Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.-232/03.09.2013
R.V. Diamond Jewellers Pvt. Ltd.
Gali no. 33, Bldg. No. 3154, Beadon Pura,
Karol Bagh, New Delhi ...Complainant
Versus
The New India Assurance Company Ltd.
7-E, Jhandewalan Extension,
Deen Dayal Upadhaya Building,
New Delhi-110055 … Opposite Party
Order Reserved on: 20.12.2022
Date of Order: 01.02.2023
Coram: Shri Inder Jeet Singh, President
Shri Vyas Muni Rai, Member
Ms. Shahina, Member -Female
Inder Jeet Singh
ORDER
1.1. (Introduction to case of parties) : The complainant, being an insured, filed the complaint u/s 12 of Consumer Protection Act, 1986 against Insurer/ OP that there is deficiency of services for want of settlement of valid claim in respect of loss suffered by the complainant during the insurance period of jewellers block insurance policy, that is why the complaint for loss amount of Rs. 8,92,967/-, along with interest at the rate of 18% on that amount till date of payment, apart from compensation of Rs. 5,00,000/- for causing of mental agony, torture, harassment due to deficiency in services and punitive damages of Rs. 1,00,000/- & litigations costs.
1.2: The OP has reservations against the allegations in complaint, while referring the record as well as surveyor's report, in addition to exclusion clause no. 2 of the policy, that no valid claim was found and complainant's claim was rightly repudiated; there was no deficiency of services at any point of time.
2.1 (case of complainant): Briefly, the complainant gives its introduction by facts and circumstances of nature of its business of manufacturing and export of gold and diamond fine jewellery, apart from its annual turnover from time to time. The manufacturing and making of the jewellery, issuance of raw gold to its appointed contractors, who carry the process of making jewellery item through the raw gold received by them. The complainant engages several contractors, they are paid for making and labour charges. Since it is an expensive items and in order to secure it from future losses against the damages, the complainant fully ensured its gold and jewellery from fire, explosion, lightening, burglary, housing breaking, theft, hole-up, robbery, riot and strike, malicious damages etc. for Rs. 4,30,00,000/-. The complainant got insured its property in respect of company’s business being carried at its place of establishment or places where process of manufacturing and making of jewellery items through raw gold is undertaken.
2.2: The complainant has been regularly paying the insurance premium, inclusive of renewals, year by year to the insurance company/OP, the insurance policy issued was bearing no. 31030346120700000004 along with terms and conditions for a period of 10.05.2012 to 09.05.2013 against receipt of payment of premium (Annex.-A to complaint).
2.3: The complainant employed Mr. Tapan Kumar Barik, a contractor for manufacturing and making of gold jewellery item of complainant company for the last 15 years. The complainant had been providing him 18 carat gold for making and manufacturing jewellery items. Mr. Tapan Kumar Barik was issued raw gold of 963.113 grams between 01.04.2012 to 23.09.2012, on running account basis (its statement of account is Annexure- E to the complaint), for making jewellery as per instructions of complainant company. The raw gold was issued under vouchers/acknowledgement (being Annex.- B colly) under the signatures of Karigar [i.e. Artisan] and correspondingly the gold jewellery manufactured used to be delivered by the said Karigar Shri Tapan Kumar (vide Annex.- C) to the complainant.
On 13.10.2012, the said Tapan Kumar Barik died during sleep, doctor diagnosed that it was heart failure (death certificate of Tapan Kumar is Annexure-D). Then immediately complainant called other workers of Mr. Tapan Kumar Barik along with locked working gold box, in which he used to be handed over the gold. The said box was opened in the presence of said workers under camera proceeding and on physical verification, gold weighing 592.068 grams was found in the box, instead of 963.113 grams, which shocked and surprised the complainant, since there was short of 371.045 grams of gold out of gold issued to him. This shortage of 371.045 grams from the gold box of karigar Tapan Kumar Barik clearly shows it was by theft or robbery or because of malicious damages. The total monetary loss is of Rs. 8,92,967/- of loss of gold of 371.045 grams.
2.4: Immediately, the complainant informed to the OP on telephone, about the loss of 371.045 grams of gold, it was asked to lodge an FIR at the concerned police station, thus complainant went to SHO PS Karol Bagh, however, the FIR was not lodged by the police since the offender had died and there cannot be FIR against dead person. However, on 18.10.2012 the complainant wrote to SHO P.S. Karol Bagh by way of handwritten complaint (which is Annexure- F). The complainant also gave written intimation of loss suffered to the OP, who appointed a surveyor and the said surveyor by his letter dated 29.10.2012 asked certain documents like claim form, death certificate, copy of FIR, ledger account, bank account detail etc., which were immediately provided on 31.10.2012 with covering letter (both letter are Annexure-G). The complainant provides all material document and detail to the surveyor during his investigation and assessment, however, the said surveyor without appreciating the facts and circumstances stated in his/surveyor report (Annex.- H to the complaint) that there is a loss of 198.32 grams during the period from 23.03.2011 to 13.10.2012 and he also concluded that the loss suffered by the complainant is falling under exclusion clause no. 2 which reads “Loss of and/or damage to the property insured which may be sustained whilst the same is being actually worked upon from any process of cleaning, repairing of restoring and directly resulting there-from.” Further the surveyor also gave reasons that no police FIR was lodged against loss, the documents submitted by the complainant had not tallied with each other and no physical verification of left over stock has been arranged by the insured, apart from the left over stock was removed from the premises, where ornaments were being manufactured by the said worker. The complainant was informed by OP by its letter dated 27.02.2013 (Annexure- I) that the complainant’s claim was rejected in view of the report of the surveyor & that the claim is not within the purview of terms and conditions of the insurance policy.
2.5: Whereas, the complainant’s claim is in within the purview of insurance policy and its claim was rejected arbitrarily without considering the documents supplied by the complainant to the surveyor, who had actually no knowledge of working of jewellery manufacturing process, his conclusion were based on misjudgment and wrong interpretation of the facts. It was also informed to OP that loss of 198.32 grams of gold being shown in the report during polish is wrong, it had no relevance to the gold lying with Tapan Kumar Barik. It was also explained that shortage of gold, which was with the polisher and is a working loss is included in 15% wastage that it is included in the finished product, which is not an actual loss and the same had no relevance to the gold lying with Tapan Kumar Barik. The surveyor had not carried any enquiry or consultation from the complainant about these facts, the complainant had written letters dated 07.03.2013 and 26.03.2013 point-wise that the surveyor had not dealt the circumstances properly [the letter dated 07.03.2013 explains that exclusion clause is not applicable; the FIR was not lodged/registered since it was against a dead person; with regard to other documents, it was also explained that relevant papers may be provided within two or three working days to the satisfaction of surveyor and with regard to no physical verification of left over stock it was also explained that the proceedings were done in camera situation and the precious gold could not be left unattended). The said letter was accompanying with relevant invoices and receipt of design no. PS-1024 and DSS-2754 (Annexure- J) but all went in vain. The complainant also requested for re-examination and reconsideration of all these points aspects by letter dated 5.4.2013 (Annexure-K) followed by several other letters and documents (Annexure-L) but the same were not appreciated and OP failed to provide any justification. Moreover, the Divisional Committee of OP also opined and invoked exclusion clause no. 2 and claim of complainant was not considered, as stated in letter dated 04.07.2013 (Annexure-M). The OP failed to understand that the said loss of 198.32 grams of gold during polishing is not the actual loss to the complainant but it is working loss, which is calculated only after working of jewellery item during the process of polishing and same is being separately provided by the complainant with respect to each design to its policy and a cap of 15% as wastage is fixed in respect of the same. The complainant’s case was not considered properly and exclusion clause no. 2 was not applicable. The surveyor had conducted the survey and prepared the report without practical knowledge of working of jewellery manufacturing process. The FIR was not lodged by the police because offender had died and FIR cannot be lodged against a dead person. There is clearly deficiency of services on part of the OP. The complainant is entitled for compensation of Rs. 5,00,000/- apart from punitive damages for fraudulent and evil act of OP. In the remaining part of the complaint, it talks about the concept of punitive damages, compensation etc. being perceived by the complainant, it does not require to reproduce them here.
3.1 (Case of OP) :The OP filed its detailed reply by splitting it into preliminary objections as well as reply on merits. There is no deficiency of service on its part, the exclusion clause no. 2 was invoked properly. Since the loss reported was within the subsistence of policy, the OP had deputed M/s S. Soni and Co. for investigation and assessment of the loss. The said surveyor had visited the insured premises and also made enquiries. It was found that the complainant company had appointed many contractors for manufacturing of ornaments and one of their contractors had expired. As per the physical verification sheets from which it was noticed that quantity of gold calculated short have no fixed trend as on certain occasions quantity increased from last physical verifications. The surveyor did not find the record as authenticated maintained by insured. The clause no. 2 was found applicable as the ‘loss and damaged to the property insured which may be sustained whilst the same is being actually worked upon from any process of cleaning, repairing or restoring and directly resulting from there-from’. That is why the surveyor concluded that the loss is not payable.
There was no FIR lodged against the loss, the documents submitted by the insured had not tallied with each other and no physical verification of the left over stock was arranged by the insured apart from the left over stock was removed from the premises, where ornaments were being manufactured. The circumstances are not suggesting either deficiency of service and the claim was rightly declined.
3.2: The issuance of policy no. 310310346120700000004 for the risk cover, its tenure from 10.05.2012 to 09.05.2013 are not denied by the OP, however, all other allegations either against the OP or against the surveyor are denied specifically, inclusive of gold of 963.113 grams of 18 carat was handed over to Tapan Kumar Barik for the purposes of making and manufacturing of jewellery items or later gold of 592.068 grams was found in the box instead of 963.113 grams or there was short of 371.045 grams of gold and OP contends that the complainant has to prove its averment. The OP relied upon the report furnished by the surveyor, which is in detail heading-wise dealing with all the aspects of case. The OP also opposes the allegations of complaint with regard to claim of compensation, punitive damages or other claims of complainant as there is no deficiency of service or unfair trade practices. The complaint deserves dismissal.
4. (Replication of complainant) : The complainant filed rejoinder, in the form of reply to preliminary objections as well as to reply to merit and factually the complainant reiterates the complaint as correct.
5. (Evidence) : Complainant’s Director Shri Aman Berry filed his affidavit of evidence, while relying upon the documents annexed with the complaint to establish its case against the OP. Similarly Shri Anil Mehan, Senior Divisional Manager of OP filed its compact affidavit of evidence, referring and relying upon on insurance policy, its terms and conditions as well as surveyor’s report.
6.1 (Submission of Parties) : Both the parties have filed their written arguments and the OP also refers and relied upon the case law mentioned in the written arguments.
6.2: The complainant as well as the OP were given opportunity to make oral submissions. The same were commenced by Shri Amandeep Singh, Advocate on behalf of complainant and on subsequent date further submissions were also made on behalf of complainant by Shri Manoj Kumar Advocate and then by Shri Mandeep Singh, Advocate on behalf of OP.
6.3: The final submissions need not to be produced herein as the same will be referred and discussed at appropriate stage.
7.1 (Findings) : The rival contentions of both the sides are considered keeping in view their case and evidence, inclusive of documentary records being relied by both sides. Many documents are showing foot-print of situation existing at relevant time.
According to case of parties, there was insurance policy for jewellers block insurance (Annexure-A to the complaint, page no. 22 to 24 & page no. 34 to 37) and its approval is by the OP (page no. 25 to 33), which is not disputed by the OP and both the sides also do not dispute the terms and conditions of insurance policy. However, there are reservations as on one side, the OP invokes exclusion clause no.2 to the circumstances of present case, apart from other aspects but on the other side the complainant claims that exclusion clause is not applicable to the case. In order to appreciate the rival contentions, it is relevant to reproduce again, the exclusion clause no. 2 which reads “Provided always that the Company shall not be liable for under this Policy in respect of –(I). Loss of and/or damage to the property insured which may be sustained whilst the same is being actually worked upon from any process of cleaning, repairing of restoring and directly resulting there-from.”. The OP also relies upon V.K. Kariyana Store vs Oriental Insurance Co. Ltd. II(2014) NC 182, wherein it was held that upon issuance of insurance policy, the insurer undertakes to indemnify loss suffered by the insured on account of risk covered by the policy, its terms have to be strictly construed to determine the liability.
7.2: There is also juxtaposition stand of complainant as well as of the opposite party as on the one side complainant claims that the surveyor has not properly assessed the circumstances and failed to appreciate the jewellery manufacturing process, apart from wastage happens in that process. On the other side, the OP maintains that there was proper investigation as well as inquiry by the surveyor and after considering all aspects, the opinion was formed by the surveyor. The surveyor's report cannot be ignored as being projected on behalf of complainant. The OP fortifies its contentions while relying upon Ragharam vs. New India Assurance Co. Ltd., MANU/CF/0207/2015, wherein it was held that as per legal position, the report of surveyor appointed by the insurance company to assess the loss in such cases is a valuable documents and unless there are cogent and valid reasons, which are recorded to be in writing such a report need not to be refuted for the purposes of assessment of loss.
7.3.1: The OP, while referring and relying upon the report of surveyor, has also referred it to refuse the claim vis-a-vis the complainant has also explained them point-wise in its letter (Annexure-J) to the OP, the same are relevant to discuss here to appreciate their cases. The resolution to them will also determine this complaint.
7.3.2: Firstly, it is a fact that no FIR was registered in respect of missing gold. However, the complainant tenders explanation that FIR could not be lodged/registered against a dead person, as advised. As per case of complainant in its pleading as well as in evidence (particularly, paragraph 6 of the complaint and paragraph 7 of his affidavit) that there was shortage of 371.045 grams from the gold box of Mr. Tapan Kumar Barik, which was clearly showing that there was theft or robbery of the said gold. The complainant further pleads that it was reported to the police, however, the FIR was not recorded as it could not be registered against the dead person. The complainant also relies upon its letter on letter-head (Annexure-F, which is DD no. 22A dated 18.10.2012, lodged with SHO, P.S. Karol Bagh) which narrates that matter was being reported to the police first time, since the insurer had asked it to report it to the police.
From the contents of this Annexure-F, two aspects are emerging viz (i) nowhere in Annexure-F it is mentioned that police was informed earlier to it but it was first time when letter (being vide DD No. 22A) dated 18.10.2012 was written on advises of Insurer/OP to inform the police; (ii) on plain reading of Annexure-F, it talks about that when gold box was inspected by complainant and then gold weighing 371 grams was found less but nowhere in the letter it mentions any allegation against anyone of theft or of robbery. However, subsequently it was alleged (in paragraph 6 of the complaint) against Shri Tapan Kumar Barik. Otherwise, in cases of theft, being cognizable offences, there could be FIR irrespective of the fact that offender is known or unknown. The complainant could have also mentioned fact of theft or robbery of gold in its letter to police, since subject matter of property was gold, however, letter 18.10.2012 does not name any culprit nor allegation of theft or robbery.
7.3.3: Secondly, the issue was with regard to physical verification of left over stock. According, to complainant the gold was a precious item, it could not be left unattended without watch and that is why the left over gold was taken care by them under camera situation in the presence of 7 to 8 people; the gold weighing 371.045 grams was found less. It is admitted case of complainant that the opposite party was not shown left over stock but paper record sheets to the surveyor of OP. OP also mentions, on the basis of survey report, that physical sheets were shown and on comparing them, the gold weighing 371 grams was found short of 18 carat gold. The surveyor also reports that left over stock was not shown to him. Now, complainant's record is to be seen and assess, how process starts from pure gold to manufacturing of jewellery of 18 carat.
As per complainant case, the said artesian Tapan Kumar Barik used to be given gold of 18 carat for manufacturing jewellery to be as per instructions of complainant, his statement of account (Annexure-E, page 73 of paper book) mentions on its left side/inwards the gold given to him from 1.4.2012 to 23.9.2012 as well as the jewellery items manufactured by him being mentioned on right side/outwards of such statement of account. It shows he ought to have balance of 963.113 grams of gold. This statement also gives reference of voucher number through which gold used to be received by him. Simultaneously, the other record (being Annexure-B, from page 38 to 60) is of printed vouchers in the name of Tapan Barik, when gold used to be received by Tapan Barik himself or other worker on such voucher. This voucher shows two figures of weights - one of them is of pure gold mentioned manually on left side of voucher and other corresponding figure is on right side of 18 carat gold, which is also mentioned manually. As depicts in the vouchers, the weight mentioned on left side of voucher is of pure gold but it is also shown in conversion weight of 18 carat and accordingly that weight of 18 carat has also been mentioned in statement of account (Annexure-E). On calculations, it is discovered on conversion basis (i.e. by base pure gold weight + 31.57% of pure gold weight) the notional weight of 18 carat of gold is arrived. It also means that purity of 18 carat gold is lesser than pure gold. Even the surveyor in his report (page 83, paragraph 8.0) also mentions that gold weighing 371 gram of 18 carat is equal to pure gold of 281.960 grams (i.e. 24 carat).
Further, when different gold jewellery items are made by artesian, then vouchers of jewellery are also prepared (Annexure-C, pages 61-68) by complainant, which also reflects design number; stones used, if any; gold consumed, notional weight of 15% is added in lieu of wastage, net consumption of gold in manufacturing the article of jewellery (after adding of that 15% in lieu of wastage aforementioned); wage of gold and the same item with voucher number and weight are shown as outwards in the statement of account (Annexure-E) of Tapan Barik. This infers, in order to compute value of weight of 18 carat gold, a conversion value of 31.57% weight is added to weight of pure gold. Then after jewellery item is manufactured by artesian (karigar) and it is received by the complainant, then complainant adds another notional weight at uniform rate of 15% (on account of wastage) to the weight of gold jewellery item (after excluding weight of stones) to compute the weight of consumption of gold in manufacturing of such jewellery item. This is clear a pattern being seen in all the vouchers (Annexure-C, pages 61-68).
There is no specific clause in the insurance policy nor in the approvals of terms and conditions of policy that this is usage in the jewellery manufacturing nor otherwise agreed that a uniform weight would be added at the rate of 15% on account of wastage. The complainant's claim is based on loss of gold of 18 carat. There is no record proved by complainant as to what exactly wastage happens or had happened in manufacturing different jewellery item from time to time by Tapan Barik. The surveyor had occasion to see physical verification sheets that gold found short ought to be because of wastage during manufacturing of gold ornaments and no fixed trend of short quantity was discovered by him as in one phase it was 36.776, in another phase it was 33.432 and on later occasion it was increased to 42.071. On the basis of record of complainant and by culling out the trend, the surveyor concluded that short quantity alleged is not actual shortage but it is inventory loss. Similarly, polish register of Tapan Barik was also verified by the Surveyor, in which it was also discovered that there was loss of 198.32 gms of gold during polishing for period from 23.3.2011 to 13.10.2012, which also covers the period of account of Tapan Barik (Annexure-E).
By looking broadly at these circumstances, it can be deciphered that it is complainant maintaining the record of issue of vouchers for handing over the gold to artesian, receiving gold jewellery from artesian, calculating consumption of gold in manufacturing the gold, but there is no evidence either by the complainant or report by the surveyor, whether Tapan Barik himself was maintaining record of actual consumption of gold in manufacturing jewellery items vis a vis none of voucher-sheets Annexure-C (page 61 to 68) are showing signature of Tapan Barik in handing over the jewellery items to complainant, alike vouchers were signed by him while receiving 18 carat gold from the complainant. Thus, to that extent the surveyor's repot cannot be ignored, particularly in the light of aforementioned discussion as well as the precedent Ragharam Vs New India Assurance Co. Ltd. case (supra) applies to this case.
7.3.4: The next issue/objection raised by OP is that complainant has not arranged for physical verification of left over-stock, although the complainant has been maintaining ledger account separately for each of its contractor but the complainant removed the left over stock from the place of manufacturing place. Whereas the complainant explained it vehemently on ground realities that gold is a precious item and it could not left lying in premises un-attended, that is why entire proceedings were done in in-camera like conditions in the presence of 7 to 8 people, left over gold stuff was possessed by the complainant.
It is admitted situation that although the place of manufacturing was in the premises covered by insurance cover, however, the left over stock was not produced and shown to surveyor during inspection and survey. As per complaint (paragraph 6) and evidence (paragraph 7 of affidavit of Director of complainant), immediately after knowing death of Tapan Barik, all the workers were called and locked box (containing gold) of Tapan Barik was opened in camera proceedings and then gold was found short in his box. Similar averments were also made by complainant in its letter to OP (Annexure-J, page 88) that proceedings of search of gold were done in the presence of 7-8 persons. This demonstrate that there was single box in locked condition of Tapan Barik and it was opened, gold was found short, then proceedings were conducted.
Whereas, there is paradoxical fact in complainant's own other letter dated 18.10.2012 (Annexure-F, page 4) being information to police, which was after five days of death of Tapan Barik, that he called all the workers with their personal boxes and also box of Tapan Barik containing gold and after inspection of all the boxes, the complainant found that gold was short of 321 gms. The complainant's Director made an inquiry at his own level but nothing was discovered. This version mean that it was not single box of Tapan Barik but there were many other boxes of other workers/persons, those boxes were also inspected and then gold was found short.
The surveyor's report is 22.2.2012. He had conducted the inquiry on 29.10.2012. The complainant wrote to police on 18.10.2012. No fact is mentioned in the complaint nor in other correspondence nor in evidence that complainant had produced the left-over stock or proposed to show to surveyor for the verification purposes.
7.3.5: The OP also refers the surveyor report that documentary record of complainant was not tallying and reconciling with each other, which complainant refute. However, it is crystal clear that complainant has just made available to surveyor to access to sheets/account record maintained by it, there was no occasion for the surveyor to make physical verification with the left over stock of gold with the record to assess the circumstances of wastage etc. That is why OP's contentions are justified that surveyor's observation that records of complainant was not tallying is emerging on the basis of that record made available. Because want of other concrete evidence by the complainant, the OP2 had invoked exclusion clause no.2 to the circumstances of case. The complainant could not establish that how the clause no.2 was not applicable.
7.3.6: The circumstances discussed and the preponderance of probabilities are not leaning towards the complainant but the same are in favour of Opposite Party. The complainant could not establish its complaint. The Complaint fails and it dismissed. Both the parties to bear their own costs.
8. Copy of this final Order be sent/provided forthwith to the parties free of cost as per Rules.
9: Announced on this 01st day of February, 2023 [माघ 12, साका 1944]
