National Consumer Disputes Redressal
M/S. Mittal Cot Fab Pvt. Ltd. vs New India Assurance Co. Ltd. on 15 March, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 36 OF 2005 1. M/S. MITTAL COT FAB PVT. LTD. Eye Hospital, G.T. Road, Village - Sewah, Panipat, Haryana ...........Complainant(s) Versus 1. NEW INDIA ASSURANCE CO. LTD. C/o G.T. Road, Panipat, Haryana ...........Opp.Party(s)
BEFORE: HON'BLE MR. C. VISWANATH,PRESIDING MEMBER HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,MEMBER
For the Complainant : Ms. Priya Kumar, Advocate
: Mr. Tejas Chhabra, Advocate For the Opp.Party : Mr. Amit Kumar Singh, Advocate
: Ms. Chubalemla Chang, Advocate
Dated : 15 Mar 2022 ORDER
1. Heard Ms. Priya Kumar, Advocate and Mr. Tejas Chhabra, Advocate, for the complainant and Mr. Amit Kumar Singh, Advocate and Ms. Chubalemla Chang, Advocate, for the opposite party.
2. M/s. Mittal Cot Fab Private Limited (the Insured) has filed above complaint for directing the opposite party to pay (i) Rs.21247665/- with interest @24% per annum from 18.05.2003 till the date of payment, (ii) Rs.50/- lacs, as the compensation, for mental agony and harassment, (iii) Cost of the litigation and (iv) any other relief which is deemed fit and proper, in the facts and circumstances of the case.
3. The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-
(a) The Insured was a company incorporated under the Companies Act, 1956 and engaged in manufacture and trade of cotton yarns, cotton spun & staple and fibre yarn in its factory situated at G.T. Road, village Sewah, district Panipat, Haryana. New India Assurance Company Ltd. (the Insurer) is a public sector insurance company and used to provide different types of insurance services. The complainant obtained Policy No.353900/11/02/00353, i.e. Standard Fire and Special Perils Policy, for a sum of Rs.1084.16/- lacs, for the period of 09.06.2002 to 08.06.2003, from the Insurer. The policy covered risk of Rs. 110/- lacs, on Stock of all kind of Cotton yarn/Raw cotton/Silk yarn/Polyester yarn/Acrylic yarn/ Woollen yarn/ All kind of waste i.e. synthetic waste or cotton waste or other goods of like nature whilst stored or lying or arranged in insured factory built of first class construction, Rs.74/- lacs on complete Building occupied as cotton spinning unit and Rs.801.6/- lacs on complete Machinery as per list. Initially, the agent/employee of the Insurer supplied Cover Note No.058304 dated 06.06.2002 to the Insured. By Endorsement No. 353900/11/02/30006 dated 14.06.2002, the clause "Reinstatement basis", has been deleted and "depreciation basis" was inserted, as applicable for the Building and Machinery. The Insured obtained Cover Note No.074895 dated 18.02.2003 (Policy No.353900/11/02/01988), i.e. Standard Fire and Special Perils Policy, for a sum of Rs.90/- lacs, for the period of 18.02.2003 to 17.02.2004, from the Insurer, on Stock of all kind of Cotton Woollen yarn, wool waste, synthetic yarn, synthetic waste or comer or all kinds of waste or all kinds of yarn and other goods of like nature whilst stored or lying or arranged in insured building built of 1st class construction.
(b) On 18.05.2003 at 18:30 hours, which was Sunday and weekly holiday of the factory, fire broke out in the factory premises. Gulab Chand Rai, who was on duty as Security Guard, noticed smoke and flames billowing out of the shed, in which, step cleaning machines were installed. When he came to the place of fire, he found that the cotton stacked within the shed was on fire. Gulab Chand Rai immediately informed Munish Kumar, the Director of the company, who was present there and raised fire alarm. On which, the workmen present in the factory started fighting with the fire equipment present in the factory. The Insured informed Fire Service Station, Panipat, on telephone, from where, two fire tenders were sent on the spot. By the time, the fire tenders reached on the spot, the fire took devastating nature. Therefore, fires tenders from Gharonda, Karnal, Gannaur, Devi Lal Thermal Power Station, National Fertilizer ltd. and Indian Oil Corporation were also called and they controlled the fire. The Insured informed the police on 19.05.2003.
(c) The Insured informed the Insurer on telephone about the fire on 18.05.2003. The Insurer instructed Ajay Mahajan, Panipat for preliminary survey. Ajay Mahajan reached the spot along with Dr. Vijay Singh, Senior Divisional Manager on 18.05.2003. At that time, the fire tenders were dousing the fire. No survey was possible at that time. He revisited the site on 19.05.2003, took photographs and prepared inventories. He submitted Preliminary Survey Report dated 20.05.2003, in which, he has mentioned that two sheds were affected with fire i.e. (i) Shed No.-1- 180 ft. x 28.6 ft., the walls were built of burnt bricks having roof of ACC sheets supported with M.S. Angles & trusses and (ii) Shed No.2- 171 ft. x 41 ft., being a tent type shed, framed on iron pillars and covered with tents.
(d) The Insurer informed Tariff Advisory Committee about this fire incident on 19.05.2003, who inspected the site on 21.05.2003 and submitted its report dated 25.05.2003 that the rate of the premium charged was in order but extra terrorism premium would have been charged. The Insurer instructed Loss Prevention Association of India Ltd., New Delhi, on 21.05.2003 about the incident. The officers of LPA inspected the spot on 28.05.2003 and submitted their un-dated report. The Insurer collected extra-premium on 14.08.2003.
(e) The Insurer instructed Mehta And Padamsey Surveyors Private Ltd., New Delhi, on 19.05.2003, for survey and assessment of the loss. The surveyor inspected the spot on 20.05.2003 and 21.05.2003 and submitted his Preliminary Loss Report dated 23.05.2003, under which, fire affected area was shown as open raw materials stocks storage yard, one shed 180 ft. x 28.50 ft. and one open sided machinery-cum-storage shed of 177 ft. x 41 ft. The surveyor vide letter dated 22.05.2003, demanded various papers for assessment of loss. The Insurer permitted the Insured to segregate of fire affected stock. The surveyor again inspected the premises on 28.05.2003 and permitted the Insured to remove F.P. bales of raw cotton and half presses bales of cotton/synthetic waste, segregate partly damaged cotton fibre quality-wise, collect and keep the burnt iron hoops of F.P. bales and iron wires of half-pressed bales and preserve the salvage. The Insured supplied various papers to the surveyor, vide letter dated 14.07.2003. The surveyor, vide letter dated 11.09.2003, called the Insured and his accountant to his office for verification of the papers. The Insured along with his accountant attended the office of the surveyor and vide his letter dated 06.12.2003, agreed for settlement of his claim for Rs.14476048/-. The surveyor submitted Final Survey Report on 08.12.2003, assessing net loss of Rs.14468099/-, without supply its copy to the Insured.
(f) The Insured sent letters dated 26.12.2003 and 06.01.2004, for settlement of the claim. Thereafter, the Insured gave various reminders for settlement of the claim. This complaint was filed in March, 2005, alleging that the claim had not been settled illegally.
4. The insurer filed its written reply on 02.06.2006, in which, the material facts relating to the trade of the Insured, issue of the insurance policies and incident of fire have not been denied. It has been stated that Cover Note No.058304 dated 06.06.2002 (Policy No.353900/11/02/00353), for period of 09.06.2002 to 08.06.2003, sum insured of Rs.1084.16/- lacs, was for risk of Rs. 110/- lacs, on "Stock of all kind of Cotton yarn/Raw cotton/Silk yarn/Polyester yarn/Acrylic yarn/Woollen yarn/ All kind of waste i.e. synthetic waste or cotton waste or other goods of like nature whilst stored or lying or arranged in insured factory built of first class construction", Rs.74/- lacs on complete building and Rs.801.6/- lacs on Machinery as per list. However, the Insured fabricated the Cover Note No.0058304 supplied to him and the words "Stocks Kept In Open" were inserted in between the lines. Similar fabrication was made in the Cover Note No.0058304, maintained at Divisional Office, in which fabricated words "Stocks Kept In Open" were written in side. There was no such fabrication in Cover Note No.0058304, maintained at Regional Office. The original schedule to this policy was found missing in the office of the Insurer. The Insured obtained a print out of the policy from the computer of the Insurer on 19.05.2003 at 12:18:15 hours and that too only of first page. The Insured obtained Cover Note No.074895 dated 18.02.2003 (Policy No.353900/11/02/01988), i.e. Standard Fire and Special Perils Policy, for a sum of Rs.90/- lacs, for the period of 18.02.2003 to 17.02.2004, from the Insurer, on Stock of all kind of Cotton Woollen yarn, wool waste, synthetic yarn, synthetic waste or comer or all kinds of waste or all kinds of yarn and other goods of like nature whilst stored or lying or arranged in insured building, built of 1st class construction. The Insured has deliberately concealed this policy in his complaint. As soon as the Insurer get information of the fire incident, he instructed Mr. Ajay Mahajan, Panipat on 18.05.2003 for preliminary survey, who submitted his Preliminary Report dated 20.05.2003. The Insurer instructed Mehta And Padamsey Surveyors Private Ltd., New Delhi, on 19.05.2003, for survey and assessment of the loss, who submitted his Preliminary Report on 23.05.2003 and Final Survey Report dated 08.12.2003, as he took time in verifying the voluminous records of the Insured. The Insurer informed Tariff Advisory Committee about this fire incident on 19.05.2003, who submitted its report dated 25.05.2003 that the rate of the premium charged was in order but extra terrorism premium would have been charged. Tariff Advisory Committee also issued a separate letter dated 17.07.2003 for taking extra premium. The Insurer collected extra-premium on 14.08.2003. A map was attached to the report dated 25.05.2003, shows that approximately 5000 square meters open storage area was affected with the fire. The Insurer instructed Loss Prevention Association of India Ltd., New Delhi, on 21.05.2003 about the incident. The officers of LPA inspected the spot on 28.05.2003 and submitted their un-dated report. While scrutinized the papers, for settlement of the claim, the Insurer noticed that stock lying in open place was damaged while both the policies were in respect of stock stored or lying or arranged in insured building, built of 1st class construction and in Cover Note No.058304, by fabrication, the words "Stocks Kept In Open" was inserted in between the lines. The Insurer then vide letter dated 07.09.2004, sought for clarification from the surveyor in this respect. The surveyor replied vide letter dated 06.10.2004, but the Insurer was not satisfied. The Insurer again vide letter dated 11.01.2005, inquired that Cover Note No.058304 was renewal of Cover Note No.174210 dated 06.06.2001, covering building, plant & machinery and stocks lying in insured factory building. The properties, which were damaged in the fire, were away from the factory building. The surveyor however did not give and satisfactory reply. The Insurer was satisfied that the place, where fire had occurred, was not covered in the insurance policies as such, vide letter dated 13.12.2005, repudiated the claim. There was no deficiency in service on the part of the Insurer.
5. The Insured filed his Rejoinder Reply on 16.10.2006, in which, the facts stated in the complaint were reiterated. He stated that at the time of issuing cover note highest rate of premium had been charged and the cover note was in respect of entire factory premises, including open area. Even assuming but not admitting that "stock kept in open" was not mentioned as alleged in the cover note, this hardly makes any difference as the factory includes entire factory premises. Total damage in the fire was of Rs.21247665/-, which was proved before the surveyor as such in this complaint that amount was claimed, which was fully covered in two policies. Repudiation of the claim was illegal. The Insured filed various documentary evidence and Affidavit of Evidence of Munish Kumar. The Insurer filed documentary evidence and Affidavit of Evidence of Raj Kumari, Senior Divisional Manager, Additional Affidavit of Evidence of Raj Kumari, Senior Divisional Manager dated 28.08.2008 and Affidavit of Evidence of Anshi Lal Madan. The Insured filed Affidavits of Munish Kumar on 25.09.2008 and 21.10.2008 and 27.10.2008. Both the parties filed their written synopsis.
6. We have considered the arguments of the counsel for the parties and examined the record. The claim was repudiated vide letter dated 13.12.2005 on the ground that the place, where fire had occurred, was not covered in the insurance policies. The Insured has filed layout map of the factory premises as Annexure-A and A-1 to the Rejoinder reply. A perusal of the maps shows that the Insured had it factory buildings in eastern side, in this map. Thereafter in middle, factory buildings of M/s. Sunhari Cotton Spinners situate. Thereafter, in western side, open bounded space of 294' x 190', [consisting two sheds i.e. (i) Shed No.-1- 180 ft. x 28.6 ft., the walls were built of burnt bricks having roof of ACC sheets supported with M.S. Angles & trusses, in which steps cleaners and fitter machines were installed and (ii) Shed No.2- 171 ft. x 41 ft., being a tent type shed, framed on iron pillars and covered with tent and large open area situate (as mentioned in preliminary report dated 20.05.2003, Annexure-R-7)] situates. This whole area including sheds and open area were used for storage of the stock and affected with the fire.
7. The arguments of the counsel for the Insured that as the word 'factory' includes 'entire factory premises' under the Factories Act, 1948, as such, entire open space belonging to the Insured and used for storage of raw materials is covered under the policies. This argument is not liable to be accepted, inasmuch as for the purposes of insurance, the place of insurance has to be specified in the policy.
8. The Insured obtained two policies i.e. (i) Cover Note No.058304 dated 06.06.2002 (Policy No.353900/11/02/00353) and (ii) Cover Note No.074895 dated 18.02.2003 (Policy No.353900/11/02/01988). Cover Note No.058304 dated 06.06.2002 was for period of 09.06.2002 to 08.06.2003, sum insured of Rs.1084.16/- lacs, (for risk of Rs. 110/- lacs, on "Stock of all kind of Cotton yarn/Raw cotton/Silk yarn/Polyester yarn/Acrylic yarn/Woollen yarn/ All kind of waste i.e. synthetic waste or cotton waste or other goods of like nature whilst stored or lying or arranged in insured factory built of first class construction", Rs.74/- lacs on complete building built of first class construction occupied as cotton spinning unit and Rs.801.6/- lacs on Machinery as per list). The Insured obtained Cover Note No.074895 dated 18.02.2003 (Policy No.353900/11/02/01988) for a sum of Rs.90/- lacs, for the period of 18.02.2003 to 17.02.2004, from the Insurer, on Stock of all kind of Cotton Woollen yarn, wool waste, synthetic yarn, synthetic waste or comer or all kinds of waste or all kinds of yarn and other goods of like nature whilst stored or lying or arranged in insured building, built of 1st class construction. These policies were not in respect of storage in open space or in second class construction. By using the term "occupied as cotton spinning unit", the place was made more specific i.e. cotton spinning unit.
9. The Insurer took the plea that the Insured fabricated the Cover Note No.0058304 supplied to him and the words "Stocks Kept In Open" were inserted in between the lines (Annexure-C, page-31). Similar fabrication was made in the Cover Note No.0058304, maintained at Divisional Office, in which fabricated words "Stocks Kept In Open" were written in side (Annexure-R-1, page-20). There was no such fabrication in Cover Note No.0058304, maintained at Regional Office (Annexure-R-2, page-21). The original schedule to this policy was found missing in the office of the Insurer.
10. The Insured denied any fabrication in Cover Note No.0058304. According to the Insured that Sanjay Vohra, Development Officer of the Insurer went on the spot for collection of the premium at the time of issue of Cover Note No.0058304. After inspecting the storage of stock in open space, building, and machineries, he charged the premium, which was maximum rate of premium as applicable for the storage of the stock. However, he prepared Cover Note in his office and sent it to the Insured. On checking the Cover Note, it was noticed that the Cover Note was not in respect of the "Stocks Kept In Open" although premium was given for it. When this was pointed out to Sanjay Vohra, Development Officer, then he himself added "Stock Kept In Open" in the Cover Note, which was issued to the Insured and in its copy with him. The Insurer initiated Disciplinary Proceeding against him, who was discharged, from the charges. Tariff Advisory Committee, in its report dated 24.05.2003, did not find any deficiency in the premium. It cannot be said that the Insured made any fabrication in the Cover Note No.0058304.
11. The Insured filed Inquiry Report dated 24.05.2006, along with his Affidavit dated 25.09.2008 (as Annexure-C-6). A perusal of Inquiry Report dated 24.05.2006, shows that when the Insured took plea that Sanjay Vohra, Development Officer, himself added "Stock Kept In Open" in the Cover Note at the time of its issuance, then Department Inquiry was initiated against Sanjay Vohra and charge in this respect was framed that "It is alleged that Mr. Sanjay Vohra, with malafide intension of providing undue benefit to the Insured M/s. Mittal Cot Fab Pvt. Ltd., tampered with the original as well as office copies of the Fire Cover Note No.0058304 dated 06.06.2002 after occurrence of the fire loss under the policy". This charge was found as not proved in the Inquiry Report dated 24.05.2006. Meaning thereby that Sanjay Vohra, Development Officer, did not make fabrication in the Cover Note No.0058304. In this Inquiry Report, there is neither any admission of Sanjay Vohra nor any finding that "Stock Kept In Open" in the Cover Note was added by Sanjay Vohra, at the time of issue of cover note. The Insured cannot get any benefit of this Inquiry Report dated 24.05.2006.
12. The term "whilst stored or lying or arranged in insured building, built of 1st class construction" is still mentioned in the Cover note and it was not cut. If the term "Stock Kept In Open" was added by Sanjay Vohra, Development Officer, at the time of issuance of cover note, there would have no reason for not cutting the term "whilst stored or lying or arranged in insured building, built of 1st class construction" from the cover note. In view of aforesaid discussion, we find that the Insured has failed to prove that the term "Stock Kept In Open" was added by Sanjay Vohra, Development Officer, at the time of issuance of cover note. The charging of tariff/premium at the highest rate is immaterial as the place of insurance cannot be changed on this ground. The findings of the Insurer in the repudiation letter dated 13.12.2005 that the place of incident (including building, machinery and stock) was outside the insured place under two policies do not suffer from any illegality.
ORDER
In view of the aforesaid discussions, the complaint has no merit and is dismissed.
...................... C. VISWANATH PRESIDING MEMBER ......................J RAM SURAT RAM MAURYA MEMBER