Chandigarh

DF-I

CC/590/2021

Madhav Textiles - Complainant(s)

Versus

United India Insurance Company - Opp.Party(s)

Tanika Goyal

04 Jun 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/590/2021
Date of Institution	:	01/09/2021
Date of Decision	:	04/06/2024

 

Madhav Textiles, through its proprietor, Sh. Rakesh Kumar Bansal s/o Shri Prem Chand, aged 55 years, having its registered office at V.I.P. Road, Lohgarh, Zirakpur, SAS Nagar, Mohali, Punjab – 140603.

2^nd Address : 718, Sector 22-A, Chandigarh.

… Complainant

V E R S U S

1. United India Insurance Company, Regional Office : SCO 123-124, Sector 17-B, Chandigarh.
2. United India Insurance Company, having its Office at S.C.O. No.357-358, Sector 35-B, Chandigarh 160035.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Dhruv Sharma, Advocate for complainant
	:	Sh. Satpal Dhamija, Advocate for OPs (through VC)

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Madhav Textiles, through its proprietor, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations as projected in the consumer complaint that the complainant is engaged in the business of trading of cotton, cotton yarn, cotton waste, textiles and related items for the last more than 19 years.  OP-1 is the regional office whereas OP-2 is the divisional office of United India Insurance Company i.e. the insurer. The complainant purchased a Marine Cargo Open Policy (hereinafter referred to as “subject policy”) from OP-2 for the safety of material being sold and shipped by it to various parts of the country and the same was valid w.e.f. 25.10.2017 to 24.10.2018 (Annexure C-2). The subject policy covered loss that may happen to the material shipped by the complainant from anywhere in India to anywhere in India and included not only material shipped through own vehicle but also through any vehicle of which services had been availed from a transporter or railways.  As per the schedule of the subject policy, it covered the risk for an initial amount of ₹15,00,00,000/- and limit per location was given as ₹20,00,000/-.  On 25.1.2018, complainant placed an order with M/s Shree Ganesh Threads Ltd., Patran, Punjab for delivery of cotton yarn (hereinafter referred to as “subject goods”) to M/s S.K. Traders, Gaya, Bihar against order received on 13.1.2018.   The said seller at Patran had asked Bhandari Road Carriers to arrange lorry for the supply of ordered goods and in turn truck bearing registration No.PB11BK-8351 was sent by the carrier.  The complainant raised bill amounting to ₹15,07,338/- (Annexure C-3) for the same and goods were handed over to the transporter vide GR dated 25.1.2018 (Annexure C-4). The subject goods shipped to Gaya, Bihar were to reach at destination latest by 2.2.2018, but, to the utter surprise of the complainant when the same did not reach there, complainant enquired from Mr. Dwarka Das, Director of M/s Shree Ganesh Threads and he further enquired about the same from the transporter, who could not give any logical explanation for the same.  Finally, on 5.2.2018, FIR (Annexure C-5) was registered against the transporter and the driver under Section 420, 407 of IPC at Police Station, Ghagga, District Patiala.  Thereafter the complainant lodged claim under the subject policy with the OPs.  Upon enquiry, it was found that the truck carrying the consignment of the complainant had been detained by the Excise Department, Bihar for the reason of carrying illegal liquor into the territory of Bihar and the same had given a dent to the high reputation of the complainant as the consignment sent by the complainant was totally legal one.  After claim was lodged (Annexure C-6) by the complainant with the OPs, surveyor for assessment of the loss was deputed by them when the vehicle was ordered to be released by order of Court and the surveyor assessed the loss to the subject goods accordingly vide report (Annexure C-7).  After receiving the surveyor report, OPs assured that the claim would be settled shortly, but, they kept lingering on the matter on one pretext or the other.  Surprisingly vide letter dated 29.6.2020 (Annexure C-9), OPs repudiated the genuine claim of the complainant in pursuance to survey report on the ground of violation of the terms and conditions (exclusion No.4.2 & 5.5) and the same is totally illegal and arbitrary in nature.  In fact, OPs failed to take into consideration the fact that the complainant and the seller were not aware about the whereabouts of the consignment when the same was in transit and on finding that the subject goods were not received by the buyer, FIR was lodged by the complainant.  Not only this even, the OPs ignored the fact that the consignment of the subject goods was ordered to be released in favour of the complainant by the court of local jurisdiction after a gap of 18 months and during that period the goods were damaged. The complainant raised his dispute with the customer department of the OP company (Annexure C-10) and dedicated grievance cell of the OP company as well as Insurance Ombudsman (Annexure C-11), but, with the no result. In this manner, the aforesaid act of the OPs amount to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their written version, inter alia, taking preliminary objections of maintainability, cause of action, concealment of facts, estoppel and non-joinder of necessary parties.  However, it is admitted that the subject policy was purchased by the complainant from the OPs and the same was valid at the relevant date, time and place.  It is also not disputed that the subject goods were transported by the complainant by arranging truck bearing No.PB11BK-8351 and the goods were handed over to the transporter and later on when the said goods did not reach at its destination, FIR was lodged by the complainant with the police. It is further alleged that, in fact, claim was lodged by the complainant with considerable delay with the OPs on 8.3.2018.   It is further alleged that the loss was got assessed by the OPs through surveyor who assessed the same to the tune of ₹13,02,432/- with the recommendation that the claim is not covered as per the terms and conditions of the subject policy by giving reference of exclusion clause 4 & 5.  It is further alleged that it is the case of the complainant that the subject goods, which were being transported, were confiscated alongwith the vehicle by the Excise Department of Bihar Govt. It further alleged that in fact, in order to get the subject goods released, complainant filed civil writ petition in the month of February 2019, almost after one year from the date of confiscation and the loss to the subject goods was caused only due to that delay and there is no deficiency in service or unfair trade practice on their part. On merits, the facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. In rejoinder, complainant re-asserted the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully, including written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainant had purchased the Marine Cargo Open Policy i.e. the subject policy which was valid w.e.f. 25.10.2017 to 24.10.2018 and the subject goods, being covered under the subject policy, were being transported through truck bearing registration No.PB11BK-8351 from Patran, Punjab to Gaya, Bihar and during the transit of the subject goods, aforesaid truck was confiscated by the Excise Department of Bihar Govt. on finding illegal liquor in the truck and the subject goods were only ordered to be released when the complainant approached the Hon'ble High Court of Bihar and the subject goods had suffered loss to the tune of ₹13,02,432/-, as has also been assessed by the surveyor deputed by the OPs, and the claim of the complainant was repudiated by the OPs vide letter dated 29.6.2020 by relying upon exclusion clause 4.2 and 5.5 of the subject policy, the case is reduced to a narrow compass as it is to be determined if the OPs were unjustified in repudiating the genuine claim of the complainant and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the OPs had rightly repudiated the claim of the complainant and the consumer complaint, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the subject policy and other documentary evidence including surveyor report, repudiation letter and the same are required to be scanned carefully for determining the real controversy between the parties.
   3. Perusal of subject policy (Annexure C-2) clearly indicates that the same was valid w.e.f. 25.10.2017 to 24.10.2018 and the relevant portion of the same is reproduced below for ready reference :-

“Commodity wise cover details :

Commodity description	Commodity type	Cover name	SI (₹)	Premium (₹)
CONSIGNMENT OF ALL TYPES OF YARN SUCH AS COTTON, PC ETC. COTTON WASTE, PC WASTE, PV WASTE &/OR ALL KINDS &/ oR OTHER SIMILAR NATURE OF GOODS TRANSPORTED BY RAIL/ROAD FROM AWI INDIA TO AWI INDIA, ALL RISKS AS PER ITC 'A' & SRCC, INVOICE VALUE ONLY, DEC. ON MONTHLY BASIS, SINGLE CARRYING LIMITN 20 LA.	OTHERS	ITC A	150,000,000.00	28,500.00

 

4. The relevant portion i.e. clauses 4 & 5 of the subject policy are required to be scrutinized carefully as the OPs had repudiated the claim of the complainant by relying upon the said clauses and the same are reproduced below for ready reference :-

“4.    In no case shall this insurance cover loss damage or expense caused by

4.1 war civil war revolution rebellion insurrection, or civil strife arising there from or any hostile act by or against a belligerent power.

4.2 capture seizure arrest restraint or detainment and the consequences there of any attempt there at

4.3 derelict mines' bombs or other derelict weapons of war.

5. In no case shall this insurance cover loss damage or expense

5.1 caused by strikers locked out workmen or persons taking part in labour disturbances, riots or civil commotions.

5.2 resulting from strikers, lock outs, labour disturbance riots or civil commotions.

5.3 caused by any act/s of terrorism being act/s of any person/s acting on behalf of, or in connection with, any organization/s which carries/carry out activities directed towards the overthrowing or influencing, by force or violence, of any government whether or not legally constituted

5.4 caused by any person/s acting from a political, ideological or religious motive.

5.5 caused by the intervention of government authorities (for e.g. Armed & Paramilitary forces, Police forces, Fire brigade, etc.) in connection with curbing and stopping what are excluded vide Clauses 5.1 to 5.4.”

5. Annexure C-7 is the survey report which clearly indicates that the surveyor had assessed the loss to the tune of ₹13,02,432/- with the recommendation that as the truck was seized by the State Govt.  due to illegal operation (illegal liquor found in truck) by the truck driver and the truck route was diverted by the diver from actual route and the type of damages were not covered as per policy terms and conditions (Exclusion clause 4 & 5), the claim was advised to be treated as no claim.
6. Annexure C-9 is letter dated 29.6.2020 vide which the OPs had repudiated the claim of the complainant and the relevant portion of the same is reproduced below for ready reference :-

“With reference to the above cited claim, Please note that your claim is repudiated and claim file stands closed on account of the following reason -

As per survey report and various claim papers, the loss/damage the is not admissible under policy term and condition.(exclusion no 4.2 and 5.5) Hence we are closing your claim file as Repudiated Claim.”

7. The learned counsel for the complainant contended with vehemence that as it stands proved on record that the complainant had ordered the transportation of the subject goods through truck No.PB11BK-8351 and during transit of the same if the truck driver changed the route or involved in some illegal activity, complainant has not to suffer for that and further when claim of the complainant is not covered by exclusion clauses 4 & 5 of the subject policy, OPs have wrongly repudiated the claim of the complainant and the present consumer complaint deserves to be allowed.
8. On the other hand, learned counsel for the OPs contended with vehemence that as it stands proved on record that the driver of the truck was involved in transportation of illegal liquor alongwith the subject goods and the complainant has not lodged the claim as per the terms and conditions of the subject policy, the claim of the complainant was rightly repudiated and the instant consumer complaint deserves to be dismissed.
9. However, there is no force in the contention of learned counsel for the OPs as the claim of the complainant is not at all excluded under clauses 4 & 5 of the terms and conditions of the subject policy (Annexure C-2) since the goods were neither damaged due to any war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom or the other grounds mentioned in clause 4 nor the same have been damaged under clause 5.5, especially when it has already been held by the Hon'ble High Court of Bihar in its order dated 22.4.2019 that the State Govt. has wrongly withheld the subject goods and immediately the goods were ordered to be released in favour of the complainant.  The relevant portion of the aforesaid order is reproduced below for ready reference :-

“We have heard learned counsel for the parties and we have perused the record and we do not find a single provision under the Bihar Prohibition and Excise Act, which empowers the Confiscating Authority to confiscate an item like cotton threads even if the same was loaded in a truck which was seized for transporting liquor. The Confiscating Authority ought to have exercised prudence rather than passing a mechanical order to confiscate the threads specially in view of the report of the Superintendent of Excise who has informed that the petitioner was nowhere connected either with the transport company or the owner of the liquor. We accordingly quash the order passed by the Collector-cum-District Magistrate, Muzaffarpur in Confiscation Case No. 66/2018-19 to the extent it proceeds to confiscate the goods belonging to the petitioner i.e 12000 kgs of cotton threads, the details of which is found in Annexure-1 and to that extent the order is set aside. The Collector-cum-District Magistrate, Muzaffarpur is directed to forthwith release the goods in question in favour of the petitioner on his production of documents supporting the ownership of the goods.

The writ petition is allowed with the direction above.”

 

10. Moreover, unless the OPs prove on record that the said illicit liquor was being transported with the involvement of the complainant, or that the complainant is connected either with the Transport company or the owner of liquor for transport of subject goods, any activity having been done by the driver during transit, the complainant is not supposed to suffer for that.  Not only this, when the aforesaid clause 4 speaks about the capture, seizure, arrest, restraint or detainment and the consequences thereof under extraordinary or abnormal situation of war, civil war etc. whereas clause 5 relates to cases of strikes, lock outs, terrorism etc., it is clear that the OPs have wrongly interpreted the aforesaid clauses while repudiating the genuine claim of the complainant.
11. In view of the foregoing discussion, one thing is clear that the OPs have wrongly repudiated the claim of the complainant by relying upon clauses 4 & 5 of the subject policy and it is safe to hold that the said act clearly amounts to deficiency in service and unfair trade practice on their part.  Hence, the present consumer complaint deserves to succeed.
12. So far as the quantum of claim prayed for by the complainant is concerned, as the surveyor has assessed the loss to the subject goods to the tune of ₹13,02,432/-, the complainant is entitled to the said amount, especially when it is not the case of the complainant that the report of the surveyor cannot be relied upon due to any reason.
13. It is pertinent to mention here that surveyor report is an important piece of evidence and has to be given due weightage and can only be ignored if there is any other cogent evidence to the contrary.  Here we are strengthened by the judgment of Hon’ble Apex Court in Khatema Fibres Ltd. Vs. New India Assurance Company Ltd. & Anr., Civil Appeal No.9050 of 2018 decided on 28.9.2021 in which it was held as under:-

       “38.  A Consumer Forum which is primarily concerned with an allegation of deficiency in service cannot subject the surveyor’s report to forensic examination of its anatomy, just as a civil court could do. Once it is found that there was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the surveyor, in a manner prescribed by the Regulations as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop.”

 

Further, the Hon’ble National Commission in New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC) held as under:-

“The Report submitted by the Surveyor is an important piece of evidence and has to be given due weight and relied upon until and unless it is proved by some cogent and reliable evidence that the Report submitted could not be relied upon.”

Further the Hon’ble National Commission in Oriental Insurance Co. Ltd vs. Arss Infrastructure Project Ltd., II (2023) CPJ 468 (NC) held as under:-

            “Insurance — Surveyors’ report — Survey and investigation are one of fundamentals in settling claim, and cannot and should not be disregarded or dismissed without cogent reasons, though it also goes concomitantly that survey or investigation should be convincing and pass test of credence in scrutiny — State Commission has not gone into contents of surveyors’ reports at all on ground that reports were filed belatedly before it — Reports were in any case available before State Commission and as such it ought to have examined their contents rather than dismissing them outright — Depending upon circumstances State Commission could have even imposed terms including cost for belatedly filing reports but to treat them as suspicious and to perfunctorily dismiss them outright merely because they were filed belatedly was not approach either justified or called for — No need to examine surveyors’ reports at this stage at any great length since both parties agree that settlement may be made on basis of respective surveyor’s assessment of actual loss in each case.”

The Hon’ble National Commission in Detco Textiles Pvt. Ltd. Vs. New India Assurance Company Ltd. & Anr., II (2023) CPJ 535 (NC) held as under:-

        “The Surveyor conducted a very detailed inspection of the premises and assessed the loss after due verification of documents. He assessed the total loss to the building, plant & machinery and furniture etc. at Rs.11,21,18,099/- after making necessary deductions of Rs.5,605,905/- towards excess clause and taking care of the process charges, debris removal, architects fee and goods held in trust arrived at the net adjusted loss of Rs.10,65,12,194/-. For every item, the Surveyor had explained the basis of arriving at the amount. The Complainant on the other hand had not placed any evidence to establish that the assessment made by the Surveyor was incorrect. The Complainant, therefore, cannot be allowed the amount beyond the assessment of the Surveyor. We see no reason not to agree with the assessment made by the Surveyor.”

 

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs are directed as under :-

1. to pay ₹13,02,432/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 29.6.2020 onwards.
2. to pay ₹40,000/- to the complainant as compensation for causing mental agony and harassment;
3. to pay ₹10,000/- to the complainant as costs of litigation.

5. This order be complied with by the OPs within forty five days from the date of receipt of its certified copy, failing which, the payable amounts, mentioned at Sr.No.(i) & (ii) above, shall carry interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
6. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

04/06/2024 hg	Sd/- [Pawanjit Singh] President
	Sd/- [Surjeet Kaur] Member
	Sd/- [Suresh Kumar Sardana] Member