State Consumer Disputes Redressal Commission
M/S Panipat Handlom Depot vs National Insurance Co. on 4 August, 2022
Appeal No.496 of 2017 04.08.2022
M/s Panipat Handloom Depot Vs. National Insurance Company Limited
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
HARYANA, PANCHKULA
Date of Institution: 21.04.2017
Date of final hearing:04.08.2022
Date of Pronouncement: 04.08.2022
Appeal No.496 of 2017
IN THE MATTER OF
M/s Panipat Handloom Depot, Jawahar Chowk, Thana Road, Fatehabad
through its proprietor Raj Kumar son of Gian Chand Caste Arora resident of
DSP Road, Fatehabad, Tehsil & District Fatehabad.
Through Shri H.P.S. Kochhar, Advocate
.......Appellant-Complainant
Versus
1. National Insurance Company Limited through its Divisional Manager,
Divisional Office, Sirsa, Tehsil & District Sirsa, Haryana.
2. Branch Manager, National Insurance Company Limited through its
Branch Office G.T. Road, Fatehabad, Tehsil & District Fatehabad,
Haryana.
Through Shri Nitin Gupta, Advocate
......Respondents -Opposite Parties
CORAM: Hon‟ble Mr. Justice T.P.S. Mann, President.
Ms. Manjula, Member
Present: Shri H.P. Kochhar, counsel for the appellant.
Shri Nitin Gupta, counsel for the respondents.
ORDER
PER: T.P.S. MANN, J.
The instant appeal has been filed by M/s Panipat Handloom Depot, Jawahar Chowk, Thana Road, Fatehabad (hereinafter referred to as the „complainant‟) for challenging the order dated 27.02.2017 passed by the District Consumer Disputes Redressal Forum, Fatehabad whereby Remanded Page 1 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited complaint filed by the complainant against National Insurance Company Limited through its Divisional Manager, Divisional Office, Sirsa and Branch Manager, National Insurance Company Limited through its Branch Office G.T. Road, Fatehabad (hereinafter referred to as the „opposite parties‟) under Section 12 of the Consumer Protection Act, 1986 was dismissed.
2. The facts leading to the complaint were that the complainant firm is dealing in retail business/trading of handloom items and other allied goods and the said firm was having cash credit account up to the limit of Rs.8,00,000/- with Bank of Baroda, Fatehabad, Tehsil & District Fatehabad against the stocks lying in the said firm. The goods were hypothecated to the Bank of Baroda on behalf of the firm for the stock-in-trade of handloom and its allied goods stored in the firm were insured by opposite party No.1 vide policy issued by opposite party No.2 having validity for one year commencing from 18.10.2011 to midnight of 17.10.2012. Being shopkeeper‟s insurance policy, it was having coverage qua fire and allied perils (contents) alongwith burglary and house breaking, money insurance (in transit), money insurance (in till/counter) baggage insurance and public liabilities for which separate requisite premium was paid by the bank after deducting the same from the account of the firm to the opposite parties. The firm was having insurance coverage upto Rs.16,00,000/- under Fire and Allied Perils (contents), excluding money and valuable, but including furniture, fixture, fittings and stock-in-trade.
3. It was also averred that during the intervening night of 22/23.08.2012 at about 3.15 a.m. the proprietor of the firm, namely, Raj Kumar received a message about breaking out of fire in the shop. He Remanded Page 2 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited alongwith his brothers Bhim and Rajender reached at the spot and found that fire had broken out in the basement of the firm/shop and heavy smoke was coming out from there. In the meanwhile, fire brigade also came at the spot and its officials managed to extinguish the fire after dismantling the first wall of the basement with the help of JCB machine. Almost the entire stock, having value to the tune of Rs.16-17 lacs, lying in the basement as well as on the ground floor of the shop/firm was gutted in fire and reduced to ashes. The police of Police Station City, Fatehabad reported the matter about this incident/mishap vide DDR No.37 dated 23.08.2012.
4. It was further averred that the proprietor of the firm gave intimation to his banker i.e. Bank of Baroda regarding the fire and loss and thereafter to the opposite parties through the bank on the same day. After this, officers/investigator of the opposite parties visited the spot and facts about the incident were verified. The surveyor visited the spot on 24.08.2012 and after preliminary discussions and obtaining report of fire brigade, he demanded account books, stock statement, balance sheet, trade account, stock register, electricity bill, income tax return etc. from the proprietor but when it was told to him that the bills of purchase of the handloom items lying in the basement were also gutted in the fire, he asked the proprietor to collect duplicate invoice in order to compare the record of purchased items from the bank statement. Vide letter dated 25.08.2012 the surveyor asked the proprietor to segregate the affected and unaffected stocks besides submitting detailed claim bill with fire brigade report alongwith receipt of charges, cause of loss and detailed sequence of events of loss, layout of the premises affected stating therein as to how the Remanded Page 3 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited effective goods were stored in the premises, location of the premises effected, accounts upto 31.03.2012 and thereafter from 01.04.2012 till date of loss, balance sheet on 31.03.2011 and 31.03.2012, trading account, copy of stock statement submitted to bank for the last six months, stock register, copy of electricity bills, income tax returns, details of stock left after loss, justification of rates claimed with evidence alongwith copy of purchase and sales etc.
5. It was further averred that the proprietor of the firm duly replied the letter dated 25.08.2012 by mentioning that the fire brigade report had already been delivered to the opposite parties on 24.08.2012 and the duplicate purchase invoices also delivered to the opposite parties. Further, the balance sheet up to 31.03.2011 was prepared on the basis of purchased, sale invoices, bank statement with the help of day-book that due to number of products the stock register could not be maintained and even it was not required and applicable in the business of handloom by any department whereas the firm was not income tax assessee and detail of left stock had already been submitted in detail; that stock lying on first floor belonged to another firm M/s Nagpal Handloom House and the purchased invoice and bank statement of that firm had already been submitted with the opposite parties and it had no relevancy with the loss/damage taken place in the basement and ground floor of the firm.
6. It was further averred that the proprietor of the firm had submitted almost all the relevant documents at the time of spot visit and thereafter the demanded documents were also handed over to the surveyor but despite that the opposite parties vide letters dated 04.10.2012 and Remanded Page 4 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited 16.11.2012 demanded the same from the firm and in case these documents were not supplied, the surveyor would recommend the matter as „No Claim‟. Some of the invoices for the purchase of handloom goods/items stood issued in the name of New Panipat Handloom Depot for which explanation was given by the proprietor of the firm that there was another firm, namely, M/s Panipat Handloom Emporium and there remained confusion and problems with regard to transportation of the goods etc. in each other and the proprietor of the firm was also having objection in the name and style, therefore, the firm got invoices for the purchase of handloom goods in the name and style of M/s New Panipat Handloom Depot and these purchases were got tallied with the statements of bank with which the stock was hypothecated. The complainant requested the opposite parties to settle the claim but they lingered on the matter on one pretext or the other just to avoid the legal claim and lastly vide letter dated 18.01.2013 the opposite parties repudiated the claim of the firm with the remarks that on receipt of final survey report and scrutiny of the claim documents submitted by the firm pertained to above cited claim and survey report of the surveyor, who physically checked/inspected and assessed the loss, it was found that the firm failed to prove the insurable interest of stocks damaged by fire because purchased bills were in the name of New Panipat Handloom Depot, Fatehabad and not in the name of complainant‟s firm i.e. M/s Panipat Handloom Depot and besides the firm failed to produce income tax returns, VAT regime certificate of the firm, besides, paid bill of electricity from the period 19.03.2012 to 07.09.2012 which also confirmed non-existence of insurable interest of complainant‟s Remanded Page 5 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited firm and therefore, the claim fell outside the ambit of the insurance policy and thus not maintainable.
7. It was further averred that thereafter the proprietor of the firm requested the opposite parties to re-investigate the matter vide letter dated 01.02.2013 and further vide letter dated 15.02.2013 also removed the queries of the surveyor but opposite party No.2 did not adhere to the request of the complainant vide letter dated 28.02.2013 with the following remarks:-
"reference on scrutiny of the claim it has been found that at the time of alleged fire most of stock present were owned by a firm New Panipat Handloom Depot as per bills produced by you and also admitted in your reply dated 15.02.2013. The firm New Panipat Handloom Depot is not insured with us and as such stock purchased and standing in the name of this firm are not covered under the policy of insurance and evidently you have failed to prove your insurable interest in the stock alleged to have been involved in the fire, rather the same existed in the name of New Panipat Handloom Depot which is separate and having a different identity firm and no benefit are claim under the policy is not admissible because insurable interest in the stock is not proved under the claim and accordingly, this claim is being repudiated on the above grounds."
8. It was finally averred that the opposite parties wrongly and illegally repudiated the claim of the complainant, which clearly amounted to deficiency in service on their part. Hence, the complaint was filed.
9. Upon notice, the opposite parties appeared and filed joint reply stating therein that the complainant had not come to the District Consumer Forum with clean hands and had suppressed the material facts. The surveyor of the opposite parties visited the spot on 23.08.2012 and on Remanded Page 6 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited 24.08.2012 and had detailed discussions with the insured, who was asked to segregate the damaged and undamaged stocks to conduct final survey, which was done on 31.08.2012. As per verifications and trading accounts till 22.08.2012, the surveyor opined that the value of the stock on the date of loss was Rs.13,50,166/-. The surveyor after segregating the stock as per percentage assessed the loss suffered due to impact of fire as follows:
1. Due to 90 % loss to stock worth Rs.1056220/- =950598.00
2. Due to 40 % of loss to stock wroth Rs.140514/- =56206.00
3. Due to 70 % of loss to stock worth Rs.153432/- =107402.00 Total: 1114206.00 Less 25 for difference in rates, quantity and quality = -278552.00 Less policy excess clause @ 5 % of the claim amount = -41783.00 Net loss assessed = 793871.00 The surveyor also opined that the insured was Panipat Handloom Depot whereas most of the bill for purchase items were in the name of New Panipat Handloom Depot and the insured had also failed to confirm some of the bills regarding purchase made by it. The surveyor had provided the following details:-
a. Total of purchases made in the name of =13,99,339.00 New Panipat Handloom depot is b. Total of bills in which the letters written =4,41,986.00 for confirmation were received undelivered c. Total of bills in which letters were =2,07,510.00 delivered to the addressees but no confirmation was received Total 20,48,835.00
10. It was further pleaded that out of the total bill stocks worth Rs.20,48,835.00, Rs.13,99,339/- were found to be purchased by New Panipat Handloom whereas the insured had purchased the stock worth Rs.6,49,496.50. The complaint of the complainant was not maintainable as the insurance could not be extended to the stocks owned by sister concern, Remanded Page 7 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited namely, New Panipat Handloom Depot. The complainant had no cause of action to file the present complaint because the repudiation was made on 28.02.2013 and the present complaint filed on 16.01.2015 i.e. after a lapse of more than one year and ten months despite the fact that it should have been filed within 12 calendar months. Accordingly, dismissal of the complaint was sought.
11. In support of its case, the complainant tendered affidavit Ex.CW1/A and documents Annexure C1 to Annexure C8, Annexure C8A to Annexure C8C whereas the opposite parties tendered affidavit of Sh.
Suresh Kumar Chaudhary, Branch Manager Annexure R1 and documents Ex.R2 to Ex.R9 and Annexure R10 to Annexure R127.
12. After going through the material available on the file, the District Consumer Forum while relying upon the judgment of the Hon‟ble Supreme Court in H.P. State Forest Company Limited Vs. United India Insurance Company Limited, 2009 (CPJ), 1 (SC) held that the complaint ought to have been filed within 12 calendar month but it was filed on 16.01.2015 i.e. much beyond the prescribed limitation of 12 calendar months as the claim of the complainant was repudiated on 28.02.2013.
13. It would be worthwhile to notice that the Hon‟ble Supreme Court in the case of H.P. State Forest Company (supra) while dealing with the question of limitation for filing the complaint observed as under:-
"21. Clause 19 in terms said that in no case would the insurer be liable for any loss or damage after the expiration of twelve months from the happening of loss or damage unless the claim is subject of any pending action or arbitration. Here the claim was not subject to any action or arbitration proceedings. The clause says that if the claim is not pressed within twelve months Remanded Page 8 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited from the happening of any loss or damage, the Insurance Company shall cease to be liable. There is no dispute that no claim was made nor was any arbitration proceeding pending during the said period of twelve months. The clause therefore has the effect of extinguishing the right itself and consequently the liability also. Notice the facts of the present case. The Insurance Company was informed about the strike by the letter of 28-4-1977 and by letter dated 10-5-1977. The insured was informed that under the policy it had no liability. This was reiterated by letter dated 22-9- 1977. Even so more than twelve months thereafter on 25-10-1978 the notice of demand was issued and the suit was filed on 2-6-1980. It is precisely to avoid such delays and to discourage such belated claims that such insurance policies contain a clause like clause 19. That is for the reason that if the claims are preferred with promptitude they can be easily verified and settled but if it is the other way round, we do not think it would be possible for the insurer to verify the same since evidence may not be fully and completely available and memories may have faded. The forfeiture clause 12 also provides that if the claim is made but rejected, an action or suit must be commenced within three months after such rejection; failing which all benefits under the policy would stand forfeited. So, looked at from any point of view, the suit appears to be filed after the right stood extinguished."
14. On perusal of the aforementioned judgment, it is made out that the Insurance Company was informed about the strike by the letter of 24.08.1977 and vide letter dated 10.05.1977, the insured was informed that under the policy it had no liability. This was reiterated by letter dated 22.09.1977. Even so, more than twelve months thereafter i.e. on 25.10.1978 the notice of demand was issued and the suit was filed on 02.06.1980. It was precisely to avoid such delays and to discourage such Remanded Page 9 of 12 Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited belated claims that such insurance policies contained a clause like clause
19.
15. Section 24A of the Consumer Protection Act, 1986 prescribes the period of limitation of two years from the date on which the cause of action has arisen for the purpose of filing the complaint.
16. In SBI Vs. B.S. Agriculture Industries (2009) 5 SCC 121, while dealing with the same provision, the Hon‟ble Supreme Court opined, thus:-
"11.....It would be seen from the aforesaid provision that it is peremptory in nature and requires the consumer forum to see before it admits the complaint that it has been filed within two years from the date of accrual of cause of action. The consumer forum, however, for the reasons to be recorded in writing may condone the delay in filing the complaint if sufficient cause is shown. The expression, „shall not admit a complaint‟ occurring in Section 24A is sort of a legislative command to the consumer forum to examine on its own whether the complaint has been filed within the limitation period prescribed thereunder.
12. As a matter of law, the consumer forum must deal with the complaint on merits only if the compliant has been filed within two years from the date of accrual of cause of action and if beyond the said period, the sufficient cause has been shown and delay condoned for the reasons recorded in writing. In other words, it is the duty of the consumer forum to take notice of Section 24A and give effect to it. If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and therefore, the aggrieved party would be entitled to have such order set aside."Remanded Page 10 of 12
Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited
17. The Hon‟ble National Consumer Disputes Redressal Commission, New Delhi in United India Insurance Company Limited Vs. Balbir Singh, Revision Petition No.2234 of 2016, decided on 27.07.2017 held as under:-
"Under Section 24(A) of the Consumer Protection Act, 1986, a Complaint shall be instituted within a period of two years from the date on which the cause of action has arisen. The claim in this case, having been repudiated by the Insurer on 06.09.2007, a cause of action to file the consumer complaint had arisen on that day. The Complaint ought to have been instituted on or before 06.09.2009........."
18. In the present case, the incident of fire had taken place on the night of 22/23.08.2012. The proprietor of the firm gave intimation to his banker regarding fire and loss and thereafter to the opposite parties through bank on the same day. After conducting inquiry into the incident, the opposite parties repudiated the claim on 28.02.2013. After the repudiation of the claim, the complainant filed the complaint on 16.01.2015 i.e. within the period of two years from the date of repudiation. Thus, the complaint filed by the complainant was well within the period of limitation. The District Consumer Forum was not justified in non-suiting the complainant on the ground that the complaint was filed within two years from the date of cause of action. Therefore, without going into the findings arrived at by the District Consumer Forum on merit, it would be in the interest of justice to accept the appeal, set aside the impugned order require the District Consumer Forum to consider and decide the complaint afresh without being swayed by the findings earlier arrived at while dismissing the complaint.
Remanded Page 11 of 12
Appeal No.496 of 2017 04.08.2022 M/s Panipat Handloom Depot Vs. National Insurance Company Limited
19. Resultantly, the appeal is accepted, impugned order is aside and the matter is hereby remanded to the District Consumer Forum for considering and deciding the complaint afresh in accordance with law. The parties through their counsel shall appear before the District Consumer Forum on 19.10.2022.
20. A copy of this order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 2019. The order be uploaded forthwith on the website of the Commission for the perusal of the parties.
21. File be consigned to record room along with a copy of this Order.
(T.P.S. MANN) PRESIDENT Pronounced On:04.08.2022 U.K (MANJULA) MEMBER Remanded Page 12 of 12