State Consumer Disputes Redressal Commission
M/S Vaishnavi Kosmeticos Pvt. Ltd. vs The Oriental Insurance Company Limited ... on 24 September, 2012
BEFORE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SOLAN, H
H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA.
Consumer
Complaint No: 13/2010
Date of Decision: 24.09.2012
M/s Vaishnavi Kosmeticos Pvt. Ltd.
Village Buranwala, Tehsil Kasauli,
District Solan, H.P. 174103
Through its Assistant Legal Manager,
Sh. Anil Kumar, S/o Sh. Rameshwar Dass
R/o House NO. 1390, Sector 13,
Hissar,
Haryana.
Complainant.
Versus
1. The Oriental Insurance Company Limited,
LIC Building,
Jagadhri Road,
Ambala Cantonment,
Through Deputy
General Manager.
2. The
Oriental Insurance Company Limited,
Divisional
Office, Shimla
Through
its Senior Divisional Manager.
3. The
Oriental Insurance Company Limited,
Branch
Office, Kasauli Road,
Sector 2, Parwanoo,
Through
its Senior Branch Manager.
4. The
Oriental Insurance Company Limited,
Head
Office, Oriental House,
Post
Box No. 7039, 125/27,
Asaf Ali Road, New Delhi,
Through its General
Manager.
5. The
Oriental Insurance Company Limited,
Regional
Office, Chandigarh,
Through
the Chief Regional Manager.
Opposite Parties.
Coram
Honble
Mr. Justice Surjit Singh, President
Honble
Mr. Chander Shekhar Sharma, Member
Honble
Mrs. Prem Chauhan, Member.
Whether
approved for reporting?[1] Yes.
For the Complainant
: Mr. Raghu Nandan Chaudhary,
Advocate.
For the Opposite Parties: Mr. Deepak Gupta, Advocate.
ORDER:
Mr. Chander Shekhar Sharma, Member:
This complaint had been filed by M/s Vaishnavi Kosmeticos Pvt. Ltd., hereinafter referred to as the complainant, who is in the business of manufacturing of detergent powder, detergent cakes, toiletries etc. since the month of June, 2007, against the Oriental Insurance Company, who is having its various offices at Ambala, Shimla, Parwanoo, Delhi, Chandigarh etc., hereinafter referred to as the opposite parties No. 1 to 5, for deficiency in service and unfair trade practice on the part of the opposite parties, wherein, the complainant had claimed the following relief in its favour i.e.:-
(i) Rs.
36,30,132.00/- lacs alongwith 18% interest;
(ii) The loss of produce to the tune of Rs. 53 lacs with 18 % interest;
iii) Compensation for damages for delay on account of loss in business of Rs.5 lacs with 18% interest;
(iv) Compensation for harassment and mental agony caused by the opposite parties to the tune of Rs. 3 lacs with interest and Compensation as litigation expenses to the tune of Rs.15,000/- .
2. Factual matrix of the case as they emerged from the complaint file in nutshell is that the complainant had obtained Standard Fire and Special Perils Policy and Burglary Policy from the opposite parties vide cover notes Annexure C-2 and C-3 dated 16.06.2007 and assured sum was to the tune of `12.00 Crore for Standard Fire and Special Perils Policy and `20.00 Crore in case of Burglary Policy, which was later on extended to `2.00 Crore more. These policies were effective w.e.f 16.06.2007 to 15.06.2008. These policies were thereafter converted and pledged to the State Bank of Patiala, Branch Panchkula Annexure C-3 and Annexure C-4 with the endorsement of the hypothecation of the respective bank.
3. Further averments in the complaint are to the effect that on the intervening second half of the night of 7th/8th of December, 2007, some mischievous/unidentified persons entered the guarded premises of the complainant and sabotaged the manufacturing plant by breaking open the taps of storage tanks containing Labsa Oil, the main raw material used to manufacture detergent powers/soap etc. The security guards posted at the plant during the night resisted the miscreants, but, they ran away leaving behind broken taps of storage tanks from which the entire above said oil drained/oozed out. Thereafter, the concerned officials of the complainant firm which is situated at Village Buranwala, Tehsil Kasauli, District Solan, H.P. were informed about the sabotage, who instantaneously informed the concerned police station as well as opposite parties about the incident vide report Annexure C-7 and C-8, (drainage/spill of 50 Mt. of Labsa Oil from storage tanks with its then estimated value to the tune of Rs. 31.50 lacs) respectively.
4. Thereafter, a police party reached the site of sabotage at about 4:10 AM and recorded Rapat Rojnamcha C-7 alongwith a subsequent visit report Annexure C-7/A on the same day at 5:30 PM. Thereafter, preliminary survey was conducted on 8th December 2007 by Sh. Chaman Singhal, who was deputed by the respondent No.3, who measured the depth of the Labsa oil so drained/oozed out and thereafter, submitted preliminary spot survey report Annexure C-9, which depicts that said repot was made within a few hours after the occurrence and which had specific averments of damage to the storage tanks/valves, which had resulted into leakage of the said Labsa oil. The preliminary investigator had also verified the stock position as 9 inches in tanks as on the 8th of December, 2007. The photographs to this effect were also annexed with the report depicting the real picture at site and the fact that damage had been caused to the tanks, as a result thereof Labsa Oil had leaked/oozed out in the insureds premises, as per the averments made in the complaint.
5. Thereafter, M/s S. Soni & Co. was also deputed as surveyor and investigator for assessment of the said claim and they had visited the complainant firms premises for survey/investigation on 16th December, 2007 and all the requisitioned documentary evidence was supplied to them. They had conducted investigation after 8 days of occurrence and their report suggests that it was a deliberate attempt of the complainant firm to drain out the Labsa oil, whereas, the same is as above said, an acid slurry and cannot be touched by human hand owing to its acidic nature which causes severe burn injuries. The statements of various employees/security guards of the complainant firm annexed with the report had been recorded, who have affirmed that there has been an attempt of sabotage owing to which the loss of Labsa oil occurred and which has not been taken account of while preparing the report. The repot repudiates the claim of the complainant firm by a sole reason that the police report/first information report has not been registered, whereas, the duty of the complainant was to inform the police authorities that some miscreants had sabotaged the factory premises and where the two DDRs C7 and C7A have been duly recorded by the police officials after due investigation at site.
6. Further averments in the complaint were to the effect that the first investigation report is to be recorded only by the police authorities and the complainant firm cannot possibly be reprimanded for the same. Further, the final assessment was to be based upon the preliminary Survey Report (prepared by a technical person of a mechanical engineer), issued after physical measurement/verification of the spot and therefore, the physical measurement/ verification made after 8 days of incident of perishable substance cannot possibly be taken into account for deciding a claim. Having said so, it can also be inferred from the report of M/s S. Soni & Co. that it is a report contrary to the report of the preliminary surveyor, where the observations made in the letter have not been taken into account, therefore, the worthiness of the former report is doubtful and also that if the later report was not to be taken into account, then why such exercise of preliminary report was done. It was also pleaded that the said final report is also baseless to the extent that the loss was to be considered/investigated under the Standard Fire and Special Perils policy (material damage), whereas, the same had been surveyed/investigated/assessed under the burglary policy ad therefore, the very essence of the report has itself rendered it infructuous.
7. Services of M/s Royal Associates, who is a detective agency/investigator was hired for probing the alleged loss in detail, who after detailed inquiry and investigation of the case submitted detailed report, Annexure R-31, alongwith statements of various witnesses recorded during the course of investigation and have concluded that the loss of Labsa Oil, due to the burglary is not genuine and there are chances of leakage of Labsa Oil, due to fault in tank and theft of Labsa oil by factory officials and detailed reasoning for their conclusion have been given in the said report and these conclusions were given by M/s Royal Associates without consultation of any technical expert, as such, as per the averments made in the complaint, the authenticity of this report is doubtful and without any basis. The complainant came to know of this report only when report was supplied to it upon its application under the RTI Act, 2005. Various communication and correspondences were exchanged between the complainant firm an and the opposite parties and request was made by the complainant vide several written communications sent to the opposite parties about the status of this claim, but, no reply was received and finally upon the communication of the complainant Annexure C-17 dated 01.12.2009, the letter of repudiation of claim was received vide letter dated 27th November, 2009, Annexure C-18, from the respondent No.3. Other averments as made in the complaint were that the entire claim was initially processed under the Burglary policy, whereas, the same was to be processed under the fire and perils policy since the claim of the complainant was insured under the same and specific directions were issued by the respondent No.4 to respondent No.1 and thereafter, the claim of the complainant was closed under the Burglary and opened under the head of Fire and Perils, which was subsequently processed and repudiated based upon the previous survey/investigation report vide Annexure R-1.
8. In this background, present complaint had been filed against the opposite parties for deficiency in service/ unfair trade practice on the part of the opposite parties.
9. The present complaint was contested and resisted by the opposite parties, who have pleaded that there is no deficiency in service on their part nor they had committed any act of unfair trade practice. It was also pleaded that the claim lodged by the complainant with respondents was duly got surveyed, inspected, investigated and assessed under both the policies and the same was not found to be genuine and maintainable and as such, was rightly repudiated vide Annexure R-1. It was also pleaded that the claim of the complainant has been considered under both the Burglary as well as Standard Fire and Special Perils ( Material Damage) Policy and was not found to be sustainable. The claim of the complainant was duly verified after considering all the relevant papers and documents submitted by it and were scrutinized by the competent authorities of the replying respondents with due application of mind and in good faith and who, thereafter, came to an irresistible and valid conclusion that the claim lodged by the complainant is not genuine and admissible as per terms, conditions and provisions of both the policies. Opposite parties have also pleaded that the complainant is not entitled to maintain the present complaint in view of its acts of omission and commission and false statements and records prepared by it. The complainant is also not entitled for any relief, as it has been using false means and devices to obtained undue benefit out of the insurance issued to the complainant, which amounts to gross breach of terms and conditions of the policies.
10. It was also pleaded that the claim, under the policies, issued to the complainant is not payable unless the terms of this condition have been complied with and in the present case complainant has failed to satisfy contractual obligations as per the terms and conditions of insurance policies. The claim, as such, has rightly and legitimately been disowned and the complaint, therefore, is liable to be dismissed. Other pleas of the respondents were to the effect that the complaint is not maintainable, since, the complainant has violated the general conditions No. 6 & 8 of the Standard Fire and Special Perils ( Material Damage ) policy and condition No. 1, 5, 7(c) of the Burglary Insurance Policy. Initially, the claim was lodged by the complainant under the Burglary policy, which was subsequently changed under Standard Fire Policy with specific reference to Riot, Strike, Malicious & Terrorism Damage cover of Standard Fire and Special Perils (Material Damage) Policy and the claim of the complainant was not found to be maintainable/covered under both the policies.
11. It was also pleaded by the opposite parties that the report submitted by Sh. Chaman Singhal is a preliminary survey report prepared on very cursory basis, who has never given conclusive finding vis-a-vis cause, circumstances and extent of the alleged loss. In the preliminary report, surveyor has not verified the stock position as 9 inches in the tanks on 08.12.2007 nor any kind of advise were given to the in the preliminary report.
12. Lastly, it was pleaded that the story of sabotage being propagated is totally false and there is no forcible entry by any person on the alleged date of loss, what to speak of the question of sabotage or like. Hence, prayer had been made for dismissal of the present complaint and it was pleaded that the claim made by the complainant is not admissible as per terms and conditions of the insurance policy and claim is based on wrong and false facts and the same is liable to be dismissed.
13. Brief resume of the evidence led by the parties in nut-shell is that in support of its case the complainant has filed affidavit of Sh. Anil Kumar, Assistant Manager and also affidavit of Subhash Chander Kumar, Vinod Kumar Paswan and statement of Devinder Singh Head Constable was also recorded. In rebuttable also affidavit of Anil Kumar had been filed and had placed reliance upon various documents Annexure C-1 to C-21. The opposite parties in support of their case have filed affidavit of Sh. Balbir Singh, Sr. Divisional Manager of the company, affidavit of Roshan Lal, Surveyor Chaman Singhal, surveyor Sanjeev Soni, Kashmir Singh proprietor of M/s Royal Associates and had placed reliance upon number of documents Annexure R-1 to R-42.
14. We have heard the learned counsel for the parties and have gone through the record of case file minutely.
15. Mr. Raghu Nandan Chaudhary, learned counsel for the appellant argued that this is a clear case of deficiency of service and unfair trade practice, on the part of the opposite parties and the just claim of the complainant had been wrongly repudiated vide Annexure C-18 by wrongly holding that it is false claim lodged by the complainant. As per him, the report was immediately lodged by S.C. Kumar, Vice President, to the police on 08.12.20007 at about 5:30 AM, which was entered as report No. 18 in Rojnamacha dated 08.12.2007 of Police Station Barotiwala, wherein, it had been clearly stated that the yesterday night i.e. 07.12.2007 at around 2:00AM, few unknown person had forcibly entered into the premises of factory and when the guard came to prevent them, then they fled away and thereafter, it was found that around 50 Mt. Labsa oil had been drained out from two of the storage tanks and one of the valve had also started leaking due to such act. Even, during the preliminary survey conducted by Sh. Chaman Singhal, Labsa Oil was found drained/oozed out as the depth level of the Labsa oil in the tanks were 3 inches in one tank and 2 in the other tank. The fact of forcible entry into the factory premises and damage caused to the storage tanks and valves, which had resulted into leakage of Labsa oil had also been established in the report. The survey reports of M/s S. Soni and company and also of Royal Associates cannot be relied upon, since these reports are not based upon any technical expert consultation. He also argued that there is no doubt delay on the part of the opposite parties in repudiating the claim, since, the claim was repudiated after a period near about 2 years on 27.11.2009. He also drew our attention to the various photographs annexed with the complaint as annexure R-19/b, R-19/c, R-19/d, R-19/f and R-19/g, which clearly depicts sprinkling of Labsa oil on the floor and damage to the tanks as well as to the pipes of the Labsa tanks.
16. Hence, as per him, claim of the complainant was genuine, which was wrongly held to be a false claim while repudiating the claim of the complainant by the opposite parties. He also argued that the loss caused to the complainant was wrongly considered/investigated under the Burglary policy, whereas, it was to be considered under the Special Fire and Peril Policy. As per him, no reliance can be placed upon the affidavit of Roshan Lal Chandel, who had stated on oath that guards Vinod Kumar and Chander Shekhar were not on duty at that night and no one entered into the factory premises in the intervening night of 7th/8th December, 2012, and alleged loss is being manipulated by the factory officials. This version is contrary to the earlier version given by the witness. Moreover, this affidavit had been given by Roshal Lal Chandel, so, that action may not be taken against him for lapse on his part regarding security measures/services, which was being rendered by him. Hence, as per him, this is a clear case of deficiency in service/ unfair trade practice on the part of the opposite parties and the complainant is entitled to the claim as prayed in the relief clause of the complaint.
17. Mr. Raghu Nand Chaudhary had also placed reliance upon various judgments of Honble Apex Court, Honble National Commission and Honble State Commission viz:-
i) Vikram Greentech (I) Ltd. & Anr. Vs. New India Assuranc Company Ltd. II (2009) CPJ34 (SC), wherein it was held that endeavour of the court must always be to interpret words of contract- court not expected to venture into extra liberalism that may result in rewriting the contract/substituting terms not intended by parties.
ii) New India Assurance Company Vs. Protection Manufacturers Private Ltd. (2010)7Supreme Court Cases 386, which dealt with the conflicting reports of surveyor and investigator-evidentiary value thereof and it had been held that in the absence of any material to support investigators report, National Commission rightly held that the fire was accidental and that investigators attempt to attribute the same to arson was motivated and intended to benefit insurer.
iii) Gammon India Ltd. Vs. New India Assurance Co. Ltd. 2004 CCJ 1054, wherein it was held that insurance company appointed second surveyor without any explanation and repudiated the claim after 6 years Whether insurance company was deficient in its service in repudiating the claim-Held:
Yes, delay of 6 years without explanation for repudiation of claim itself constitutes deficiency in service.
iv) Purar Textiles Ptv. Ltd. Vs. New India Assurance Co. Ltd. 2004 CCJ 971, wherein it was held that the fire insurance repudiation of claim-damage to factory in fire-insurance company contended that claim was wrong and fabricated-insurance company went on appointing surveyors one after another and repudiated the claim on the basis of law survey report stating that purchase bills were not genuine-sale and purchase transactions were duly recorded in the account books-Whether the insurance company was deficient in its service in repudiating the claim-Held: Yes.
v) New India Assurance Company Ltd. Vs. Mam Chand Matania, III (2010) CPJ 62(NC), wherein it was held that claim keep pending for long period when regulations prescribe 30 days limit repudiation unjustified-no satisfactory explanation offered by Insurance Company-District Forums order upheld.
vi) Sunil Bansal Vs. New India Assurance Company Limited and Anr. I (2010) CPJ 34, wherein it was held that the surveyors opinion totally ambiguous for want of details, real measurement, lacks of necessary requirements of such opinion-
repudiation of claim on basis of such report unjustified-insurer held liable to pay sum assured-Order upheld in appeal.
There is no dispute about the legal proposition laid down in these precedents by the Honble Apex Court, Honble National Commission and Honble State Commission.
18. Mr. Deepak Gupta, learned counsel for the opposite parties argued that the claim lodged by the complainant was not found to be genuine after due survey and investigation and it was rightly repudiated vide Annexure R-1 and as per him the claim of the complainant had been considered both under Burglary and Special Fire and Peril Policy and was not found to be sustainable, and after due application of mind, the opposite parties had come to the valid conclusion that the claim of the complainant is not admissible as per the terms and conditions of the policies and there is no illegality in the repudiation of the claim, as such, there is no deficiency in service/ unfair trade practice on the part of the opposite parties. As per Mr. Gupta no reliance can be placed upon the report of the preliminary surveyor Sh. Chaman Singhal, as it is not a final report and is not conclusive regarding the quantum of alleged loss and as per him no sabotage or damage of any kind had been observed during the preliminary survey report and the opposite parties have rightly repudiated the claim on the basis of the reports of M/s S. Soni Annexure R-23 and Royal Associates investigator-detective Annexure R-31. The contents of statement of Sh. Roshal Lal Chandel, who was engaged for providing security services clearly depose that Vinod Kumar and Chander Shekhar were not on duty on 07.12.2007 and no one had entered into the factory premises on the night intervening 7th / 8th December 2007 and the alleged loss is manipulated by the factory officials. Hence, the claim lodged by the complainant is false and it was rightly repudiated.
19. Mr. Gupta also argued that the present complaint is barred, in view of the withdrawal of earlier complaint filed before the State Consumer Disputes Redressal Commission at Panchkula without seeking any liberty to file afresh complaint on the same and similar cause of action. There is no force in the arguments of the counsel for the respondent, since, State Consumer Disputes Redressal Commission, Panchkula was not having the jurisdiction to try the present complaint because the cause of action had arisen within the jurisdiction of the this commission as the factory premises is situated in Village Buranwala, Tehsil Kasauli, District Solan, H.P. and no permission is required from the State Commission for filing the present complaint.
20. After hearing the Ld. counsel for the parties and minutely scanning the record of case, we are of the considered view that the claim has been wrongly repudiated by the opposite parties vide letter dated 27.11.2009 Annexure R-1. Reasons being that the grounds given for the repudiation of the said claim of the complainant in the said letter are erroneous, not justifiable and are not legally sustainable in view of the evidence on record.
21. In the present case, immediately after draining out of Labsa oil by the miscreants, police report was made by S. C. Kumar, Vice President of the company, which is reproduced by the S.H.O. Barotiwala in report No. 16 dated 08.12.2007 of Police Station Barotiwala. Annexure C-7 which clearly depicts that miscreants had forcibly entered into the factory premises of the complainant firm and had drained out the Labsa oil from two tanks, which had flowed out from the tank, as a result thereof, loss to the tune of Rs. 35,00,000/- had been caused to the complainant firm and this fact is also corroborated from the contents of report No. 18 dated 08.12.2007 entered in the Rojnamcha of Police Station, Barotiwala, by S.H.O. that the loss of Labsa oil had been caused and offence under Section 427 IPC had been made out and D.D. No. 18, which had been recorded by the SHO Barotiwala on the basis of statement of S.C. Kumar is the report lodged with the police and thus the ground of the repudiation that no FIR was lodged is not legally sustainable.
22. Moreover, the loss caused to the Labsa oil is also corroborated from the report Annexure C-8 made to the insurance company by the complainant and even forcible entry by the miscreants in the morning hours of the night intervening 7th / 8th December, 2007 and the fact that push had been given to the guard Vinod Kumar by the miscreants and Labsa oil had been drained out is also corroborated by the Statement of Roshan Lal Chadel, Shayam Lal, Vinod Kumar and from the affidavit of S.C. Kumar, Vinod Kumar Paswan and brief repot of incident as Annexure R-21. Even, SHO Barotiwla in his letter addressed to Sh. S.C. Kumar, vice president, of M/s Vaishnavi Kosmeticos Pvt. Ltd. Anneuxre C-21 had intimated that since offence under Section 427 IPC is made out, which is non-cognizable, as such, the company should take action at their own end and no further action is to be taken by the police.
23. In the present case, immediately after the receipt of the report by the complainant, opposite parties appointed Sh. Chaman Singhal as surveyor-cum-loss assessor, who had conducted the preliminary survey and submitted his report Annexure R-19 which is at page Nos. 209 to 211, which clearly depicts that the damage to the Labsa oil, which was filled in the tanks, had been caused by draining out of Labsa oil by the miscreants. The portion of the report of the surveyor is extracted herein below for ready reference.
Inspection and Observations:
Under telephonic instructions received from Sr. Divisional Manager, Shimla on 8th December, 2007 about the preliminary survey of the Burglary loss at insureds premises M/s Vaishanvi Kosmeticos (P) Ltd. Buranwalla, which occurred on 7th/8th December, 2007, at about 0200 hrs. On reaching the insureds premises, the undersigned met with insured official Mr. S.C. Kumar and inspected the storage tank area and found that the Labsa (Liquid Material) lying on the floor, which is drained out from tank No. 1 and tank No.4. One of the containers lying side of the wall and liquid material was scattered on the muddy ground. The few photographs were arranged to depict the loss. The undersigned checked the level of the storage tank No.1 and tank No.4 and the details of the stock in tanks accounted are as under:-
i) Tank No. 1 : 3 from bottom level
ii) Tank No. 2 : 2 from bottom level xxx xxx xxx
24. Even photographs Annexure R-19/b, R-19/c, R-19/d, R-19/f and R-19/g taken by the surveyor, which are at page 212 to 214 of the complaint file show that tanks of Labsa oil had been damaged and also that the Labsa oil had spilt on the ground of the factory premises. In photograph annexure R-19/C container is lying in the premises of the factory, photograph annexure R-19/g shows that pipe of tank had been damaged and photograph annexure R-19/f shows that taps were broken, hence, it cannot be said that the claim lodged by the complainant was not genuine one, which was the main ground taken by the opposite parties for repudiation of the claim.
25. Survey report of M/s S. Soni and Co. surveyor-cum-loss assessor, Annexure R-29, cannot be given too much weight since the reasons given for repudiation of the claim of the complainant viz. no FIR was lodged, claim was not genuine and no forcible entry had been made in the factory premises, cannot be relied upon, as immediately after the occurrence, D.D. No. 16 dated 08.12.2007 was recorded by the police, which fact corroborates the occurrence and M/s S. Soni and Co. surveyor-cum-loss assessor had visited the premises after 8 days of the occurrence and report of the preliminary surveyor Sh. Chaman Singhal Annexure R-19, takes precedence over the report of M/s S. Soni and Co. who had visited the spot immediately after the occurrence on 08.12.2007 at about 12:00AM and made important observations regarding draining out of Labsa oil as already referred above. Even M/s S. Soni and Company had recorded the statement of the Vinod Kumar, Guard, who was on duty on the relevant day and statements of Shyam Lal & Roshal Lal Chandel, Incharge Security Services, who in their earlier version dated 16.12.2007, which is at page 359 to 360 of the complaint file had clearly stated that the miscreants had forcibly entered the factory premises and drained out the Labsa oil and caused loss to the complainant firm and their conclusion that the negative stock of the Labsa oil was 854.76 kg. as depicted in their report, Annexure R-29 was also not a true fact.
26. M/s Royal Associates, detective-cum-surveyor who had recorded the statements of Roshan Lal Chandel, Shayam Lal dated 30.01.2008, which are at page No. 355 to 358 of complaint file, wherein, it was stated that Vinod Kumar and Chander Shekhar, Security Guards were not on duty on the day of occurrence and no incident of theft had occurred or no outsiders come in the premises of the factory in the night of 07.12.20007, the earlier statements were made under the pressure of the officials of the factory and no such incident had occurred, whereas, in the earlier versions of these witnesses they have deposed that the miscreants had entered into the premises of factory at about 4:00AM and had given push to Sh. Vinod Kumar and had drained out the Labsa oil, which had sprinkled on the ground near tanks. The main reasons for resiling of these witnesses from their earlier statements dated 16.12.2007 appears that they had apprehension that action would be taken against them for their carelessness by the company, as such, they had changed their versions, hence, their statements which were made before the Royal Associates cannot be believed. So, on the basis of report of Royal Associates, it cannot be inferred that the complainants claim is not genuine. In view of the overwhelming evidence on record, as referred to above, and from the affidavits of Vinod Kumar and S.C. Kumar etc., it is clear that the claim had been wrongly repudiated and letter of repudiation is not legally sustainable in view of the aforesaid evidence on record, as discussed in earlier paras above.
27. In this regard, the judgment of apex Court titled which Dharmender Goel Vs. Oriental Insurance Company , III (2008) CPJ 63 SC, is also applicable in the present case, wherein it was held that the Insurance Company being in a dominant p often act in an unreasonable manner and after having accepted the value of a particular insured goods that very figure on one pretext or the other when they are called upon to pay compensation. This ta leave it attitude is clearly unwarranted and only as being bad in law, but, ethically indefensible.
28. The claim of the complainant was wrongly dealt with under Burglary policy, whereas, the same was required to be dealt under the Standard Fire and Special Policy, Annexure R-5 and it was a case of malicious damage. Hence, in the present case, there is clear deficiency in service/unfair trade practice on the part of the opposite parties. Now, the main question is that how much damage/loss had been caused to the complainant in the present case due to draining of Labsa oil by the miscreants. M/s S. Soni & Co. had been appointed as surveyor-cum-loss assessor, in the present case, who assessed the loss to the tune of Rs. 25,89,555.01/-, and had concluded that there was negative stock of 854.76 kg. as on 07.12.2007, whereas, loss caused to the complainant is calculated wrongly, which loss after calculation comes as follows:
Closing Stock of Labsa Oil, as on 07.12.2007 45068.8 kg. + 854.76 Kg.
=45923.56 Kg.
Less: Labsa Stock 9 depth 3254.0 Kg.
- 45923.56 Kg.
=42669.5 Kg.
Rate of Labsa as per FIFO Method per kg.
Rs. 61.69/-
Net Loss (45923.56 X Rs.61.69) Rs. 2632285.10
29. There is also delay on the part of the opposite parties in taking the final decision, on the claim of the complainant, who had sent number of letters for the knowing the status of the claim, since the date of occurrence is 07.12.2007 and ultimately the claim was repudiated vide letter dated 27.11.2009 Annexure R-1, hence there was delay of nearly about 2 years in settling the claim of the complainant, for which complainant is also entitled for compensation for harassment to the tune of Rs. 1,50,000/-.
30. In view of the aforesaid discussion and facts and circumstances of the case, this is a clear case of deficiency in service/unfair trade practice on the part of the opposite parties, as such, the complaint is partly allowed and the opposite parties are liable to indemnify State Bank of Patiala, Branch Panchkula, to the tune of Rs. 26,32,285/- in view of the banker clause in the policy, which is at page 189 of the complaint file and which read as under:
That upon any monies becoming payable under this policy the same shall be paid by the company to the Bank and such part of any monies so paid as may relate to the interests of other parties insured hereunder shall be received by the Bank as Agents for such other parties.
31. In addition to this amount of Rs. 1,50,000/- is to be paid as compensation to the complainant for the loss caused to the complainant for undue delay in processing the case, as letter of repudiation is dated 27.11.2009, as such, the period of about 2 years has been taken in the same. The litigation costs is quantified at Rs. 10,000/-. It is father directed that the aforesaid amount payable to the complainant by insurance company be deposited with this Commission within 45 days from the date of passing of this order failing which complainant will be entitled for interest @ 9% per annum till deposit of the awarded amount.
(Chander Shekhar Sharma) Member September 24, 2012.
GAURAV} Justice (Retd.) Surjit Singh, President:
I have had the advantage of going through the order written by Mr. Chander Shekhar Sharma, learned Member. I would like to supplement the reasoning given by learned Member and also to modify the quantum of insurance money payable to the complainant, in the light of the same.
2. Case of the complainant is that he had purchased two policies, one Burglary Policy and the other Standard Fire and Special Perils Policy and under both the policies, stock worth `2.00 crores (`200.00 lacs) had been insured. On the night intervening 7th & 8th December, 2007, some miscreants are alleged to have entered the walled compound of the complainant factory, where eight tanks containing various kinds of liquid stock were placed. Miscreants allegedly wanted to steal or cause loss of Labsa Oil stored in two tanks. They allegedly, by use of violence, broke taps causing huge spillage of the said oil. Security guards on duty noticed the attempt and raised alarm. Miscreants allegedly fled.
3. Matter was reported to the police by Shri S.C. Kumar, Vice President of the complainant at 4.10 day time (it is not written in the report whether it was in the morning or in the evening), vide report Ext. PW4/A. Police visited the site and after inspection entered report in the Roznamcha at Sr. No.18 at 5.30 p.m., copy PW4/B, that in the darkness of the previous night, some unknown passer-by had tampered with two of the tanks containing Labsa Oil resulting in spillage of oil, to the tune of `35.00 lacs.
This report was entered by the S.H.O. of concerned Police Station, after visiting the spot to verify the report Ext. PW4/A, lodged by Shri S.C. Kumar, Vice President of the complainant.
4. Intimation of the incident was given to the opposite parties also, who deputed a surveyor, namely Shri Chaman Singhal. Said surveyor submitted a preliminary report, Annexure R-19, in which it is mentioned that miscreants had drained the storage tanks and one of the valves had leaked out. According to him, tank No.1 was left with only 3 oil from the same level and tank No.4 with 2 oil from the same level. Thereafter, a regular surveyor was deputed, who visited the spot on 16.12.2007, and submitted report, Annexure R-29. This surveyor was M/s. S. Soni & Co. Surveyor concluded as follows:-
1. The loss occurred on the intervening night of 7th & 8th December, 2007 and survey & investigation were carried out on 16.12.07.
2. The insured informed the police and the police lodged the complaint in their Roznamcha and issued DD No.18 dt. 08.12.07 but no proper F.I.R. as per Form 154 has been registered under and no IPC section has been charged. Under these circumstances police complaint has no authenticity.
3. No forcible entry has been proved from any aspect. As the culprits came in the factory premises from the open space and ran away from that. No witness statement proves forcible entry of the culprits.
4. As no IPC section has been charged by the police authorities and this does not comply the policy conditions and considering this no liability arises out on the insurers.
5. As per physical verification of stock as on 16.12.07 the stock comes in negative which proves that the stock register is not maintained properly.
5. Opposite parties also engaged an Investigating Agency, named Royal Associates, who submitted report, Annexure R-31, and gave the following opinion:-
On the basis of above said findings, we are of the opinion that loss of Labsa due to Burglars is not genuine. Security guards and incharge of security clearly stated in his statements as well as affidavit that they given previous statements about loss under pressure of factory official, so these statements should to treated as cancelled. They further said that loss is being manipulated by factory official. Moreover Labsa is not easily available in market and taking it out from tank is also not easy as it is very harmful for body parts. There are chances of leakage of Labsa due to fault in tanks or theft of Labsa by factory officials and in both cases it is not covered under policy. And the most important things that no FIR was lodged for said loss only DDR was lodged. Insurer may deal with claim as per terms and conditions of policy, keeping in view of above said findings. This report is issued without prejudice.
6. Initially the claim was treated as one under the burglary policy and when the complainant, after obtaining information under the Right to Information Act, came to know that the claim had been treated under the said policy, approached the opposite parties, to treat the same under Standard Fire & Special Perils Policy, the opposite party appears to have examined the same in the light of terms and conditions of that policy.
7. On the basis of the final survey report and the investigation report, Annexures R-29 & R-31 respectively, opposite parties repudiated the claim, vide Annexure R-1, on the following grounds:-
1. As per the reports of investigator & surveyor the incident of loss as reported by you has not been found genuine-this fact is otherwise also in your knowledge as per the information obtained by you under RTI Act.
2. No person entered inside the factory on the date of alleged loss as confirmed by the security personnel, no proper FIR was lodged and there was negative stock (i.e. of Labsa Oil) on the date of alleged loss.
3. The claim lodged by you violated the General Conditions No.6 & 8 of our Fire Policy No.263104/11/2008/123 and Condition No.1,5 & 7 (C) of our Burglary Policy No.263104/48/2008/102.
8. The first ground, on which claim has been repudiated by the opposite parties, is that the incident of loss has not been found to be genuine. This ground is founded on the final survey report, Annexure R-29, and investigation report, Annexure R-31. M/s. S. Soni & Co., who submitted the final report, Annexure R-29, visited the spot on 16.12.2007, or say more than a week after the incident. Surveyor deputed initially, by the opposite parties themselves, namely Chaman Singhal, visited the spot on 08.12.2007, or say on the date of the incident itself after sun rise. He reached the spot at 12.00 in the noon and submitted report, Annexure R-19. According to this report, there was spillage of Labsa Oil from tanks No.1 & 4 and only 3 oil from bottom level in one tank and 2 oil from bottom level in the other tank was left and rest of it had spilled. He submitted photographs, Annexure R-19(a) to R-19(n), with his report. He also submitted copies of entries in the stock register showing the stock position of the oil, in question.
9. It was argued during the course of hearing that report had been lodged with the police at 4.00 in the evening, though the incident was alleged to have taken place around 2.00 a.m. Submission is shown to be incorrect, because the preliminary surveyor, who reached the spot at 12.00 on the next following day, in his report, Annexure R-19, has stated that incident had already been reported to the police. That means the incident had been reported before 12.00. The timing recorded in the police report, copy Ext. PW4/A, as 4.10 day time, therefore, becomes immaterial. In any case the time recorded as 4.10 day time does necessarily mean post diem.
10. Fact that the preliminary surveyor had noticed that report stood lodged with the police before his reaching the spot at 12.00, in the noon belies the plea that there was delay in reporting the matter to the police. The said surveyors observation that there was spillage of oil and only 3 in one tank from bottom level and 2 in other tank from bottom level was left, shows that there was huge spillage. Photographs submitted with the report of the preliminary surveyor also indicate thick layer of spilled oil. Opposite parties have totally ignored the report of the preliminary surveyor, which is supposed to be quite significant, because of the fact that it is based on the inspection of spot, soon after the occurrence of the incident.
11. M/s.
S. Soni & Co., who submitted the final survey report as also the investigating agency engaged by the opposite parties, i.e. Royal Associates, who submitted report, Annexure R-31, based their findings about the incident being not genuine on the affidavit, Annexure R-32, of Roshan Lal, Security Incharge and statement, Annexure R-33, of Shyam Lal, security guard. In the affidavit of Roshan Lal and the statement of Shyam Lal, declaration is to the effect that nobody had entered the factory on the relevant night and that earlier statements made by them that four persons were seen jumping over the boundary, had been made under pressure from the high-ups of the factory of the complainant.
12. Admittedly, Shri S.C. Kumar, Vice President and other officers of the Company, were not at the factory on the relevant night. Report was lodged to the police at 4.10 in the morning by Shri S.C. Kumar, on the basis of information supplied to him by security guards, including Roshan Lal, whose affidavit, Annexure R-32, has been pressed into service by the opposite parties and Shyam Lal, whose statement, Annexure R-33, has been made the basis for the finding that incident is not genuine. Therefore, it cannot be said that the version, which was given to the police by Shri S.C. Kumar, Vice President of the complainant, was cooked by him to claim insurance money. Roshan Lal and Shyam Lal do not say in their aforesaid affidavit and statement that they had not informed Sh. S.C.Kumar and other higher functionaries of the complainant about the incident.
13. It is quite likely that Shri Roshan Lal and Shri Shyam Lal backed out from their initial version, which they gave to Shri S.C. Kumar, as also to the preliminary surveyor of the opposite parties, that four miscreants were seen fleeing after jumping over the boundary wall, with a view to escaping their own liability/accountability because they along with four other persons were on security duty and despite their being on such duty, miscreants were reported to have entered the compound and caused damage. A police party headed by S.H.O., visited the spot after report, Ext. PW4/A, was lodged by Shri S.C. Kumar, and after such visit, S.H.O. entered a report in the Daily Diary, copy Ext. PW4/B, per which some passer-by had tampered with the tanks containing Labsa Oil, causing spillage of oil to the tune of `35.00 lacs. This report was made at 5.30 p.m., which fact suggests that report was entered after thorough inspection of the spot. The fact that loss of Labsa Oil worth `35.00 lacs, was recorded in the Roznamcha by the S.H.O., on the basis of his own observation made during inspection, belies the opposite parties plea that the incident was not genuine. If the incident were not genuine, then how did spillage of huge quantity of Labsa Oil valuing around `35.00 lacs can take place. Complainant itself could not have caused the loss, as the money claimed is not more than the loss noticed by the S.H.O.
14. Next ground for repudiation of claim is that no proper F.I.R. had been lodged and there was negative stock of Labsa Oil on the date of the alleged loss.
15. Report had been lodged with the police within a couple of hours of the incident, as noticed hereinabove. Recording of the formal F.I.R. on the basis of the report lodged with the police by Shri S.C. Kumar, vide Ext. PW4/A, was the duty of the S.H.O. of the concerned Police Station. He did not enter formal F.I.R., because after visiting the spot, he entered report, Ext. PW4/B, in the Daily Diary to the effect that this was a case of some unknown passer-by having meddled with the tanks causing huge loss to the tune of `35.00 lacs and this being an offence, under Section 427 I.P.C., which is not cognizable, no action by the police was required.
16. As regards the observation that there was negative stock of Labsa Oil on the date of alleged loss, final survey report, Annexure R-29, and investigation report, Annexure R-31, disprove the same. In report, Annexure R-29, it is mentioned, vide para 16.0, that entries in the stock register of Labsa Oil showing the stock position from 01.04.2007 to 16.12.2007, were verified and compared with the vouchers in support of the same period and that on comparison of the entries and vouchers and taking into account the quantity of loss reported by the complainant, i.e. 41,814.8 Kgs., it was found that not only that there should not have been any quantity of Labsa Oil in the stock, but there was supposed to be negative stock of 854.76 Kgs., but actually there was 3254 Kgs. of oil as the depth of oil in the tank was 9. These observations of the surveyor, even if taken on their face value, do not show that no spillage of Labsa Oil had taken place or that the claim was bogus. Complainant reported loss of 41,814.8 Kgs. This figure may not be arithmetically accurate. When such a huge loss is there, and the lost liquid is spilled around over a large area, as in this case, exact quantity cannot be worked out. Assessment is done normally by approximation.
17. The fact that as per stock register, there was negative stock of 854.76 Kgs., but on physical verification 3254 Kgs. oil was found in the tanks, suggests that the loss reported by the complainant was not mathematically accurate and that it was slightly exaggerated. The exact figure of loss can be worked out by deducting from the figure of loss reported by the complainant, the figure of stock in hand, i.e. 3254 Kgs., and the negative figure of 854.76 Kg. Thus, the loss works out at 41,814.8 Kgs. minus 37,706.04 Kgs.
18. Rate of Labsa Oil, as intimated by the complainant to the opposite parties while reporting the incident, was `63/- per Kg. (the estimated loss was stated to be 55 metric tonnes worth `31.50 lacs). Thus, the loss in monetary terms comes to `23,75,480/-, if the quantity of spilled Labsa Oil is taken to be 37,706.04 Kgs., as demonstrated hereinabove.
19. The last ground raised by the opposite parties in their letter of repudiation, Annexure R-1, is that the alleged loss is not covered either under Standard Fire & Special Perils Policy or the Burglary Policy. It is stated that general conditions No.6 & 8 of Standard Fire & Special Perils Policy having been violated, the loss is not indemnifiable. General conditions No. 6 & 8 of the Standard Fire & Special Perils Policy, Annexure R-5, read as follows:-
6.
(i) On the happening of any loss or damage the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage or such further time as the Company may in writing allow in that behalf deliver to the Company.
a) A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items or property damaged or destroyed, and of the amount of the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not including profit of any kind.
b) Particulars of all other insurances, if any The Insured shall also at all times at his own expense produce, procure and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with.
(ii) In no case whatsoever shall the Company be liable for any loss or damage after the expiry of 12 months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration; it being expressly agreed and declared that if the Company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court of law then the claim shall for all purposes be deemed to have been abundant and shall not thereafter be recoverable hereunder.
7. xxx xxx
8. If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the Insured, all benefits under this policy shall be forfeited.
20. In view of what has been stated hereinabove, both in the order of learned Member Shri Chander Shekhar Sharma as also in my part of the order, complainant cannot be said to have committed breach of either of the above reproduced two conditions, as he reported the loss on the very next day of the occurrence to the opposite parties as also to the police and also the claim is not fraudulent nor does it contain any false declaration. Complainant claims indemnification under Standard Fire & Special Perils Policy and, therefore, we need not examine the conditions of burglary policy.
21. In view of the above discussion, none of the three grounds, on which the claim was repudiated, vide Annexure R-1, can be said to be well founded. If that is so, the repudiation is unjustified and, therefore, it amounts to deficiency in service.
22. As a sequel to the above reasoning, complaint is allowed and the opposite parties are ordered to pay `23,75,480/-, on account of insurance money, with interest at the rate of 9% per annum, from the date of the complaint, to the date of the payment of the aforesaid amount of money and also to pay `1.00 lac, as compensation and `10,000/-, as litigation expenses.
23. One copy of this order be sent to each of the parties, free of cost, as per Rules.
(Justice Surjit Singh) President
24. I endorse the supplementary reasoning of the Honble President and also agree to the reduced amount of compensation directed to be paid by the Honble President.
(Chander Shekhar Sharma) Member
25. I agree.
(Prem Chauhan) Member September 24, 2012.
N Mehta) [1] Whether reporters of the local papers may be allowed to see the order? Yes