National Consumer Disputes Redressal
Diamond Ply. Pvt. Ltd. vs United India Insurance Co,Ltd. on 15 July, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 240 OF 2002 1. DIAMOND PLY. PVT. LTD. SAVALIA ENGINGEERING COMPOUND OPP. 137 LAST BUS STOP BAPUNAGAR AHMEDABAD-380024 GUJRAT ...........Complainant(s) Versus 1. UNITED INDIA INSURANCE CO,LTD. A-501 GANESH PLAZA NAVARANGPURA AHMEDABAD 380009 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE DR. S.M. KANTIKAR, MEMBER
For the Complainant : Mr.Shirish Trivedi, Advocate For the Opp.Party : Mr. S. K. Ray, Advocate
With Mr. Amitava Poddar & Mr. Narender Singh,
Advocates
Dated : 15 Jul 2015 ORDER
JUSTICE J.M. MALIK
1. Diamond Ply Pvt. Ltd., a registered company, the complainant, transacts the business of manufacturing of ply wood/flush door & block board. Its factory is situated at Vatadi Road, Hariyala Gam, Kheda-Dholka State Highway, Taluka - Matar, District - Kheda, Gujarat. The complainant obtained a 'Fire Policy' from the United India Insurance Company Ltd., the Opposite Party (OP), on 23.07.2001.
2. During the subsistence of the policy, on the night of 01.11.2001, approximately at about 4.00AM, fire broke out in the factory of the complainant. The police and fire brigade were informed about it. The OP was also informed about this fact, on 02.11.2001. FIR, Bill of Fire Brigade and intimation to the OP-Insurance Company, were placed on record as Schedule-2 to 4.
3. The OP appointed Krij Consultants as Surveyors to assess the loss of the complainant. The complainant submitted all the necessary details vide Schedule-5 which included claim bills, copy of policy, list of machinery, equipment, details of raw materials, list of damaged machinery, finished goods, adhesive electrical fittings, stores, survey report of building materials, valuation report for building, valuation report for machinery-electric fittings, etc. The complainant has referred to "Claims Procedural Manual" of OP which states vide Rule 8(7) that all documents must be called for in 'one go and not in piecemeal'. The claim should be processed expeditiously and settled as early as possible after receipt of all documents. The complainant has also referred to Rule 2(9) of the "Claims Procedural Manual", which runs as under :-
"Normally, final survey report is expected to be submitted by the Surveyor within 15 days. Where due to circumstances beyond control of the Surveyor, the final survey report is likely to be delayed, the surveyor shall, within 15 days, submit interim status / survey report including the stage at which the survey work rests, the difficulties encountered in finalizing the survey report and when final report could be expected".
4. It is stated that as many as 40 letters were exchanged between the Surveyor and the complainant. More than 5 months had elapsed, but there was no result. There was deviation from the above said Rules. The final survey was not given till the filing of this complaint. The complainant sent letter on 11.02.2002 and informed the OP that there was loss, approximately, more than Rs.70.00 lakhs, plus actual interest paid, plus production loss. Copy of the letter has been placed on record as Schedule-6. The said letter also mentioned that if the OP will not finalise the loss assessment immediately, the complainant would have no option, but to appoint an approved surveyor from its end, for the purpose of assessment of the loss. Another letter was sent to the Chairman & Managing Director, where all the facts were narrated.
5. On 14.02.2002, the Surveyor sent a letter to the complainant stating that he had found some discrepancies. The OP also sought details from the complainant vide its letter dated 19.02.2001. The complainant sent its reply dated 21.02.2001 vide Schedules-8 to 10. Ultimately, this complaint was filed with the following prayers :-
"A) allow the complaint/petition of the petitioner.
B) Respondent be ordered to treat initial loss assessment of the petitioner as Rs.62,43,076/- as initial loss assessment of the petitioner and pay immediately Rs.62,43,076/- as initial claim amount along with 24% interest p.a. from 05.03.2002 till the date of realization.
C) Respondent be ordered to pay immediate expenses which are occurred during non-working days, due to fault lies on part of Respondent Rs.9,00,000/- as per attached statement.
D) Though it is in real sense irreparable loss to petitioner but as mere token compensation, respondent be ordered to pay immediate Rs.5,00,000/- to petitioner towards the mental agony and harassment.
E) Respondent be ordered to pay immediate Rs.25,000/- to petitioner towards the token compensation of personal visit, telephonic request expenditures.
F) any further appropriate order be passed, looking to the case and facts/circumstances of the petitioner".
6. The OP has set up the following defence. The complainant represented to OP that due to short circuit in the electrical panel of the boiler, the oil which was circulated in the boiler burst out and sprinkled upon the stock of wood stored near the boiler. The oil had fallen on fire-wood of boiler and the fire-wood caught the fire. The fire spread over the factory. The complainant claimed an amount of Rs.1.20 crores. M/s. Kirj Consultants & Surveyors visited the place of incident on 02.11.2011, 05.11.2001, 25.11.2001, 10.12.2001, 16.12.2001, 03.04.2002 and 16.06.2002 for assessment of loss. On 02.11.2001 Forensic Science Laboratory collected the samples from the complainant's premises.
7. On 09.01.2002, the OP received a letter from Charotar Nagrik Sahkari Bank Ltd., stating that the factory and machinery of the complainant were hypothecated to the Bank and therefore the OP should disburse the claim amount in favour of the Bank. Copy of the letter dated 09.01.2002 has been placed on record as Annexure R-1. On 10.01.2002, the abovementioned Surveyors reported to the regional office of the OP that there were certain discrepancies in the stocks declared by the complainant/insured, as per their Balance Sheet. Secondly, the closing stocks did not tally with the stock declared to the Excise Department. On 16.01.2002, the discrepancy which occurred in the Schedule of insurance was rectified. On 17.01.2002, the Surveyor requested the complainant to furnish the report of Forensic Science Laboratory. The preliminary survey report shows that the Surveyor had assessed the net loss at Rs.20,72,111/-.
8. On 16.01.2002, the insured re-estimated the loss at Rs.70.31 lakhs against the original estimated loss of Rs.1.20 crores. The complainant raised objection to the preliminary report. The Surveyor informed him that he had deducted 2.5% depreciation for the building, 5% p.a. for the boiler, press and electrical installations. He further deducted 10% depreciation for the machines which were handling the wooden and dust chemicals. On 01.04.2002, the complainant/insured again, furnished a fresh Balance Sheet with Trading Account and Profit & Loss A/c for the period from 01.04.2001 to 31.10.2001, in which, discrepancies were found in the date of purchase amount with the earlier Balance Sheet and Closing Stock. In the Closing Stock A/c, the insured also accounted stores, spares and other items. The Surveyor came to the conclusion that the insured had no right to club the amount of stores, spares and other items in the Closing Stock A/c of the Trading A/c. The Surveyor also reported that those items were not damaged at all. The complainant did not send the report of Forensic Science Laboratory, as requested. The OPs have got doubts with regard to the happening of the incident, on 02.11.2001, for the following reasons :-
"i) As per the report of the Loss Prevention Association of India, the probable cause of fire could be left out smoking material (beedi, cigarette, burnt match-stick) by operator on goods stacks.
ii) Electrical faults (i.e., ground - short circuit and over-loading) in the boiler, electrical panel causing fire, sparks falling on the woods stored nearby
iii) arson
iv) according to the said report, most probably, cause for this fire incident might be on account of electrical faults or left out smoking material.
v) change of figures in purchase account and the closing stock of the insured which was tendered to the Surveyor in the month of January, 2002.
vi) as per the report of Forensic Science Laboratory, the fuses which were mounted on the wall of the insured premises were found intact and this also raised suspicious circumstances.
vii) the insured was running its business in loss amounting to Rs.81,63,580/- upto 31st March, 2001 for the last two consecutive years and this also raised suspicious circumstances while processing the claim of the complainant/insured".
9. It is explained that due to the above said facts, it took reasonable time in processing the claim. Letters dated 14.02.2002 and 19.02.2002 sent to the complainant to co-operate with the Surveyor, were unanswered. Instead of replying to those discrepancies, the complainant appointed its own Surveyor, Mr. Hemant P. Shah, who, were neither authorized nor empanelled by OP in this regard. The said Surveyor estimated the loss at Rs.62,430,076/-. Correspondence went on between the parties and the Surveyor finally assessed the loss at Rs.31,44,129/-. The OP has not yet decided the matter finally. The case of the complainant remained pre-mature, till the final assessment of the loss arrived at by the Surveyor, with the co-operation of the complainant. The delay, if any, was attributed to the non-cooperative attitude of the complainant.
10. We have heard the counsel for the parties. Counsel for the parties have invited our attention towards the order dated 08.03.2011, which runs as follows :
"Heard counsel for the parties partly. Counsel for the opposite party to clarify on the following issues.
As per report of the Kunj Consultant dated 16.01.2003, the assessed loss was Rs.20,72,111/- but as per order dated 05.02.2004, the Commission had directed interim payment of Rs. 31,44,129/- on the submission made by counsel for the opposite party that the Surveyor had approved the said amount. Thus, there is a discrepancy of more than 10 lakhs which is required to be explained.
For this purpose, counsel for the opposite party seeks some time. Hence, adjourned to 04.05.2011 for final hearing on request of both sides".
The said payment, in the sum of Rs.31,44,129/- was accordingly made to the complainant, on 09.07.2011, by the OP.
11. The first submission made by the counsel for the complainant was that no repudiation was made by the Opposite party. The cause of action is a continuing one. Secondly, the OP did not comply with Rules 8(7) and 2(9), cited above. They should have decided the case immediately. The final report has not been prepared up till now. The OP had never offered part payment in the sum of Rs.20,72,111/- to the complainant.
12. Again, Mr. Hemant P. Shah, is a company approved Surveyor and he is a Chartered Engineer, Marine Expert and a registered Valuer and Loss Assessor having licence, which is valid up to 30.04.2005. Consequently, the question about his competency does not arise. It is explained that, although, affidavit of Mr. Hemant P. Shah was not placed on the record, yet, his report cannot be discarded on that very ground. The delay cannot be attributed on the part of the complainant. It has always cooperated. The complainant has referred to one authority titled in Ashwini Textiles Vs. Oriental Insurance Co. Ltd. & Ors., in Original Petition No.196/1998, reported in NCJ 2002 609.
13. These arguments have substance in a measure. In this case, the private Surveyor appointed by the complainant itself, of its own accord, is pitted against the official Surveyor. No cogent or plausible reason was given, as to why the private Surveyor could not pin-point any flaw in the report of the official Surveyor. This is well settled that the value of the report of the official Surveyor has got infinite importance. In United India Insurance Co. Ltd., & Ors. Vs. Roshan Lal Oil Mills Ltd. & Ors., (2000) 10 SCC 19, the Hon'ble Apex court was pleased to hold :
"7. The appellant had appointed joint surveyors in terms of Section 64-UM(2) of the Insurance Act, 1938. Their report has been placed on the record in which a detailed account of the factors on the basis of which the joint surveyors had come to the conclusion that there was no loss or damage caused on account of fire, was given and it was on this basis that the claim was not found entertainable. This is an important document which was placed before the Commission, but the Commission, curiously, has not considered the report. Since the claim of the respondent was repudiated by the appellant on the basis of the joint survey report, the Commission was not justified in awarding the insurance amount to the respondent without adverting itself to the contents of the joint survey report, specially the facts enumerated therein. In our opinion, non-consideration of this important document has resulted in serious miscarriage of justice and vitiates the judgment passed by the Commission. The case has, therefore, to be sent back to the Commission, for a fresh hearing".
14. This Commission, in D.N.Badoni Vs. Oriental Insurance Co.Ltd, 1 (2012) CPJ 272 (NC), observed that it is a well settled law that a Surveyor's report has significant evidentiary value unless, it is proved otherwise, which the petitioner has failed to do so in the instant case.
15. Complainant could not file the affidavit of its Surveyor but the OP Insurance company has filed the affidavit of its Surveyor. Thus, it is well settled that the Surveyor's report has significant value. Under these circumstances, we will place reliance on the report filed by the Official Surveyor.
16. Now, we turn to the question of delay. It is true that about 40 letters were exchanged between the parties. In the written arguments, the complainant itself mentions as under :-
"4. It is also fact that, Forensic Science Laboratory never gives its report promptly and immediately to any private party. Hence, the primary report was given to the opponent by complainant and thereafter whenever FSL had given its final report then it was given to the opponent. Therefore, complainant does not cause any delay and there is no any voice or hand of complainant in that issue. At this juncture, we clear that it is also fact that as FSL is being autonomous body and we have no any control on it, moreover surveyor of opponent had also not collected samples of the gutted goods and opponent had not given it to FSL but police authority did it, hence, delay was caused on the part of FSL. Therefore, it is evident that opponent is responsible for delay".
17. It is thus clear that no delay can be attributed on the part of OP, Insurance Co. It is also correct that the complainant could not co-operate due to its own mistake and due to non-receipt of report from Forensic Science Laboratory.
18. Moreover, the complainant does not have a set claim to be made before the Insurance Company. Sometimes, it says that the loss has occurred up to Rs.1.20 crores. Thereafter, it came down to Rs.70.31 lakhs, but its own Surveyor assessed the loss at Rs.64,43,076/-. The 'but and ben' stand set up by the complainant further weakens its own case. It is also clear that the books of accounts were not properly maintained. The 'flip-flop' stand of the complainant creates a doubt about the genuiness of its claim.
19. Consequently, we hereby order that the complainant is entitled to a sum of Rs.31,44,129/-, which has already been paid to it, on 09.07.2011. The complainant is entitled to have interest on the said amount from the date of incident, i.e., 02.11.2001, till 09.07.2011 @ 9% p.a. Further, the complainant is also entitled for compensation towards harassment, mental agony and litigation costs in the sum of Rs.30,000/-.
20. The said interest amount on the sum of Rs.31,44,129/- for the period, from 02.11.2001 to 09.07.2011 @ 9% p.a., as well as compensation be paid to the complainant by the OP-insurance Company, within 90 days' from the date of receipt of copy of this order, otherwise, the said amounts will carry interest @ 9% p.a., till their realization.
......................J J.M. MALIK PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER