State Consumer Disputes Redressal Commission
M/S Cds India & Scc vs Uiic Ltd. on 18 May, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.34 of 2012
Date of Institution: 14.05.2012
Date of Decision: 18.05.2015
M/s CDS India & SCC (J.V.), Corporate office D-98, Industrial Area,
Phase-7, Mohali, Branch Office : # 21605, Street No. 6/1-A, Power
House Road, Bathinda, through duly authorized Director of SCC
Harvinder Pal Singla.
.....Complainant
Versus
United India Insurance Co. Ltd., 7-A, Civil Lines, Bathinda, through its
Branch Manager.
........Opposite Party
Consumer Compliant U/s 17 of the
Consumer Protection Act.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President
Shri Baldev Singh Sekhon, Member
Present:-
For the complainant : Sh. Mukand Gupta, Advocate
For the opposite party : Sh. D.P.Gupta, Advocate
.............................................. BALDEV SINGH SEKHON, MEMBER The present complaint has been filed by the complaint- company through its Director Harvinder Pal Singla u/s 17 of the Consumer Protection Act, 1986 (in short, "the Act") against the opposite party on the allegation that it has failed to pay insurance Consumer Complaint No.34 of 2012 2 claim filed on account of damage caused to roads, material, equipment due to floods at its site of work.
2. Briefly stated, the facts of the case are that the complainant firm was allotted a road and bridge work, regarding up- gradation of Deodhar Nainawali Road & Links in Yamuna Nagar District by Haryana State Roads and Bridges Development Corporation Ltd. The complainant-firm purchased the insurance for road and sites of the work from the opposite party (in short the OP), vide cover note No. 501016, for a sum insured of Rs. 38,85,00,000/- w.e.f. 10.11.2009 to 2.2.2012 on payment of premium of Rs. 4,75,652/-. It also got insured its plant and machinery etc. for a sum of Rs.6,00,000,00/-, vide cover note No. 501017 w.e.f. 10.11.2009 to 2.2.2012, after paying Rs.93,314/- as premium. OP never supplied any insurance policy against the said cover notes. It was pleaded that due to continuous and nonstop heavy rain fall and due to damage to the Sukhi Dam on 8.9.2010, the project site of the complainant firm was damaged and huge loss to the tune of Rs.47,29,900/- was suffered by it. National Highway 73 was washed away near Chachroli and there was no connection between Khazirabad and Yamuna Nagar. The site was totally cut off from adjoining cities. Complainant firm lodged insurance claim with the OP, alongwith details of loss to the tune of Rs.47,29,900/-. OP appointed M/s Rakesh Narula and Co., Surveyor- cum-Loss Assessor, from Vadodra, to assess the loss, who inspected the site on 22.9.2010 and 23.9.2010 and again from 7.10.2010 to 9.10.2010 and demanded irrelevant documents, including Daily Rain Fall reports from Indian Meteorological Department w.e.f. year 1991 to Consumer Complaint No.34 of 2012 3 2010. The complainant-firm submitted requisite documents, i.e. photo copies of both cover notes, total Stock Statements, Photo Copy of company profile, Certificate of incorporation, spot map, Rate list provided by the Haryana State Roads and Bridges Development Corporation Ltd., copy of the complete details of the loss and all repair bills of plant and machinery. The said Surveyor sent one mail to the official of the complainant firm on 15.3.2011, through which complete survey report was sent in which loss to the tune of Rs.25,21,438/- was assessed. Thereafter, the said Surveyor neither came to the spot nor prepared the report. When complainant firm inquired about the survey report, the said Surveyor told that he wanted to have another visit to the spot and demanded Air tickets from the complainant firm. Having no alternative, it booked air tickets from Vadodra to Delhi in July, 2011 under compelling circumstances, as it was badly in need of the claim amount. The said Surveyor visited the spot from 11.7.2011 to 13.7.2011 and slept over the matter thereafter. The complainant firm inquired many times from the office of OP at Bathinda regarding its claim but Mr. H.K.Kapoor, Branch Manger and Mr. Balwinder Singh, Divisional Manager, did not give any satisfactory reply and rather told that they would send some inquires to the Surveyor. The matter remained pending between the Insurance Company and its Surveyor. It was further pleaded that the Surveyor was appointed by the OP and was working under its directions and supervision. Ultimately the Surveyor prepared the final Survey Report on 20.8.2011, in which loss assessed was drastically reduced to Rs.18,66,586/-. Excess clause of 5% was also applied and the amount was further reduced to Consumer Complaint No.34 of 2012 4 Rs.17,73,257/-. It was specifically mentioned in the report at Page No.7, in Para No.10.3, that "he minimized the loss of insurance claim and under writers may kindly appreciate the efforts" which indicated that reduction in claim was without any merit and was done just to please the OP. Once the Surveyor had already assessed the loss on 8.9.2010, he had no power to reduce it subsequently. The Surveyor also disallowed the claim for the "plant and machinery" on the ground that the same was not insured, whereas it was duly covered, vide Cover Note No.501017. Surveyor further declined some items on the ground that the damage to those occurred due to rain water and, therefore, were not covered; whereas in the preliminary report dated 15.3.2011, all these items were considered and were included in the total loss that occurred due to heavy non-stop rains and flood water of Sukhi dam. Legal notice dated 21.1.2012 was also served upon OP and its higher officials i.e. Chief Regional Manager, Ludhiana, Chairman-cum-Managing Director at Chennai. Thereafter, OP sent a letter dated 25.1.2012, alongwith settlement voucher, for full and final discharge of the claim for an amount of Rs.12,62,000/- and demanded signatures of the complainant alongwith blank cancelled cheque. When inquired about additional deduction in the claim amount from assessment made by the Surveyor in 2nd Survey Report, Mr. H.K.Kapoor and Balwinder Singh told that they had reduced the items No.4 & 5 of Annexure 2 of assessment sheets in the Report dated 20.08.2011; whereas these items were passed by the said Surveyor after taking the rates from the bills of Anant Stone Crusher and Anando Screening Plant. On 31.1.2012, the complainant-firm sent the Consumer Complaint No.34 of 2012 5 cancelled cheque to OP and signed the said discharge voucher with the remarks that only "part payment" was being received. Thereafter, it received a letter, through their Advocate Sh. Manohar Lal Bansal, in which it was conveyed that OP had settled the claim to the tune of Rs.12,63,637/- and was ready to pay the said amount as full and final settlement and that same was kept pending because the complainant had not signed the full and final discharged voucher. The complainant wrote registered letter dated 3.2.2012 to Chairman, IRDA, under intimation to OP and their high officials, regarding the act and conduct of OP but all in vain. However, Mr. R.K.Singh, from the Regional Office of OP at Ludhiana, conveyed in letters dated 14.2.2012, 5.3.2012 and 12.3.2012 that there was no rule for submitting full and final discharge voucher before release of the payment, but, he also expressed his helplessness to get the same released without signing of the discharge voucher. Left with no alternative, the complainant issued a legal notice to the OP on 23.4.2012 but OP still refused to release even the amount of Rs.12,62,000/-. Under these circumstances, the complainant was compelled to sign the full and final discharged voucher.
3. It was further pleaded that the OP was supposed to settle the claim within 2-3 months, as per law settled by Hon'ble Supreme Court but in the present case it failed to settle the claim till the filing of the complaint before this Commission on 14.5.2012. Due to non- payment of the total claim amount of Rs.47,29,900/- complainant firm has suffered heavy damages in the form of interest loss @ 18% from the date of Loss and was also suffering mental agony and pain for Consumer Complaint No.34 of 2012 6 which it is entitled to the compensation amount of Rs.10,00,000/-. Litigation expenses to the extent of Rs. 3,00,000/- were also prayed.
4. Upon notice, the OP filed detailed written reply taking the preliminary objections that the complainant firm is not a juristic person and therefore, the complaint filed by it was not maintainable as M/s CDS India and SCC (JV) is neither a corporate body nor a partnership firm. Therefore, no complaint can be filed on its behalf. It was pleaded that the complainant firm is not a consumer as defined under the Consumer Protection Act because it had taken the insurance in connection with its commercial activities and therefore, complaint was not maintainable. The claim of the complainant firm has already been considered in terms of the facts, which came on record, by the competent authority in the light of the report submitted by the Surveyor and has approved the claim for a sum of Rs.12,63,637/-, about which, the complainant firm was informed and was requested to submit the discharged voucher. As the complainant firm did not submit the same, the amount could not be released. However during the pendency of the complainant before this Commission, a sum of Rs.12,63,637/- was paid to the complainant. As the claim had already been settled, the complainant cannot invoke the summary jurisdiction under the Consumer Protection Act. It was admitted that cover note No.501017 was issued by the OP to cover the plant and machinery but pleaded that the claim was not lodged under the said policy by the complainant firm. It was denied that the terms and conditions were not settled and that any irrelevant document was called for. It pleaded that the surveyor was the best person to know as to what documents were Consumer Complaint No.34 of 2012 7 relevant for the assessment of the loss. Moreover, under the policy of insurance, it was the duty of the complainant firm to provide all documents and information as may be required by the OP or the Surveyor for the settlement of the loss. The Surveyor was neither its agent nor he was working as such. No complaint was received from the complainant firm with regard to his working. He was working under the license granted to him by the Insurance Regulatory and Development Authority and is an independent body governed by the Rules & Regulations framed by the said authority. It was denied that the Surveyor had earlier submitted a report dated 25.3.2011 assessing the loss at 25,21,430/- and pleaded that the report (Annexure C-6) is an unsigned document and cannot be considered as a report submitted by the Surveyor. No complaint was received from the complainant that the Surveyor was demanding air tickets from the complainant firm. In case it had provided tickets on its own to the Surveyor, then, it cannot be blamed. Otherwise also it has to bear the expenses of the Surveyor as per the rules applicable in this regard. It was admitted that the Surveyor, in his report, assessed and recommended the loss to the tune of Rs.15,75,211.55 after applying the excess clause. The complainant firm even consented to accept Rs.17,73,257.32 as loss. Surveyor, in its report (Annexure R-3) at entry No. 4&5 of Annexure-2 to the report, considered items; namely, "aggregate 10 mm and 22 mm" (17000 cft.) and "washed sand"
(10,000 cft.) on the basis of bill No.2427 dated 17.9.2010 and bill No.5 dated 20.9.2010. On scrutiny, it was found that these bills were of a date subsequent to the date of loss. Therefore, the amount of these Consumer Complaint No.34 of 2012 8 bills could not have been considered by the Surveyor. After reducing the amounts of these two bills, the assessed loss came down to Rs.13,30,143.73 (Rs. 16,58,643.73 - Rs.3,28,500/-). From that, an amount @ 5% i.e. Rs. 66,507/-, on account of excess clause was reduced. Hence the net payable amount was worked out to be Rs.12,63,637/- which was offered to the complainant firm. It was also admitted that the Surveyor disallowed the claim for plant and machinery but pleaded that unless and until the policy of insurance, regarding plant and machinery, was produced before the Surveyor, he could not have presumed that any such insurance for the plant and machinery did exist. No claim was lodged by the complainant under the said policy of insurance. So there was no reason for referring to the said policy. It was also pleaded that preliminary report cannot be considered as report regarding assessment of loss as it was only preliminary observation after first inspection. Denying all other allegations, dismissal of the complaint was prayed.
5. In support of his contentions, the complainant tendered into evidence affidavit of Sh. Harvinder Pal Singla, authorized Director of the complainant firm Ex.CA, alongwith documents, Resolution dated 1.5.2012 Ex.C-1, Cover note dates dated 10.11.2009 Ex-C2 & Ex-C3 respectively, letter dated 16.9.2010 Ex.C-4, letter Ex.C-5, Surveyor Report Ex.C-6 & C6 (Colly), legal notice dated 21.1.2012 Ex.C-7, letter dated 25.1.2012 Ex.C-8, letter dated 31.1.2012 Ex.C-9, letter dated 20.2.2012 Ex.C-10, reply dated 3.2.2013 Ex.C-11, letters dated 3.2.2012, 2.2.2012, 9.2.2012, 20.2.2012, 7.3.2012, 9.3.2012, 21.3.2012, 31.3.2012, 14.2.2012, 5.3.2012, 12.3.2012 Ex.C-12 to Consumer Complaint No.34 of 2012 9 Ex.C-22 respectively, legal notice dated 23.4.2012 Ex.C-23, reply dated 25.4.2012 Ex.C-24, regulations Ex.C-25 & Ex.C-26 respectively and closed the evidence.
6. The opposite parties tendered into evidence affidavits of Sh. H.K.Kapoor dated 13.5.2013 as Ex.O-A, Sh. Gobind Aggarwal dated 13.5.2013 as Ex.-O-B, Sh. Rakesh Narula dated 3.1.2013 as Ex.-O-C, alongwith documents insurance policies Ex.-O1 & Ex.-O2 respectively, copy of the Surveyor report dated 20.8.2011 Ex.O3, photocopy of policy schedules dated 14.11.2009 Ex.O4 & Ex.O5 respectively, copy of dispatch register dated 7.12.2009 Ex.O6 and closed the evidence.
7. We have thoroughly gone through the pleadings of the parties and have carefully perused the evidence on the record and heard the learned counsel for the parties at length.
8. The objection of the OP regarding the non-maintainability of the complaint on the ground that the complainant firm has availed the insurance policy for its commercial activity is not sustainable because it is well settled that insurance cover is availed only to indemnify the actual loss suffered by the insured and same has no concern with any commercial activity of the insured.
9. The main dispute referred in the complaint with regard to the assessment of quantum of loss suffered by the complainant firm due to the flooding caused by the heavy rains followed by the damage to the Sukhi Dam on 8.9.2010. The complainant firm has contended that the Surveyor had earlier submitted assessment of loss to the tune of Rs.25,21,430/- , copy of which has been proved on record as Ex.C- Consumer Complaint No.34 of 2012 10 6, Perusal of this document reveals that it is not an authentic document as the same is not, at all, signed by the said surveyor. OP has admitted that it was only preliminary observation after the first inspection. Moreover it was only a tentative loss assessment and same was not yet finalized. However, it can be used to see how the process of the assessment of loss progressed.
10. OP has placed on record the final Survey Report of M/s Rakesh Narula and Co. dated 20.8.2011 as Ex.O-3, in which loss as per Method-2 has been assessed as Rs.16,58,643.73. It is explained that method-2 is based on the fact that policy was obtained on the contract issued by Haryana State Roads and Bridges Development Corporation and, therefore, actual loss assessed is to be restricted upto the amount mentioned in the said contract. It is noted that the loss was assessed by surveyor under 5 different heads i.e. road work, construction material, consumables, lab equipment and machinery items. It is further seen that no assessment has been made by him under the item No.4 (Lab equipment) and Item No.5 (Machinery) on the ground that these items were not covered by the policy No. 200401/44/09/03/6000000/7 (Ex.O-1), under which the claim was filed by the complainant firm. Apparently, the insurance policy (Ex.O-1) was issued in continuation to the cover note No.501016 dated 10.11.2009; copy of which has been proved by the complainant as Ex.C-2. Perusal of this cover note shows that complainant firm obtained a "Contractor All Risk Policy" in which "risk covered" is defined as under :
"On making and paving of Roads by the above said contractor through the above said principal covered Works, Plant and Material whilst lying and or stored at site and or site Consumer Complaint No.34 of 2012 11 godowns if any, for the work of Upgradation of Deodhar Nainawali Road and Links in Yamuna Nagar District vide principal letter No.1641/HSRDC Risk Covered :-
Fire, Theft, Damage during making and paving of roads, STFI"
11. The plain reading of the above provision shows that works, Plant and Material used for paving the roads were also covered. Thus, the loss to the plant, including machinery etc., was also duly covered. Though the complainant firm as well as the OP has admitted that "plant and machinery" were covered under the other policy obtained vide cover note No.501017 (Ex.C-3) but same is factually incorrect. Infact, both the policies have identical coverage. The policy cover note (Ex.C-2) is for work of making and paving of "Roads" while policy cover note (Ex.C-3) is for construction of "Bridges". Both these projects were to be executed against order No.1641/HSRDC issued by Haryana State Roads and Bridges Development Corporation and "Plant" is covered under both these policies. It is noted that no specific detail of the risk covered has been mentioned in the policy schedules proved by OP as Ex.O-4 and Ex.O-5. Accordingly, the loss, which has been excluded on account of items No.4 & 5 i.e. lab equipment and machinery items; details of which have been mentioned in Annexure 4 & 5 to Assessment Report, Ex.O-3 as Rs.5860/- and Rs.3,00405/- respectively, is allowed as same is included in cover note (Ex.C-2).
12. OP has contended that on receipt of the report from the Surveyor, item Nos.4&5 mentioned in Annexure-3 of Ex. O-3 were considered and disallowed because the bill No.2427 dated 17.9.2010 and Bill No.5 dated 20.9.2010 relating to "aggregate 10 mm and 20 Consumer Complaint No.34 of 2012 12 mm" (17,000 cft.) and "washed sand" (10,000 cft.) were prepared after the date of damage i.e. 8.9.2010. Apparently, this amount could not have been allowed by the surveyor. The contention of the complainant that these bills were obtained merely to ascertain the rates of the items is not tenable because in its claim (Ex.C-5) under the heading "material", complainant firm has claimed the loss of these two items mentioning that these were purchased against the said bills dated 17.9.2010 and 20.9.2010. Accordingly, we hold that deduction of Rs.3,28,500/- by surveyor out of the amount assessed by surveyor on account of these items is justified.
13. The complainant has further contended that certain items were disallowed by the surveyor on the grounds that those were damaged due to rain water and not due to flooding and therefore, were not considered while assessing the loss. This deduction is not justified because it is not specified how the surveyor reached the conclusion that the said damage to the roads was on account of the "rain only"
and not due to "flooding". It is interesting to note that surveyor in his report Ex.O-3, has categorically observed to the contrary as under :
5. CAUSE OF LOSS :
5.1 Loss suffered by insured is due to flooding and inundation due to unprecedented heavy, incessant and torrential rainfall, as well as release of water from the nearby Sukhi Dam. 5.2 It resulted into the flooding and inundation in the entire road area under construction and it caused loss to the various sections of the various roads under construction.Consumer Complaint No.34 of 2012 13
5.3 The loss suffered by the insured is due to flooding and inundation due to unprecedented heavy and incessant rainfall on 8.9.2010 in and around the area of the project. 5.4 The loss suffered by the subject package under construction was found to have occurred due to the flooding and inundation and loss has happened suddenly due to the sudden and unforeseen circumstances beyond the control of the insured and hence the loss is admissible and payable as per the Policy terms and conditions.
14. Once, it is concluded by the surveyor that the loss occurred due to flooding and inundation of entire road area under construction due to sudden and unforeseen circumstances beyond the control of the insured and hence the loss was found admissible and payable as per policy terms and conditions, then certain loss could not have been excluded on the ground that same was caused due to rains and not due to flooding. Moreover, reference has not made to any exclusion clause of the policy that excludes such loss. It is noted that items No.3,8,9,10,11,12,17, 18 and 19 of Annexure 'A' to Ex.O-3 were initially included in the tentative loss assessment report (Ex.C-6). It seems that exclusion of these items in final Survey Report (Ex.O-3) was only meant to please the OP. We are constrained to observe that surveyor has not carried out the survey in an impartial or objective manner. He states in Para 10.3 as under :
"we are happy that our decision of appointment of the expert into this case, has resulted in the considerable loss minimization of the lodged insurance claim. Underwriters may kindly appreciate Consumer Complaint No.34 of 2012 14 the efforts that have been put into the assignment as more number of days have been put into the assignment by travelling all the way from Baroda in Gujarat. "
The surveyor even had the audacity to boost in his report that he had managed to minimize the loss and even highlighted the favours done to the OP and further stressed that OP should appreciate his efforts. Probably, he wanted to be rewarded for his efforts. It clearly shows that surveyor was primarily interested only in reducing the quantum of loss. He even disallowed the items, which were included in initial assessment report (Ex.C-6), without any cogent reason. Accordingly, the loss against item No. 3, pertaining to Road 'A' (amounting to Rs.51927/-), Item No. 8&9 pertaining to Road 'C' (amounting to Rs.1,17,421/-) Item No.10,11&12 relating to Road 'E' (amounting to Rs.20881/-) and Item Nos.17,18 & 19 relating to Road 'F' (amounting to Rs.26,807/-); details of which are mentioned in Ex.C- 6, are allowed.
15. It is surprising to note that OP did not release even the amount of Rs.12,63,630/-, which was approved by it and conveyed to the complainant firm vide memo dated 25.1.2012 (Ex.C-8) inspite of request made by the complainant firm consenting that it was ready to accept the same under protest. But the OPs insisted on submission of discharge voucher as full and final settlement; which amounted to adoption of unfair trade practice on its part. Complainant firm definitely had a right to disagree with the report of the surveyor. Consumer Complaint No.34 of 2012 15
16. In view of the above discussion, the assessment made by the Surveyor to the tune of Rs.16,45,643.33 in his report Ex.O-3 is revised as under :
(a) Assessment made by Surveyor as per Rs. 16,58,643/-
Method-2
(b) Less amount deducted by OP against bill Rs. 3,28,500/-
dated 17.9.2010 and bill dated 20.9.2010
(c) Plus amount not considered by Surveyor Rs. 2,27,035/-
(as per amount mentioned in tentative assessment statement Ex.C-6)
(d) Plus loss suffered by complainant against Rs. 5,860/-
Lab Equipment (as per Annexure-4)
(e) Plus loss suffered by complainant against Rs. 3,00,405/-
machinery (as per Annexure-5 )
(f) Gross Assessed Loss Rs. 18,63,443/-
(g) Less Excess clause @ 5% of assessed Rs. 93,172/-
amount
(h) Net assessed loss Rs. 17,70,271/-
(i) Amount already paid on 25.9.2012 to the Rs. 12,63,637/-
complaint during pendency of complaint
before this Commission
(j) Balance payable amount Rs. 5,06,634/-
17. In view of the above discussion, the complainant firm is held entitled to Rs. 17,70,271/- as insurance claim from OP. Accordingly, its complaint is allowed and OP is directed to pay Rs.5,06,634/- (Rs.17,70,271/- (-) Rs.12,63,637/- already paid by OP) to the complainant firm alongwith interest @ 9% per annum on Rs.17,70,271/- from 16.3.2011 (i.e. six months from the date of filing the claim) up to the date of payment of Rs. 12,63,337/- on 25.9.2012 and thereafter on Rs.5,06,634/- up to realization. OP is further directed to pay Rs.11,000/- to the complainant as litigation expenses. This order be complied within 45 days of the receipt of the copy of the Consumer Complaint No.34 of 2012 16 order, failing which the said amount of Rs.5,06,634/- will continue to yield interest @ 9% per annum till realization.
18. The arguments in this complaint were heard on 07.05.2015 and the order was reserved. Now, the order be communicated to the parties.
19. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH) PRESIDENT (BALDEV SINGH SEKHON) MEMBER May 18, 2015 KK Consumer Complaint No.34 of 2012 17