National Consumer Disputes Redressal
Ashwani Textiles vs Oriental Insurance Co. Ltd. And Anr. on 23 July, 2002
ORDER
J.K. Mehra, J. (Member)
1. In this original petition, Complainant is a partnership firm and wholesale dealers of M/s. Vimal Suitings and M/s. Mafatlal Shirting for the State of Haryana and have their showroom, inter alia, at Bhiwani. The Complainant had got his showroom insured for a sum of Rs. 40 lakhs and paid a premium of Rs. 8,020/- covering the period 30.10.1996 to 29.10.1997 vide Cover Note No. 321675.
2. It is alleged in complaint that the Opposite Party Insurance Company, had not issued the stamped policy. The case of the Complainant is that on 20.4.1997 at about 0235 hours fire caused by electrical short circuit gutted the whole showroom and all the books of accounts and other records were also burnt in the said fire. Though the fire bridge fought for two hours nothing could be saved. As per the fire bridge, the fire was 'major fire' and 90% of the total contents of the stocks were damaged in the fire. On report being lodged with the Police, they also found that the source of the fire was short-circuit. The Insurance Company, on being informed about the damage caused by the fire, deputed a Surveyor, Mr. O.P. Gupta, who visited the site on the same day i.e. 20.4.1997 and took a number of photographs which show the effect of fire. It is alleged in the complaint that the Surveyor did not allow the Complainant to segregate the salvaging of the damaged and water damaged thans of cloth so that the loss could be minimised and insisted upon the Complainants to keep the remains of the stock, locked in a room for examination by yet another Surveyor to be deputed by the Opposite Party, as a result the strength of the fibre became weak and it reduced such thans to no value.
3. The Insurance Company then depend another Surveyor, Mr. K.C. Sharma, who inspected the site of fire, took note of the damage caused to the stocks, obtained copies of several accounting records and statements from the Complainants and, as is evident from the complaint that the Opposite Party had withdrawn that Surveyor.
4. The Opposite Party then deputed yet another firm of Surveyors. M/s. P. Kumar Garg & Associates who had also visited the site on 22.4.1997 and instructed the Complainant to keep all the damaged material/cloth which was brunt as well as stock for the consideration of the insurers. On 29.5.1997 the Opposite Party directed the Complainant to keep all the damaged/semi-damaged and safe stocks infact till the finalisation of claim amount which direction according to the Complainant, aggravated the loss, as it lead to further deterioration of the cloth. The second Surveyor collected the claim form for Rs. 38,73,695/- from the Complainant on 21.5.1997. In spite of all the documents/necessary information being forwarded to the Opposite Parties from time to time, the Opposite Parties had written a letter to the Complainant on 6.6.1997 requiring some more details which were also forwarded by the Complainants. The allegation of the Complainant is that the Surveyors started making unreasonable and illegal demands upon them and threatened that unless those demands were met, the Complainants should not hope for a fair settlement and that the settlement which may be offered would be for a small amount as their entire amount of loss in respect of the stocks totally burnt would be excluded. In spite of the personal visits by the Complainant and written requests by way of letters, there was no response from the Insurance Company till 9.9.1997. On 15.9.1997 the Complainant was informed that the second Surveyor, M/s. P. Kumar Garg & Associates, had assessed the loss at Rs. 3.66 lakhs taking into consideration the stocks shown to the preliminary Surveyor to him. The Complainant vide letter dated 17.9.1997 written to the Opposite Parties requested them to properly assessed the loss as the assessment made was not acceptable to him. Thereafter, he had also written a letter dated 25.9.1997 to this effect to the Opposite Party No. 2 which fell on deaf ears. On 14.10.1997 the Complainant had met the officers of the head office of the insurers, i.e. Opposite Party No. 3, who, after taking into the evidence placed before them, appointed an experienced reputed firm of surveyors. M/s. K.D. Kohli & Co. Pvt. Ltd. to reassess the loss actually suffered by the Complainant. Thereafter, M/s. K.D. Kohli & Co. Surveyors, visited the spot obtained a large number of documents and discussed with the various persons. And, according to the Complainant, he had learned during the discussions at the office of the Opposite Parties that M/s. K.D. Kohli & Co. had submitted their report in early June, 1988 and had assessed the loss suffered by the Complainants to be around Rs. 30 lakhs. Since then, till the date of filing of the complaint, i.e. 25.8.1998, in spite of a number of personal visits, writing letter, the claim was not settled, which, ultimately, lead the Complainant to approach the National Commission by way of this original petition claiming the following reliefs:
1. A sum of Rs. 38,73,695/- being the amount of loss suffered by the Complainants as a result of the said fire.
2. Interest at the rate of 18% on the said amount of Rs. 38,73,695/- from 20.4.1997 upto the date of institution of this action and thereafter upto the date of realisation.
3. A sum of Rs. 10 lakhs being the compensation for harassment, mental pain and agony and loss of business and the continuing expenses of the business due to non-settlement of the claim despite continuous approach by the Complainants.
4. The costs of this action and such other relief as in the opinion of your Lordships may be deemed just and proper in the circumstances.
5. On notice being issued, the Opposite Parties filed their written version wherein they denied the allegation of deficiency of service on their part and stated that the claim put forward by the Complainant was clearly exaggerated, mala-fide/fraudulent and hence that the complaint was not maintainable under the Consumer Protection Act, 1986. The Opposite Parties admitted in their reply appointment of the preliminary Surveyor on 20.4.1997 and also the appointment of final Surveyor, i.e. the 2nd Surveyor, M/s. P. Kumar Garg & Associates, in terms of Section 64 UM of the Insurance Act, 1938, who visited the premises on 22.4.1997. It is alleged in the reply that the Complainant did not supply the necessary information as required by the Opposite Parties vide their letter dated 2.6.1997. The Opposite Parties, vide their letter dated 28.6.1997 asked the Complainant to show the cause why the 838 thans/pieces should not be rejected for want of verification, as the case of the Opposite Parties is that the Preliminary Surveyor Shri O.P. Gupta had mentioned in his report that he was shown 1.332 thans/pieces on his visit on 20.4.1997 and before the final Surveyor the Complainant produced only 494 thans/pieces. The Complainants describe this act of the Complainant as mala-fide and fraudulent. On 9.9.97 the Opposite Parties submitted its report assessing the loss at Rs.3.36 lakhs with the following remarks:
"That the Complainant had shown only 494 thans to the Surveyor during his visit on 22.4.97 to the premises whereas the preliminary surveyor Shri O.P. Gupta was shown 1.332 thans, preliminary Surveyors confirmed that each and every thans/pieces was counted during physical verification, no relevancy between value of stock statement submitted to the Bank and estimates submitted by the Complainant, the Complainant took out stocks between preliminary Surveyor and final Surveyor just to deceive the Opposite Party in order to claim the value of captioned stock as total loss is also clear from photo copy of claim form submitted by Complainant, preliminary Surveyor confirmed that 838 thans were saved from fire."
6. The Opposite Parties, vide their letter 21.7.1998 requested the final Surveyors that certain facets of the claim were required to be looked into afresh and asked the Surveyors Shri P. Kumar Garg & Associates to issue joint Surveyor report about final assessment of loss in consultation with M/s. K.D. Kohli & Co. The Opposite Parties state that in spite of the time bound request made by the opposite parties through its letter dated 24.8.1998, the joint Surveyors neither reached any final conclusion or submitted the joint survey report and even did not communicate the status of claim. Therefore, they had appointed another independent agency. M/s. Select Surveyors to review the documents on record, i.e. the various survey reports, reassessment report and to submit the review report so that final decision could be taken, who did the same exercise as was done by his predecessors, consulted all the Surveyors, verified the whole of the record and finally assessed the loss at Rs. 10.73 lakhs.
7. In view of what is stated above by the Opposite Parties they issued a letter dated 31.3.1999 communicating their final decision to the Complainant with the request to execute discharge voucher.
8. The Opposite Parties have also contended that this is not a fit case to be tried under the Consumer Protection Act, 1986 as it requires elaborate evidence both oral as well as documentary, to be recorded and it is possible only in civil courts and prayed to dismiss the complainant with costs.
9. We have gone through the complaint, written version, affidavits of Mr. R.S. Malik, Mr. Suresh Gautam, partner of M/s. Ashwani Textiles and also the various annexures filed before us. We are of opinion that this case need not be sent to civil court as a perusal of the documents clearly show deficiency in service on the part of the Insurance Company in not setting the claim in time.
10. In this case the loss of 1332 thans was claimed, most of thans were of polyester fibre which, on brake out of fire melted and turned into small polyester balls. Therefore, these could not be produced before the Surveyor in the form of a fabric. But, the preliminary Surveyor went into this question and examined the claim. Thereafter, a final Surveyor was appointed. It is alleged that he demanded a bribe of Rs. 4 lakhs, i.e. Rs. 2 lakhs in advance and Rs. 2 lakhs after the claim is allowed. On the matter being reported to the Head Office of the Opposite Party the Head Office appointed M/s. K.D. Kohli & Co. Pvt. Ltd. Surveyors. But, before their embarking on their investigation, the second Surveyor who alleged to have demanded the bribe had submitted a report assessing the loss only at Rs. 3.66 lakhs. M/s. K.D. Kohli & Co. Pvt. Ltd. who were appointed by the Insurance Company went into the details of the loss and assessed the loss at Rs. 22,87,654/-. We have perused that report which is a detailed one wherein M/s. K.D. Kohli & Co. Pvt. Ltd. Insurance Company appointed yet another Surveyor without complying with all the requirements of Section 64 UM of the Insurance Act, 1938 and without any explanation being offered for such repeated appointments of Surveyors. No satisfactory explanation has been offered to us in that respect. We feel that the appointment of the 4th Surveyor was absolutely uncalled for and unauthorised and such report should be ignored. The only explanation given by Mr. Vishnu Mehra, learned Counsel for the Insurance Company that they wanted the second Surveyor M/s. P. Kumar Garg & Associates, and M/s. K.D. Kohli & Co. Pvt. Ltd. to reconcile their reports, which they refused to do. We fail to understand as to why such demand was made by the Insurance Company M/s. P. Kumar Garg a report did not inspire confifence and in the face of clear allegations of corruption why did Opposite Party insist on the their report and Kohli's report to be reconciled. The details given by M/s. K.D. Kohli & Co. Pvt. Ltd. are in order and the reasoning for non-production of 838 thans/pieces is quiet, cogent ones. Once the polyester catches the flame. It will melt into a bail of polyester. Therefore, it could not be produced in the fabric form. Therefore, we find that the report of the last Surveyor who was unauthorisedly appointed, ignored this important fact and is perverse.
11. In the circumstances, we find absolutely no reason to disagree with the findings of M/s. K.D. Kohli & Co. Pvt. Ltd., Surveyors and consider that the claim of the Complainant should have been allowed at Rs. 22,87,854/-. We, therefore, allow this complaint and award Rs. 22,87,654/- with interest at the rate of 12% thereon from two months after the date of report of M/s. K.D. Kohli & Co. Pvt. Ltd. till the date of payment. The Complainant will be entitled to costs assessed at Rs. 3,000/-. The above mentioned amounts shall be paid to the Complainant within a period of four weeks from the date of receipt of a copy of this order. The Original Petition is disposed of in the above terms.