State Consumer Disputes Redressal Commission
M/S Attero Recycling Pvt. Ltd. vs United India Insurance Co. Ltd. on 29 July, 2016
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
CONSUMER COMPLAINT NO. 03 / 2013
M/s Attero Recycling Pvt. Ltd.
Khasra No. 173, Village Raipur (Bhagwanpur) Industrial Area
Roorkee, District Haridwar
......Complainant
Versus
United India Insurance Company Limited
Branch Office-II, 40, Arhat Bazar
Saharanpur Chowk, Dehradun
through its Branch Manager
......Opposite Party
Sh. R.S. Negi, Learned Counsel for the Complainant
Sh. J.K. Jain, Learned Counsel for the Opposite Party
Coram: Hon'ble Mr. Justice B.S. Verma, President
Mr. D.K. Tyagi, H.J.S., Member
Mrs. Veena Sharma, Member
Dated: 29/07/2016
ORDER
(Per: Justice B.S. Verma, President):
This consumer complaint under Section 12 read with Section 18 of the Consumer Protection Act, 1986 has been filed by M/s Attero Recycling Pvt. Ltd. (hereinafter referred to as "complainant") against the opposite party, alleging deficiency in service on the part of the opposite party in denying the claim of the complainant.
2. Briefly stated the facts of the case are that the complainant is having a factory at Khasra No. 173, Village Raipur (Bhagwanpur) Industrial Area, Roorkee, District Haridwar and is engaged in recycling, assembling and manufacturing of electronic items. The complainant had taken a Standard Fire and Special Perils Policy 2 No. 250102/11/12/11/00000019 from the opposite party - United India Insurance Company Limited, Arhat Bazar, Saharanpur Chowk, Dehradun for the period from 04.05.2012 to 03.05.2013. Under the said policy, the building of the complainant - company including boundary wall, Shed and RCC construction was insured for sum of Rs. 6,00,00,000/-; plant and machinery including transformer and electrical fittings was insured for sum of Rs. 8,48,00,000/- and stock of raw material, semi-finished product and finished product was insured for sum of Rs. 6,00,00,000/- and the total sum insured under the policy was Rs. 20,48,00,000/-. The complainant had taken the first insurance policy from the opposite party in the year 2009, which was being renewed by the opposite party from time to time. A fire occurred in the factory premises of the complainant on 27.11.2012, intimation whereof was given to the Fire Brigade Authorities, who visited the site and extinguished the fire. In the fire incident, the complainant suffered a loss of Rs. 65,96,000/- on account of damage to the building, material as well as goods. The complainant reported the incident to the opposite party and lodged the claim with the opposite party for indemnification of loss. The opposite party appointed Major R.K. Saraswat (Retd.) as surveyor. All the required documents were made available to the surveyor. Inspite of expiry of four months from the date of the fire incident, the opposite party did not settle the claim of the complainant. The complainant had taken cash credit limit of Rs. 10,00,00,000/- from Oriental Bank of Commerce, Raipur, Bhagwanpur, Roorkee and is burdened with interest on the said limit due to non-settlement of the claim by the opposite party. The complainant sent a legal notice dated 15.02.2013 through its counsel to the opposite party for payment of the claim amount, which was duly served upon the opposite party on 27.02.2013, but the claim was not settled by the opposite party. Therefore, alleging deficiency in service on the part of the opposite 3 party, the complainant filed the present consumer complaint and sought the relief as mentioned in the prayer clause of the consumer complaint.
3. The opposite party - insurance company filed written statement and pleaded that on receipt of the intimation of fire, the opposite party appointed Major R.K. Saraswat (Retd.) as surveyor for assessment of loss; that the required documents were not submitted by the complainant with the surveyor; that the surveyor submitted his report dated 12.04.2013 to the opposite party, wherein he has assessed the loss to the tune of Rs. 7,93,274/-; that the surveyor has opined that the loss does not fall under the purview of the insurance policy; that on the basis of the survey report, the claim of the complainant was repudiated by the opposite party through letter dated 29.05.2013 on the ground that inspite of letters / reminders sent to the complainant, the complainant has not complied with the required papers / documents and also that on the basis of claim form, survey report, photos, claim does not come into the purview of the policy, since the policy was taken recycling plant of E-waste and loss has taken place at Refurbishment / repairing of electronic goods unit and that there is no deficiency in service on their part.
4. In evidence, the complainant has filed the affidavit dated 30.01.2014 of Sh. Nitin Gupta, Managing Director of the complainant
- company. The opposite party has filed the affidavit dated 15.10.2014 of Sh. A. Sonam, Regional Manager of the insurance company in evidence and has also filed the affidavit dated 15.10.2014 of the surveyor Major R.K. Saraswat (Retd.). The opposite party has also filed the copy of the survey report dated 12.04.2013 of Major R.K. Saraswat (Retd.). The complainant has also filed the affidavit dated 16.01.2015 of Sh. Nitin Gupta, Managing Director of the 4 complainant - company in rebuttal to the affidavit of Sh. A. Sonam and Major R.K. Saraswat (Retd.) filed by the opposite party in evidence. Learned counsel for the parties have also filed the written arguments.
5. We have heard the learned counsel for the parties gone through the record.
6. There is no dispute with regard to the insurance as well as fire in the insured factory during the subsistence of the insurance policy. The insurance company has repudiated the claim of the complainant through their letter dated 29.05.2013 (Paper No. 107) on the ground that inspite of letters / reminders, the complainant did not submit the required papers and also that the claim does not fall under the purview of the insurance policy.
7. While coming to the conclusion that the claim does not fall under the purview of the insurance policy, the opposite party - insurance company has placed reliance on the survey report. The survey report dated 12.04.2013 submitted by Major R.K. Saraswat (Retd.) is on record (Paper Nos. 73 to 82). The surveyor in his report has concluded that the complainant - insured does not manufacture any electronic goods / items, nor any assembly line / assembly process was observed, whereas raw material was being used in the assembly line to manufacture electronic goods or appliances and that the policy does not state any risk description of the nature of job the insured is undertaking. In the insurance policy (Paper Nos. 8 to 9), the description of risk has been mentioned as "recycling plant & machinery, transformer, electrical fittings, building, boundary walls shed, raw material, semi-finished product and finished product". Thus, the raw material and semi-finished product were also covered as 5 risk under the insurance policy. The surveyor has also stated that the claim has been lodged for damage to old / scrap / salvage / discarded / damaged / destroyed / defective / outdated electronic goods that were kept or were under the process of repairing and refurbishing. We are of the view that looking into the description of risk mentioned in the insurance policy and the claim lodged by the complainant, the claim of the complainant was fully covered under the insurance policy and there was no justification on the part of the insurance company to repudiate the claim on the ground that the same does not fall under the purview of the insurance policy. It is also significant to mention here that the complainant has been taken the insurance policy from the opposite party from the year 2009 onwards and the same was being renewed from year to year. The surveyor in his report has also stated that the complainant has been insuring the unit since April, 2009. Thus, the opposite party was fully aware right from April, 2009 of the nature of business carried on by the complainant and if the complainant - insured was carrying on the business other than what told to the insurance company at the time of taking the insurance policy, the insurance company ought not to have insured the unit. In can not be said that the opposite party was put under any dark by the complainant with regard to the business carried on by the complainant in the unit. It is further important to mention here that the insurance policy must have been issued after physical inspection of the unit and after taking into consideration the nature of business carried therein and the risk was accordingly covered under the insurance policy. The insurance company has also charged handsome amount of premium from the complainant at the time of issuing the insurance policy. Thus, it does not now lie in the mouth of the insurance company to say that the claim lodged was beyond the purview of the insurance policy or that the claim was not covered under the insurance policy.
68. So far as the plea taken by the insurance company with regard to non-submission of required documents by the complainant is concerned, the complainant has specifically pleaded in para 5 of the consumer complaint that all the required documents were submitted with the opposite party and all the required formalities were also completed by the complainant. There is nothing on record to show that the required documents were not submitted by the complainant with the opposite party and that the complainant did not complete the requisite formalities for settlement of the claim. The surveyor in his report has mentioned that the value / cost and nomenclature of items / contents were tallied with the cash memos / purchase of scrap from various vendors / users / companies etc., as provided / supported by the insured. Thus, it can not be said that the required documents were not submitted by the complainant. All the required documents were duly provided by the complainant to the surveyor appointed by the opposite party.
9. From above discussion, it is amply clear that the opposite party was not at all justified in repudiating the claim of the complainant and by doing so, the opposite party has committed deficiency in service and in the present facts and circumstances of the case, there has been clear-cut deficiency in service on the part of the opposite party by denying the genuine and legitimate claim of the complainant on unwanted grounds and which do not have any substance.
10. So far as quantum is concerned, the complainant has stated that it has suffered a loss of Rs. 65,96,000/- in the fire mishap. The surveyor in his report dated 12.04.2013 has mentioned the estimated loss as Rs. 65,37,350/- and the loss assessed for has been mentioned by the surveyor as Rs. 50,00,164/-. While assessing the loss, the surveyor has mentioned the net amount assessed as Rs. 50,00,164/-
7towards stock and repairs to building and the net amount payable has been assessed by the surveyor as Rs. 7,93,274/-. The surveyor has calculated the salvage value as Rs. 41,65,139/- (85% of the total value of stock of Rs. 49,00,164/-). We do not find any justification on the part of the surveyor for making such a huge deduction from the net amount assessed. The surveyor has not given any sound reasoning for making deduction towards salvage value @85%. It may also be noted that if 85% of the loss assessed is deducted towards the value of the salvage, the insured will get almost nothing towards reimbursement of the loss sustained by him and such a huge deduction @85% towards salvage value can not at all be said to be justified and permissible. The surveyor has also deducted a sum of Rs. 41,751/- (5% of Rs. 8,35,025/-) towards excess clause, which is justified, as the said deduction finds mention in the insurance policy itself. There was also no justification on the part of the surveyor for deducting sum of Rs. 1,00,000/- towards the loss sustained to the building of the insured factory.
11. It is true that in insurance matters, the report of the surveyor is an important document and the surveyor's report can not be ignored easily, but at the same time, there should be some justification on the part of the surveyor while making deduction from the assessed loss and the assessment of loss should be made by the surveyor taking into consideration the totality of the facts and circumstances of the case and the deductions which are permissible under the policy and also those which appear justified should only be made by the surveyor while making assessment of loss sustained by the insured in the incident / accident. We are of the view that deduction @15% towards value of the salvage from the assessed loss of Rs. 50,00,164/- would be just and proper in the given facts and circumstances of the case and, thus, after deducting sum of Rs. 7,50,025/- (15% of 8 Rs. 50,00,164/-), the amount payable comes to Rs. 42,50,139/-. It is also important to mention here that the assessed loss was already taken at the depreciated value of the goods damaged in the fire incident and hence there was no justification on the part of the surveyor to deduct 85% amount towards value of the salvage, as in the fire incident in question, raw material was burnt. The surveyor has further deducted 5% amount towards excess clause as per the policy condition, which as is stated above, is justified. Therefore, further sum of Rs. 2,12,507/- (5% of Rs. 42,50,139/-) is to be deducted towards excess clause. This way, the net compensation payable to the complainant comes to Rs. 40,37,632/-. Since there is deficiency in service on the part of the opposite party by repudiating the genuine and legitimate of the complainant on unwanted grounds and, as such, the complainant is also entitled to interest @9% p.a. on the above amount of Rs. 40,37,632/- from the date of filing of the consumer complaint till payment.
12. In view of above, consumer complaint is allowed and the opposite party - insurance company is directed to pay compensation of Rs. 40,37,632/- to the complainant together with interest @9% p.a. from 09.04.2013, i.e., the date of filing of the consumer complaint till payment. No order as to costs.
(MRS. VEENA SHARMA) (D.K. TYAGI) (JUSTICE B.S. VERMA) K