Delhi

South Delhi

CC/386/2017

AVANTI OVERSEAS PVT LTD - Complainant(s)

Versus

UNITED INDIA INSURANCE COMPANY LTD - Opp.Party(s)

22 Feb 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

 

 

Case No. 386/2017

 

 

Avanti Overseas Pvt. Ltd.

Through its Authorized Representative

Having its registered office at

D-37, South Extension Part-II

New Delhi-110049, India

….Complainant

Versus

 

United India Insurance Company Ltd.

Through its Director

42-C, Third Floor

Moolchand Commercial Complex

New Delhi-110024

 

        ….Opposite Party

    

 Date of Institution    :  31.10.2017      

 

 Date of Order            : 22.02.2023      

 

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Sh. U.K. Tyagi, Member

 

 

ORDER

 

 

Member: Ms. Kiran Kaushal

 

1. Brief facts of the complaint as pleaded are:

Complainant is a company represented by authorized signatory Mr. Rajesh Mittal, Chief General Manager of the company. Complainant got his factory insured from United India Insurance Company Limited, hereinafter referred to as OP. The insurance cover was provided to the Complainant for any loss caused to the factory building due to fire, storm, etc. subject to payment of insurance premium.

2. Complainant on 01.04.2016 insured its factory under Standard Fire and Special Perils (Single Block) for the period 17.04.2016 to 16.04.2017 and paid the premium of Rs. 66,267/- to OP for the same. The sum insured was to the tune of Rs. 5 Crores.
3. It is stated that on 23.5.02016 a violent storm broke out in the city of Panipat where the factory was located and the said storm damaged the building/property including Partition walls-Gypsum, Grid False Ceiling, Brick Work with RCC Pillars and Toughened Glass in Director’s Room, Brick Work with RCC Pillars and Toughened Glass in Pad Printing section, Staircase window-Toughened Glass, UPVC frames, Electrical Fittings and Ducting
4. Complainant informed OP regarding the incident by an email dated 23.05.2016 requesting the company to conduct a survey to assess the loss caused to the building/property. On 25.5.2016 OP appointed a surveyor who carried out detailed and exhaustive inspection of the property/building. Surveyor submitted its report on 21.7.2016 wherein the loss/damage was assessed to the tune of Rs. 7,26,725/-. However, the surveyor took into account the Under Insurance Factor @ 24.53% and other clauses and arrived at a final figure of net assessed loss at Rs. 5,21,037/-.
5. It is further stated that as the complainant was unable to carry on his business from the damaged building and OP was not approving the report of its surveyor, complainant on 19.09.2016 carried out the repairs/replacement of damage caused to the property/building. In this regard complainant incurred cost of Rs. 9,76,541/-  including taxes.
6. Meanwhile, OP kept raising objections and kept asking the surveyor to survey the property again. Surveyor re-iterated the claim for damage to gypsum walls and false ceiling. Succumbing to the pressures of OP,  surveyor submitted its addendum report reduced the repair costs of UPVC windows and cost of misc electric and plumbing works , accordingly net assessed loss was reduced from Rs. 5,21,037/- to Rs. 4,11,515/-. The  said reduction was made as the net assessed loss relating to four UPVC windows and miscellaneous electrical and plumbing work was reduced.
7. Complainant made verbal inquiries and on 08.3.2017 wrote an email to OP enquiring about the status of its claim. OP vide email dated 9.3.2017 informed the complainant that the Competent Authority had approved the claim for a sum of Rs. 1,03,331/- only. It was further informed that OP would make the payment only when the complainant would sign a pre-drafted disbursement voucher.
8. Complainant was shocked and surprised to know that OP had reduced almost 80 % of the net assessed loss. However, he got to know from the email dated 09.03.2017 that in order to deliberately reduce the claim value OP appointed a Second Surveyor to again assess damage to property/building. This was in spite of the fact that OP had sought several clarifications from the first surveyor.
9. It is further stated that OP coerced the complainant to accept payment of only Rs. 1,03,331/- subject to execution of a discharge voucher/no claim certificate. The complainant refused to execute the said discharge voucher/no claim certificate on the dotted lines and protested the same to the effect that it was ready to receive the payment only without prejudice to its right. OP refused to accept the same.
10. Aggrieved at not receiving the rightful claim, complainant approached this Commission with prayer for directions to OP to pay sum of Rs. 5,21,037/-with interest @ 18 % from 23.05.2016 when the property/building was damaged. Additionally it is prayed that OP be directed to pay sum of Rs. 5 lac towards compensation for mental harassment, loss and Rs1 lac towards litigation cost.
11. OP resisted the complaint stating interalia that complainant has misused the process of law and has concealed material fact from the Commission. It is stated by OP that complainant has already settled the claim with the insurance company vide its letter dated 27.04.2017. According to the settlement, insurance company has paid the entire claim amount to the complainant and the same has been taken/accepted by the complainant.

Copy of disbursement voucher is annexed as Annexure-R3 and copy of surveyor report and claim note is annexed as Annexure-R4 & R5 respectively.

12. OP has denied that the quantum of destruction and damage caused to the building/ property was valued to the tune of Rs. 9,76,541/- including taxes. It is also denied that any pressure was put on the first Surveyor to change the calculations. However, it is submitted that the first surveyor included the losses, which were not covered under the policy and when the OP officers perused the same another investigator was appointed. Thereafter the actual loss payable subject to the terms & conditions of the policy, as admissible and assessed was paid to the complainant with its consent towards full and final settlement.

In view of the same it is prayed that the complaint be dismissed with heavy costs.

13. Rejoinder is filed on behalf of the complainant, evidence by way of affidavit and written arguments are filed on behalf of parties. Submissions made on behalf of parties are heard. Material placed on record is perused. 
14. Admittedly loss/damage occurred to the said factory/premises due to storm on 23.05.2016. The factory/building being covered by insurance, claim was raised by the complainant. Pursuant to raising of the claim, surveyor was appointed by OP company to evaluate the damage occurred. The said Surveyor visited the premises of OP on 25.05.2016 and filed detailed report on 21.7.2016 wherein the extent of damages, insurable interest and other markers to assess the loss were considered. Finally the surveyor assessed the loss of building at Rs. 5,48,460/-.
15. As stated, Complainant got his building repaired on 19.09.2016 to make it functional for the purposes of running his business. Meanwhile as OP company was not satisfied with the assessment, the surveyor was asked to reassess the damage caused as per the terms and conditions of the policy. Thereafter an addendum report was submitted by the surveyor on 24.09.2016 wherein the loss assessed was reduced to Rs. 4,11,515/-. OP again sought clarification from the surveyor and a detailed clarification was provided by the surveyor on 09.11.2016 without further reducing the claim assessed.  Still dissatisfied OP appointed another surveyor this time. The Second Surveyor appointed by OP company submitted its report on 23.01.2017 that is, after about seven months from the occurrence of the incident and the loss assessed was to the tune of Rs.1,03,331/-.
16. We have gone through the surveyor report of the first surveyor appointed by OP company, the details and clarifications provided by surveyor seem quite reasonable. OP has not provided any justifiable ground for obtaining repeated reports.
17. Hon’ble National Consumer Disputes Redressal Commission in Hundi Lal Jain Cold storage and Ice Factory Pvt. Ltd. Vs. Oriental Insurance Company Ltd. volume-II(2005) CPJ 17(NC) has held that practice of insurance company to appoint one surveyor after another is wholly unjustified.

Hon’ble Supreme Court in Venkateswara Syndicate Vs. Oriental Insurance III(2009)CPJ 81 (SC) has held :- 

  

“We also add, that, under this section the Insurance Company cannot go on appointing surveyors one after another so as to get a tailormade report to the satisfaction of the concerned officer of the Insurance Company, if for any reason, the report of the surveyors is not acceptable, the insurer has to give valid reason for not accepting the report. Scheme of Section 64UM particularly, of Sub-section (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated, etc., it must specify cogent reasons, without which it is not free to appoint second surveyor or surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of surveyor/surveyors. There is no prohibition in the Insurance Act for appointment of second surveyor by the Insurance Company, but while doing so, the Insurance Company has to give satisfactory reasons for not accepting the report of the first surveyor and the need to appoint second surveyor.”

.

Similar view was held by Hon'ble National Commission in New India Assurance Co. Ltd. Vs R.P. Oil Industries Insurance [IV(2016CPJ627(NC)] .

18. As held above, we are of the opinion that OP has not given any cogent and sufficient reason for not accepting the report of first surveyor and appointing a second surveyor that too after seven months from the occurrence of the incident and after repairs to the building had been done. As the report of the second surveyor is based on the photographs whereas report of the first surveyor is based on visiting immediately after the incident occurred; therefore the report of the first surveyor is found to be logical, detailed and based on site inspection and visit.

As regards OP stating that complainant has already settled the claim with OP and the insurance company has paid the entire claim amount to the complainant reference is made to “Worldfa Exports Pvt. Ltd. v. United India Insurance Company Ltd.” [2015 (225) DLT 722], wherein the Hon’ble High Court has  held-

“The insurance companies cannot deny the payment of the admitted claim amount to the insured unless a complete discharge is given by the insured. The insistence of the insurance company to sign a discharge voucher of full and final settlement before release of admitted claim amounts to coercion and undue influence as defined in Sections 15 and 16 of the Contract Act and such contracts are voidable under Section 19 and 19A of the Contract Act.

The withholding of the admitted amount by the insurance companies unless complete discharge is given, amounts to deficiency in service within the meaning of Section 2(1)(g) of the Consumer Protection Act, 1986 as the insurance companies are not expected to withhold the admitted claim amount till the insured gives the receipt of full and final settlement”.

 

The complainant states that he was asked to sign on the dotted lines and coercive approach was employed by OP to make the payment of Rs. 1,03,331/-. It is seen that Complainant has not signed the discharge voucher. However, it is not denied by the Complainant that he has received Rs. 1,03,331/-  without prejudice to his rights vide letter dated 27.04.2017.

 

19. In view of the discussion above, we hold OP to be deficient in service for not providing the complainant its rightful claim. Therefore OP is directed to pay the complainant as per the addendum report of the first surveyor on 24.09.2016. As Complainant has already received an amount of Rs. 1,03,331/- the same is deducted from Rs. 4,11,515/- to be paid by OP. Hence, OP is directed to pay Rs. 3,08,184/-  with interest @ 6% p.a.   from  the date  of filing of complaint  within three months from the date of order, failing which OP shall pay the said amount @ 9% till realization. Additionally OP is directed to pay Rs. 10,000/- towards harassment and litigation cost.

Parties to be provided copy of order as per rules. Order be uploaded on the website.

File be consigned to the record room.