Chandigarh

DF-II

CC/272/2021

M/s Vaishali Furniture Palace Through its Sole, Proprietor, Manish Kumar Jindal - Complainant(s)

Versus

United India Insurance Company Limited - Opp.Party(s)

Adv. Parunjeet Singh

02 Aug 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	272/2021
Date of Institution	:	26.04.2021
Date of Decision	:	02.08.2023

 

                     

 

 

M/s Vaishali Furniture Palace through its Sole Proprietor, Manish Kumar Jindal, Regd. Office: Shop No.11, Furniture Market, Sector 53, Madanpur Road, Chandigarh -160017.

…. Complainant .

Versus  

1.  United India Insurance Co. Ltd., through its Authorized Signatory/Branch-in-Charge, BO 3, Chandigarh, SCO No.855, Ist Floor, NAC, Manimajra, Chandigarh -160101.

2.  United India Insurance Co. Ltd., through its Authorized Signatory, Regd./Head Office: 24, Whites Road, Chennai-600014.

…. Opposite Parties.

 

BEFORE: 

SHRI AMRINDER SINGH SIDHU, PRESIDENT

SHRI B.M.SHARMA, MEMBER

 

PRESENT:-

         Sh.Parunjeet Singh, Counsel of complainant

         Sh.Sukaam Gupta, Counsel of the OPs.

 

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.), LLM,PRESIDENT

1.     The brief facts of the case as pleaded by the complainant are that he purchased Standard Fire and Special Perils Policy from OP No.1 (Annexure C-2) for a premium of Rs.11908/- valid from 25.07.2019 to 24.07.2020 for the sum insured of Rs.16 lacs. The description of the goods insured as per the insurance policy was of stock on wooden furniture, mattresses and other related items stored/lying at the address. On 13.04.2020 at 11 PM, the insured premises caught fire and the same was reported to the Fire Control Room by SI Sumer Singh who was on duty at the Furniture Market Chowk.  On 14.04.2020, an FIR No.0091 of 2020 u/s 436  IPC against unknown persons was lodged at PS Sector 36, Chandigarh.  The said outbreak had not only engulfed the shop of the complainant but also 18 shops as mentioned in the FIR.  In this regard, a copy of the FIR No.36 dated 14.04.2020, which records the turn of events is Annexure C-3. The complainant alleged to have suffered loss of Rs.14,77,800/- due to said outbreak.  The complainant submitted the claim alongwith the requisite documents  including the stock record as on 01.04.2020 as per the books of accounts.  However, OP No.1 rejected the claim vide letter dated 21.01.2021 by citing that the claim file is closed on account of breach of policy condition.  The surveyor and loss, Sh.Rajan Sharda vide its assessment report dated 27.10.2020 despite recognizing that the closing stock on 13.04.2020 is recorded as 2250864.75 has severely under reported the loss of goods at the demised premises.  It has been pleaded that the OP has not denied the claim as fraudulent as per Clause 8 of the Exclusion clause of the policy consisting of shops, commercial complexes and service residential units/apartments etc.  The complainant also submitted the trading account details as on 13.04.2020 which clearly state the exact losses to the tune of Rs.14,77,800/-.   It has further pleaded that the stock to the tune of Rs.19.00 lakhs which constituted a part of the stock lying at the demised premises was hypothecated with the Bank of Maharashtra as on 04.04.2020 i.e. nearly 7 days before the fire incident.  Finally, the complainant served a legal notice dated 25.02.2021 for due indemnification of the amount of loss suffered by him on account of the fire incident, occurred on 13.04.2020. Alleging that the aforesaid acts of omission and commission on the part of the OPs amount to deficiency in service and unfair trade practice, the complainant has filed the instant complaint seeking directions to the OPs to compensate/reimburse the complainant to the tune of Rs.14,77,800/- with interest, compensation for mental agony and physical harassment as well as litigation expenses.
2.     After service of the notice, the OPs filed the written version and admitting the issuance of the policy in question to the complainant. However, it has been stated after receiving intimation regarding the loss, the Surveyor-Sh.Rajan Sharda was appointed to assess the loss who after carrying over the physical inspection and keeping in view the terms and conditions of the policy assessed the loss to the tune of Rs.67,324/-. The surveyor asked the complainant to submit proof of ownership/rent deed with regard to the premises wherein the loss occurred but no proof of ownership was ever submitted by the complainant.  The complainant has no insurable interest to claim under the terms and conditions of the policy.  It has been pleaded that the closing stock as on 13.04.2020 has been observed as Rs.2250866/- and the insured has taken SI of Rs.16.00 lakhs for stocks, thus stocks are under insured and by applying average the loss assessed is adjusted as Rs.1,08,778/- x 1600000/2250866= Rs.77,324/- and there is excess of Rs.10000/- as per policy terms and conditions and as such the loss comes to Rs.67,324/-. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on their part, the OPs prayed for dismissal of the complaint.
3.     The Complainant filed replication to the written version of the OPs controverting their stand and reiterating his own.
4.     The parties filed their respective affidavits and documents in support of their case.
5.     We have heard the Counsel for the contesting parties  and have gone through the documents on record.
6.     The learned counsel for the complainant contended with vehemence that as it stands clear on the record that the OP was already having documents pertaining to the furniture shop of the complainant which fact was also verified by the OP before issuing the policy (Annexure C-2) and also getting the same verified through its Surveyor and Loss Assessor who had submitted its report Annexure C-6 the complainant has successfully proved deficiency in service on the part of OPs and the complainant is entitled for the claim as prayed for. On the other hand, learned counsel for the OPs contended with vehemence that since the requisite documents as required for the release of the claim have not been submitted by the complainant, the consumer complaint of the complainant being false and frivolous be dismissed with costs. There is no force in the contention of the learned counsel for the OPs as it is an admitted case of the parties that the shop in question was being insured by the OPs at the relevant time i.e. 25.07.2019 to 24.07.2020 as is also evident from the insurance policy (Annexure C-2). So far as the defence of OPs that the complainant has not submitted the rent deed or title deed qua the ownership of the shop is concerned, the same seems to be without any merit especially when it has come on record that the aforesaid shop was being insured by the OPs since long period of time, which was issued by the OPs only after verifying the spot. Not only this even the surveyor report (Annexure C-6) having been relied upon by the OPs clearly indicates that he visited the spot and found that the furniture shop was being run by the complainant which was burnt in fire.  Thus, it is clear on record that the claim of the complainant was intentionally not released by the OPs on flimsy grounds i.e. by asking him to produce rent deeds etc.
7.     It is observed that at page No.1 of the policy issued by United India insurance Co Ltd in favour of Vishali Furniture Palace (Annexure C-2), the agent’s name was mentioned Bank of Maharashtra and at page No.3 description of property was mentioned as “On stock of wooden furniture, mattresses and other related items, stored lying at the above address for the sum assured Rs.16,00,000/-. In FIR No.91 dated 14th of April 2020 under section 436 IPC (Annexure C-3), the  statement of Sub inspector Sameer Singh given at Police Station Sector 36 reads as under:

“It is stated that I am stationed as a Sub-Inspector at Police Station Sector 36. On 13.04.2020 I was on duty from 10 PM to 8 PM. Furniture Market Square at the spot. At about 11 PM, the shops at the Furniture Market immediately caught fire and the control room and fire brigade were immediately informed and I also reached the spot and saw that from the Sector 53 Chowk Chandigarh about 18 shops were burning and the goods lying there had been burnt and finished. The fire was controlled by the Fire Brigade vehicle which reached the spot. And I took steps to find out the reasons for the said fire. The Fire which was caused by some unknown persons for causing loss of the goods lying at the shop and for causing damage and destruction. Legal action be taken.”

 

         So from the wording of informant, it is clear that it is a major fire which burnt & finished goods lying in those 18 shops. Further, the complainant has placed on record photographs of the shops as Annexure C-4 (Colly.), which also show that goods were badly burned.

8.     Mr.Rajan Sharda, Surveyor & Loss Assessor in his letter dated 27.10.2020 (Annexure C-6) addressed to Branch Manager, United India insurance Company Limited stated that subject matter of policy was for Rs.16.00 lakhs stock and wooden furniture and mattress and other related items stored lying at the above address. The date of loss was mentioned 13^th April 2020 and loss caused due to accidental fire. Date of survey was 4^th May 2020 and subsequently, the estimated loss was mentioned as Rs 14,77,800/-. The surveyor also reported that the financial statement submitted were studied. In financial year 2018-2019, the insured has shown closing stock of Rs.21,60,241/- in trading account whereas in the balance sheet, closing stock has been taken as Rs.8,17,292.85P. The closing  stock in trading account as on 31.03.2020 will arrive at Rs.22,50,865/- instead of Rs.36,13,811/-. The stock as on 13^th April 2020 will also be considered as Rs.22,50,885/-. The insured have filed the claim bill, on account of stock damaged of  Rs.14,77,800/-. The Surveyor in its survey report stated that furniture was semi burned and clothes were partly burnt whereas mattresses were completely burnt and reduced to ashes. The Surveyor assessed the loss at Rs.1,08,779/- taking into account the fact that stock was underinsured & by applying the formula of average clause, the loss was assessed at Rs.67,324/-. Thereafter, the Surveyor has given the following remarks:-

“There is no rent deed available with the insured. The land on which the whole market has been operating is under legal dispute. The market is not Govt. approved market. There is no permanent numbering allotted by Govt. to shops. The shop is not registered under Punjab Shops and Establishment Act. The whole market is illegal. The insured has not disclosed these facts to the Company which amounts breach of condition of the policy i.e. 'The policy shall be void and all premiums paid hereon shall be forfeited to the Company, in the event of misrepresentation, mis-description or non disclosure of any material information'. In light of above facts no liability is being recommended in the claim and the claim is recommended to be closed as No Claim.

 

The report is being issued without prejudice subject to terms conditions of the policy issued.”

 

         It is observed that the Surveyor has neither tendered his report in evidence by way of submitting his affidavit as per the requirement of the Consumer Protection Act nor mentioned or produced the copy of bills of purchase showing the actual rates of purchase of the items, which were damaged during outbreak of fire, for the perusal & satisfaction of this Bench. Mere statement that rates of purchase mentioned on bills of items constituting total amount of Rs.1,08,779/- is not enough but required copies of actual bills produced by the insured before the Surveyor. Moreover, the Surveyor mentioned in his report that 18 shops of the market were burnt in the fire. Further the Surveyor held that the  whole market is illegal. The insured has not disclosed these facts to the Company which amounts breach of condition of the policy i.e. 'The policy shall be void and all premiums paid hereon shall be forfeited to the Company, in the event of misrepresentation, mis-description or non disclosure of any material information'. In light of above facts no liability is being recommended in the claim and the claim is recommended to be closed as No Claim.

        It is observed that in the policy document, it is categorically stated that the goods so insured are for a 'Kucha Shop". Therefore, since the same is recognized by the Policy itself, the plea that the market is allegedly illegal cannot sustain. There is nothing on record which suggests that the complainant at the time of getting the insurance mentioned that market was legal, and his shop was not a ‘Kacha Shop’(shop made of mud etc). So, it is held that the OP has wrongly and arbitrary closed the claim as ‘No claim’. It is further held that the OP failed to prove on file that net loss caused by fire was for Rs.67,324/- only for the purpose of claim. The documents which the complainant has placed on file ‘statement of stock hypothecated to Bank of Maharashtra’ Branch Chandigarh dated 4^th April 2020 wherein it is clearly mentioned that ‘Raw Material of furniture is value worth Rs.3,00,000/-, Almira, sofas, bed, tables extra is of value worth Rs.13,00,000/-Whereas other material of furniture such as tables, chairs, and swings are of value  of Rs.4,00,000/-. Thus, the total value of furniture is to the tune of Rs.20,00,000/-

9.          The Hon’ble Supreme Court in case titled as National Insurance Co. Ltd vs. Hareshwar Enterprises Private Limited & Ors (Civil Appeal No.7033 of 2009) decided vide order dated 18th of August 2021 held that “in the settlement of insurance claims, the surveyor report is not final and conclusive”. The Surveyor’s report cannot be relied upon because in the statement of the stock of hypothecation to the Bank of Maharashtra Branch, Chandigarh on 4^th April 2020 declared total value of Rs.20.00 lakhs and it is proved on file that material in the shop was burnt in the fire, which burnt 18 shops of the market.
10.          The complainant is claiming net loss of Rs.14,77,800/- but could not exactly prove it. However, he proved on record that there was a major fire in the market and his furniture, burnt in it. Hence, in cases where exact amount cannot be determined, non-standard formula may be applied in determining the loss suffered by the complainant in order to avoid further complications and set the matter at rest.
11.     In the light of the aforesaid discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. The OPs are directed to pay 75% of the value of the loss of Rs.14,77,800/- to the complainant alongwith interest @ 6% p.a. from the date of filing the complaint till the date of actual realization within 60 days from the date of receipt of copy of order by the OP.
12.     The pending application(s) if any, stands disposed of accordingly.
13.     Certified copy of this order be sent to the parties, as per rules. After compliance file be consigned to record room.

Announced in open Commission 02/08/2023
	Sd/- (AMRINDER SINGH SIDHU) PRESIDENT
	Sd/-
	(B.M.SHARMA) MEMBER