BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

==========

Complaint  Case No: 243 of 2010

Date  of  Institution :   26.04.2010

Date of   Decision   :   25.05.2011

Pindi Fashion Mall Pvt. Ltd., SCF No.20, Sector 19-D, Chandigarh, through its Director Sh.Tejinder Singh.

….…Complainant

                                       V E R S U S

The Oriental Insurance Company Pvt. Ltd., SCONo.5, Sector 17-E, Chandigarh, through its Manager/Principal Officer.

          ..…Opposite Party

CORAM:          SH.LAKSHMAN SHARMA                         PRESIDENT

SH.ASHOK RAJ BHANDARI            MEMBER

MRS.MADHU MUTNEJA                        MEMBER

Argued by:     Sh.Raman Sharma, Advocate for the complainant.

Sh.Vinod Chaudhary, Adv. for the OP.

PER MADHU MUTNEJA, MEMBER

­­­­­­­

1]             The instant complaint is filed by Pindi Fashion Mall against Oriental Insurance Company regarding the repudiation of a claim made against theft at the premises of the complainant.

                Factually speaking, the complainant is a Private Limited Company registered under the Companies Act.  It is a family concern and involved in the business of garments/textiles.  The complainant had obtained a money insurance policy from the OPs valid from 31.3.2009 to 30.3.2010 against an annual premium of Rs.3035/-.  A copy of the cover note has been placed on record as Ann.C-2.

                As per the complainant on the intervening night of 31.8.2009/1.9.2009 a theft took place in the premises of the complainant in which cash of Rs.2.57 lacs was stolen by thieves after breaking open the shop. An F.I.R. was registered with Police Station Sector 19, Chandigarh under Section 457/380 IPC on 1.9.2009.  The Police Investigated the case but the culprits could not be traced.  Hence, the police submitted an Untraceable Report.  The copies of F.I.R. and Untraceable Report have been placed at Ann.C-3 & C-4. The complainant also informed the OP vide letter dated 1.9.2009 about the theft of the cash (Ann.C-5).  The  OP appointed a Surveyor, who visited the site and obtained all desired information and documents from the complainant for assessment of the loss.

                Unfortunately, the complainant received a letter dated 8.2.2010 from the OP in which it was stated that the complainant had manipulated the claim showing abnormal high sale a day before the incident.  It was stated that an amount of Rs.75,000/- have been deposited on 10.8.2009 but no corresponding entry was available in the cash book on that day.  The OP had repudiated the claim on basis of all these conclusions. The complainant has alleged that there is no reasonable basis to suspect the accounts of the complainant which are meticulously maintained and authenticated.  The complainant has been filing all requisite statutory returns with the concerned Tax Departments as per requirement.

                It has been submitted that the business of the complainant is such that the item sold are of varying prices and hence sales may vary considerably from day to day.  A single item may fetch even a lakh of rupees, while other may fetch just a few thousands.  The complainant has also filed the copies of bills, cash receipts, vat bill, cash book, day book, Vat return  and audit report for the claim vide application dated 5.4.2011 by way of additional evidence because the OP had taken the stand that all accounts and details of transactions were manipulated and abnormal.  The complainant has thus made a prayer that the complaint be allowed and the OP be directed to honour the claim of Rs.2.56 lacs with cost and compensation.

2]             After admission of the complaint, notice was sent to the OP.

                The OP in the reply has taken the preliminary objection that the alleged loss of the complainant is not only misconceived, but has been filed to cause wrongful loss to the insurance company by manipulating the sales.  The amount of rs.75,000/- deposited in the bank has no corresponding entry available in the cash book.  Hence, as per the OP, if the claim under the policy is demanded by frivolous means, then as per Condition No.6 of the Policy, the benefits and rights of the insured stands forfeited.  The relevant clause is reproduced as under:-

“Clause No.6:- If any claim under this policy shall be in any respect fraudulent or if any fraudulent means or devices are used by the insured or any one acting on the insured behalf to obtain any benefit under this policy, all benefits and rights under the policy, shall be forfeited.”

                The Surveyor, who assessed the claim has come to the firm conclusion that the record was manipulated and the  claim was inflated.  According to the OP, the case should be referred to the Civil Court of competent jurisdiction.

                On merits, the OP has taken a plea that the complainant is a commercial organization and hence cannot invoke the jurisdiction of the Consumer Protection Act.  Further, the OP has submitted that the complainant has juggled the figures and manipulated the record to inflate his claim and hence the claim has been repudiated as there was gross mismatching in the entry reflected in the cash book and the bank.  The OP has also attached the Surveyor Report of Sh.Rajan Sharda, Surveyor & Loss Assessor.  The remarks of the surveyor in the Survey Report is as under:-

“The insured in our opinion have tried to manipulate the record to inflate the claim, thus have committed fraud and violated the basic condition of the insurance policy.  The clause 6 states. If any claim under this policy shall be in any respect fraudulent or if any fraudulent means or devices are used by the insured or any one acting on the insured behalf to obtain any benefit under this policy, all benefits and rights under the policy, shall be forfeited.  Keeping the facts of the claim in view in our opinion the claim of the insured should be repudiated.”

The OP has therefore prayed for the dismissal of the complaint.

3]             Parties led evidence in support of their contentions.

4]             We have heard the ld.Counsel for the parties and have perused the record.

5]             The complainant is aggrieved because the OP has failed to honour their commitment against the insurance policy issued.  They have placed reliance on the report of Surveyor.  Remarks of the Surveyor have already been reproduced above to state that the complainant has manipulated the figures to reach the claimed amount.

6]             In response to these allegations of the OP, the complainant vide application dated 5.4.2011 had submitted copies of the Bills dated 31.8.2009, Vat Bill dated 31.8.2009, Cash Receipts dated 31.8.2009, Cash Book dated 1.8.2009 to 31.8.2009, Day Book dated 1.8.2009 to 31.8.2009, Vat Return dated 18.9.2009 and Audit Report dated 28.8.2010 (Ann.C-10 to C-16) to show the monthly tax return and annual income tax return to show their financial position as well as transactions.

                A perusal of these records clearly shows that the complainant could not have manipulated so many entries, hence the allegations of the OP that the complainant has manipulated the accounts to show a high figure of sale on 31.8.2009 does not seem reasonable and plausible.

7]             The Op has taken preliminary objection that the complainant being a commercial organization is not a consumer and thus cannot invoke the jurisdiction of this Fourm.  In our view the complainant is well covered within the definition of “consumer” as per Section 2(d)(ii) of the Consumer Protection Act, 1986 (as amended upto date).  Hence, the objection of OP is not tenable.   The Surveyor Sh.Rajan Sharda, has assessed the loss of the complainant to Rs.1,04,806/- (Ann.C-1).  In our opinion this amount should be paid by the OP to the complainant against the claim filed by him.

9]             As far as the plea taken by the OP with regard to referring this matter to Civil Court of competent jurisdiction is concerned, we are of the opinion that Section 3 of the Consumer Protection Act, 1986 (as amended upto date) provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.  Invoking the provisions of the Consumer Protection Act, 1986 (as amended upto date) for getting the claim would be a remedy available to the complainant. 

10]            Taking into account the above observations, we allow the complaint in favour of the complainant.  The OP is directed to pay Rs.1,04,806/- (as assessed by the Surveyor) to the complainant along with Rs.20,000/- as compensation for the harassment caused as well as Rs.7000/- towards cost of litigation, within a period of 30 days from the receipt of its certified copy, failing which the OP shall pay the amount of Rs.1,24,806/- along with interest @12% per annum from the date of repudiation of the claim i.e. 8.2.2010 till the date of actual payment besides paying Rs.7000/- as cost of litigation.

                    Certified copy of this order be communicated to the parties, free of charge. After compliance, the file be consigned to the record room.

Announced

25.05.2011

(LAKSHMAN SHARMA)

PRESIDENT

                                                           (ASHOK RAJ BHANDARI)

MEMBER

(MADHU MUTNEJA)

MEMBER