National Consumer Disputes Redressal
M.P. Forest Produce, Trading & ... vs National Insurance Co. Ltd. on 30 August, 2000
ORDER
Mr. B.K. Taimni, Member
1. Six separate Original Petitions bearing No. 196/94, 197/94, 198/94, 199/94, 252/94 and 253/94 have been filed by Madhya Pradesh Minor Forest Produce, Trading & Development Co-operative Federation claiming varying amounts of compensation from the Opposite Party - National Insurance Company consequent to the 'fire' in different godowns storing Tendu Patta, covered by two different but similarly placed Fire Insurance Policies taken from the Opposite Party.
2. The brief facts of the case are that the Complainant had taken two Comprehensive Insurance Policy Nos. 320208/3300006/91 and 320208/3300008/91 for Rs. 102.50 crores and Rs. 80 crores for a one year period commencing from 27.4.91 to 26.4.92 and 15.8.91 to 14.8.92 respectively, covering the risk of fire to Tendu Patta stored in different godowns listed as Annexure to the two Policies. Losses were caused by fire in six different Godowns on different dates, each of which is the cause of the complaint filed before this Commission. Since the Opposite Party - Insurance Co., on being approached to compensate for the losses suffered by the Complainant on account of fire to the Tendu Patta stocks covered by the Policy did not epouse any response, hence, this Complainant Federation filed these complaints to direct the Opposite Party to pay the compensation as claimed by the Complainant. The Opposite Party filed a written version as well as certain other documents out-lining the grounds of repudiation in four cases i.e. 196-199/94 and part acceptance of claim in respect of other two petitions - 252-253/94. No other evidence was produced or led by either side. On the last date of hearing, i.e. 14.7.2000, both the parties were given liberty to file written submissions within a period of three weeks. Written arguments have since been filed by the Opposite Party in all the cases. No written submissions were received within the stipulated time from the Complainant.
3. Since the Complainant and the Opposite Party are the same and cause of action is also the same in all the cases, all the six complaints have been clubbed and one single order is being passed.
4. Briefly stated, the facts in each case are :
OP NO. 196 OF 1994 Tendu Patta, was stored in one Amrit Kumar Verma Godown, at C-40, Behari, Satna District. This godown was covered by the Insurance Policy No. 320208/3300006/91, valid for the period 27.4.1991 to 26.4.1992. There was a sudden outbreak of fire on 29.8.91 in the godown. The occurrence of fire was reported to the Police, and Godown Incharge on the same day. The Opposite Party was informed of the incident of fire on 30.8.91. A claim amounting to Rs. 22,93,263/- was preferred by the claimant. A Surveyor was appointed by the Opposite Party but the claim was not settled. Hence this complaint, to direct the Opposite Party to pay the claimed amount along with 20% rate of interest and costs.
OP 197 OF 1994 The Tendu Patta stored in the Godown No. 3, owned by one Mr. Narender Kumar Singhal at Gandhi Nagar, Bhopal, was covered by the same Policy Nos. 320208/3300006/91 valid for the period 27.4.1991 to 26.4.1992. There was a sudden outbreak of fire in the Godown on 29.8.91 at about 1.30 AM, destroying the Tendu Patta stocks. The fire incident was reported to the Police and to the Opposite Party on 30.8.91. After due internal assessment by the Complainant, a claim asking for a compensation amounting to Rs. 30,96,000/- was preferred with the Opposite Party. They appointed Surveyors who were furnished with all the details they wanted. Since the claim was not settled by the Opposite Party, hence this complaint, to direct the Opposite Party to make payment of the claimed amount and 20% rate of interest, plus costs.
OP NO. 198 OF 1994 The Tendu Patta stored in the Godown of L.P. Katare, Godown No. 3, Pateri, Satna was covered by the same Policy Nos. 320208/3300006/91 valid for the period 27.4.91 to 26.4.1992. On 24.8.91 at about 10. PM, there was a sudden outbreak of fire destroying the stocks of Tendu Patta stored in this godown. The incidence of fire was reported to the Police. The Opposite Party was informed of the incident on 29.8.91 claiming an amount of Rs. 75,54,121.90 as compensation for the losses caused to the Complainants on account of the said fire. Surveyors were appointed by the Opposite Party to assess the damage and they were given all the assistance, information and details sought by them. Still the claim has not been settled. Hence this complaint, to direct the Opposite Party to pay the claimed amount and 20% rate of interest till the date of payment, plus costs.
OP NO. 199 OF 1994 The Tendu Patta stored in the Godown of Shankar Property, Godown No. C/27, Satna, was covered by the same Policy Nos. 320208/3300006/91, valid for the period 27.4.1991 to 26.4.1992 On 7.7.1991 at about 4.30 PM, there was a sudden out break of fire in this Tendu Patta Godown causing extensive damage to the stocks of Tendu Patta stored therein. The matter was reported to the Police at about 5.00 PM on the same day. The Opposite Party was informed of this incident on 8.7.91 and filed a claim for Rs. 69,00,000/- as compensation for the damage caused to the Complainant by the aforementioned fire and covered by the Policy. The Opposite Party appointed Surveyors who carried out on the spot survey and necessary information/details were made available to them. Still the Opposite Party has not settled their claim, hence, this complaint, to direct the Opposite Party to pay the claimed amount as well as interest at the rate of 20% p.a., plus costs.
OP NO. 252 OF 1994 The Tendu Patta stored in the Godown of Ram Sanjeevan Sharma Tharari, Dist. Chattarpur, was covered by the Policy No. 320208/3300008/91, for Rs. 80 crores, valid from 15.5.91 to 14.8.91. On 10.8.91 at about noon, there was a sudden out break of fire in this Godown destroying the stocks of Tendu Patta. Intimation of the incident was given to the Opposite Party on 14.10.91. Two insurance claims amounting to Rs. 21,73,928/- were also filed with the Opposite Party. This claim has not been settled. Hence this complaint to direct the Opposite Party to pay the above claimed amount along with 24% rate of interest till the date of payment.
OP NO. 253 OF 1994:
The Tendu Patta stored in the Godown of Marketing Co-operative Federation at Salaiya District, Jabalpur was covered by the same Policy Nos. 320208/3300006/91, valid for the period 27.4.1991 to 26.4.1992. On 10.11.91, there was a sudden out break of fire in the godown causing extensive damage to the stocks of Tendu Patta stored therein. The fire incident was reported to the Opposite Party on 14.11.91. After some correspondence with the Opposite Party, the Complainant filed a claim for Rs. 25,98,000/- for compensating them against the losses caused to the Complainant on account of fire which was covered by a valid Insurance Policy. Surveyors were appointed and all information was given to them, yet their claim has not been settled. Hence this complaint, to direct the Opposite Party to make payment of the claimed amount along with 24% rate of interest, as well as costs.
5. In their written version as well as in the written arguments, the Opposite Party has stated that in respect of Complainant Nos. 196-199/94, the claim of the Complainant has been repudiated and intimation given to the Complainant. Uniformly, the ground for repudiation is that in all these four complaints, based on an internal inquiry conducted by the Insurance Co., they found out that it was not a case of spontaneous outbreak of fire but the stocks were 'set on' fire by some interested persons. Hence, they are not covered by the Policy as it stood on that day. It is the contention of the Opposite Party that the Complainant obtained the coverage of 'risk of Riot, malicious damage and terrorist damage' effective from 30.8.91. Hence, the four complaints for damages caused by fire before 30.8.91, which in the view of the Opposite Party is a case of malicious damage, are not covered by the valid policy as it stood on 29.8.91. The argument of the Respondent is that the Complainant's stocks get covered against the risks from the date they paid additional premium i.e. 30.8.1991 to cover the risk of riot, malicious damage and terrorist damage. In view of this, the Opposite Party has rightly and correctly repudiated the claim.
6. In respect of the complaint Nos. 252-253/94, the Opposite Party offered to pay Rs. 13,58,702/- and Rs. 12,70,344 to the Complainants against claims of Rs. 21,73,928/- and Rs. 25.98 lakhs, respectively, based on the Surveyor's Reports, but the same has been refused by the Complaint. The Opposite Party is still willing to pay these amounts as assessed by their Surveyors.
7. The principal grounds of repudiation of claims in complaint Nos. 196-199/94 appear to be two-fold even though they form part of the same string. The conclusions of the enquiry got conducted by the Opposite Party through an 'Investigator Insurance Companies' is that this was not a case of spontaneous fire, but, these were the cases in which godowns were set on fire to cover the mis-happenings at the godowns viz-a-viz stocks. This version, having found easy acceptance with the Opposite Party Armed with this argument based on this report, the Opposite Party Company unilaterally decided to declare this that this was a case of malicious damage and not covered by the Policies valid on the days of fire incidents, emboldened them to repudiate the claim.
8. A mere perusal of the material on record is enough to demolish the very foundations of the repudiation. It is not the case of the Complainant that the claim preferred by them is as per terms of Policy effective from 30.8.1991. May be, that after a series of fire occurrences in different godowns, they decided to cover the risk of riot, malicious damage and terrorist damage. In the claim papers of the Complainant, there is not even a whisper that the claim is under the revised terms or risk covered effective from 30.8.91. It appears to be clearly, a part of imagination on the part of the Opposite Party to repudiate the claim on this ground. Let us see what is the veracity of the proof on which the Opposite Party wishes to stand on? There is only one report of the Investigator of Insurance Companies' who is from their own outfit. At the end of each report, he refers to some 'Enclosures' - nowhere they have been made available. If the Opposite Party was so sure of these grounds of repudiation based on the report of the Investigator, did they not feel the necessity to inform the same to the Complainant while repudiating the claim? The letter of repudiation jumps to its self-created conclusion that these claims are not covered by the terms of the policy valid on 29.8.91 without in anyway spelling out the grounds for the same, leaving us with the impression that the Opposite Party Company never wanted to share the full facts with the Complainant. Perhaps they were not sure of their own ground especially when the Police who had registered cases under Section 436 of IPC had to file and F.R. for want of any evidence in this regard; after all they were dealing with a wholly owned State Government Federation engaged in the upliftment and ensuring better remuneration largely to the tribals of the State.
9. No evidence by way of affidavits or otherwise was led by the Opposite Party in support of grounds for repudiation of the claims preferred by the Complainants. Merely placing a report and that too without any enclosure referred to therein - even for our benefit - does not help them. It cannot have any evidentiary value to validate their stand. Since no evidence was led, no cross-examination could be carried out, in the absence of which, the very grounds of repudiation i.e. malicious damage caused by 'setting-on-fire' the stocks of Tendu Patta in these godowns, gets defeated. If the report of the Investigator appointed by the Opposite Party Company is not found to be admissible as a conclusive proof, then the deduction of the Opposite Party-Insurance Company to repudiate the claim of the Complainant on the sole ground of 'malicious damage' falls flat. The case of the Opposite Party has no legs to stand on.
10. With regard to complaint Nos. 252-253/94, it is seen that the Opposite Party based on the Surveyor's Report agreed to settle the claim but was refused by the Complainant. We have gone through the Surveyor's Report which is exhaustive and carries great details. To date, no effort has been made by the Complainants to rebut or challenge the findings of the Surveyor, especially, since it is available on record and the documents on which Opposite Party was relying upon, to limit the claim of the Complainant. It seems, the Complainants were not serious in pursuing the matter or challenging the findings of the Surveyors.
11. In a tabulated form, the status come out as follows:
Claim preferred by Surveyor's Report the Complainant accepting the claims
1. 196/94 Rs. 22,93,263/- Rs. 20,83,847/-
+ Fire Brigade charges-
Rs. 14,125/- + 20% rate of interest.
2. 197/94 Rs. 30,96,000/- + Rs. 36,04,571/-
salvaging charges + 20% rate of interest
3. 198/94 Rs. 75,58,220/- Rs. 38,16,889/-
+ Fire Brigade charges plus 20% rate of interest
4. 199/94 Rs. 69,36,233/- Rs. 51,76,846/-
+ 20% rate of interest (on Stock-realisation basis) & Rs. 40,56,903/-
(on Physical-stock basis)
5. 252/94 Rs. 21,73,928/- Rs. 13,58,702/-
+ 24% rate of interest
6. 253/94 Rs. 25,98,000/- Rs. 12,70,344/-
+ 24% interest thereon
12. On the written submissions/arguments, advanced by the Opposite Party, it is all a reiteration of the points already dealt in by us above except one point and that is since complaint Nos. 196-199/94 are complicated ones and criminal cases are pending in various courts in Madhya Pradesh and since there are allegations of fraud against the Complainant, these complaints should be sent to Civil Court. No material, whatever, has been brought on record to substantiate even prima facie, any of the points now sought to be introduced. This appears to be a clear ploy on the part of the Opposite Party to delay the matter as it will be in their interest.
13. The basic facts are quite clear and not disputed, the Complainants had a valid Insurance Policy to cover damages caused by fire in all these godowns. There was a fire on these days and, damages were caused by the fire, this also stands corroborated by the Surveyor's appointed by the Opposite Party. The only limited point needs consideration with us is whether the repudiation in respect of cases 196-199/94 were in order or not?
14. As already discussed above, besides the report of their appointee - Investigator which is completely uncorroborated and unsubstantiated, there is no other ground brought to our notice to repudiate the claim. No effort, whatever appears to have been made by the Opposite Party - Insurance Company, either to examine any witness or produce any material, through which they could show that they made any attempt to ascertain the points brought out in the report of the Investigator either from the Government or from the Complainant. It appears that for them the report of the Investigator was 'God-sent' and treating this as a final proof in itself, made it convenient to repudiate the claim.
15. In our view, this has been a misconstrual of evidentiary proof and failure to treat the claims on merits, as per the terms of the Policy valid on and before 29.8.91, and by not paying the Complainant the amount of damages assessed by the Surveyors is a clear case of deficiency of service on the part of the Opposite Party - Insurance Co.
16. In the light of the above, we direct the Opposite Party to pay to the Complainant, the amounts assessed by the Surveyor, except in the case of OP No. 197/94, where payment be restricted to the amount of claim preferred by the Complainant and in OP No. 199/94, where payment be made on the amount arrived at by the Surveyors on the basis of Physical-Stocks, along with 12% interest starting two months after the date of incident of fire to the date of payment as a full and final settlement. This payment shall be made within eight weeks of this order.
17. No order as to costs.