National Consumer Disputes Redressal
M/S Aristo Texcon Private Limited, vs M/S United India Insurance Company ... on 30 August, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 53 OF 2014 1. M/s ARISTO TEXCON PRIVATE LIMITED, Through its Authorized Representative, Regd. Office: Stephen House, 5th Floor, Room No. 79, 4, BBD Bagh East, KOLKATA - 700001. ...........Complainant(s) Versus 1. M/s UNITED INDIA INSURANCE COMPANY LIMITED & 2 ORS. Head Office: 24, Whites Road, CHENNAI - 600014. 2. Shri P. S. Ramnathan, United India Insurance Co, Ltd., Second Floor, Sapthagiri Tower, 10/8, Ramar Koil Street, Ram Nagar, COIMBATORE - 641009. 3. M/s S. N. & Associates, Through its Proprietor, Shri Sudas Sen Gupta, Flat No. B-1, 45R, Moore Avenue, KOLKATA - 700040. 4. M/s United India Insurance Company Ltd., Divisional Office-IV, 2, Brabourne Road, 3rd Floor, KOLKATA - 700001. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,PRESIDING MEMBER
For the Complainant : Mr. Anil Agarwalla, Advocate
: Ms. Neha Sharma, Advocate For the Opp.Party : Ex-parte
Dated : 30 Aug 2022 ORDER
1. Heard Mr. Anil Agarwalla, Advocate, for the complainant. None appeared for the opposite parties.
2. M/s. Aristo Texcon Private Limited (the Insured) has filed above complaint for directing United India Insurance Company Limited (the Insurer) to pay (i) Rs.32850037.26/- with interest, as the insurance claim, (ii) Rs.2/- crores, as the compensation for mental agony and harassment, (iii) cost of 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) M/s. Aristo Texcon Private Limited (the complainant) (the Insured) was a private company, registered under the Companies Act, 1956 and engaged in the business of manufacture and sale of elastic, tapes, laces, mattresses, pillows, cushions and readymade garments. Its factory was situated at Plot No.-20-45, Radhanath Chowdhary Road, Tangra Industrial Estate-II, Kolkata.
(b) United India Insurance Company Limited (the Insurer) was a Public Insurance Company and engaged in the business of providing different types of insurance services to the general public. The Insured obtained 'Standard Fire and Special Perils Policy' No.030400/11/11/00000158, for a sum of Rs.7.10 crores (Rs.1.10 crore on Building, Rs.one crore, on Plant, Machinery & Accessories and Rs.5/- crores on Stock), for a period of 31.05.2011 to 30.05.2012, from the Insurer.
(c) A massive fire broke up around 21:00 hours on 19.02.2012, in the factory premises of the Insured, which was a seven storied building. 19.02.2012(Sunday) was a holiday for the factory, as such, apart from, the security guard, no employee was there. On coming to know about the fire, the security guard immediately informed to Fire Service Station, from where 5-6 fire tenders were sent on the spot, which doused the fire up to 24:00 hours, in night. Fire was initiated from ground floor and spread up to first and second floors. Disaster Management Team also came on the spot, who sealed the building, for forensic investigation to find out the root cause of the fire.
(d) The Insured informed the Insurer about fire incident and loss at its factory premises on 20.02.2012 and submitted a claim form to Divisional office on 20.02.2012, giving estimated loss to Rs.6/- crores. The Insurer appointed Mr. P.S. Ramnathan, Coimbatore (opposite party-2), as the surveyor on 21.02.2012. The surveyor reached Kolkata on 22.02.2012 and asked the Insurer to provide a local person, (knowing Bengali language) as his assistant. The Insurer deputed one Mr, Dasgupta, to assist the surveyor. The surveyor inspected the factory premises on 22.02.2012, took photographs, videography and prepared inventory, in presence of the Director of the Insured. The surveyor asked the Insured to segregate the burnt articles. Time to time the surveyor demanded papers for assessment of loss, which were supplied by the Insured. As advised, the Insured supplied an item-wise list of the loss/claim on03.03.2012, in which total claim was mentioned as Rs.32527455.31.
(e) The Insurer also appointed M/s. S.N. & Associates, Kolkata (opposite party-3) as the Investigator. The major part of the claim of the Insured was loss of 72000 readymade garments and its packing. The Insured informed that it had received Purchase Order of 72000 ladies readymade garments, from Spectrum World FZC, Rak, U.S.E., dated 20.12.2011. The Insured purchased fabrics from M/s. Sanjay Enterprises, Room No.320, 3rd Floor, 7/1, Grant Lane, Kolkata, Hanuman Traders, 14, Jella Para, 1st Bye Lane, Howrah and United Trading Company, 17/1, Atindra Mukherjee Lane, Howrah, which were got tailored from M/s. Mangla Traders, Amta, Howrah-Proprietor Kaushik Panchal and M/s. Mamoni Industries, Amta Howrah- Proprietor Chittranjan Panchhal, located at a distance of 80 KM from factory premises. The surveyor and the Investigator visited Amta, and inspected premises of the tailors, along with the Director of the Insured and also visited the premises of the suppliers of fabrics i.e. M/s. Sanjay Enterprises, Hanuman Traders and United Trading Company. These three firms belonged to two real brothers.
(f) On the complaint of Disaster Management Team, the police registered a case against the management of the Insured. The officers of Forensic Science Laboratory, Government of West Bengal examined the spot on 26.03.2012 and submitted its Report dated 27.03.2012, in which, it has been mentioned that cause of fire might be due to accidental electric fault. Seat of fire was south east part of ground floor, where cartons were stacked up to 6' to 8' height, were heavily damaged. The wooden mezzanine floor collapsed and damaged. The western side of the ground floor, lift, stair case, mezzanine floor and first floor was found much affected with fire.
(g) It is stated that the surveyor held several meeting from March, 2012 to June, 2012. The surveyor and the Investigator asked for various details and documents, which were furnished/supplied time to time, lastly up to 09.01.2013. As required by the Insurer, the Insured filed its Claim Form on the format on 20.06.2012, for total sum of Rs.32850037.26 (adding expenses incurred during this period on segregation of the damages materials, removal of debris, on various inspections, reports and in collection of papers). The Insured through emails/letters dated 26.09.2012, 22.10.2012, 23.01.2013, 05.04.2013, 27.04.2013, 12.06.2013, 29.07.2013 and 05.08.2013, requested various officers of the Insurer to settle the claim but no reply was given. The Insured gave a legal notice dated 27.06.2013.
(h) In the meantime, the Investigator submitted his Report dated 14.01.2013, without supplying its copy to the Insured. The surveyor submitted Final Survey Report dated 11.03.2013, observing that (i) fire was simultaneously broke-out at more than one place, one of which may not be accidental. (ii) The claim was liable to repudiated under Condition Nos.6 and 8 of General Terms and Conditions. Thereafter, all the papers were examined by the competent authority of the Insurer, who by letter dated 14.08.2013, repudiated the claim, invoking Clauses- 6 & 8 of General Terms and Conditions of Standard Fire and Special Perils Policy.
(i) Thereafter, this complaint was filed on 25.02.2014, claiming deficiency in service on the part of the Insurer. The observation of the surveyor and the Insurer that simultaneously broke-out of the fire at multiple places could not be accidental is contrary to the report of Forensic Science Laboratory, dated 27.03.2012, in which, it was found that cause of fire was accidental and due to electric fault. The Insurer appointed an Investigator, who after investigation submitted his Report dated 14.01.2013, in which, he did not find any foul play on the part of the Insured. All the loss/transaction were verified and corroborated by the Investigator. The surveyor and the Insurer have illegally ignored this report.
4. The Insurer filed its written reply on 03.11.2014 and contested the complaint. The facts of obtaining 'Standard Fire and Special Perils Policy No.030400/11/11/00000158, for a sum of Rs.7.10 crores (Rs.1.10 crore on Building, Rs.one crore, on Plant, Machinery & Accessories and Rs.5/- crores on Stock), for a period of 31.05.2011 to 30.05.2012, from the Insurer, appointment of the surveyor and the investigator and their reports and repudiation of claim vide letter dated 14.08.2013 are not disputed. It is stated that report of Forensic Science Laboratory dated 24.03.2012 was not a conclusive proof of the cause of fire. Although from March, 2012 to June, 2012, various meeting were held by the surveyor but relevant papers for assessment of loss could not be supplied by the Insured. The surveyor and the Insurer both considered the report of Investigator dated 14.01.2013 and for valid and cogent reasons ignored it. The claim was found highly exaggerated and based upon fabricated papers as such, entire claim was repudiated invoking Clauses-6 & 8 of General Terms and Conditions of Standard Fire and Special Perils Policy. Delay was caused for the reasons that the Insured took time in submitting papers and clarifications to the surveyor and the Investigator. There was no deficiency in service on the part of the Insurer. The preliminary objection that the Insured is engaged in commercial activities and not a 'consumer', is also raised.
5. The Insured filed Rejoinder Reply on 18.02.2015, documentary evidence and Affidavit of Evidence of Manoj Kumar Sharma, the Director and Affidavit of Evidence of Lalit Kumar. The Insurer filed Affidavit of Evidence of Mr. Rakesh Kumar, Assistant Manager. The Insured filed short synopsis.
6. I have considered the arguments of the counsel for the complainant and examined the record. Fire incident in the factory premises of the Insured and consequent loss has not been disputed. The Insurer repudiated the claim, stating that cause of fire was doubtful and the claim was exaggerated and based upon fabricated documents, invoking Clauses-6 & 8 of General Terms and Conditions of Standard Fire and Special Perils Policy. Clauses 6 & -8 of General Terms and Conditions is quoted below:-
"6.(i).- On the happening of any loss or damage, the Insured shall forthwith give notice thereof to the Company and shall within 15 days after the loss or damage or such further time as the Company may in writing allow in that behalf, deliver to the company.
(a) claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items or property damaged or destroyed and of the amount of loss or damage thereto respectively having regard to their value at the time of the loss or damage not including profit of any kind.
(b) Particulars of all other insurances, if any.
The Insured shall also at all times at its own expense produce and give to the Company all such further particulars, plans, specification books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of loss and the circumstances under which the loss or damage occurred and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.
No claim under this policy shall be payable unless the terms of this condition have been complied with.
8. If the claim be in any respect fraudulent, or in any false declaration be made or used in support thereof or any fraudulent means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefits under this policy shall be forfeited."
7. The Insured claimed Rs.24220862.63 for finished goods, which included Rs.18153919.44 for 72000 ladies garments/readymade garments, out of total claim of Rs.32850037.26 (page-154). Main objection is in respect of the claim for 72000 ladies garments, which according to the surveyor was exaggerated and based upon fabricated papers. The Insured informed that they had received Purchase Order dated 20.12.2011 of 72000 ladies readymade garments, from Spectrum World FZC, Rak, U.S.E. Then they purchased fabrics from M/s. Sanjay Enterprises, Room No.320, 3rd Floor, 7/1, Grant Lane, Kolkata, Hanuman Traders, 14, Jella Para, 1st Bye Lane, Howrah and United Trading Company, 17/1, Atindra Mukherjee Lane, Howrah. These firms belonged to two real brothers, who allegedly purchased fabrics from M/s. Tirupati Enterprises, 3 Radha Krishan Shopping Centre, Udhna Magdalla Road, Majura Surat. These garments were got tailored from M/s. Mangla Traders, Amta, Howrah-Proprietor Kaushik Panchal and M/s. Mamoni Industries, Amta Howrah- Proprietor Chittranjan Panchhal, the two real brothers, located at a distance of 80 KM from factory premises.
8. The Insured produced Challan No.112 dated 15.12.2011, in respect of supply of 12451 mtrs Blended Fabrics, Challan No.121 dated 24.12.2011, in respect of supply of 24774 mtrs Blended Fabrics, Challan No.135 dated 30.12.2011, in respect of supply of 18651 mtrs Blended Fabrics, Challan No.136 dated 06.01.2012, in respect of supply of 18651 mtrs Blended Fabrics, Challan No.147 dated 12.01.2014, in respect of supply of 18680 mtrs Blended Fabrics by Tirupati Enterprises to Sanjay Enterprises. Challan No.129 dated 27.12.2011, in respect of supply of 8238 mtrs Blended Fabrics, Challan No.139 dated 08.01.2012, in respect of supply of 8925 mtrs Blended Fabrics, Challan No.149 dated 14.01.2012, in respect of supply of 17737 mtrs Blended Fabrics, by Tirupati Enterprises to United Trading Company. Challan No.113 dated 15.12.2011, in respect of supply of 17667 mtrs Blended Fabrics and Challan No.118 dated 22.12.2011, in respect of supply of 17798 mtrs Blended Fabrics by Tirupati Enterprises to Hanuman Traders. Total 163572 mtrs. In books of account, the Insured has shown purchase of 8689 mtrs, on 02.01.2012, 8978 mtrs on 03.01.2012, 9022 mtrs on 06.01.2012 and 8776 mtrs on 10.01.2012 from Hanuman Traders and 8971 mtrs on 04.01.2012, 8238 mtrs on 13.01.2012, 8925 mtrs on 24.01.2012 and 8766 mtrs on 30.01.2012 from United Trading Corporation, which do not tally from Challans produced by the Insured. No proof relating to payment of these huge purchases has been produced.
9. The Insured produced transportation proof of these fabrics as Consignment Notes of Prakash Logistics dated 06.12.2011 of transportation of 80925 mtrs Blended Fabric and 22.12.2011 of transportation of 82673 mtrs Blended Fabric (Total 163601 mtrs). By these consignments Tirupati Enterprises transported to Tirupati Enterprises. None of these consignments were in the names of Sanjay Enterprises, United Trading Company and Hanuman Traders. Various challans were of January, 2012, while transportations were done in December, 2011. In previous years, the Insured did not purchase fabric from these traders. There was no reason for not purchasing fabric from other regular customers, from where the Insured used to purchase fabric.
10. The surveyor observed that these traders were unable to show any document in respect of purchase/sale and transportation of fabric during his first inspection. Even they were not in position to inform the name of transporter.
11. The Insured claimed that 72000 pieces of ladies garments were tailored by M/s. Mangla Traders, Amta, Howrah-Proprietor Kaushik Panchal and M/s. Mamoni Industries, Amta Howrah- Proprietor Chittranjan Panchhal, located at a distance of 80 KM from factory premises. The Insured submitted Invoices of M/s. Mangla Traders dated 20.01.2012 of 5000, 25.01.2012 of 5000, 30.01.2012 of 5500, 03.02.2012 of 5000, 08.02.2012 of 5000, 13.02.2012 of 5500 and 17.02.2012 of 5000, ladies T-Shirts. The Insured submitted Invoices of M/s. Mamoni Industries dated 18.01.2012 of 5000, 23.01.2012 of 5500, 27.01.2012 of 5500, 01.02.2012 of 5000, 06.02.2012 of 5500, 10.02.2012 of 5000 and 15.02.2012 of 5000, ladies T-Shirts.
12. Within a short period of about one month, these two brothers allegedly tailored 72000 ladies garments, i.e. 1200 per day each. The surveyor inspected their factory premises. The surveyor observed that one convertor was manufacturing mattress and pillow cover for the Insured. Not even a single piece of garment material, accessories, pattern or any similar article in support of tailoring of readymade garments or garment remnant could be found in side of his premises. The convertor could not give details of how many peoples were employed, number of sewing cutting tables and scissors. In the premises of second convertor manufacturing of low-cost fancy jewellery boxes, using local labour was going on. There was also no equipment/sign of tailoring readymade garments. The Investigator has not analysed these evidence on record and submitted his report dated 14.01.2013 in a casual manner.
13. The Insured has not given any explanation to aforementioned facts and circumstance nor challenged the finding/observation of the surveyor in the complaint. Supreme Court in Khatima Fibres Ltd. Vs. New India Insurance Company Ltd., 2021 SCC OnLine SC 818, held that in the absence of malafide and misconduct on the part of the surveyor, its report cannot be ignored. The claimed of Rs.18153919.44 for 72000 ladies garments/readymade garments, out of total claim of Rs.32850037.26 was not proved from any reliable evidence. The Insurer is justified to repudiate the claim invoking clause-8 of General Terms and Conditions of the Insurance Policy, as the above facts and circumstances prove that the claim was exaggerated and based upon fabricated papers. The repudiation letter dated 14.08.2013 does not suffer from any illegality.
ORDER
In view of the aforesaid discussions, the complaint is dismissed.
......................J RAM SURAT RAM MAURYA PRESIDING MEMBER