number of times, to settle the final claim. It was further stated that on 03.02.2010, the surveyor submitted the Final Report, to the Opposite Parties, and assessed the claim at a consolidated sum of Rs.48,43,268/- and after adjusting the On Account Relief of Rs.30,00,000/-- paid by way of an interim measure assessed the balance payable at Rs.18,43,268/-. It was further stated by the complainant that, in final survey report, dated 03.02.2010 at pages 11 and 12, the Surveyor qua Policy No. 420102/11/08/3100000052, in dispute, assessed and deducted a sum of Rs.12,82,500/- + Rs.4,05,769/- + Rs.1,60,080/- + Rs.1,13,400/- from the Loss Assessed on account of depreciation qua (1) Noritsu QSS-10001, (2) Noritsu QSF-450 L. (3) Frontier 370, and (4) Computers, on Market Value Basis instead of Reinstatement Basis Clause, wherein no depreciation was deductable; thus causing a tangible and actual loss of Rs. 19,61,749/- to the complainant. It was further stated that, thereafter, the surveyors vide their Addendum dated 01.04.2010 to the Final Report dated 03.02.2010, informed the Opposite Parties that the Final Assessment of the Loss stood reduced now to Rs.48,01,272/- only and now the Total Balance Liability payable was reduced to Rs.18,01,272/- only. In the meantime, the complainant, vide its letter dated 06.06.2010 sought a copy of the Proposal Form got filled in (If Any) by the Opposite Parties, while taking out the Renewal Policy in dispute, so as to settle the issue of the change of valuation, from Reinstatement Basis to Market Value basis which had already caused an actual loss of Rs19,61,749/- to the complainant. It was further stated that vide letter dated 08.06.2010, the Opposite Parties informed the complainant that the surveyor approved the claim for a sum of Rs.48,01,272/- only and a sum of Rs.18,01,272/- was payable subject to furnishing the full and final settlement vouchers to which the complainant protested. It was further stated that on the persistent requests by the complainant, the Opposite Parties vide letter dated 27.07.2010, after a passage of over 15½ Months, from the accrual of the claim issued two cheque for Rs.4,78,153/- + Rs.13.17,500/- totaling to Rs.17,95,653/- to the Complainant, which again were short by a sum of Rs.5619/- from the revised assessment made by their own Surveyors. It was further stated that the complainant vide its letter dated 17.09.2010 asked the Opposite Parties about the basis of change of the nature of Policy from the earlier Reinstatement Basis to the Market Value Basis, but to no effect. Alleging that the aforesaid acts of omission and commission, on the part of Opposite Parties, amount to deficiency, in service, and unfair trade practice, the complainant filed the present complaint. 2 In their joint written reply, the Opposite Parties, stated that the complainant took two insurance policies from them on market value basis for the same premises effective from 8.7.2008 for Rs.50.00 lacs and from 6.1.2009 for Rs.46.0 lacs respectively. It was further stated that the complainant did not produce any evidence in respect of his claim that the policy effective from 8.7.2008, was on reinstatement basis. It was further stated that the complainant was not a consumer as per Section 2(1)(d) of the Consumer Protection Act, 1986, as it was running a large scale business of photographic lab and employed several technical persons, and earning huge profits. It was further stated that, thus, the complaint was not maintainable before this Commission. It was further stated that Rs.30.00 lacs as interim relief were paid to the complainant on humanitarian grounds so that he could recover from his immediate financial crisis. It was further stated that the Surveyor assessed loss to the tune of Rs.48,01,271/- on market value basis and recommended payment of Rs.18,01,271/- towards full and final payment after deducting Rs.30.00 lacs from the actual loss amount already paid as interim relief. It was further stated that the complainant did not cooperate with the Opposite Parties regarding the payment of amount assessed by the Surveyor and the same was released on receipt of the discharge disbursement vouchers. It was further stated that the complainant never raised any objection, regarding the reinstatement clause, during the existence of the policy, but on 8.7.2009, he raised the objection for the first time, which was after the expiry of policy. It was further stated that the Opposite Parties had done everything, as mentioned in paragraph 16, in accordance with the Rules, to hasten the process of claim, but the complainant was itself deficient and caused delay in providing the documents to the Opposite Parties as well as to the Surveyor in piecemeal, which took time, in processing the claim. It was further stated that perusal of the claim check list, submitted by the Surveyor, in respect of the policy, for the period from 8.7.2008 to 7.7.2009 shows that the Divisional Office Sector 26 had observed in its remarks, that the insurance policy No. 420102/11/08/3100000052 for the period from 8.7.2008 to 7.7.2009, was renewed for Rs.50.00 on market value basis. The check list further showed that claim for policy No. 420102/11/08/3100000182 effective for the period from 6.1.2009 to 5.1.2010 was recommended for Rs.13,325,28/-. It was further stated that after scrutiny of the documents, certain observations were made and the Surveyor was requested vide annexure OP-29 to give clarifications regarding the calculations made by it. Thereafter the Surveyor vide Annexure OP-30 submitted addendum to the final report and recommended payment of Rs.18,01,272/- to the complainant and also further advised to consider the hypothecation clause while making the payment. It was denied that even after the receipt of addendum to the final report the claim was delayed for over 1 year. It was further stated that after the receipt of addendum to the final report, the same was processed, and there were some discrepancies, in the final report, on the part of the surveyor, which were got corrected, which is evident from the email dated 13.5.2010 of the surveyors wherein they accepted their discrepancies. It was admitted that on receipt of vourchers duly discharged from the complainant, payment of Rs.18,01,272/- was made to it vide two cheques. However, the delay of 15½ months from the accrual of the claim was denied. It was denied that Rs.5619/- were still short. The details of Rs. 5619/-were clearly mentioned in the discharge vouchers, which was admitted by the complainant. It was further stated that it was on account of deduction of reinstatement premium from the date of loss till the date of expiry of the policies. All other allegations, levelled by the complainant, in the complaint, were denied. It was further stated that there was neither any deficiency, in service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. 3 The parties led evidence, in support of their case. 4 We have heard the Counsel for the parties, perused the written arguments submitted by the Counsel for the Opposite Parties, and have gone through record, carefully. 5 The learned Counsel for the complainant, submitted that the complainant purchased standard fire and special insurance policy bearing no. 420102/11/08/3100000052, on reinstatement basis. He took this policy on the renewal basis after paying the due premium and getting it renewed for the last 15 years. However, the Opposite Parties at the time of renewal of the policy for the period from 8.7.2008 to 7.7.2009 wrongly issued it on market value basis, without obtaining his prior consent, instead of reinstatement basis. He further submitted that the fire took place in the insured premises on 9.4.2009, during the existence of this policy and the same was informed to the insurer on 9.4.2009 by telephone and then vide letter dated 10.4.2009.The grouse of the complainant is that the Opposite Parties settled the claim on the market value basis, by wrongly deducting depreciation, thereby causing a sizable loss of Rs.19,61,774/.-. He further submitted that not only this, the Opposite Parties were also deficient in providing services, because they failed to settle the claim, within the reasonable period of 4 or 5 months as stipulated by law and settled it after an inordinate delay of 15½ months of the accrual of cause. 6 The Counsel for the Opposite Parties, submitted that the policy effective from 8.7.2008 to 7.7.2009 for a sum of Rs.50.00 lacs, was taken by the complainant on market value basis.. He further submitted that as the complainant had purchased various policies, sometime he was taking the same on reinstatement basis and sometimes on market value basis. He further submitted that after the occurrence of the incident, immediately a Surveyor was appointed and after obtaining the Surveyor report, the claim of the complainant was settled. It was further submitted that the complainant did not fall within the definition of consumer. It was further submitted that, thus, there was no delay on the part of the Opposite Parties, in settling the claim. 7 We do not find any merit in the contention of the Counsel for the Opposite Parties that the complainant is not a consumer. In Harsolia Motors Vs. National Insurance Company ltd. I(2005) CPJ 27 (NCDRC) , it was held by the Hon’ble National Commission, that taking of insurance policy, is for the protection of interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose. Hence the complainant is a consumer as defined under section 2(1)(d) of the Consumer Protection Act, 1986. The submission of the Counsel for the Opposite Parties, thus, being devoid of merit is rejected. 8 A perusal of Annexure OP-8/2, reveals that initially the complainant purchased the policy, in question, for the first time from 8.7.2005 to 7.7.2006, on reinstatement basis, which was admittedly renewed from time to time on reinstatement basis, without any break. The Opposite Parties also admitted in para No.9 of their reply that initially the policy, in dispute, was on reinstatement basis. It was submitted by the Counsel for the Opposite Parties, that the policy, in question, was on market value basis, for the period from 8.7.2008 to 7.7.2009. The Opposite Parties, however, failed to produce any document, that the policy, in dispute, was converted from reinstatement basis to market value basis. No fresh proposal from, was obtained by the Opposite Parties, from the complainant, for the conversion of policy from reinstatement basis to market value basis, for the period from 8.7.2008 to 7.7.2009. A bare perusal of the documents, placed, on record, by the Opposite Parties regarding policy No. 420102/11/08/3100000052, show that it was renewed on reinstatement basis, without any break. In the policy for the period 8.7.2008 to 7.7.2009 (Annexure- OP 1) there is no mention that the same was issued on market value basis.. This fact is further corroborated from Annexure OP-6, the interim report dated 19.6.2009, wherein, under the heading of basis of valuation, it was clearly observed by the surveyor that the “previous policies were on the reinstatement basis whereas the said clause is not found stipulated in the present policy, and also there was no break. Insurers have been asked to clarify the basis of valuation. Pending same we are issuing report on market value for on account of payment.”. Therefore, the conversion of the policy from reinstatement basis to market value basis without the consent of the complainant is against clause 4 of the guidelines of Insurance Regulatory and Development Authority (Protection of policy holders’ interest) Regulations, 2002 (for short IRDA). Thus, the Opposite Parties have wrongly settled the claim of the complainant, on the market value basis, by deducting an amount of. Rs.19,53,745/- as depreciation value (as is evident from Annexure OP-30 Addendum to Final Report). Otherwise, had the Opposite Parties settled the claim of the policy, in question, on reinstatement basis the depreciation aforesaid would not have been deducted. Therefore, the complainant is entitled to get amount of Rs.19,53,745/- , which was wrongly deducted by the Opposite Parties. 9 The incident took place on 9.4.2009 and the Opposite Parties paid Rs.30.00 lacs to the complainant on 15.10.2009, as interim relief, out of which Rs.9,95,506/- were paid towards policy No. 420102/11/08/3100000052 and an amount of Rs.5,97,726/- was paid at the time of payment of remaining amount of Rs. 18,01,272/- on 27.7.2010. Thus the Opposite Parties paid a total amount of Rs.15,93,232/- (as is evident from Annexure OP-30 Addendum to Final Report). to the complainant towards the policy in question. In our opinion, the Opposite Parties had made payment of Rs.9,95,506/- as interim relief, towards the disputed policy on 15.10.2009, well within time. But they paid the remaining amount of Rs.5,97,726/- towards this policy on 27.7.2010, after a delay of more than 8 months from the date of payment of interim relief i.e. 15.10.2009. So, the Opposite Parties did not make the payment of the remaining amount, as assessed by the Surveyor, to the complainant, within time and, thus, they are liable to pay interest on the said amount. Thus the Opposite Parties were deficient in rendering service as they firstly settled the claim wrongly, on market value basis, without any written consent of the complainant, and, secondly settled the same with delay, due to which the complainant certainly suffered mental agony as well as physical harassment. 10 In view of the above discussion, we are of the considered opinion that the complaint has substance and is, therefore, liable to succeed. Accordingly we partly allow the complaint, with costs, and direct the OPs as under; 1. The Opposite Parties are directed to settle the claim of the complainant in relation to the policy bearing No. 420102/11/08/3100000052 on reinstatement basis and pay Rs.19,53,745/-, which were wrongly deducted, by them, as depreciation charges, with interest @8% P.A. w.e.f. 15.10.2009 i.e. the date when the amount of interim relief, in the sum of Rs.9,95,506/- lacs was paid. 2. The Opposite Parties are directed to pay interest @8% P.A. to the complainant from. 15.10.2009 till 27.7.2010, on the amount of Rs.5,97,726/- , which was paid to it, with delay of more than 8 months on 27.7.2010. 3. The Opposite Parties are directed to pay Rs.20,000/- to the complainant for physical harassment and mental agony, suffered by it. 4. The Opposite Parties are directed to pay to pay Rs.10,000/- to the complainant as costs of litigation. The aforesaid order, be complied with, by the Opposite Parties, within 30 days, from the date of receipt of a certified copy of this order, failing which, penal interest @ 12% P.A. shall be paid thereon, from the date of default till its realization, besides costs of Rs.10,000/-. 11 Copies of this order be sent to the parties, free of charge. Pronounced. January, 30, 2012 . sd/- [JUSTICE SHAM SUNDER] PRESIDENT Sd/ [NEENA SANDHU] MEMBER Sd/- [JAGROOP SINGH MAHAL] MEMBER
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | |
