State Consumer Disputes Redressal Commission
Shri. Jatinder Pal Singh Arora vs The Oriental Insurance Co. Ltd. on 18 October, 2012
BEFORE THE HON'BLE STATE CONSUMER DISPUTES REDRESSAL
BEFORE THE
HON'BLE STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MAHARASHTRA, MUMBAI
Complaint
Case No. CC/00/208
1. Shri. Jatinder Pal Singh Arora, Proprietor
M/s. Guru Nanak Rubber Works, Compound, K. P. Chugh
Industries, L. B. S. Marg, Sonapur Lane, Bhandup (W), Mumbai 400 078.
...........Complainant(s)
Versus
1. The Oriental Insurance Co. Ltd.
Dadar Division, Laxmi Commerce Centre, Senapati
Bapat Marg, Dadar (W),
Mumbai 400 020.
............Opp.Party(s)
BEFORE:
HON'BLE Mr. P.N. Kashalkar PRESIDING MEMBER
HON'BLE MR. Dhanraj Khamatkar Member
PRESENT:
Mr.S.B.Prabhawalkar-Advocate
......for the Complainant
Mr.J.S.Chandnani-Advocate
......for the Opp. Party
ORDER
Per Honble Mr.P.N.Kashalkar, Presiding Judicial Member Complainant has filed this consumer complaint against M/s.Oriental Insurance Co. Ltd., Dadar Division, Dadar (W), Mumbai alleging deficiency in service on its part. According to complainant, he is a proprietor of M/s.Guru Nanak Rubber Works having its factory at Compound K.P.Chugh Industries, L.B.S. Marg, Sonapur Lane, Bhandup (w), Mumbai 400 078. Opponent is the Insurance Company and complainant had insured his premises, machinery, stock, etc. with the opponent by taking Fire Policy No.124201/11/98/00473. According to complainant, fire took place on 30/10/1997 and he filed claim with the opponent being no.11/98/00003. The complainant states that on 30/10/1997 at about 11.00 p.m. at night, fire took place in his company premises. His watchman who was residing near the factory had seen the fire and shouted for help. The complainant was contacted by his watchman on the telephone. The Complainant then immediately rushed to the factory. In the meanwhile complainant, watchman and nearby company telephoned to the fire station. The complainant stated that when he reached the factory, he with the help of others tried to extinguish the fire but could not succeed. In the meantime, fire brigade from Mulund came, they could not control the fire and after two hours Mulund fire brigade was able to extinguish the fire. Complainant received Fire report on 25/11/1997 from Deputy Chief Fire officer. He then gave intimation to the Insurance Company. The police report was also lodged with Bhandup police station.
Police recorded panchanama of the incident. On the said intimation of fire, opponent appointed M/s.A.S.Engineers as surveyors.
M/s.A.S.Engineers visited his premises to inspect, verify and assess the loss suffered due to fire on 30/10/1997. All documents sought by M/s.A.S.Engineers were tendered.
M/s.A.S.Engineers submitted survey report and assessed loss occasioned to the complainant at `8,88,680/-. But ultimately, opponent appointed another surveyor M/s.Ashok Chopra & Co. to investigate the loss due to fire. Said M/s.Ashok Chopra & Co. also called for documents and information. Thereafter, he continuously wrote various letters to the opponent for early settlement of claim. He also wrote letter to the Managing Director of the Company at New Delhi on 07/04/1999 requesting him to look into the matter pending settlement of claim.
But ultimately, he received letter dated 05/04/1999 that complainants fire at his premises was not covered by fire policy purchased by him since his plant and machinery was gutted in fire, which took place on 30/10/1997 as per investigation report.
Hence they informed him that it was not possible for them to accept the insurance claim as lodged by the complainant. According to complainant, there was minor fire on 27/09/1997 and such incidents are common in rubber manufacturing company for which necessary repairs were carried out and after inspection of factory by insurance officer of the branch they collected premium from the complainant and, therefore, complainant pleaded that opponents have wrongly withheld the claim amount as assessed by M/s.A.S.Engineers. The complainant is thus deprived of legitimate claim of `8,88,680/- and, therefore, he filed consumer complaint alleging deficiency in service on the part of opponent. He also claimed interest @ 17% p.m. on the said amount from 06/02/1998 till disposal of complaint. Besides he prayed for costs of the complaint.
2. Insurance Company filed written version and held that the complaint as filed by the complainant is totally false. Branch Manager had rightly repudiated the claim of the complainant by letter dated 05/04/1999 on the basis of report given by M/s.A.S. Engineers. At the request of the complainant, matter was further examined by the Regional office and Regional office also concurred with the view expressed by the investigator that the alleged loss occasioned to the complainant and the fire that took place on 30/10/1997 was not payable as per the terms and conditions of the policy and, therefore, complaint is liable to be dismissed with compensatory costs as per section 26 of the Consumer Protection Act, 1986. Opponent also pleaded that Kunbi Sahakari Bank Ltd. to whom the policy in question has been hypothecated, has not been impleaded as party and, therefore, on this count also complaint should be dismissed.
Opponent further pleaded that complainant was insured under Fire Policy No.124201/11/97/00360 for their gala at `2,00,000/-, for stock `3,00,000/- and machinery `11,00,000/-. So total sum insured was `16,00,000/- for the period from 12/07/1996 till 11/07/1997. Said policy was not renewed.
Subsequently, complainant took fresh policy on 30/09/1997 but this was cancelled since inception vide endorsement No.124201/11/E/98/0052 dated 08/10/1997 since the cheque was dishonoured. The complainant thereafter took fresh policy No.124201/11/1998/473 for the period from 08/10/1997 to 07/10/1998. The total sum insured was `16,50,000/-. Exhibit 2 to the complaint is the said policy. Complainant intimated the claim stating that their factory was gutted in fire on 30/10/1997. Estimated loss was about `6,00,000/- Opponent appointed surveyor who visited the complainants factory premises on 31/10/1997 and, ultimately, submitted their report dated 06/02/1998 along with annexures. It is marked as Exhibit 3 to the complaint. As the policy was hypothecated to Kunbi Sahakari Bank, the Branch Manager of the opponent wrote letter dated 10/02/1998 and contacted the bankers to enquire if any claim is reported by the complainant subsequent to 08/10/1997. Exhibit 4 is the said letter. In reply, the bankers enclosed a letter dated 29/09/1997 received by them from the complainant wherein complainant has stated that due to electrical short circuit the factory was totally burnt on 27/09/1997 at 9.00 p.m. Premises of the complainant was inspected by the bankers on 28/10/1997 as per the report of the bank enclosed therewith together with the police panchanama. Exhibit 5 is the copy of the said letter dated 12/02/1998 received from the bank along with its annexures. Opponent pleaded that it is pertinent to note that fire on 27/09/1997 was not disclosed by the complainant while taking fresh policy on 08/10/1997. Documents signed by the bank along with forwarding letter were also significant.
Branch Manager therefore felt that this matter required further investigation and, therefore, further obtaining approval from Dadar D.O. office, some queries were sent to the original surveyor. The first surveyor even disclosed that he was not aware about the fire that took place on 27/09/1997. Therefore, the company appointed investigator M/s.Ashok Chopra & Co. to investigate the matter. They gave their report on 06/02/1998 along with the documents. Their finding was that the insured had intimated their bankers through their letter dated 29/09/1997 that their factory was totally burnt by heavy fire on 27/09/1997 at 21.00 hrs. The Fire Brigade also confirmed that they had received fire call at 21.25 hours on 27/09/1997 and attended the loss at M/s.K.P.Chugh Industries, Sonapur Road, Bhandup (West). This letter confirms large stock of rubber goods, electrical installations were gutted in fire. Insureds banker visited the premises on 20/10/1997 and made a report that fire took place on 27/09/1997. Stock of rubber goods was found to be completely destroyed. It was claimed before the bankers that these goods were said to belong to M/s.J.B.Industries, even though the insured did not produce any document to prove his ownership. The opponent pleaded that thus there is no explanation at all as to how stock of 30/07/1997 could be declared on 01/07/1997and the statement handed over on 09/07/1997. The company procured Balance sheet for the period 01/04/1997 to 31/10/1997 and 01/11/1997 to 31/03/1998. Neither of these balance sheets have any entry giving loss due to fire.
Considering the documents inspected by the Insurance Company and the bankers, they concluded that insured was not covered by any fire policy on 27/09/1997 when all their stocks were destroyed by fire and in connivance with some officials of their banker, they have tried to manipulate the records to create a value for stock subsequent to 27/09/1997 and they had taken fresh policy w.e.f. 08/10/1997 and insured have engineered and obtained documents for a supposed fire on 30/10/1997. Under the circumstances, M/s.Ashok Chopra & Co. opined that the insured was not covered for the risk at the time of actual fire. So loss was not admissible under the terms and conditions of the policy purchased by the complainant from opponent on 08/10/1997.
In view of this finding given by the investigator, since there was no stock available on 30/10/1997 alleged to have been burnt in fire, the Insurance Company was pleased to repudiate the claim by letter dated 05/04/1999. They therefore pleaded that they are not guilty of any deficiency in service and complainant has lodged fraudulent claim and, therefore, they have rightly repudiated the said claim.
3. Both the parties have filed various documents on record besides affidavit in evidence. We heard submissions of Mr.S.B.Prabhawalkar-Advocate for the complainant and Mr.J.S.Chandnani-Advocate for the opponent.
4. The only point that arises for our consideration is whether the repudiation of the claim made by the complainant was justified in the circumstances obtainable?
Our finding is in the affirmative.
Reasons :- No doubt after fire that allegedly took place on 30/10/1997 claim was lodged and M/s.A.S.Engineers were appointed by the Insurance Company/opponent and M/s.A.S.Engineers submitted final report, which is at page nos.63 to 75 of the paper book and in the said report M/s.A.S.Engineers concluded that damage due to admissible peril is covered and hence claim is admissible under terms and conditions of subject policy. No breach of warranties was observed. Net payable claim after all deductions worked out to `8,88,680/-. Insured has agreed to above assessment and report is based on actual inspection carried out at site and discussions held with the insured, information made available. On the basis of this report, it is the contention of the complainant that the opponent company should have allowed the claim lodged by the complainant.
He should have been awarded compensation of `8,88,680/-. However, Insurance Company sent repudiation letter dated 05/04/1999.
Repudiation letter is at Exhibit L. They mentioned in the repudiation letter that, the file was handed over for investigation to Mr.Ashok Chopra. We have now received his report according to which the fire took place on 27/09/1997 when all your stocks were destroyed by fire. Hence, as on 27/09/1997 you were not covered by any Fire Policy. This loss is thus not admissible under the terms and conditions of the policy and we are therefore repudiating your claim and treating it as NO CLAIM.
Mr.Prabhawalkar Ld.counsel for the complainant assailed this repudiation letter by submitting that they had harped upon the fact that fire had taken place on 27/09/1997 and on 27/09/1997 since there was no fire policy purchased by the complainant from them, there was no claim but opponent had not sent repudiation letter in respect of claim lodged by them for the occurrence dated 30/10/1997. Complainant had taken policy on 08/10/1997 after the occurrence of fire on 27/09/1997. He had lodged claim no.11/98/00003 for the fire that took place on 30/10/1997 under policy no. 124201/11/98/00473. But they were simply referring to incident that took place on 27/09/1997 and stated that on that date complainant was not holding any policy issued by the opponent. According to Mr.Prabhawalkar-Ld.counsel for the complainant, thus, there was no repudiation from the Insurance Company about the claim lodged by him vide claim no.11/98/00003 under the policy he had purchased on 30/10/1997. However, if we peruse this repudiation letter carefully, they have covered incidence of fire that took place on 27/09/1997 as well as on 30/10/19997 and fire of 30/10/1997 was reported to the Insurance Company and that is why the Insurance Company had appointed M/s.A.S.Engineers as surveyor and M/s.Ashok Chopra & Co. as investigator. There was no mention in the report of M/s.A.S. Engineers that there was earlier fire at the premises of the complainant on 27/09/1997.
Earlier incidence of fire on 27/09/1997 was suppressed by the complainant from the Insurance Company as well as from the surveyor M/s.A.S.Engineers appointed by the Insurance Company to assess the loss. According to the complainant the fire that took place on 30/10/1997. It is for this reason M/s.Ashok Chopra & Company was appointed as investigator and they made a detailed investigation and came to the conclusion that claim lodged by the complainant was absolutely false and frivolous and with the help of bankers, complainant managed to collect stock statement to make a show that in the fire that took place on 30/10/1997 complainant suffered huge loss in stock in trade, finished goods, etc. From the letter of the complainant himself addressed to Kunbi Sahakari Bank Ltd., the scale of justice gets tilted in this particular case. Said letter is dated 29/09/1997 addressed to Manager, Kunbi Sahakari Bank Ltd. by complainants firm M/s.Guru Nanak Rubber Works. In this letter the complainants Director is informing the bank that, we are very sorry to inform to you that due to electrical short circuit our Factory was totally burnt by heavy fire on 27th Night 9.00 p.m. I would request you to visit my Factory site do the Primary Inquiry of the situation. Kindly do the needful & oblige. This letter dated 29/09/1997 is putting the death nail in the coffin of the complainants case. Case of the complainant is that on 30/10/1997 there was fire in the Factory and in the said fire, his factory was gutted and as per report of M/s.A.S.Engineers, he suffered loss of `8,88,680/-. But this letter dated 29/09/1997 is categorical and in this letter in unequivocal terms the complainant is informing his bankers i.e.Kunbi Sahakari Bank Ltd. that due to electrical short circuit his Factory was totally burnt by heavy fire on 27th Night 9.00 p.m. and they should come to do preliminary enquiry of the situation. This letter itself is disproving the case of the complainant and supporting the investigation report submitted by M/s.Ashok Chopra & Co. The conclusion in the report is supported by factual position and they smelt that there was manipulation and fraudulent preparation of the claim with the help of their bankers. The Fire Brigade officials and police officers also helped complainant to make a show that there was incident of fire on 30/10/1997. In the light of complainants own letter written to their bankers, we have got no option but to hold that claim preferred by the complainant for the fire occurrence on 30/10/1997 was nothing but a false claim because his factory was gutted in fire on 27/09/1997 itself for which he has reported the matter to the police, fire brigade and also to his banker Kunbi Sahakari Bank Ltd. In the circumstances, without further going into details we hold that consumer complaint as filed by the complainant is appearing to be false and frivolous. Claim was rightly repudiated by the Insurance Company/opponent herein supported by investigators report (Exhibit 12) and, therefore, we find no substance in the complaint filed by the complainant.
Hence the following order:-
ORDER Consumer complaint stands dismissed.
Complainant to pay costs of `5000/- to the opponent and bear its own costs.
Inform the parties accordingly.
Pronounced on 18th October, 2012.
[HON'BLE Mr. P.N. Kashalkar] PRESIDING MEMBER [HON'BLE MR.
Dhanraj Khamatkar] Member Ms.