State Consumer Disputes Redressal Commission
M/S. Frontier Remedies vs Bajaj Allianz General Insurance ... on 7 December, 2011
1 C.C..No.: 08-08
STATE CONSUMER DISPUTE REDRESSAL COMMISSION,
MUMBAI, CIRCUIT BENCH AT AURANGABAD.
Date of filing : 05.06.2008
Date of Order: 07.12.2011
COMPLAINT CASE NO.: 08 OF 2008
M/s. Frontier Remedies
Through its Proprietor,
Dr. Murakonda Venkata Narayana
R/o. Plot No.73, Khiwnsara Park,
Garkheda Parisar, Aurangabad. ...Complainant
-V/s-
1. Bajaj Allianz General Insurance Co.Ltd.
2nd Floor, Rajendra Bhavan,
Adalat Road, Aurangabad.
2. The Saraswat Co-operative Bank Ltd.
Khadakeshwar Branch, Aurangabad. ...Opponent
... Respondent
Coram : Mrs. Uma S.Bora, Hon`ble Presiding Member.
Mr. K. B. Gawali, Hon'ble Member.
Present: Adv. Shri. S. N. Lavekar, for complainant.
Adv. Shri. S. G. Chapalgaonkar, for opponent No.1,Bajaj Allianz. None appeared for opponent No.2.
- :: ORAL ORDER ::-
Per Mrs. Uma S.Bora, Hon`ble Member
1. Complainant M/s. Frontier Remedies is proprietorship firm situated at Gat No.40, Gevrai Village, Paithan Road, Aurangabad. Said firm is manufacturing Bulk Drugs such as Oxybutynine Chloride, Warfarine sodium, Cetirazine Dihydrocholoride and Fluconazole etc. Opponent No.1 is Bajaj Allianz General Insurance Company with whom said firm was insured since 2001 and policy was renewed every year. Opponent No.2 is the Sarswat Co-
operative Bank from whom complainant had obtained loan for running his 2 C.C..No.: 08-08 business. In the year 2001 loan of Rs.5,00,000/- was sanctioned, thereafter in the year 2002 loan of Rs.22,16,000/- was sanctioned, and on 25.09.2002 opponent No.2 bank agreed to sanction the loan of Rs.80,00,000/- to the complainant. Complainant obtained "Standard Fire & Special Peril Policy"
from opponent No.1 insurance company. Policy period was 18.10.2006 to 17.10.2007. Sum insured was Rs.30,00,000/- for the stock of complainant. It is stated in the complaint that, complainant was performing his best in the business and having good will in the market for their products. Complainant received various purchase orders from the customers situated abroad. During currency of policy on 09.02.2007 factory of complainant caught fire and said fire consumed total stock as well as the machinery, furniture, fixtures, electrical fittings. Said fire ruined the factory building. Immediately Mr. Jaidevan Pillai, Manager of the company called the fire brigade. After the efforts for six hours fire brigade extinguished the fire. Complainant reported said incident to police authorities. On 10.02.2007 said incident was informed to the opponent No.1 insurance company. Accordingly surveyor visited the factory on 11.02.2007. Surveyor Shri. V.S. Gandhi asked the complainant to supply various documents which were supplied by the complainant. Many queries were made by the surveyor which were also answered by the complainant. It is alleged by the complainant that on 27th June, 2007 without any prior intimation insurance company sent their Chartered Accountant Shri. J. C. Bhansali, to inspect the factory. On 03.09.2007 insurance company repudiated the claim of the complainant on the ground that, surveyor's finding confirmed that false documents submitted by complainant to obtain benefits under policy. All benefits under this policy forfeited as per general policy terms and condition and condition No.8 which states as under:
General Condition No.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 3 C.C..No.: 08-08 benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the Insured, all benefits under this policy shall be forfeited.
a) After receipt of said letter complainant approached to opponent No.1 and tried to explain the situation. He produced all the documents regarding the purchase of the raw material from various firms. He produced the receipts of freight paid by him to various transporters, but insurance company did not consider his claim. Therefore, complainant approached to Commission. In all, complainant claimed compensation of Rs.71,00,000/-. The explanation about claim of compensation is given as follows:
Complainant claimed insured amount i.e. Rs.30,00,000/- along with 24 % interest. Complainant also claimed net profit income which he had to loose due to non-fulfillment of the orders of supply because of the incident of fire. Complainant claimed Rs.1,00,000/- for deficiency in service on the part of insurance company and s. 10,00,000/- for mental agony. In all complainant claimed Rs.71,00,000/-.
b) With the complaint, complainant filed following documents-
i) Copy of loan agreement
ii) Copy of insurance policy
iii) Copy of purchase order
iv) Report of the police station
v) Copies of letters
vi) Copy of Mr. J.C. Bhansali's letter
vii) Claim repudiation letter dated 03.09.2007
viii) Claim repudiation letter dated 08.04.2008
ix) Photographs of the incident
x) Balance sheet
xi) Documents of sales tax returns
xii) Receipts of transporters etc.
4 C.C..No.: 08-08
2. Adv. Shri. S. G. Chapalgaonkar, appeared for opponent No.1, Bajaj Allianz. Notice was served on opponent No.2, none appeared for opponent No.2. Complaint proceeded exparte against opponent No.2. Opponent No.1 filed their written statement. Opponent No.1 admitted the policy and also admitted the incident of fire. It is submitted that, the claim is repudiated by insurance company by relying on the General Condition No.8 which is correct and proper. It is stated in the written version that, after getting the preliminary survey report by Shri. V. S. Gandhi, surveyor Shri. J. C. Bhansali investigated the matter. While investigating the matter he cross checked all the bill invoices of the stock alleged to have been stored by the complainant. During scrutiny it was found that invoice in respect of Suman Enterprises is doubtful. Therefore, surveyor visited the address mentioned in the invoice of Suman Enterprises and it was found that, there is no such dealer existed with said name and on the given address. It is stated by respondent that, mobile numbers mentioned in the invoice of Suman Enterprises were found fake and bogus. Therefore, surveyor made search on the basis of VAT CSP numbers mentioned in the invoice but they were also found fake. Therefore, surveyor made correspondence through post as well as courier, but it was confirmed that said Suman Enterprises was not in existence. Therefore, insurance company rightly repudiated the claim by relying on condition No.8. There is no deficiency in service committed by insurance company.
3. Respondent produced survey report submitted by Shri. V. S. Gandhi as well as Shri. J. C. Bhansali. Envelops sent by post, courier. Respondent also produced search report in respect of VAT CSP numbers. Opponent No.1 also produced the search result made in respect of Suman Enterprises by the surveyor. Evidence affidavit of Tularam Gorkha, Dy. Manager (Technical) of Bajaj Allianz and Shri. J. C. Bhansali, Surveyor & Loss Assessor. After receipt of copy of written version filed by insurance company, respondent No.1, complainant filed rejoinder affidavit, wherein complainant tried to explain the 5 C.C..No.: 08-08 factual position. It is stated in the said rejoinder that, if insurance company found that M/s. Suman Enterprises is not in existence and bills issued were bogus, then insurance company ought to have taken action against said concern. For the bogus receipts of Road Lines invoices and bills complainant is not liable, action must have been taken against said Suman Enterprises.
4. After perusing the complaint, relevant documents and written version with relevant documents following issues are framed for the consideration.
ISSUES
1. Whether, the complainant is entitled to claim the compensation as per his complaint? -No.
2. Whether, opponent proves that, repudiation of claim is legal and proper? -Yes.
3. What order?
Adv. Shri. S. N. Lavekar, appeared for complainant. It is submitted by Adv. Lavekar that, complainant had obtained "Standard Fire & Special Peril Policy"
since year 2001. Policy was continuously renewed for running the business. Complainant had obtained loan from opponent No.2 bank. It is further submitted by Adv. Lavekar that complainant is well reputed company in the field of chemical. Complainant had achieved good will in the market therefore, their business was expanded. Even by relying on their credibility, opponent No.1 bank increased the loan amount. But, due to sudden incident of fire complainant had suffered huge loss. It is submitted by Adv. Lavekar that earlier surveyor Shri. V. S. Gandhi was appointed by insurance company who assessed the loss. Said surveyor inspected the premises of complainant and after verification of all the documents and considering the loss suffered by complainant he assessed the loss to the tune of Rs. 2,83,868/-. It is submitted by Adv. Lavekar though first surveyor correctly assessed the loss insurance company appointed second surveyor without any reason. It is submitted by 6 C.C..No.: 08-08 Adv. Lavekar that if insurance company found any document as forged and fraudulent it should have taken action to prosecute the person who issued the forged and fabricated documents, but without taking action against them, insurance company repudiated the claim of the complainant. Therefore, insurance company committed deficiency in service.
5. In support of his contention he relied on-
i) Oriental Insurance Company Vs. Sita Ram, reported in IV (2006) CPJ 226. It is held by Himachal Pradesh State Commission that, affidavit of surveyor who conducted the survey must have been filed by the insurance company.
ii) United India Insurance Co. Ltd. Vs. M/s. Guljar Cold Storage & Ice Factory, reported in III (1999) CPJ 203.
It is held by U.P. State Commission that, there is no evidence by way of affidavit of surveyor filed by the insurance company, therefore reliance not to be placed on report.
iii) M/s. Ritu Gram Udyog Samiti Vs. The New India Assurance Co.Ltd., reported in- 2008 (III) CPR 192.
It is held by National Commission that, insurance policy taken in respect of industrial shed, therefore claim should not be defeated or repudiated on plea and ground that policy was taken for commercial purpose.
iv) M/s. JK Cement Works Vs. M/s. Oriental Insurance Co. ltd, reported in 2009 (I) CPR 44 (NC). It is held that, Insurance Policy obtained for commercial activity. It obtained to cover risk to commercial activity, therefore Complainant is consumer.
7 C.C..No.: 08-08Adv. S. G. Chapalgaonkar, appeared for opponent No.1 submitted that, it is an admitted fact that, complainant had obtained policy by name "Standard Fire & Special Perils Policy". It is also admitted that, incident have occurred in the factory premises. At the outset Adv. Chapalgaonkar submitted that, complainant is commercial entity and therefore he is not consumer as per definition of consumer in Consumer Protection Act. It is submitted by Adv.Chapalgaonkar that after receipt of claim for compensation in respect of loss due to fire, surveyor Shri. V. S Gandhi assessed the loss. Accordingly, Shri. Gandhi after inspection and verification of all documents and statement of concern persons assessed the loss. After submission of report of surveyor Shri. Gandhi, insurance company appointed Shri. J. C. Bhansali to investigate the matter as Shri. Bhansali is expert in Cast, Account, Taxation etc. for purpose of verification bills of purchase for making proper assessment of loss. It is necessary to investigate the particulars about the purchase of raw material made by complainant, because it is claimed by complainant that, the raw material he had purchased worth Rs.14,43,000/- from one Suman Enterprises was totally burnt in the incident, therefore, with view to investigate the purchase order, invoices, transport receipts, payment of bill etc. Shri. J. C. Bhansali was appointed by insurance company. It is further submitted by Adv. Chapalgaonkar that, while investigating the matter it was found by Bhansali that, said Suman Enterprises from whom complainant alleged to have purchased huge stock worth Rs.14,00,000/- is not in existence. It is further submitted by Adv. Chapalgaonkar that, Shri. Bhansali tired to verify the existence of said Suman Enterprises by sending letter through post, courier company, by contacting on mobile numbers, land line numbers, mentioned in the invoice and personal visit on the address printed on the invoice of Suman Enterprises, but it was confirmed that said Suman Enterprises is not in existence, therefore insurance company rightly repudiated the claim by relying on condition No.8 of General Condition. There is no deficiency in service.
8 C.C..No.: 08-086. In support of his contention he relied on-
i) Kalyanpur Cement Ltd., Vs. the New India Assurance Co.
Ltd. reported in IV (2006) CPJ 87 (NC).
It is held by National Commission that, claim lodged for value of Rs.26,28,828/--Claim based on 2 documents- Upon investigation, both documents found forged and fabricated, therefore, insurance company is not liable.
ii) In Md. Hafizuddin Vs. United India Insurance Co. ltd, reported in CLT (NC) 1 (2006) 278.
It is held by National Commission that, repudiation of insurance claim on the ground of suspicion that complainant had committed fraud to cheat the insurance Co. is quite justified.
7. We heard both counsels and perused the record. It is an admitted fact that, complainant had obtained "Standard Fire & Special Peril Policy". Incident of fire occurred in the factory premises during the currency of policy. After receipt of claim by insurance company surveyor was appointed. Surveyor investigated the matter and assessed the loss. While assessing the loss it was found that, complainant alleged that, raw material purchased by one Suman Enterprises worth Rs.14,43,000/- was totally gutted in the fire. For claiming the said amount complainant relied on the tax invoices issued by Suman Enterprises, the receipts of transport issued by Batco Road lines in favour of Suman Enterprises and bills regarding the raw material. Shri. J. C. Bhansali was appointed by the insurance company to inquire about the said purchase transaction. Shri. Bhansali took great effort to investigate the said transaction. Shri. Bhansali search on internet about Suman Enterprises and in the search result it was found that, no firm by name Suman Enterprises is in existence on the given address. Shri. Bhansali tried to search Suman Enterprises by various 9 C.C..No.: 08-08 means of correspondence like by post, contact on mobile and land line and personal visit. But, it was found that, there is no such firm in existence. After getting the investigation report by Shri. Bhasali insurance company rightly repudiated the claim relying on condition No.1 of General Condition. In support of this repudiation Dy. Manager of insurance company and Shri. J. C. Bhansali, surveyor filed the affidavit. Therefore, while deciding the issues above mentioned we answered issue No.1 in negative and issue No.2 in affirmative. In our view, insurance company repudiated the claim as per Condition No.8 which reads as under:
General Condition No.8:
"If the claim be in any respect fraudulent, or if any false declaration be made or used in support of 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 willful act, or with the connivance of the Insured, all benefits under this policy shall be forfeited.
In our view, after the thorough investigation done by Shri. Bhansali repudiation is legal and proper. Hence,
-:: ORDER ::-
1. Complaint is dismissed.
2. Parties to bear their own cost.
(K. B. Gawali) (Mrs.Uma S. Bora)
Member Presiding Member
Kalyankar