National Consumer Disputes Redressal
M/S A. I. Champdany Industries Ltd., vs M/S New India Assurance Co. Ltd. & 2 Ors., on 23 October, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 450 OF 2013 1. M/s A. I. CHAMPDANY INDUSTRIES LTD., Through its Director, Regd. Office: 25, Princep Street, KOLKATA - 700072. ...........Complainant(s) Versus 1. M/s NEW INDIA ASSURANCE CO. LTD. & 2 ORS., Regd. & Head Office: 87, Mahatma Gandhi Road, Fort, MUMBAI - 400001. 2. The Regional Manager, New India Assurance Co. Ltd., Kolkata Regional Office, 4, Mangoe Lane, KOLKATA - 700001. 3. The Divisional Manger, New India Assurance Co. Ltd., Unit-510700, 4, Mangoe Lane, 2nd Floor, KOLKATA - 700001. ...........Opp.Party(s)
BEFORE: HON'BLE MRS. JUSTICE DEEPA SHARMA,PRESIDING MEMBER HON'BLE MR. C. VISWANATH,MEMBER
For the Complainant : For the Opp.Party :
Dated : 23 Oct 2019 ORDER
APPEARED AT THE TIME OF ARGUMENTS
For the Complainant : Mr. Srijan Nayak, Advocate and
Mr. Vikas Nautiyal, Advocate
For the Opposite Parties : Mr. Vishnu Mehra, Advocate and
Mr. Anant Narain Mehrotra, Advocate
ORDER
C.VISWANATH
1. According to the Complainant, he took a Standard Fire and Special Perils Policy No. 510700/11/09/11/00007701 with add on coverage for Earthquake (Fire & Shock) in respect of Building Shed and Godowns, Plant & Machinery, Electrical Installations, Store Materials, generator sets including fittings, diesel oil in barrel, stock of paint etc. at the Complainant's factory at Konnagar, Hooghly-712235. The policy coverage was from 29.01.2010 to 28.01.2011. The Opposite Parties demanded Rs.2,55,771/- towards insurance premium, including service taxes which was duly paid by the Complainant by cheque. The Complainant advised the Opposite Parties, vide letter dated 08.12.2010, to enhance the total sum insured from Rs.10,42,67,000/- to Rs.11,47,67,000/- by altering the insured amount against item no. 6(a), 6(c) and 6(e) and the Complainant paid an additional premium of Rs.3,641/- by cheque. On 14th December, 2010 at about 9:05 p.m., fire occurred at the Lean-to-shed which extended to the front side of the adjacent Finished Goods Godown located within the Konnagar Factory of the Complainant. As a result, huge quantity of jute goods kept in "Lean to Shed" as well as entangled jute thread waste lying in front of Finished Goods Go-down were totally burnt, besides damage to the Lean-to-Shed. The Complainant took all reasonable steps to minimize the consequential damage and loss. On 15.12.2010, the incident of fire was brought to the notice of Kanaipur Beat House under Uttarpara Police Station and a Complaint was registered under GDE No. 239 dated 15.12.2010. The Complainant informed Opposite Party No.3,vide letter dated 15.12.2010, about the said incident of fire with estimated figure of consequential loss, which was duly received. Thereafter, the Opposite Parties appointed one Sri Dilip Kumar Saha, Insurance Surveyor to conduct survey and assess the loss. Sri Saha visited the Complainant's factory at Konnagar, along with an executive of the Opposite Parties on 16th December, 2010 and carried out joint inspection of the affected properties and made a joint inspection note. The Surveyor also visited the factory as and when required in connection with the assessment of loss and the Complainant furnished all information, documents and records as required by the Surveyor from time to time. The claim form was issued by the Opposite Parties through the surveyor and the Complainant submitted the form duly filled to the surveyor, claiming an estimated loss of Rs.1,48,94,993/-. The Surveyor in his report clearly and categorically confirmed the incident of accidental fire at the Complainant's Konnagar factory. The report reads, "on the basis of the foregoing facts and circumstances, we are of the opinion that the fire took place all of a sudden and it was beyond control of the management and accidental in nature as transpired from our in depth examination of the cause of fire and its consequences thereof. Insured has suffered loss to its stock and other assets as elaborated here-in-before".
2. However, the claim of the Complainant was repudiated by the Opposite Parties, vide letter dated 04.01.2012, on the ground that :
"The alleged loss in reference is not reflected in your books of account as such being a public exchequer we cannot consider an unaccounted alleged loss". The Complainant, vide letter dated 09.02.2012, objected to the repudiation of the claim for reimbursement on flimsy grounds and requested the Opposite Parties to reconsider its decision and settle the claim. Through the same letter, Complainant further requested the Opposite Parties for a copy of the survey report. The contention of the Opposite Party that the claimed amount was not reflected in the Books of Accounts cannot be a factor for denying his claim. If there was any alleged violation of the statutory rules by the insured of submitting proper income tax return, the Insurance Company cannot take the plea against a genuine claim. The Insurance Company has nothing to do with any alleged violation related to the financial year. Statement of claim has been made as per the policy issued by the Insurance Company, against a huge amount of premium. The reason for repudiation was not a condition available in the terms of the policy. The Opposite Parties did not dispute the occurrence of fire or the amount of loss suffered by the Complainant which was based on facts and findings of their appointed surveyor. Decision of the Opposite Parties to repudiate the claim of the Complainant on unrelated and extraneous ground was clearly premediated and intended to harass the Complainant. Hence, the present Complaint was filed.
3. Alleging deficiency on the part of Opposite Parties, Complainant filed a Complaint before this Commission under Section 21 of the Consumer Protection Act, 1986, praying relief as under:-
· Pay Rs.1,48,94,993/- towards the loss suffered. · Reimbursement of salvaging expenses of Rs.66,000/- and fire fighting expenses Rs.25,052/-. · Pay interest for the period from 14th February, 2011 to the date of actual payment. · Pay Rs.10,00,000/- towards compensation for harassment and mental agony. · Pass any other such order or orders in the interest and justice of the case.
4. The Complaint was contested by the Opposite Party by filing Written Statement. It was reiterated that a Standard Fire and Special Perils Policy No. 510700/11/09/11/00007701 with add on coverage for Earthquake (Fire & Shock) in respect of the properties lying at the Complainant's factory at Konnagar, Hooghly-712235 was obtained by the Complainant. The policy coverage was from 17:14 hours on 29.01.2010 to midnight of 28.01.2011. Upon receipt of the information of fire, the Opposite Party appointed Sri. Dilip Kumar Saha, Insurance Surveyor who as team jointly with Opposite Party's executive Mrs. Jayshree Saikia reached the Complainant's factory (Jute Mill) at Konnagar on 16.12.2010 and carried out joint inspection, of the area of the mill affected by fire. The Complainant submitted the claim form on 14.02.2011 for Rs.1,48,94,993/-. The Surveyor submitted his Final Survey Report dated 14.12.2011. The Surveyor assessed the loss at Rs.46,60,925/- on "Without Prejudice Basis" and expressed their inability to recommend for indemnification of the said loss by the Opposite Parties. It was observed that that neither the Lean to shed location nor the other fire affected area was found to be covered under the Building Section of the policy. The Surveyor in his report dated 14.12.2011, while extracting the amount claimed by the Complainant on stock, building and electric installation, categorically stated that they differ with the valuation of the Complainant on stock loss. On building, the surveyor stated that they have not considered anything, as lean-to shed is not found to be covered in the building section of coverage.
In para-22 of the survey report, it was observed as under:-
"22. One pertinent point needs to be mentioned here that insured's parent company's audited annual report-for FY 2010-11 mentioned two instances of loss of one of the units of the parent company in page (39) under point No. 25 (annexed to this report as annexure J annual report 2010-11) reproduced as under-
In respect of the fire occurred on 22nd April, 2006 and 21st January 2011 at Wellington Jute Mill Rishra, the final assessments to the damage caused to the assets is yet to be completed by the insurance authorities. Pending such assessment, no adjustment has been made to the accounts to the extent of estimated loss of goods -1059 MT-Rs.770.70 lacs (2009-10-1480 MT-694.23 lacs) the company has filed necessary claims with the insurance authorities and adjustments to the accounts would be effected on completion of assessment and settlement of related claims" read with contents of director's report appearing in page (7) of the said annual report reproduced as-
In respect of loss on a/c of fire at the Company's Wellington Jute Mill on 22nd April 2006 and 21st January 2011, the company has not made any adjustments in the books as the claim is pending settlement with the Arbitrator and Insurance Company respectively. The company recognizes insurance claims on receipt/assessment basis of related claim from insurance authorities. But this way loss under consideration has not been mentioned-according to insured's claim it was Rs.149 lacs approx. which is material compared to the overall profit before tax of all the units together under the parent company Al Champdany Industries Ltd. Rs.22,71,641/- appearing in page no. 24 of the report. Although insured's official argued that compared to the total stock position of Rs.141 crores approx. as on 31.03.2011, it remained immaterial. But insured's argument remains short of standard practice causing us to refrain from recommending for the indemnification to the claim by the insurer. In short so far the public document of Annual Report is concerned insured is found to have not recognized the loss under consideration even though insured's claim amount remains at Rs.149 lacs without disclosing the fact of fire dated 14.12.2010 at Konnagar unit being insured under the policy under consideration." During the survey 3 sets of audited statements of accounts as Annual Report of insured's holding company where insured's accounts are clubbed with other group companies for the FY : 2008: 09, 2010-11 with insured's statutory auditor's certification independently - on stock position of insured unit as on 31.03.2009, 31.03.2010 and 31.03.2011 of Survey Report were considered by us while assessing the loss. Thus, the surveyor left the decision to be taken on the Opposite Parties.
Without prejudice to the above and without admitting any liability, it was stated that in para-3 of the complaint, the Complainant has restricted its claim to Rs.53,88,086/- in the Consumer Complaint under Section 17 of the Consumer Protection Act, 1986 filed before the West Bengal State Consumer Disputes Redressal Commission. In this view of the matter, the Complainant cannot and ought not to be permitted to claim any amount greater than the amount of Rs.53,88,086/-. There is no deficiency in service attributable against the Opposite Party, since the claim of the Complainant has been duly repudiated by the Opposite Party by letter dated 04.01.2012. The Claim was repudiated for the reason that after meticulously considering the record, the alleged loss in reference is not reflected in the books of account of the Complainant and as such the Opposite Parties cannot consider an unaccounted alleged loss. Neither the lean to shed location nor other fire affected area is covered under the Building section of the policy as duly recorded by the Surveyor in his Final Survey Report dated 14.12.2011. After the repudiation letter dated 04.01.2012, the Complainant represented before the Opposite parties to reconsider the claim. According to the Opposite Parties as the Complainant failed to respond to the reason of repudiation as assigned in letter dated 04.01.2012, the Complainant was not entitled to any amount since the insurance claim had been validly repudiated by a reasoned letter dated 04.01.2012 and the Complaint deserved to be dismissed.
5. Heard the Learned Counsels of the Complainant as well as the Opposite Parties. Also carefully perused the record.
6. The Complainant took a Standard Fire and Special Perils Policy with added coverage for Earthquake (Fire & Stock) for his factory at Konnagar for the period 29.01.2010 to 28.01.2011. During the period covered under the insurance, on 14.12.2010 at about 9:05 PM fire occurred in his factory and his stock was burnt. The Complainant duly informed the Police as well as the Opposite Party Insurance Company about the fire and the estimated loss. Surveyor Mr. Dilip Kumar Saha was appointed to conduct the Survey and assess the loss. The Complainant submitted duly filled-in claim form for an estimated loss for Rs.1,48,94,993/-. The Surveyor after inspection reported that the fire took place all of a sudden, was accidental in nature and beyond the control of the management and the insured suffered loss of the stocks. The Surveyor submitted his report on 14.12.2011. The Surveyor assessed the loss at Rs.46,60,925/- and expressed his inability to recommend for indemnification of the said loss by the Opposite Party. Thereupon the claim of the Complainant was repudiated by the Opposite Party Insurance Company, vide letter dated 04.01.2012 on the ground that the alleged loss in reference was not reflected in books of account.
7. The Opposite Parties raised the issue of maintainability of the Complaint. The issue for consideration is as to whether the Complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not. It has been held by this Commission in Harsolia Motors v. National Insurance Co. Ltd. I, (2005) CPJ 27 (NC) decided on 03.12.2004 that since an insurance policy is taken for reimbursement or for indemnity of the loss which may be suffered on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose. This Commission does possess the requisite jurisdiction to entertain a Consumer Complaint wherever a defect or deficiency in the services rendered by an insurer is made out. In view of the above, the Complaint is held maintainable.
8. The main ground for repudiation was that the alleged loss was not reflected in their books of accounts. On this, the Surveyor himself states in his Report that the final assessment to damage caused to assets is yet to be completed by Insurance Authorities. Pending such assessments no adjustment has been made to the accounts to the extent of estimated loss of goods. Discrepancy in accounting, if any would need to be looked into by the concerned financial regulators/authorities and cannot be a ground to repudiate the claim of insured.
9. It is an undisputed fact that the Complainant suffered huge loss on account of devastating fire. It is important to note that the Surveyor assessed the loss based on verification of stock and available evidence. Accordingly, Surveyor quantified the loss suffered, though the claim was in excess of the assessed amount. In the repudiation letter dated 04.01.2012, the Insurance Company had not given any reason as to why the loss assessed by the Surveyor was not accepted. The reason mentioned for repudiating the claim was beyond the scope of the contract. The grounds of repudiation of the claim do not relate to any terms and conditions of the Policy. The loss as assessed by the Surveyor, as genuinely suffered by the insured, needs to be fully compensated and cannot be denied on unrelated considerations.
10. In view of above, the complaint is partly allowed. The Opposite Party is directed to pay a sum of Rs.46,60,925/- (as assessed by surveyor) towards claim of the Complainant alongwith compensation in the form of simple interest @9% p.a., with effect from the date of repudiation of the claim till realization, within 8 weeks from the date of pronouncement of this order. There shall be no order as to costs.
......................J DEEPA SHARMA PRESIDING MEMBER ...................... C. VISWANATH MEMBER