State Consumer Disputes Redressal Commission
M/S Nikku Ram & Company vs Oic on 3 May, 2016
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
Consumer Complaint No. 147 of 2014
Date of institution:11.9.2014
Date of Decision: 3.5.2016
M/s Nikku Ram & Company through its Partner Mr. Anish Gupta, F-19/49,
Sector 8, Rohini, Delhi - 110 085
Complainant
Versus
1. The Oriental Insurance Company Limited through its Branch
Manager, Branch Office : Pheruman Chowk, Kotkapura, Near Old
Grain Market, Kotkapura, District Faridkot (Punjab) - 151 204.
2. The Oriental Insurance Company Limited through its Regional
Manager, Surendra Building, SCO No. 109-110-111, Sector 17-D,
Chandigarh.
Opposite Parties
Consumer Complaint under the Consumer
Protection Act, 1986.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Jasbir Singh Gill, Member
Mrs. Surinder Pal Kaur, Member
Present:-
For the complainant : Sh. Munish Goel, Advocate
For the opposite parties : Sh. Ram Avtar, Advocate
Consumer Complaint No. 147 of 2014 2
Gurcharan Singh Saran, Presiding Judicial Member
ORDER
Complainant has filed this complaint under the Consumer Protection Act, 1986 (for short 'Act') against opposite parties(hereinafter referred as Ops) on the averments that complainant is a partnership firm and Sh. Anish Gupta is one of the partner is authorised to file this complaint. Complainant firm is engaged in wholesale trading of all types of clothes being managed by Sh. Anish Gupta, one of the partner having its office located at F- 19/13, Sector 8, Rohini, Delhi-85 and its godown at Chandni Chowk and Rithala Industrial Area, New Delhi. They had taken a standard fire and special peril policy from Ops w.e.f. 8.2.2012 to 7.2.2013 covering the location on the risk at its godown on all kinds of stocks of fabric in loose and/or otherwise. However, no copy of terms and conditions of the policy was provided. On 14.4.2012, after closing the godown operation, when the godown was reopened on Monday i.e. 16.4.2012 as 15.4.2012 was Sunday, it was found that the water had accumulated in the in the godown and stock was damaged due to water effect and sustained the loss and damages due to inundation from the adjoining building, where the construction was going on. On 29.4.2012, the complainant had also written a letter to owner of the adjoining building that due to his construction activity, water had accumulated/logged in his godown and as result of that, complainant sustained loss. Owner of said building did not deny the loss. Complainant immediately intimated the loss to Ops on 16.4.2012 vide email dated 29.4.2012. They filed the claim form on 21.4.2012 and Consumer Complaint No. 147 of 2014 3 claimed the amount of loss of Rs. 34,88,769.78 from Ops. Ops appointed M/s Alka Gupta and Associate to assess the loss and all the relevant papers were provided to the aforesaid Surveyor on 16.4.2012. Another letter No. NR/1594 dated 16.5.2012 was written to the Surveyor, which was acknowledge by him. Complainant extended full cooperation to the Surveyor by submitting all the documents demanded by the Surveyor. Intimation of the same was also given to Ops. Surveyor also observed and maintained that complainant/insured suffered a loss due to accumulation. It was due to seepage of water from adjacent building under construction. However, the Surveyor wrongly and arbitrarily reduced the total loss at Rs. 22,31,686/- and after applying the salvage and excess clause, finally assessed the loss at Rs. 18,07,821/- whereas the complainant Company suffered a loss of Rs. 34,88,769/-. At the time of incident, the Surveyor found the stock in the complainant's firm amounting to Rs. 4,14,03,296/-. However, Ops vide their letter dated 8.10.2013 informed the complainant that claim has been repudiated by the Competent Authority that the loss was caused due to seepage, which does not fall under the perils covered under the terms and conditions. Therefore, repudiation was not justified. This act of Ops amounted to deficiency in service. Hence, the complaint with the direction to Ops to pay the loss suffered i.e. Rs. 34,88,769/- alongwith compensation of Rs. 5 lacs on account of mental pain and agony and Rs. 2.50 lacs towards litigation expenses.
2. Complaint was contested by Ops, who filed written reply taking preliminary objections that the complaint filed by the Consumer Complaint No. 147 of 2014 4 complainant is mischievous, filed to over reach the law and contract of indemnity as agreed between the parties. After examining claim from all aspects, it was found that claim was not tenable. Complainant had misread the inundation. Proper application of the meaning of the word inundation would belie the claim filed by him, which was rightly repudiated by Ops. The claim of the complainant was strictly decided according to the terms and conditions of the policy. The Committee was constituted, who took note of word inundation and observed that loss was not due to inundation but seepage and accordingly, vide letter dated 8.10.2013, intimation was sent to the complainant that their claim is not maintainable. In fact the loss to the stock of the complainant had occurred due to the negligence of the owner of the adjoining building. Complainant vide letter dated 29.4.2012 intimated the owner of that building and requested to compensate the loss, therefore, the complainant are recovering the loss from the owner of the adjoining building. Ops were not bound to follow blindly the recommendations of the Surveyor. Otherwise Surveyor recommended the total loss suffered by the complainant amounting to Rs. 18,07,821/-. Since claim was not maintainable, therefore, it was rightly repudiated, in this way, there was no deficiency in service on the part of Ops. On merits, the averments stated in the preliminary objections were reiterated. It was again stated that the loss suffered by the complainant does not come within the meaning of inundation, it was on account of seepage, therefore, claim was not maintainable according to the terms and conditions of the policy. Complainant suffered a loss due to Consumer Complaint No. 147 of 2014 5 negligence on the part of owner of the adjoining building, therefore, he should claim the loss from that owner. Otherwise, as per the recommendation of the Surveyor, the loss suffered by the insured is to the tune of Rs. 18,07,821/-. There was no deficiency in service on the part of Ops. Claim was rightly repudiated. Complaint is without merit, it be dismissed.
3. The parties led their respective evidence in support of their contentions.
4. In support of his allegations, complainant had tendered into evidence affidavits of Anish Gupta, Partner Ex. CW-1/A & B, affidavit of Suresh Kumar Ex. CW-2, affidavit of Sudhir Kumar Ex. CW-3, insurance policy Ex. C-1, email Ex. C-2, letter Ex. C-3, insurance claim Ex. C-4, claim loss Ex. C-5, letter Ex. C-6, letter Ex. C-7, email Ex. C-8, audit reports Exs. C-9 to C-11, income tax report Ex. C-12, letters/registered receipt Exs. C-13 to C-19, legal notice Ex. C-20, registered receipt Ex. C-20, wet cloth details Ex. C-22, retail invoices Ex. C-23, Excise Invoice and Tax Invoice Bills Ex. C-24, resolution reference No. 1769 Ex. C-25. On the other hand, Ops had tendered into evidence affidavit of Vikas Chadha, Dy. Manager Ex. OPW-1/A, affidavit of Sh. S.K. Sharma, Dy. Manager Ex. OPW-2/B, affidavit of Mrs. Alka Gupta, Surveyor and Loss Assessor Ex. OPW- 3/C, policy endorsement & terms and conditions Ex. Op-1, survey report Ex. Op-2, reply to legal notice Ex. Op-3, repudiation letter Ex. Op-4.
5. We have heard the counsel for the complainant Sh. Munish Goel, Advocate and counsel for Ops Sh. Ram Avtar, Consumer Complaint No. 147 of 2014 6 Advocate and have carefully gone through the pleadings made in the complaint, written version and documents on the record as well as written arguments filed by Ops.
6. The first question for consideration is whether the claim filed by the complainant is covered under the policy terms and conditions. The policy has been placed on the record as Ex. OP-1 and terms and conditions of the Standard Fire and Perils Policy have been enclosed with it and in the column damage, the coverage is as under:-
"Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or Inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature. (Wherever earthquake cover is given as an "add on cover" the words "excluding those resulting from earthquake volcanic eruption or other convulsions of nature" shall stand deleted."
7. Counsel for the complainant stated that his claim is under Inundation. The Dictionary meaning of the word "Inundation" is flood, to cover or ever spread with water or deluge. As per averments in the complaint, complainant has referred that on the evening of 14.4.2012 Saturday he closed the godown and opened it on the morning of 16.4.2012 at about 11.30 a.m. as Sunday was a closed day and at that time, they came to know that the water had accumulated in the godown and the stock was damaged. Intimation Consumer Complaint No. 147 of 2014 7 was given to Ops. They appointed M/s Alka Gupta & Associates as a surveyor and the surveyor report is tendered by Ops as Ex. Op-2. They have also referred Clause VI i.e. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation and the surveyor observed that from the averments made above and as per Clause VI, it is observed that complainant suffered a loss due to inundation, which was mainly due to seepage of water from the adjacent building under construction resulting in accumulation of water into the insured basement thereby damaging the stock. They further observed that the loss was purely accidental and beyond his control and insured stock was damaged due to inundation, which in their opinion was covered under Clause VI referred above. Whereas the counsel for Ops has stated that it was not inundation but only the seepage. The seepage has been defined as leakage. In case a heavy water is accumulated then it will be termed as 'inundation'. No doubt that water had come on account of seepage from the adjoining building but when a heavy water had accumulated it, has turned into inundation. Therefore, surveyor was justified that damage to the stock was due to inundation by way of seepage. It was not only the seepage but the end result is to be seen whether it was a simple seepage or the situation has converted into inundation. Against the report of the Surveyor, no other report has been placed on the record by Ops. Whereas Ops had repudiated the claim of the complainant vide letter Ex. C-13 wherein complainant was intimated that on close scrutiny of the claim viz-a-viz the terms and conditions and coverage of the policy issued, we regret to inform you that claim is not tenable Consumer Complaint No. 147 of 2014 8 on the ground of proximate cause of the loss is 'seepage'. The peril of seepage does not fall under the list of perils covered under the policy. However, Ops failed to gather the facts on the record by way of seepage such a heavy quantity of water had accumulated in the godown of the complainant that it had taken the condition of inundation, as a result of which heavy loss to the complainant of Rs. 34,88,769.78. Apart from the report of the Surveyor, no other evidence has been placed on the record. Normally, the Surveyor report is to be followed unless contrary evidence is produced on the record. No doubt that surveyor report is of great importance and normally it should be considered. Surveyor report is an important document and cannot be ignored without any compelling evidence as held by Hon'ble National Commission in III(2008) CPJ 158 (NC) "Pradeep Kumar Sharma Vs. National Ins. Co." and I (2007) CPJ 278 (NC) "Suryachem Industries Vs. Oriental Ins. Co. Ltd." that Surveyor's report being an important document has to be given due relevance and importance unless it is rebutted by some cogent evidence. Against the report of the Surveyor, Ops have not placed on the record any evidence that it was not a case of inundation, therefore, we are of the opinion that it was a case of inundation, duly covered under the terms and conditions of the policy.
8. Second point is the quantum. Again we are to refer the report of the Surveyor Ex. Op-2. According to the report of the Surveyor, complainant claimed a loss of Rs. 34,88,769/-. However, in the assessment of loss, he has referred the material purchased from 2004 to 2012 for different amounts covered under the chart. Then the Consumer Complaint No. 147 of 2014 9 Surveyor has applied deductions/allowances for obsolete stock covered from 5% to 80%. Contention of the counsel for the complainant is that there is no parameter fixed by the Surveyor to make these deductions. In case the policy has been taken covering the stock, the stock may be old or new but whatever deductions are to be made, those are made according to the terms and conditions of the policy. We have the terms and conditions of the policy. We do not find any Clause under which any deduction is to be made on account of obsolete stock. Even during the course of arguments, counsel for Ops was unable to refer to any clause under which these deductions are possible on account of obsolete stock. No such condition has been referred even in the written reply. Therefore, counsel for the Ops was unable to convince before this Commission how and under what provision of the terms and conditions, these deductions have been made. Normally we are to follow the terms and conditions of the policy. Even Consumer Fora cannot go beyond the terms and conditions of the policy. In case the terms and conditions does not allow any deduction on account of obsolete stock then Surveyor was not justified, who made such deductions to reduce the amount claimed by the complainant but with respect to deductions, if any, made by the Surveyor it should be on some basis and in case the Surveyor made the deductions without any basis those cannot be considered. Whereas counsel for the Ops vaguely submitted that in case we are relying upon the report of the Surveyor, then the report of the Surveyor be accepted in totality but this is not an appropriate argument. For each and every fact, Surveyor is required to justify his Consumer Complaint No. 147 of 2014 10 findings. In case we have accepted the findings of the Surveyor for loss on account of inundation, it does not mean we are automatically to accept the amount of compensation as assessed by the Surveyor. The deductions allowed by the Surveyor are subject to conditions. Excess clause is there and salvage value is there i.e. liable to be deducted. Even counsel for the complainant stated that he has no objection with regard to deductions on account of salvage as well as excess clause. The objection is with regard to the deductions on account of obsolete stock. Neither surveyor nor Ops has referred any clause under the terms and conditions, under which any deduction is possible on account of obsolete stock. Therefore, no deduction could be allowed on account of obsolete stock. After deduction of salvage and excess clause from Rs. 34,88,769/-, which comes to Rs. 4,23,865/-, the complainant will be entitled to Rs. 30,64,904/-.
9. No other point has been argued.
10. In view of the above, we accept the complaint and give a direction to Ops to pay a sum of Rs. 30,64,904/- on account of loss suffered by the complainant. Ops are further directed to pay a sum of Rs. 25,000/- on account of compensation and Rs. 11,000/- on account of litigation expenses. Ops are directed to make this payment within a period of 45 days on receipt of the copy of the order passed by this Commission, failing which complainant will be entitled to interest on the amount of Rs. 30,64,904/- @ 9% p.a. from the date of filing the complaint till actual payment.
Consumer Complaint No. 147 of 2014 11
11. The arguments in this Consumer Complaint were heard on 25.4.2016 and the order was reserved. Now the order be communicated to the parties as per rules.
12. The Consumer Complaint could not be decided within the statutory period due to heavy pendency of Court cases.
(Gurcharan Singh Saran) Presiding Judicial Member (Jasbir Singh Gill) Member May 3, 2016. (Surinder Pal Kaur) as Member