State Consumer Disputes Redressal Commission
Shah Abu Bukkar Multipurpose ... vs United India Insurance Company Limited on 7 November, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No.497of 2017
Date of institution : 28.06.2017
Date of decision : 07.11.2017
The Shah Abu Bukkar Multipurpose Agriculture Cooperative Service
Society Limited, Shah Abu Bukkar, Tehsil Zira, District Ferozepur
through its Secretary Balvir Singh, aged 52 years.
.......Appellant-Complainant
Versus
1. United India Insurance Company Limited, Near Bus Stand,
New Talwandi Road, Zira, Tehsil Zira, District Ferozepur, PIN-
142 047 through its Branch Manager.
2. United India Insurance Company Limited, registered and head
office 24 Whites Road, Chennai, PIN-600 014 through its
authorized signatory.
........Respondents-Opposite Parties
First Appeal against the order dated
26.5.2017 of the District Consumer
Disputes Redressal Forum, Ferozepur.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member
Present:-
For the appellant : Shri Rahul Arora, Advocate. For the respondents : Shri Munish Goel, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The instant appeal has been filed by the Shah Abu Bukkar Multipurpose Agriculture Cooperative Service Society Limited, the appellant/complainant, against the majority order dated 26.5.2017 passed by two Members of the District Consumer Disputes First Appeal No.497 of 2017 2 Redressal Forum, Ferozepur (in short, "the District Forum"), whereby the complaint filed by it, under Section 12 of the Consumer Protection Act, 1986 (in short, "the C.P. Act") has been dismissed. However, the complaint has been allowed by the President of the District Forum, vide separate order of the same date and the opposite parties were directed to pay ₹7,26,000/- to the complainant along with interest @ 7.5% per annum from the date of occurrence till its recovery. The opposite parties were further directed to pay ₹20,000/-, as compensation for mental agony, pain and harassment as well as litigation expenses.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum. Facts of the complaint:
3. Brief facts, as averred in the complaint, are that the complainant is a Cooperative Society, which got insured its articles i.e. all kinds of fertilizers, pesticides, insecticides for ₹12,00,000/- and essential commodities for ₹3,00,000/- with the opposite parties by paying the premium of ₹8,685/-, vide insurance policy bearing No.2012032614P111403999 dated 17.3.2015 for the period from 17.3.2015 to 16.3.2016. It is averred that on the midnight of 20/21.1.2016 at about 12.30 A.M. some unidentified persons entered into the premises of the complainant and stolen the following items from its godown:-
Sr. No. Type Quantity Rate Total Costs
(In Rs.) (In Rs.)
1. DAP 418 Bags 1,161.00 4,85,298.00
First Appeal No.497 of 2017 3
2. NPK 123216 175 Bags 1,061.00 1,85,675.00
3. Ghee 22 Tins 1,050.00 23,100.00
4. Sugar 4500 KG 32.50 1,46,250.00
5. Lux Soap 48 Pieces 8.00 384.00
6. Oil Sarson 26 Tins 1,300.00 33,800.00
(Mustard)
7. Refind Oil 30 Tins 1,060.00 31,800.00
8. 8 Soaps 315 Kg. 40.00 12,600.00
9. Tea 118 Kgs. 200.00 23,600.00
10. Surf (Tide) 94 Kgs. 70.00 6,580.00
11. Topic 31 Pieces 389.50 12074.50
Total 9,61,161.50
The complainant lodged FIR No.57 dated 30.4.2016 under Section 457/380/342 IPC, PS-Zira. Thereafter the claim was lodged with the opposite parties on 22.1.2016 along with all the required documents for the settlement of the claim but they continued to delay settlement of the insurance claim on one pretext or the other. Thereafter legal notice was also served on 3.10.2016 upon the opposite parties but all in vain. Feeling aggrieved by the non-settlement of the claim by the opposite parties, the complainant filed the present complaint before the District Forum for issuance of directions to the opposite parties to pay ₹9,61,161.50P along with interest, compensation and costs.
First Appeal No.497 of 2017 4Defence of the opposite parties:
4. Upon notice the opposite parties appeared and filed joint written statement taking preliminary objections to the effect that the date of theft as mentioned in FIR No.57 dated 30.4.2016 was midnight of 20/21.1.2016 and as such, there is a delay of more than three months in the registration of the FIR with regard to the alleged theft in the insured premises. Therefore, the insured/complainant has breached the terms and conditions of clause 5 & 11 of the Insurance Policy. As such, the claim of the complainant has rightly been repudiated during the pendency of the complaint, vide letter dated 21.11.2016 on the ground of delay of three months in lodging the FIR. The complainant does not fall within the definition of 'consumer' as provided under the C.P. Act. The complainant-
Society is involved in indirect finance to the farmers and buys fertilizers, pesticides etc. from Markfed, Iffco etc. and sell the same to retail farmers on credit basis. The society is being run for the commercial purpose of earning profits and that the net debit/credit total worth of ₹15,75,17,310.96 in a period of nine months. On merits, the averments made in the preliminary objections were reiterated. Denying all other averments made in the complaint a prayer for dismissal of the complaint was made. Finding of the District Forum:
5. Both the sides produced evidence in support of their respective averments before the District Forum. After appreciating the evidence on record and the averments of both the sides, the two Members of the District Forum dismissed the complaint, vide First Appeal No.497 of 2017 5 impugned order dated 26.5.2017. However, the President of the District Forum allowed the complaint, as aforesaid, vide separate order dated 26.5.2017.
6. We have heard learned counsel for both the sides and have carefully gone through the records of the case. We have also gone through the written arguments submitted by the appellant/complainant.
Contentions of the Parties:
7. Learned counsel for the complainant relying upon the written arguments has argued that the theft took place in the midnight of 20/21.1.2016 and information with regard to the same was given to the opposite parties on 23.1.2016 and the same is apparent from their own documents Ex.OP1&2/2 and Ex.OP1&2/6. The FIR might have been registered after some delay. However, the information regarding theft had been given by the complainant immediately on 21.1.2016. The said fact is proved by the copy of the agenda passed by the complainant on 21.1.2016 Ex.C-15, which is a public document of the office of Assistant Registrar, Cooperative Societies, Zira. However, the Members of the District Forum while dismissing the complaint disbelieved the said document merely on the basis of conjectures and surmises. A copy of the dispatch register of the office of Assistant Registrar, Cooperative Societies, Zira has been annexed with the written arguments and a perusal of the same reveals dispatch to SSP, Ferozepur at Serial No.75. A copy of the letter written by the SSP, Ferozepur to the Assistant Registrar, Cooperative Society, Zira dated 1.2.2016 has also been annexed First Appeal No.497 of 2017 6 with the written arguments asking for the submission of relevant records with regard to the theft of the articles for further necessary action. It has been further argued that the Members of the District Forum have wrongly read clause 5 and 11 of the Insurance Policy.
Clause 5 of the Policy nowhere states forthwith registration of FIR. It only states forthwith lodging of complaint, which has been rightly lodged in the present case. Therefore, the impugned order passed by the two Members of the District Forum is a cryptic order and the same is liable to be set aside, whereas the order passed by the President of the District Forum is liable to be upheld. He relied upon the following two judgments:-
i) 2014(3) PLR 315 (National Insurance Co. Ltd. v.
Kunwar Pal and another) of Hon'ble Punjab and Haryana High Court; and
ii) 2016(1) CPJ 13 (Oriental Insurance Company Limited and Anr. v. Sandeep Sharma) of Hon'ble Haryana State Consumer Disputes Redressal Commission, Panchkula.
8. On the other hand, it has been vehemently argued by the learned counsel for the opposite parties that there was delay of more than three months in lodging the FIR, which is in violation of clause 5 & 11 of the Insurance Policy. It has been further argued that the transaction of the complainant within eight months was about ₹15 to 16 Crores, which speaks the business to be commercial in nature and the case is not a "consumer dispute". The complainant-Society is not a "consumer" as defined under Section 2(1)(d) of the C.P. Act. Rather the remedy is available elsewhere and not before the District First Appeal No.497 of 2017 7 Forum. The Members of the District Forum have passed a well reasoned order and there is no merit in the present appeal and the same is liable to be dismissed with costs.
Consideration of Contentions:
9. We have given our thoughtful consideration to the contentions raised by the learned counsel for both the sides.
10. So far as the plea of the opposite parties that the complainant is a Cooperative Society and as such, it does not fall within the meaning of 'consumer' as defined under Section 2(1)(d) of the C.P. Act is concerned, similar question came up before the Hon'ble National Commission in Consumer Case No.1385 of 2015 (KHANDELWAL FRIENDS CO-OPERATIVE HOUSING SOCIETY LTD. v. ORRA REALTORS PVT. LTD.) decided on 3.1.2017 where the complaint was resisted by the OP primarily on the ground that the complainant is not a consumer since the relationship between the parties is that of principal to principal. It has held by the Hon'ble National Commission in para no.3 as under:-
"3. It is not in dispute that the parties to the complaint had entered into an agreement dated 11.09.2009. Under the said agreement, the OP was to demolish the existing buildings of the complainant society and construct residential flats for allotment to its members. The OP was entitled to utilize the permitted FSI originating from the plot subject matter of the agreement and the FSI acquired by it at its own cost by First Appeal No.497 of 2017 8 way of TDR on the said property. The OP was also entitled to use and consume all FSI incidentally allowed, including free of charge or by way of payment of premium for constructing the new building of maximum permissible area. It is thus, evident that the OP was to render services of housing construction to the complainant society for consideration in the form of utilization of the permitted and acquired FSI. It is immaterial that the flats to be constructed by the OP were to be allotted to the members of the society, the material aspect being the engagement of the OP by the society for demolishing the existing building and construction of a new building consisting of residential flats for the members of the society. Though it was stated in the agreement that the agreement between the parties shall be on principal to principal basis, the aforesaid clause does not take the complainant society out of the purview of the term consumer as defined in Section 2(1)(d) of the Consumer Protection Act. Therefore, I have no hesitation in holding that the complainant society was a consumer of the OP which was to provide the service of housing construction to the said society for the benefit of its members. Therefore, this Commission does possess the requisite jurisdiction to entertain this complaint." First Appeal No.497 of 2017 9
In the present case also the complainant-Society is not doing any business for personal gain/profit or to meet out the livelihood but it is established for the welfare of the public i.e. poor farmers. Therefore, it is held that the complainant-Society is a 'consumer' as defined under Section 2(1)(d) of the C.P. Act.
11. Now coming to the merits of the case. Admittedly the stocks/articles of the complainant-Society were insured with the opposite party, vide the Insurance Policy mentioned in the complaint and theft had taken place on the midnight of 20/21.1.2016. The claim was lodged with the Insurance Company on the next day. Intimation was also given to the SSP, Ferozepur for registration of the case and after due investigation FIR No.57 dated 30.4.2016 under Section 457/380/342 IPC, was registered by the police of PS- Zira. The insurance claim was repudiated by the opposite parties during the pendency of the complaint, vide letter dated 21.11.2016 on the ground of delay of three months in registration of FIR. The only question to be decided in the present case is, whether there was delay of three months in giving intimation to the police regarding the theft, if so, its effect?
12. Ex.OP-1&2/2 is the copy of the recommendations of the Committee of the opposite parties recommending the repudiation of the claim to the competent authority on the ground of delay of more than 3 months in registration of the FIR. The date of intimation of the insurance claim with opposite parties has been mentioned as 23.1.2016. Therefore, the Insurance Company was intimated about First Appeal No.497 of 2017 10 the theft of the articles on the next very day. A copy of the agenda passed by the complainant-Society dated 21.1.2016 has been placed on record as Ex.C-15. A perusal of the same reveals that the agenda was passed with regard to the theft of the articles in the midnight of 20.01.2016 and 21.1.2016 by some unidentified persons by confining the chowkidar of the complainant-Society. It was also resolved that the total loss of the articles was to the tune of ₹9,61,161.50P and that by sending a copy of this agenda, Senior Superintendent of Police, Ferozepur may be requested to lodge FIR in this regard through Assistant Registrar, Cooperative Societies, Zira. A copy of the Dispatch Register of the office of the Assistant Registrar, Cooperative Societies, Zira has been annexed with the written arguments by the complainant-Society in which letter was dispatched to Senior Superintendent of Police, Zira at serial No.75 dated 21.1.2016. The complainant-Society also annexed a copy of the letter written by Senior Superintendent of Police to Assistant Registrar, Cooperative Societies, Zira dated 1.2.2016 with the written arguments asking him to send the relevant record for further necessary action. The SSP, Ferozepur sent that letter with reference to office letter No.75 dated 21.1.2016 of the Assistant Registrar, Cooperative Societies, Zira. It is, thus, crystal clear from the above said correspondence which took place in due course of process between the complainant-Society, Assistant Registrar, Cooperative Societies, Zira and the SSP, Ferozepur, that the complainant-Society immediately after the theft passed the resolution on 21.1.2016 and sent the same to the Assistant First Appeal No.497 of 2017 11 Registrar, Cooperative Societies, Zira, who further sent the same to the SSP, Ferozepur, vide office letter No.75 dated 21.1.2016 for registration of the FIR with regard to the theft of the articles. This fact is also clear from the letter of SSP, Ferozepur to the Assistant Registrar, Cooperative Societies, Zira, dated 1.2.2016 in which he asked for relevant records for further necessary action in the matter. Therefore, it is held that the complainant-Society gave intimation to the SSP, Ferozepur through Assistant Registrar, Cooperative Societies, Zira with regard to the theft of the articles on 21.1.2016 itself. It is not in the control of the complainant-Society to lodge the FIR. It could only inform the police, which it did promptly and it is the duty of the police to register the FIR. Relevant clause 5(i) of the insurance policy, Ex.C-4, reads as under:-
"5. Claim Procedure:
(i) The insured shall upon the occurrence of any event giving rise or likely to give rise to a claim under the Policy:
(a) in the event of theft, lodge forthwith a complaint with the police and take all practicable steps to apprehend the guilty person or persons and to recover the property lost.
(b) give immediate notice thereof to the Company and shall within fourteen (14) days thereafter furnish to the Company at his own expense, detailed particulars of the amount of the loss or damage First Appeal No.497 of 2017 12 together with such explanations and evidence to substantiate the claim as the Company may reasonably require."
Thus, as per the above mentioned clause the complainant-Society was to lodge a complaint with the police, which they did promptly by approaching the SSP, Ferozepur through Assistant Registrar, Cooperative Societies, Ferozepur for which necessary resolution was passed on the same very day i.e. on 21.1.2016. The complainant-Society also admittedly informed the opposite parties about the theft on 23.1.2016 i.e. the very next day. Therefore, there was no delay in giving intimation of the theft to the police or to the Insurance Company and, as such, there is no violation of Clause 5 or 11 of the insurance policy.
13. Moreover, in a latest judgment dated 4.10.2017 passed in Civil Appeal No.15611 of 2017 (OM PRAKASH v. RELIANCE GENERAL INSURANCE AND ANR.) in which the truck was stolen and there was delay in giving intimation to the Insurance Company, the Hon'ble Supreme Court while allowing the appeal in para no.11 has observed as under:-
"11. It is common knowledge that a person who lost his vehicle may not straightaway go to the Insurance Company to claim compensation. At first, he will make efforts to trace the vehicle. It is true that the owner has to intimate the insurer immediately after the theft of the vehicle.First Appeal No.497 of 2017 13
However, this condition should not bar settlement of genuine claims particularly when the delay in intimation or submission of documents is due to unavoidable circumstances. The decision of the insurer to reject the claim has to be based on valid grounds. Rejection of the claims on purely technical grounds in a mechanical manner will result in loss of confidence of policy-holders in the insurance industry. If the reason for delay in making a claim is satisfactorily explained, such a claim cannot be rejected on the ground of delay. It is also necessary to state here that it would not be fair and reasonable to reject genuine claims which had already been verified and found to be correct by the Investigator. The condition regarding the delay shall not be a shelter to repudiate the insurance claims which have been otherwise proved to be genuine. It needs no emphasis that the Consumer Protection Act aims at providing better protection of the interest of consumers. It is a beneficial legislation that deserves liberal construction. This laudable object should not be forgotten while considering the claims made under the Act."First Appeal No.497 of 2017 14
14. Now coming to the quantum of insurance claim to be paid to the complainant-Society. The President of the District Forum while allowing the complaint has relied upon the report of the Surveyor Ex.OP1&2/6 in which the loss was assessed at ₹7,26,000/- and has awarded the same to the complainant-Society. We do not find anything wrong in that finding of the President of the District Forum as the report of the surveyor is an important piece of evidence and he is master in his field of surveying and assessing the loss. The rate of interest awarded by the President of the District Forum is also genuine and is upheld. However, only ₹5,000/- is awarded as litigation expenses out of ₹20,000/- awarded as compensation for mental agony, pain and harassment as well as litigation expenses by the President of the District Forum, as no compensation can be allowed to the complainant-Society on account of mental agony, pain and harassment.
15. In view of our above discussion, this appeal is partly allowed. The impugned order passed by the two Members of the District Forum dated 26.5.2017 is set aside and the order passed by the President of the District Forum is upheld with the above mentioned modification.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER November 7, 2017 Bansal First Appeal No.497 of 2017 15