Haryana

Ambala

CC/56/2010

M/S KHADI UDYOG - Complainant(s)

Versus

THE NEW INDIA ASSURANCE COMPANY LTD - Opp.Party(s)

RAVINDER GOEL

28 Jan 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMBALA.

           Complaint Case No.      : 56 of 2010

Date of Institution         : 23.02.2010

            Date of Decision            : 28.01.2016

M/s Khadi Udyog, Jathlana, village Manglai, Jagadhri Road, Ambala Cantt through its Secretary and authorized person, Sh. Rajesh Singla S/o Sh. Om Parkash.

                                                                                                                                                                                      ……Complainant.

                                                                                                                    Versus

The New India Assurance Company Limited (Branch Office 3501), 6292 Nicholson Road, Ambala Cantt through its Branch Manager.

                                                                                                                                                                        ……Opposite Party      

Complaint Under Section 12 of the Consumer Protection Act.

CORAM:    SH. A.K. SARDANA, PRESIDENT.

                   SH. PUSHPENDER KUMAR, MEMBER.                  

Present:       Sh. Anil Kumar, Adv.  counsel for complainant.

                   Sh. Mohinder Bindal, Adv. counsel for OP.                 

ORDER.

                    The present complaint under section 12 of the Consumer Protection Act, 1986 (hereinafter in short called as the ‘Act’) has been filed by the complainant alleging therein that the complainant society  established a Khadi products manufacturing unit and it was comprehensively insured  for all the stocks of raw material i.e. cotton, wool etc.  with the OP for the past several years and the last such two policies for a insured sum of Rs.60.00 lacs each were taken by complainant vide policy No.353501/46/07/53/00000288 dated 28.07.2007 by paying a premium of Rs.3371/- and policy no.353501/11/07/13/00000526 dated 28.07.2007 by paying a sum of Rs.21,135/- respectively which were effective during the period 28.07.2007 to 27.07.2008.  It has been submitted that a sudden fire had broken out on 04.04.2008 and Fire Brigade was informed immediately and to combat the fire, several fire vehicles/tenders were pressed into service from Ambala as well as from other nearby Fire Stations as  the fire was very devastating and huge stocks of raw-material, semi-finished and finished products were lying in the unit  of complainant and said operation continued from 04.04.2008 to 07.04.2008. It has been further  submitted that on the day of occurrence i.e. 04.04.2008, a stock of cotton/raw cotton weighing 25484.39 Kgs. was stored in the godown of complainant at village Manglai, out of which 25236.390 Kgs was gutted in the fire  and as such the complainant suffered a loss of Rs.16,14,039.50.  After this, complainant informed the OP Insurance Company and Mr. Rakesh K. Khanna was appointed as Surveyor by the OP to assess the loss suffered by the complainant. As per complainant, he submitted all the documents as requisited  by the Surveyor & the OP company including copy of Fire Report, Copy of Police Report, Fire Extinguishing Charges Bill, Balance Sheet, Trading Account etc. alongwith claim form but to utter surprise of complainant, the Surveyor again  vide his letter dated 18.07.2008 asked for   submission of documents and the complainant again submitted all the required documents  to the Surveyor but  the Op insurance company vide their letter dated 19.12.2008 informed the complainant that they have received the Survey Report of Mr.Rakesh K. Khanna, Surveyor wherein he has recommended to close the file of complainant as ‘No Claim’.  Thereafter,  the complainant visited several times as well as sent letters to the Op for supplying copy of the Survey Report  but  the same was not supplied. As such,  a registered legal notice  as well as through UPC got served upon the OP Insurance Co. for making the payment of claim amount alongwith interest as well as for supplying report of surveyor but of no use. Complainant also made written request to the OP and also got forwarded request from SSI  Branch  of Punjab National Bank wherefrom the complainant had raised loan for purchase of stock etc. but OP Insurance Company not responded. Hence, having no alternative, complainant has preferred the present complaint seeking relief as mentioned in the prayer para.

2.                Upon notice, OP Insurance Company appeared through counsel and filed written statement raising preliminary objections qua non-maintainability of complaint as there is no deficiency in service on the part of Op and complainant is not a consumer.  On merits, it has been urged that  complainant was insured with the OP but not comprehensively and only carpet & druggets  (cotton/Jute/Wool) was insured for the period from 28.07.2007 to 27.07.2008  and not  the stock of raw material as alleged in the complaint. It has been further urged that  complainant failed to  supply the information regarding other firm M/s Singla Handloom which is owned by the wife of complainant and is in the adjoining room of the complainant firm in which the stock of complainant was lying.  As per evidence collected from the surrounding, confirms the malafide intention of the complainant and he is habitual to lodge false claims with the insurance companies and the claim of the complainant has been rightly repudiated as no loss has been caused to the stock of the complainant. It has been further  contended by the OP that complainant failed  to supply the documents as requisited by the Surveyor and the complainant has not suffered any loss rather  a false claim has been filed by the complainant. It has been submitted that there is another firm in the same premises under the name & style of M/s Singla Handloom  which was locked at the time of visit of Surveyor and wife of Sh. Rajesh Singla is the proprietor of that firm.  Further,  the complainant has not cooperated with the surveyor at the time of survey, as such, the surveyor has rightly recommended to close the file of the complainant as ‘No Claim’.  Hence, there is no deficiency in service on the part of OP and thus OP has prayed for dismissal of the complaint with costs.

3.                In evidence, counsel for complainant tendered affidavit of complainant as Annexure CW/1 alongwith documents as Annexures C-1 to C-33 and closed the evidence whereas on the other hand, the counsel for OP placed on record affidavit of Sh. S.L. Gulati, Senior Divisional Manager as Annexure RX  and affidavit of Surveyor as Annexure R-Y alongwith documents as Annexures R-1  to R-4 and closed the evidence on behalf of OP.

4.                We have heard learned counsel for the parties and gone through the record very carefully. Counsel for complainant argued that complainant firm was  comprehensively insured with the OP insurance company w.e.f. 00:00 hours on 28.07.2007 to  midnight of 27.07.2008 and on 04.04.2008, due to fire, the stock of his cotton/raw cotton weighing 25236.390 Kgs. was gutted  in the fire, as such, the complainant suffered a loss to the tune of Rs.16,14,039.50. It has been further argued that  the fire was so grave that it remained continued  from 04.04.2008 to 07.04.2008 and was put under control after great efforts by fire authorities. But  inspite of submitting all the requisite documents with the OP insurance company, they rejected the claim of complainant as ‘No Claim’ despite the fact that the stock  of all kinds of raw material whilest stored or lying or in the process was under risk cover of the policy in question. The counsel for the complainant placed reliance on case law reported in 2009(7)SSC Pg. 787(SC) titled as New India Assurance Co. Ltd. Vs. Pradeep Kumar wherein it has been observed by Hon’ble Supreme Court that “Surveyor’s report-Although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousands rupees or more by insurer, but surveyor’s report is not the last and final word- It is not sacrosanct   that  it cannot be departed from; it is not conclusive-Approved surveyor’s report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”  Besides it, counsel for complainant relied upon other case laws rendered by Hon’ble National Commission  titled as Harsolia Motors  Vs. National Insurance Co. Ltd. reported in 2005(1)CLT Pg. 97 and Chander Prakash Vs. ICICI Lombard General Insurance Co. Ltd reported in CPJ 2012 –III Pg. 444 wherein it is held that “consumer Protection Act, 1986, Section 2(1)(d)- commercial purpose-insurance policy-whether insurance policy taken by commercial units could be held to be hiring of service for commercial purpose and thereby excluded from the purview of the Consumer Protection Act? Question  answered in negative –held that a person who takes insurance policy to cover the envisaged  risk does not take  the policy for commercial purpose, policy is only for indemnification the actual loss-it is not to generate profit.”

5.                On  the other hand, the counsel for the OP has contended that OP acted fairly and as per law, only criteria  to reject the claim of insured  is the basis of assessment and observation made by the surveyor who reported that  “The cause of fire is doubtful as the fire stated to be initiated during working hours from the adjoining room having brick wall portion and fire was stated to be travelled through it from 3-4 gaps in the wall. Insured had not acted swiftly to minimize the loss as on 5^th April, 2008, no fire tender was recalled despite the fact that cotton was still smoldering with fire.  This shows the affected stock was very cheap i.e. like waste cotton. From some local persons, we have come to know that in the past also fire had taken place many times. Within the building complex, Mr. Rajesh Singla has another firm in the name of Singla Handloom that carries the similar nature of business.  He did not cooperate to provide the required details of Singla Handloom, which was essential to know that burnt stock was of Gram Udyog or Singla Handloom. We have come to know that his wife is the proprietor of Singla Handloom. On his visit on 29.11.2008, he has only provided the rough sketch of building area and stated that affected store was of Gram Udyog.  But in it was even noticed that machine room was in the area of Singla Handloom. As per records of insured25236.390 Kg of Desi Cotton was in the stock and that was entirely burnt. Photographs taken by us clearly depict that around 4000 Kg. of Desi Cotton was still present outside the godown other than that which was segregated from the burnt cotton. This clearly depicts the intention of the insured was  to exaggerate the loss and the insured did not cooperate in providing the inventory of the stock lying there.”  Thus the counsel for OP insurance company has contended that the claim of the complainant has rightly been rejected.

6.                At the very outset, it is an admitted fact on record that the insurance policies (Annexure C-3 & C-3/A) issued by OP insurance company covers the risk ‘On stocks of all kinds of raw material, lisk silk, woolen yarn, hand woven cloth cotton &/or waste cotton, finished &/or semi finished handloom goods and other items of insured  Kadi whilst stored &/or lying & /or in process in abovesaid factory built of first class construction & /or carding machines at 5 locations of the complainant society situated at various addresses as well  mentioned in the policy document (Annexure C-3).  So, the contention of the OP that the loss occurred to the complainant does not cover in the risk as per insurance policies is not tenable since their policy documents itself speaks that the loss occurred to the complainant is fully covered in the policies in question. Further the documents i.e. Annexures C-10 to C-15 are the receipts of amounts charged by Municipal Council, Ambala City, Municipal Council, Ambala Cantt  & M.C. Shahbad for extinguishing the fire from 04.04.2008 to 07.04.2008 at the location of complainant society.  So, it does not look nice from the mouth of OP company that no fire took place at the alleged date and time rather the documents of fire authorities proves that fire took place  at the location of complainant society and caused loss. Besides it, the version of complainant is also proved from the copy of DDR (Annexure C-16) and Fire report (Annexure C-17) issued by Fire Authorities wherein it has been mentioned under the clause description  of damage “Cotton bales approximately weight 20 tonns and machinery was damaged by fire and water, approximately  loss 13 lacs”.  So, in view of the facts and documents referred above, it is established that major fire broke out in the premises of complainant society/firm   causing loss to the raw material of the firm.  Further  the said fact of breaking out of the fire at the premises of complainant society has also been admitted by the OP’s surveyor in  his report dated 03.12.2008 (Annexure R-2) at page -5 detailed as under:-

POSITION AT SURVEY:

                   “There is no doubt that a major fire took place at the address as given in the policy on 04.04.2008. Due to lack of cooperation on the part of insured, we were unable to identify whether loss was  of insured or of Singla Handloom, situated at same address” meaning thereby that the factum of breaking out of the fire at the premises of complainant and occurring of loss therefrom is not disputed rather the  dispute is only qua identification of loss i.e. whether the loss is of Singla handloom or of complainant society/insured but to prove said factum, OP has failed  to submit any document on the file wherefrom it is concluded that the loss relates to Singla Handloom  allegedly situated at the address of complainant society as alleged by Surveyor in his report ( Annexure R-2) except the copy of order dated 13.09.2011 passed by Hon’ble State Consumer Disputes Redressal Commission, Haryana, Panchkula in FA No.647 of 2007 titled as New India Assurance Co. Ltd.  Vs.  M/s Singla Handloom (though placed on file as Annexure R-4 on 05.01.2016 by way of additional evidence alongwith affidavit of   Surveyor only to fill up the lacuna) wherein the address of M/s Singla Handloom is mentioned as Bazaza Bazar, Ambala Cantt and not that of complainant society.  So  the claim of complainant society has been wrongly repudiated by the OP on the presumptions of  surveyor report.

                   Second contention  raised by OP Insurance Company that complainant is not a consumer is also not tenable because policies in question (Annexure C-3  & C-3/A) were issued by OP for indemnification of loss caused to the stocks of all kinds of raw material whether finished or semi finished and other items of Insured  whilst stored or lying  or in process   in the abovesaid factory Built of First Class construction and/or carding machines in its due course of business and not for any commercial purpose or generating profit or for any resale and as such the complainant is squarely covered under the provisions of  Consumer Protection Act and is held to be a consumer as per judgments of Hon’ble National Commission titled as Harsolia Motors Vs. NIC Ltd. &  Chander Parkash  Vs. ICICI Lombard G.I.C. Ltd. (supra).

7.                Now the next question arises for consideration before theForum is that “what amount of compensation on account of damage to the insured stock, complainant firm /society is entitled?”

                   To prove this fact, complainant has submitted in para No.5 of the affidavit (Annexure CW/1) that “on the fateful day of 04.04.2008,a stock of cotton/raw cotton weighing 25484.39 Kgs. was stored in the godown of the complainant at village Manglai, out of which cotton/raw cotton 25236.390 Kgs. was guted in the fire and as such in the above fire the complainant had suffered a loss of Rs.16,14,039.50. The details of stock on 04.04.2008 and stock gutted in fire are detailed in the list Annexure C-26” but no any report of valuer/loss assessor has been placed on file by the complainant to further  substantiate  its claim except the report of Fire Station Officer, Haryana Fire Officer, Ambala Cantt ( Annexure C-17) wherein the approximate loss of Rs.13.00 lacs has been mentioned whereas on the other hand, OP has also failed to produce any evidence on the court file to the effect that the damaged stock was of such particular amount except alleged in the Surveyor Report (Annexure R-2) i.e. loss quantified to the tune of Rs.3,10,194/-. In these circumstances, we are of the considered view that the claim of complainant firm qua value of damaged stock as claimed in the complaint/affidavit cannot be accepted in toto and at the same time, Op insurance company is also not entitled to repudiate/reject the claim of complainant firm in toto.  Thus we hold that complainant firm is entitled to get compensation on non-standard basis i.e. 75% of the claimed value of the damaged stock of Rs.16,14,039.50 P i.e. Rs.12,10,529/- only appreciating the judgment rendered by Hon’ble National Commission in case titled as New India Assurance Co. Ltd. Vs. Malti Bhikhabhai Bhoya reported in2013 (3) CLT Pg.178. Accordingly, we allow the present complaint partly and direct the Ops No.1 & 2 to comply with the following directions within 30 days from the communication of this order:-

(a)       To release the insurance claim  amounting to Rs. 12,10,529/- to the complainant society -firm alongwith simple interest @ 9% per annum to till its realization.

 

 (b)      Also to pay Rs.10,000/- as costs for unwanted litigation including the advocate’s fee etc.

                   Further the award in question/directions issued above must be complied with by the OP  within the stipulated period failing which all the awarded amounts  shall further attract simple interest @ 12% per annum for the period of default. So, the complaint is decided in above terms. Copies of this order be sent to the parties concerned, free of costs. File be consigned to the record room after due compliance. 

 Announced: 28.01.2016                                                                   Sd/-         

                                                                                               (A.K. SARDANA)

                                                                                                        PRESIDENT                                                                                                       

                                             

                                                                                                  Sd/-                                                                                                                                                                                                                     (PUSHPENDER KUMAR )

                                                                                                            MEMBER