State Consumer Disputes Redressal Commission
Sukhwinder Kaur vs National Insurance Company Limited on 6 January, 2015
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
Consumer Complaint No.05 of 2014.
Date of Institution: 09.01.2014.
Date of Decision: 06.01.2015.
Sukhwinder Kaur W/o Satnam Singh, R/o 37-C, Rajguru Nagar,
Ludhiana.
.....Complainant
Versus
National Insurance Company Limited, Branch Office, Atam Nagar,
Ludhiana.
...Opposite Party.
Consumer Complaint U/s 17 of the
Consumer Protection Act, 1986.
Before:-
Shri Baldev Singh Sekhon, Presiding Member.
Shri Harcharan Singh Guram, Member.
...................................
Present For the complainant: Ms Sukhwinder Kaur, in person.
For the OP : Sh. Munish Goel, Advocate.
BALDEV SINGH SEKHON, PRESIDING MEMBER:-
This complaint has been filed by the complainant U/s 17 of the Consumer Protection Act against the deficiency in service and the mental harassment suffered by her at the hands of OP, wich failed to Consume Complaint No.05 of 2014 2 provide her adequate compensation as per the Insurance Policy taken by her from the OP.
2. Earlier this complaint was filed by her before the District Consumer Disputes Redressal Forum, Ludhiana (in short, "the District Forum") which vide its order dated 12.12.2013, held that her complaint for the recovery of compensation from OP was not maintainable before it, as the amount of compensation claimed acceded Rs.20 lacs, that was beyond the pecuniary jurisdiction of the District Forum.
3. Briefly stated, the facts of the case are that the complainant took an insurance policy having sum insured of Rs.16.50 lacs from the OP for insuring her crop of Safed Musli (a medicinal herb), which was sown by her under "buy back guarantee scheme" with Nandan Biomatrix (Hyderabad). The area of land insured was 7.5 acres and insurance policy was extended to cover "pest and disease" also on payment of additional premium for the same. Insurance Policy No.401300/47/06/9300000010 was issued by the OP, that was valid for the period 04.09.2006 to 03.09.2007. The sum insured was @ Rs.4.40 per plant/tuber sown and in all Rs.3,75,000/- pants were sown in 7.5 acre of land @ 50,000 plants per acre. Hence, per acre sum insured was Rs.2.20 lacs and the total sum insured was mentioned as Rs.16.50 lacs. The said agriculture crop was financed by Punjab National Bank, Specialized Agriculture Branch, Gol Market, Model Town, Ludhiana and a loan of Rs.16.5 lacs was sanctioned, which was split into term loans for Rs.11.5 lacs and KCC limit for Rs.5 lacs.
4. The complainant was under immense stress due to burden of huge debt. It was pleaded that 96.3% of her crop was lost due to Insured Peril i.e. fungal attack. Had there been no such fungal disease, Consume Complaint No.05 of 2014 3 her yield would have been five times her input i.e. 3,000 kgs. x 5 - 15,000 kgs. and its market value would have been Rs.22.50 lacs @ Rs.150 per kg. i.e. the agreed rate by Nandan Biomatrix. But there was only 1119 kgs. of yield, out of which, only 550 kg. was considered as good fungal free yield. The value recovered for this yield was only Rs.82,500/-. Thus, the net market value of the yield lost was Rs.21,67,500/-. But Sh. R.R.Gupta, Surveyor appointed by OP-1, calculated very low amount i.e. Rs.3,98,177/- as compensation against the claim of Rs.16,74,073/-, because the surveyor followed a wrong and old policy document for assessing the loss, which was not applicable in her case.
5. It was further averred that the OP had mal intentions right from the beginning. They made every attempt to delay and ultimately, declared her claim as "no claim". She requested the surveyor as well as the insurance company several times to calculate the insurance claim as per the policy document, but they paid no heed to her repeated requests and she was, therefore, compelled to approach the Insurance Ombudsman, Chandigarh.
6. Even the office of the Insurance Ombudsman, Chandigarh could not do justice to her on the following facts:-
i) Ombudsman increased the amount of compensation from Rs.3,98,177/- to Rs.5,49,291/- in his first verdict dated 17.11.2008, which was a little higher than that of the surveyor without reading the policy documents.
ii) Even in the 2nd hearing, when the whole day of 23rd July, 2009 was devoted to resolve this issue and the insurance policy document was discussed in details, Ombudsman could not Consume Complaint No.05 of 2014 4 deliver justice to her. It was however admitted that the policy clauses were overlooked inadvertently while passing the first order dated 17.11.2008. Ombudsman further made it clear that the insured was entitled to more compensation as per policy clauses and, therefore, an additional sum of Rs.4.66 lacs became payable, but while giving the verdict, he only allowed Rs.4 lacs as ex-gratia payment.
7. Dissatisfied with the order passed by Insurance Ombudsman and unaware of the fact that OP had challenged the verdict of Ombudsman in Punjab & Haryana High Court, the complainant filed a complaint before District Forum, Ludhiana on 23.12.2009, but its proceedings were stayed by the order of the District Forum dated 07.04.2010 on the ground that a civil writ petition was pending before the High Court, Chandigarh inspite of the fact that her case for deficiency in service had no concern with the case filed by OP challenging the powers of Ombudsman. Hon'ble High Court, vide its order dated 25.01.2011, directed OP to pay the amount to the insured as ordered by the Ombudsman in his 2nd verdict by observing that the insurers do not enjoy any right to challenge the verdict of its own Ombudsman. Thereafter, as per directions of the Hon'ble High Court, OP released the amount of Rs.4 lacs (wrongly written as Rs.3 lacs) on 21.07.2011. It was also pleaded by the complainant that she was entitled to much more amount of compensation than what she got through intervention of Insurance Ombudsman. She, therefore, again requested the District Forum on 29.07.2011 to hear her complaint for deficiency in service, but it was again stayed on 16.12.2011 on the Consume Complaint No.05 of 2014 5 same ground. Subsequently, a Revision Petition was filed before this Commission against the order dated 16.12.2012 and this Commission, vide its order dated 31.10.2012, directed the District Forum to re-open and re-hear her complaint. However, the learned District Forum, vide its order dated 06.12.2013, directed the complainant to file the complaint before this Commission, as the compensation demanded by her exceeded Rs.20 lacs and that it was not competent to deal with her complaint.
8. It was further pleaded that the OP, who was harassing her since 2006 when she purchased the policy cover, was found deficient in rendering services to her on the following grounds:-
i) OP was not ready to give acknowledgement of the intimation of loss given to them on 25.04.2007.
ii) The surveyor took undue long time in submitting his report after 13 months.
iii) OP did not listen to her requests for revision of amount of compensation, as the surveyor excluded so many items of input cost while calculating the compensation. He even violated the provisions of policy document and followed a wrong and old policy terms and conditions, which were not applicable in her case.
iv) OP started making unnecessary inquiries from the complainant after getting the surveyor's report and wasted approximately 8 months. It was only through the intervention of the Ombudsman that she could get a partial payment of Rs.5,49,291 ( wrongly written as Rs.6,59,031/-in the complaint) against claim of Rs.17,68,598/-.
Consume Complaint No.05 of 2014 6
v) In the 2nd hearing on 23.07.2009, when the policy document was discussed in details, the insurance company had no justified defence, except to raise the objection that the Ombudsman could not have re-opened her case. It was pointed out by the complainant that the insurance company itself had got many cases reviewed by Ombudsman.
vi) OP challenged the 2nd order of Ombudsman, which was passed on 23.07.2009, in the High Court, inspite of being aware of the fact that the insurers cannot challenge the orders of the Ombudsman as per Rule 12 (3), 16 (5) of Redressal of Public Grievances Rules, 1998.
vii) The Insurance Regulatory and Development Authority had issued a circular dated 23.11.2010 that insurers must review the cases filed by them against the orders of Ombudsman in the light of orders of Delhi High Court, passed in Writ Petition No.10638 of 2006.
9. It was further pleaded that she suffered huge losses as well as mental harassment, agony and trauma during the pendency of the complaint at various levels and in the present complaint, the complainant sought issuance of following directions to OP to pay her compensation as per following details:-
a) Amount due as on 23.12.2009 as claimed= Rs.14,74,801/-.
b) Amount received as per orders of Hon'ble High Court dated 21.07.2011= Rs.4 lacs.
c) amount to be recovered at present = Rs.10,74,801/-
She also prayed for payment of compensation as under:- Consume Complaint No.05 of 2014 7
I) interest @ 18% p.a. on Rs.15,08,846/- from January, 2010 to June, 2011 for 18 months i.e. Rs.3,98,196/-.
II) Interest @ 18% p.a. on Rs.12,08,846/- from August, 2011 to December, 2013 for 28 months i.e. Rs.4,51,416/-. III) Compensation for mental harassment and legal expenses amounting to Rs.1.50 lacs.
Total Recoverable Amount = Rs.20,74,413/-.
10. Upon notice, the OP filed written reply, taking preliminary objection that the complaint was not maintainable before this Commission, as it has no jurisdiction in the matter. The complainant obtained insurance policy, in question, for commercial purpose and, as such, she is not a consumer, as defined under the Consumer Protection Act, 1986 (in short, "the Act"). It was further objected that the complaint involves disputed and complicated questions of facts and law. Therefore, the remedy, if any, available to the complainant, was by way of filing a civil suit.
11. It was further pleaded that this Commission has no jurisdiction to try and entertain the complaint, as the matter has already been taken up by the Insurance Ombudsman and the same has awarded amount for loss against the insurance policy. Once the Insurance Ombudsman has dealt with the matter and has given its decision on merits, then, this Commission cannot sit in appeal against the order of the Insurance Ombudsman. The complainant could have opted for proper legal remedy by challenging the order of the Insurance Ombudsman. She cannot file the complaint under the Act for the redressal of her grievances against the compensation already awarded by the Ombudsman.Consume Complaint No.05 of 2014 8
12. It was also pleaded that the complaint was not maintainable as the same is barred by limitation. The cause of action arose to the complainant on the date of loss i.e. 25.04.2007 and, as such, the complainant could have filed the complaint only upto 24.04.2009, whereas the present complaint has been filed in January, 2014. Learned District Forum has mentioned in its order that the period for which the complaint remained pending before it shall be excluded while calculating the period of limitation. Even in that eventuality, the complainant cannot presume that delay in filing the present complaint stands condoned on the basis of order of the District Forum unless the complainant filed application for condonation of delay and got the delay condoned from this Commission.
13. It was further pleaded that this Commission does not have the pecuniary jurisdiction to try and entertain the present complaint. It was pointed out that the complainant has filed an exaggerated claim with the sole purpose to come within the jurisdiction of this Commission.
14. On merits, it was admitted that the policy was for Rs.16.50 lacs, which was further divided into two parts i.e. Part-I and Part-II. The claim under Part-I was for Rs.7.50 lacs, whereas the claim under Part-II was for Rs.9 lacs. The claim of the complainant fell under Part-II, having the sum insured of Rs.9 lacs, and that the OP-insurance company has already paid a sum of Rs.9,49,291/-under the orders of Ombudsman. As such, the complainant cannot have any right to claim beyond Rs.9 lacs being the insured amount.
15. It was further averred that the surveyor recommended the claim of the complainant to the tune of Rs.3,98,177/- after applying its mind and proper verification. Thereafter, the complainant filed a petition Consume Complaint No.05 of 2014 9 before the Insurance Ombudsman, who awarded the compensation to the tune of Rs.5,49,291/-. Accordingly, the OP offered the same to the complainant and she accepted this sum as full and final settlement without any protest and thereby admitted the report of the surveyor to be correct assessment of her loss and gave her consent for acceptance of Rs.5,49,291/-. She also accepted the cheque for the same amount as full and final settlement without any coercion, undue influence, fraud, mistake or mis-representation. As such, she was barred to raise any dispute after accepting the money in full and final settlement. The Insurance Ombudsman has already allowed more than the sum insured.
16. It was further averred that the present policy was "Safed Musli Plantation Insurance", under which, the insured can cover the risk under two parts.
Part-I: This covers input cost incurred for raising the plantation upto 11 months of transplantation in the main field.
Part-II: This covers market value of the tubers at field level irrespective of the amount of inputs incurred.
It is further mentioned under the policy that the insurance cover for Part-I is compulsory. If any proposer opts for Part-II of the policy, then indemnity payable upto 6 months will be based on the actual input cost incurred upto that stage or limit of indemnity payable as shown in the policy under Part-I of the cover and beyond that period, if tuber formation has already been started, compensation payable will be as per the prevalent market value of the tubers on the basis of valuation table as shown in Part-II under the policy schedule that provides as under:-
Consume Complaint No.05 of 2014 10
Part-I: since Part-I refers to the input costs incurred for stage wise cultivation of the crop, the maximum indemnity payable in case of any loss would be based on the following chart:-
Stage of Plantation/Policy Percentage of sum Insured Upto 2 months 5% Upto 3 months 10% Upto 4 to 6 months 30% From 7 months to 9 months 60% Part-II Stage of Plantation/Policy Percentage of sum insured Upto 2 months -
Upto 3 months - Upto 6 months - Upto 9 months 80% Upto 11 months 100%
17. In the present case, the complainant took the policy for the period 04.09.2006 to 03.09.2007 and the date of sowing was 26.08.2006 and the loss was reported to the insurance company on 26.04.2007, having date of loss as 25.04.2007. As such, the loss was to be assessed only under Part-II only. It was further submitted that Part-I does not come into picture as loss was reported in 8 to 9 months.
The sum insured under Part-II was only for Rs.9 lacs, whereas as per the order of the Ombudsman, the insurance company has already paid Rs.9,49,291/-. As such, the complainant cannot demand more amount beyond the sum insured under part-II. The complainant has admitted Consume Complaint No.05 of 2014 11 that she received Rs.5,49,291/- and Rs.4 lacs against insurance cover for Rs.16.50 lacs, whereas under the prayer clause, she has demanded Rs.14,74,801/- as on 23.12.2009. She has not given any explanation of the calculation of this amount. She has further admitted that she received the said amount of Rs.9,49,291/- out of Rs.16.50 lacs, as such, it is not understood how she calculated Rs.10,74,801/- as balance amount.
18. It was further submitted that on the basis of the prospectus, complainant filled the proposal form and accordingly, OP issued the policy to her, under which the scope of the policy was covered under Part-I and Part-II. She was provided with complete policy document along with terms and conditions at the time of issuance of the policy. She was aware about Part-I and Part-II of the policy and its scope of coverage as well as the exclusions from the inception of the insurance policy. Denying all other allegations, dismissal of the complaint with heavy costs was prayed.
19. The complainant led her own evidence by way of her affidavit Ex.C-A along with documents Ex.C-1 to Ex.C-16.
20. The OP led its evidence by way of affidavits of Sh. Davinder Grover, its Dy. Manager Ex.R-A and Ex.R-B, affidavit of Sh. R.P. Gupta, Surveyor Ex.R-C along with documents Ex.R-1 to Ex.R-17.
21. We have thoroughly gone through the pleadings of the parties and have carefully perused the evidence brought on record by the parties and heard the complainant in person as well as learned counsel for the OP at length.
22. The first and foremost question to be settled by this Commission is whether the complaint filed by the complainant was Consume Complaint No.05 of 2014 12 barred by limitation? It is established from the facts pleaded by both the parties that the first complaint was filed by the complainant before the District Forum on 23.12.2009. It is further observed that although the surveyor submitted his first report (Ex.R-6) on 02.05.2008, but the OP did not settle the claim of the complainant and kept it pending. Therefore, the complainant had to approach the Insurance Ombudsman on 30.09.2008 for settling her claim, who gave his first verdict on 17.11.2008 and further enhanced the claim by Rs.4 lacs on 23.07.2009; payment against which was released on 21.07.2011. It is apparent that the claim filed by the complainant was never settled by the OP at its own level and the same was settled only by Ombudsman on 17.11.2008 and enhanced on 23.07.2009. The order dated 23.07.2009 was, however, challenged by the OP before the Hon'ble High Court on the ground that the Ombudsman did not have powers to review its own order. Thus, it was a continuous cause of action for the complainant till her claim was decided by Ombudsman and payment was ordered to be released by the Hon'ble High Court vide order dated 25.01.2011. Thus, the first complaint, filed by the complainant before the District Forum on 23.12.2009 i.e. within 5 months of the settlement of claim by Ombudsman was well within the period of limitation and thereafter, she filed present complaint before this Commission after about one month of order of District Forum dated 12.12.2013.
23. The second objection of the OP is that the complainant is not a consumer as defined under the Act because she has availed the insurance cover for commercial purpose, as the cultivation of the Safed Musli crop was done for earning profit on large scale. We find no merit in this contention, as it is settled law that the insurance cover is Consume Complaint No.05 of 2014 13 obtained for indemnifying the actual loss suffered by the insured and such indemnity has nothing to do with the commercial activity, if any, of the insured.
24. The third objection of the OP is that the Insurance Ombudsman had already given the first award on 17.11.2008, which was further enhanced, against the regulation, on 07.08.2009. As per regulations, the Ombudsman had no jurisdiction to review its own order and, therefore, the OP filed civil writ petition before the Hon'ble High Court of Punjab & Haryana, challenging the power of the Insurance Ombudsman to review its own order. It was contended that this Commission cannot sit in appeal on the orders of the Ombudsman. Apparently, the complainant took up the matter with the OP and vigoursly followed it, but even after the submission of delayed surveyor's report dated 25.02.2008, instead of settling the matter, the OP kept it pending. The complainant had to approach the Ombudsman for settlement of her claim. Not satisfied with the decision of the Ombudsman, especially when even the powers of the Ombudsman to review his own order were challenged by the OP before the Hon'ble Punjab & Haryana High Court by filing a civil writ petition, complainant filed a consumer complaint before the District Forum for redressal of her grievances under the Act; Section-3 of which provides for an additional remedy to the consumers. This right of the consumer is in addition and not in derogation of any other law for the time being in force.
25. A case came up before the Hon'ble National Commission, having far reaching effect on the authority of Ombudsman whether complainant was debarred from re-agitating his grievances before Consume Complaint No.05 of 2014 14 Consumer Fora under the Consumer Protection Act. Hon'ble National Commission considered various provisions of the rules and was pleased to hold in case "Kameshwari Prasad Singh Vs. National Insurance Co. Ltd." (2005) I CPJ-107 (NC) in Paras No.8,10,11 & 12 as under:-
"8. Apart from the aforesaid general principles, the rules framed by the Central Government nowhere provide that the decision of the Ombudsman would be binding on the assured if he does not agree to the said decision. The agreement by the assured is the basis of passing award and that the recommendation/award made by the Ombudsman is binding on the Insurance Company and the Insurance Company is required to carry out the same.
-----------------------
10. In case, if the award is not accepted by the complainant, then the Insurance Company may not implement the said award.
11. The rules quoted above are clear and do not require any further consideration.
12. In view of above discussion, it is held that the decision of the Ombudsman is not binding on the complainant and the decision of the Insurance Company to repudiate the claim is subject to adjudication by the Fora Constituted under the Consumer Protection Act."
26. Subsequent to pronouncement of above judgment by Hon'ble National Commission, a provision was accordingly made even in the Rules of Insurance Ombudsman. Rule-23 of Insurance Ombudsman (The Redressal of Public Grievances Rules, 1998) under Consume Complaint No.05 of 2014 15 the heading "Award by Ombudsman: whether binding on complainant?"
provides as follows:-
"In case, if the award is not accepted by the complainant, then the Insurance Company may not implement the said award. In view of the above discussion, it is held that the decision of the Ombudsman is not binding on the complainant and the decision of the Insurance Company to repudiate the claim is subject to adjudication by the Fora constituted under the Consumer Protection Act."
27. The 4th preliminary objection of the OP is that this Commission has no pecuniary jurisdiction to decide this complaint, as the claim amount, mentioned in the claim and admitted by her is below Rs.20 lacs and as such the complaint fell within the pecuniary jurisdiction of the District Forum and not this Commission, is also not tenable, because the complainant initially filed the complaint before the District Forum on 29.07.2011 and proceedings under which were stayed in the light of pending civil writ petition before the High Court. After the disposal of the Revision Petition no.06 of 2012 filed by the complainant on 31.10.2010, this Commission, vide its order dated 12.12.2013, directed the District Forum to revive the complaint, but the learned District Forum held that the complaint was not maintainable before it, as the amount of compensation has exceeded Rs.20 lacs and the same was beyond its pecuniary jurisdiction. Thereafter, the complainant filed the present complaint before this Commission. The OP did not choose to challenge the said order dated 12.12.2013 and the same has, thus, attained finality. Therefore, OP cannot now take Consume Complaint No.05 of 2014 16 the plea that the claimed amount in the complaint was less than Rs.20 lacs.
28. Coming over to the merits of the case, the admitted facts are that the complainant obtained a "Safed Musli Plantation Insurance Policy" from the OP, vide policy No.401300/47/ 06/ 93/00000010, which was valid for the period 04.09.2006 to 03.09.2007. The policy document has been proved by the complainant as well as the OP as Ex.C-3 and Ex.R-3 respectively. Perusal of this document reveals that the sum insured under the policy was Rs.16.5 lacs. It is further mentioned therein that 3,75,000 plants of Safed Musli were insured for a total sum of Rs.16.5 lacs @ Rs.2.20 lacs per acre. It is further specified therein that the sum insured per plant is Rs.4.40 and the policy was also extended to cover "pest and disease". The case of the complainant is that she planted total number of 3,75,000 plants in her 7.5 acres of land, out of which, 96.3% of the crop was lost due to the insured peril i.e. fungal attack. It is contended that had there been no such fungal attack, her yield would have been 15000 kgs. and its market value would have been Rs.22.50 lacs, as agreed by Nandan Biomatrix and that only 1119 kgs. of yield was produced, out of which, only 550 kg., amounting to Rs.82,500/- was found as good fungal free yield. Thus, the net market value of the yield lost was Rs.21,67,500/-. It is further contended by the complainant that OP had mal intentions right from the beginning and it made every attempt to delay the matter and ultimately, failed to pay her any compensation due to which, she had to approach the Insurance Ombudsman for settling her claim.
29. The categorical stand of the OP is that though the policy was for Rs.16.5 lacs, but the same was further divided into two parts Consume Complaint No.05 of 2014 17 i.e. Part-I and Part-II. The claim under Part-I was for Rs.7.50 lacs, while claim under Part-II was for Rs.9 lacs. It was specifically contended that the claim of the complainant fell under Part-II, having the sum insured for Rs.9 lacs and that the insurer had already paid Rs.9,49,291/- under the orders of Ombudsman and Hon'ble Punjab & Haryana High Court. As such, the complainant does not have any right to claim beyond Rs.9 lacs. It was further contended by OP that M/s R.P. Gupta, the surveyor appointed by it, after applying its mind and proper verification recommended the claim of the complainant to the tune of Rs.3,98,177/- vide report dated 02.05.2008 (Ex.R-6) and that thereafter, the complainant filed a petition before Ombudsman, who awarded the compensation of Rs.5,49,291/- and the complainant accepted the same as full and final payment without any protest. This compensation amount was further enhanced by Ombudsman, by awarding additional amount of Rs.4 lacs as ex-gratia in favour of the complainant. The said amount was released as per the interim order of Hon'ble High Court inspite of the fact that Ombudsman was not competent to review its own order. It was further contended that as the loss occurred during 8- 9months of the policy, the complainant cannot claim compensation under Part-I.
30. OP has relied upon the prospectus of the "Safed Musli Plantation Insurance" Ex.R-1, in which the scope of the cover of the policy stands defined as under:-
1. Scope of the cover: For covering the total plantation, as well as its tubers the coverage is divided into two sections/parts:
Part-I: This covers input cost incurred for raising this plantation upto 11 months of transplantation in the main field. Consume Complaint No.05 of 2014 18 Part-II: This covers market value of the tubers at field level irrespective of the amount of inputs incurred. Insurance Cover for Part-I is compulsory. If any proposer opts for Part-II of the policy, then indemnity is payable upto 6 months will be based on the actual input cost incurred upto that stage or limit of indemnity payable as shown in the policy under Part-I of the cover and beyond that period if tuber formation has already been started, compensation payable will be as per the prevalent market value of the tubers on the basis of valuation table as shown in Part-II under the policy schedule. Perils Covered: (Part-I & II) A. Standard Cover:
I. Fire II. Lightening
III. Storm, Cyclone, Typhoon, Hurricane, Tempest, Tornado Flood and Inundation IV. Riot and Strike V. Acts of Terrorism VI. Earthquake VII. Impact Damage by Rail/Road vehicle/Wild Animal. B. Add on Cover: Pest and Disease- available as Add-On cover on payment of additional premium.
2. Sum Insured:-
Part-I: The sum insured is the actual input cost incurred for all the activities together for raising the plantation. Part-II: The sum insured is the market value of the root tubers at the time of harvest. The market value consists of accumulated Consume Complaint No.05 of 2014 19 input cost, investment cots, interest charges and all other related costs, which are added together to derive on the value of the end product in the market."
31 However, in the proposal form (Ex.R-2) filled by the complainant, the total insurance cover under the policy is specified as Rs.16.5 lacs, which is further split in two parts i.e. Rs.7.5 lacs under Part-I, which relates to input cost and Rs.9 lacs under Part-II which pertains to market value of tubers, irrespective of the input cost. Even the market value of tubers at field level is mentioned as Rs.9 lacs. Conjoint reading of prospectus and the proposal form would make it clear that insurance cover under Part-I was for actual input cost upto Rs.7.5 lacs, while the cover under Part-II was Rs.9 lacs, irrespective of input costs. Other conditions mentioned in T & C are contrary to the policy document (Ex.R-3) and the proposal form (Ex.R-2). Therefore, these cannot be made applicable in the instant case.
32. Since the complainant paid the premium for full sum insured of Rs.16.5 lacs, she was entitled for indemnity upto the total sum insured of Rs.16.5 lacs. Otherwise also, as per scope of cover, the insurance for part-I was compulsory and Part-II was optional. The contention of the OP that the insurance cover was applicable under Part-II only, is baseless because if the cover under either Part-I or Part- II was to be made applicable, then the sum insured could not have been equal to the sum of indemnity available separately under Part-I and Part-II. Therefore, the complainant is entitled to the indemnity under Part-II as well as under Part-I i.e. for Rs.16.5 lacs. Consume Complaint No.05 of 2014 20
33. It is clearly specified in the policy schedule (Ex.C-3/Ex.R-
3), that 3,75,000 plants were insured @ Rs.4.40 per plant. Even in the proposal form proved by the OP as Ex.R-2, it is specified that 3,75,000 tubers were to be planted in 7.5 acres of land for which total sum insured was Rs.16.5 lacs. The market value of tubers at field level was fixed at Rs.9 lacs. Accordingly, sum insured under Part-I and Part-II was proposed as Rs.7.5 lacs and Rs.9 lacs respectively.
34. It is observed that surveyor, in its report dated 02.05.2008 (Ex.C-6/Ex.R-6), admitted that the loss suffered by the complainant was covered under the policy, but assessed the loss as Rs.3,98,177/- as against the total sum insured of Rs.16.5 lacs. He worked out the input cost as Rs.9,61,644/- against the estimated input cost submitted by the complainant as Rs.18,35,195/-. He allowed only 45% of this input cost as compensation by concluding that 55% of the loss was due to reasons other than "fungal attack". He attributed 10% of the loss to less germination of plants, 20% to natural mortality and 25% to improper cultural practices, adverse weather conditions etc". It is observed that deduction of only 10% of input cost is based on the Germination Certificate dated 05.09.2006 submitted by M/s Diverse Agro and other 45% deduction is merely guessed by the surveyor without any report of any expert. Moreover, there is no such exclusion clause in terms and conditions of the policy (Ex.R-4). Evidently, the site was inspected by the surveyor for the first time on 15.05.2007 i.e. one month after the loss was reported. Therefore, he was not in a position to make a guess of his own about the normal mortality or about weather conditions without any report to that effect. Surveyor has only discussed the input cost against Part-I and has not touched the market value" as mentioned Consume Complaint No.05 of 2014 21 in Part-II. The OP has contended that the loss was payable only under Part-II having sum insured of Rs.9 lacs, because the loss was reported during 8th and 9th month of the policy. This contention of the OP is utterly ridiculous. When the cover under Part-I, which is based on input cost, is made compulsory and plantation has reached the stage of tuber formation, then the complainant is entitled to claim both under Part-I as well as under Part-II i.e. upto the total sum insured of Rs.16.5 lacs. Moreover, the complainant has paid the premium for full sum insured of Rs.16.50 lacs. Then her claim can, in no way, be restricted upto Rs.9 lacs only, especially when Part-I was made compulsory. It is also surprising to note that the surveyor initially assessed the input cost as Rs.9,61,644/- in his report (Ex.R-6) dated 02.05.2008, which was enhanced to Rs.13,11,305/- in his report (Ex.R-8) dated 17.11.2008. This input cost was further enhanced to Rs.14,23,085/- in his report (Ex.R-10) dated 11.07.2009. Still, he restricted the payable amount only to Rs.3,69,015/- under Part-II only, which is even less than the first award of Ombudsman. It is, thus, evident that the approach of the surveyor is erratic, arbitrary and highly biased in favour of the OP because he has completely ignored the facts mentioned in the insurance document (Ex.C-3/Ex.R-3) in which specific reference is made about insurance cover of Rs.16.5 lacs having been givenfor 3,75,000 plants per acre or @ Rs.4.40 per plant. Therefore, all the three reports of the surveyor are not at all reliable and need to be discarded. It is evident from the report of M/s Diverse Agro (Ex.R-16) dated 28.04.2006 that 3,75,000 plants were sown by complainant, out of which 3,37,500 germinated as per certificate dated 05.09.2006. Thus, the complainant was entitled to insurance claim of Rs.4.40 x Consume Complaint No.05 of 2014 22 3,37,500 = Rs.14,85,000/-. After deducting 10% towards excess clause and Rs.82,500/- towards the amount recovered for fungal free yield obtained, Rs.12,54,000/- were payable to the complainant.
35. It is seen that the loss to the crop was noticed by the complainant on 25.04.2007 and the same was immediately brought to the notice of the OP on 26.04.2007, who appointed the surveyor to assess the loss, who took over one year to assess the loss and even thereafter, the OP failed to settle the claim at its own level. The complainant had to approach the Ombudsman on 30.09.2008 against the delaying tactics adopted by OP in not settling the claim. It is settled law that in case the surveyor is to be appointed to assess the loss, the claim is to be settled by insurer within a period of 6 months, whereas in the present case firstly, the surveyor took over one year to submit his one sided report and thereafter, the OP failed to settle the claim as per policy scheduled/proposal form. OP released the payment of Rs.5,49,291/- on 24.12.2008 only after Ombudsman gave his first verdict. Similarly, additional amount of Rs.4 lacs was released only after directions were issued by the Hon'ble High Court on 21.07.2011. Thus, OP not only under-assessed the amount, but also delayed the matter firstly by not settling the claim at its own level and then by challenging the award of Ombudsman by filing civil writ petition before Punjab & Haryana High Court. There oppressive actions of OP were capricious and arbitrary and amounted to deficiency in service. It caused the complainant huge financial loss as well as lot of physical and mental harassment, as she could not repay the loan of Rs.16.5 lacs raised from Punjab National Bank. During the course of argument, the complainant also placed on record various notices including the Consume Complaint No.05 of 2014 23 demand notice dated 06.05.2014 issued by Punjab National Bank u/s 13 (2) of the SARFASEI Act. Therefore, she is entitled to compensation for mental harassment as well as for the financial loss suffered by her.
36. Hon'ble Supreme Court in case "Ghaziabad Development Authority Vs. Balbir Singh" 2004 (5) SCC-65 held in Para-6 (relevant portion) as follows:-
"We are in full agreement with what is observed herein. Thus the law is that the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen. The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enables a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law. It acts as a check on arbitrary and capricious exercise of power. It helps in Consume Complaint No.05 of 2014 24 curing social evil. It will hopefully result in improving the work culture and in changing the outlook of the officer/public servant. No authority can arrogate to itself the power to act in a manner which is arbitrary. Matters which require immediate attention should not be allowed to linger on. The consumer must not be made to run from pillar to post. Where there has been capricious or arbitrary or negligent exercise or non exercise of power by an officer of the authority, the Commission/Forum has a statutory obligation to award compensation. If the Commission/Forum is satisfied that a complainant is entitled to compensation for loss or injury or for harassment or mental agony or oppression, then after recording a finding it must direct the authority to pay compensation and then also direct recovery from those found responsible for such unpardonable behaviour. At this stage itself it must be mentioned that learned Attorney General had relied upon the case of Ghaziabad Development Authority vs. Union of India reported in (2000) 6 SCC 113 wherein, whilst considering a case of breach of contract under Section 73 of the Contract Act, it has been held that no damages are payable for mental agony in cases of breach of ordinary commercial contracts. This Court considered the case of Lucknow Development Authority (supra) and held that liability for mental agony had been fixed not within the realms of contract but under principles of administrative law. In this case the award towards mental agony was deleted on the ground that these were no pleadings to that effect and no finding on that point. This authority does not take a contrary view to the principles laid down in Lucknow Development Authority's case Consume Complaint No.05 of 2014 25 but merely differentiates it on facts. Thus where there is a specific finding of misfeasance in public office compensation for mental agony can be granted. If there are findings of misfeasance in public office then the principles set out in this authority will have no application and the principles set out in Lucknow Development Authority's case (supra) would apply. In such cases it would be open for the Commission/Forums to grant compensation for mental agony."
37. The OP has also raised the objection that the complainant could not have filed the complainant before the District Forum after having given the consent letter dated 17.11.2008 vide which she accepted the amount from the OP in full and final settlement of her claim. It was argued by the complainant that she was under huge pressure on account of outstanding loan amount and was badly in need of the claim amount. Therefore, she had no other option but to accept the offered amount to discharge her liability. She has also placed on record various notices issued by Punjab National Bank, including notices under SARFAESI Act. Moreover, the consent (Ex.R-17) was for acceptance of amount as awarded by Ombudsman in its first award dated 17.11.2008, which was immediately challenged by her by filing review petition before Ombudsman, whereupon the amount was further enhanced by Ombudsman by Rs.4,00,000/-. Thus, earlier settlement, against which the consent was obtained from the complainant by the OP, cannot be said to be full and final settlement. Hon'ble Supreme Court in case "United India Insurance Vs. Ajmer Singh Cotton & Consume Complaint No.05 of 2014 26 General Mills & Ors.", 1999 (2) CPC-601 (SC) held in Para-4 (relevant portion) as follows:-
"Despite execution of the discharge voucher, the consumer may be in a position to satisfy the Tribunal or the Commission under the Act that such discharge voucher or receipt had been obtained from him under the circumstances which can be termed as fraudulent or exercise of undue influence or by mis- representation or the like. If in a given case, the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, mis-representation, under influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complaint is made would be justified in granting appropriate relief."
Hon'ble National Commission, while relying upon the above referred authority of the Apex Court, in R.P. No.870 of 2001 dated 10.05.2001 (United India Ins. Co. Ltd. Vs. K. Gangadharan), was pleased to hold as under:-
"In our view, State Commission has correctly arrived at the finding to hold that the discharge receipt was given by the complainant due to his financial hardship and not on account of his free will. It was noticed that complainant had specifically averred that his economic condition was such that he had to accept the offer made by the insurer and he had perforce to sign the receipt giving complete discharge to the petitioner.
Thus, the complainant was justified in filing the complaint before this Commission inspite of having given the receipt in full and final settlement of her claim.
38. In view of the above discussion and findings, the complaint of the complainant is accepted and the OP is held liable to pay Consume Complaint No.05 of 2014 27 Rs.12,54,000/- towards insurance claim. The complainant has already received Rs.5,49,291/- on 24.12.2008 and Rs.4,00,000/- on 21.07.2011. Accordingly, the OP is directed to pay the balance insurance amount of Rs.3,04,479/- along with interest @ 12% p.a. on Rs.12,54,000/- from 25.10.2007 (6 months from the date of loss) to 24.12.2008, thereafter on Rs.7,04,709/- from 25.12.2008 to 21.07.2011 and then on Rs.3,04,709/- from 22.07.2011 till realization. The OP is further directed to pay to the complainant an amount of Rs.1,00,000/- as compensation for physical and mental harassment along with litigation expenses of Rs.33,000/-. The compliance of the order be made within one month of the receipt of copy of the order, failing which the amount of Rs.1,33,000/- would also carry an interest @ 9% p.a. from the date of this order till realization.
39. Arguments in this complaint were heard on 15.12.2014 and the order was reserved. Now the parties be communicated about the same.
40. The complaint could not be decided within statutory timeframe due to heavy pendency of Court cases.
(Baldev Singh Sekhon) Presiding Member (Harcharan Singh Guram) Member January 06, 2015.
(Gurmeet S)