National Consumer Disputes Redressal
United India Insurance Co. Ltd. vs Gaurav Overseas Inc. on 11 August, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 815 OF 2013 (Against the Order dated 11/07/2013 in Complaint No. 26/2007 of the State Commission Rajasthan) 1. UNITED INDIA INSURANCE CO. LTD. 8TH FLOOR, KANCHANJUNGA BUILDING, 18 BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI ...........Appellant(s) Versus 1. GAURAV OVERSEAS INC. THROUGH PROPRIETOR PRADEEP CHHUGANAI, 3 SP 3 SECTOR, JAWAHAR NAGAR, JAIPUR RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER HON'BLE MR. PREM NARAIN, MEMBER For the Appellant : For the United India Ins. Co. : Ms. Suman Bagga, Advocate For the Respondent : For the Gaurav Overseas : Mr. R.K. Sharma, Advocate Dated : 11 Aug 2016 ORDER PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER Both these appeals arise out of single order of State Commission; hence, decided by single order.
2. F.A. No. 607 of 2013 - Gaurav Overseas Inc. Vs. United India Ins. Co. Ltd. has been filed by the complainant and F.A. No. 815 of 2013 - United India Ins. Co. Ltd. Vs. Gaurav Overseas Inc. has been filed by OP against order dated 11.07.2013 passed by the State Consumer Disputes Redressal Commission, Rajasthan (in short "the State Commission) in Complaint No. 26/2007 - Gaurav Overseas Inc. Vs. United India Ins. Co. Ltd. by which, complaint was partly allowed and OP was directed to pay Rs.7,53,809/- along with compensation of Rs. 50,000/-.
3. Brief facts of the case are that the complainant dealing in garments exports obtained insurance policy for its goods, stock, plant & machinery from OP. During currency of policy, on 13.3.2004 at about 1.00 a.m. fire broke out in the insured plant on account of which, complainants sustained loss of about Rs. 85 to 90 lakhs as goods, material and plant & machinery were completely destroyed. Intimation was given to OP immediately. Two surveyors were appointed by OP who required documents which were supplied to them. OP settled claim for Rs.31,17,623/- whereas complainant suffered loss of Rs. 85 to 90 lakhs. Complainant accepted aforesaid amount under protest and claimed rest of the amount. Alleging deficiency on the part of OP, complainant filed complaint before learned State Commission. OP resisted complaint, admitted insurance policy and incident of fire, but submitted that surveyor and investigator conducted the survey fairly and impartially and on the basis of the survey report, an amount of Rs. 31,17,623/- was paid to the complainant on 7.6.2005 against "full and final settlement" of his claim. The complainant accepted the aforesaid amount voluntarily with his sweet will and without any compulsion. The complainant is not a consumer as he was engaged in commercial transaction. The present matter cannot be decided summarily by the Commission as it requires detailed inquiry/trial and so the present complaint is not maintainable before the Commission and prayed for dismissal of complaint. Learned State Commission after hearing both the parties, allowed complaint partly and directed OP to pay amount as mentioned above against which, these appeals have been filed. OP along with appeal has also filed application for condonation of delay in filing appeal.
4. Heard learned Counsel for the parties finally at admission stage and perused record.
5. In the application for condonation of delay, OP submitted that after receiving copy of impugned order on 5.8.2013, it was sent to Divisional office and then Regional office and Head office and after receiving approval from Head Office, file was sent to Advocate on 11.11.2013 and appeal was filed on 27.11.2013 and prayed for condonation of delay of 81 days. As per office report, there is delay of 84 days. No doubt, date-wise explanation has not been given by the appellant, but looking to the explanation given by appellant, we deem it appropriate to condone delay subject to cost in the light of latest judgments of Hon'ble Apex Court in (1) Civil Appeal Nos. 10120-10121 of 2014 - Jeevanti Devi Vs. Commercial Motors & Anr; (2) Civil Appeal No. 10289 of 2014 - A.T.S. Govindarajane Vs. Chief Manager, State Bank of India; and (3) Civil Appeal No. 5071 of 2014 - Taipen Traders Ltd. & Anr. Vs. M/s. Bhawani Cold Storage & Ors. by which delay of 135 days, 149 days and 218 days, respectively in filing revision petition was condoned and in such circumstances, delay of 84 days is condoned subject to payment of cost of Rs. 5,000/- to complainant.
6. Learned Counsel for the complainant submitted that inspite of loss of Rs.85 to 90 lakhs, learned State Commission has committed error in allowing complaint partly and further apprised that surveyor without any cogent reason reduced quantum of compensation which was accepted by complainant under protest; hence, appeal be allowed and impugned order be modified. On the other hand, learned Counsel for the OP submitted that inspite of consent letter by complainant for receiving amount as full and final satisfaction, learned State Commission has committed error in allowing complaint partly; hence, appeal be allowed and impugned order be set aside.
7. It is not disputed that complainant sustained loss due to fire of the insured stock and machinery during subsistence of insurance policy. It is also not disputed that by letter dated 21.1.2005 complainant submitted consent to receive Rs.31.23 lakhs as full and final settlement which letter bears signatures of complainant at 3 places, which runs as under:
"To The Regional Manager United India Ins. Co. Ltd.
Tonk Road, Jaipur Sub: Fire Claim Dear Sir, This is regarding the Fire Claim for the Fire took place on 13.3.2004 against policy No. 140301/11/03/00196 assessed and investigated by Sh. R.K. Pitti, Surveyor and Shri S.L. Agarwal, Investigator. I have submitted all the paper as desired against the loss reported by me.
As informed to me assessment of loss has been assessed by Surveyor & Investigator for Rs. 31.23 lakhs net after all deduction and being net amount payable to me.
I hereby give my full and free consent if net amount of Rs. 31.23 lakhs paid to me without any further deductions. After this payment, I will not have any claim of any nature.
8. In this letter, it has specifically been written that he has given this consent in presence of mind and consciousness. Two lines have been inserted by hand in which it was mentioned that after receiving payment, he will not have any claim of any nature. Learned Counsel for complainant submitted that hand written lines were not inserted by complainant which argument is devoid of force because after inserting these two lines again complainant has put his seal and signatures below these two lines and on printed material he had already put signatures at two places. Learned Counsel for complainant submitted that under financial constraints and due to harassment this consent was given under coercion, but in support of his contention, he has not placed any document except protest letter dated 8.6.2005 given after receiving aforesaid payment on 7.6.2005. After giving consent on 21.1.2005, complainant has written reminders on 25.1.2005, 18.2.2005, 29.3.2005 and 6.6.2005 and in those letters it has nowhere been mentioned that consent dated 21.1.2005 was given by complainant under coercion or without free will. In the aforesaid letters only it has been requested that claim may be settled at the earliest. In such circumstances, it can very well be inferred that consent letter dated 21.1.2005 signed by complainant at three places was given by him out of free will without any coercion or undue influence. Merely because by letter dated 8.6.2005, protest has been made and it has been mentioned in the letter that amount was accepted by him under protest, it cannot be presumed that amount was accepted by complainant under protest.
9. Hon'ble Apex Court in C.A. No. 10784 of 2014 @ SLP (C) No. 24652/2013 - New India Assurance Co. Ltd. Vs. Genus Power Infrastructure Ltd. held that once complainant has signed detailed letter of subrogation accepting amount in full and final settlement of his claim under the policy, it would be presumed that signing of letter of subrogation was voluntary and free from any coercion or undue influence. In paragraph 9 of the judgment it was observed as under:
"9. In our considered view, the plea raised by the respondent is bereft of any details and particulars, and cannot be anything but a bald assertion. Given the fact that there was no protest or demur raised around the time or soon after the letter of subrogation was signed, that the notice dated 31.03.2011 itself was nearly after three weeks and that the financial condition of the respondent was not so precarious that it was left with no alternative but to accept the terms as suggested, we are of the firm view that the discharge in the present case and signing of letter of subrogation were not because of exercise of any undue influence. Such discharge and signing of letter of subrogation was voluntary and free from any coercion or undue influence. In the circumstances, we hold that upon execution of the letter of subrogation, there was full and final settlement of the claim. Since our answer to the question, whether there was really accord and satisfaction, is in the affirmative, in our view no arbitrable dispute existed so as to exercise power under section 11 of the Act. The High Court was not therefore justified in exercising power under Section 11 of the Act.
In the light of aforesaid judgment, we are of the view that complainant signed consent letter dated 21.1.2005 voluntarily and free from any coercion or undue influence and in such circumstances, he is estopped from claiming any extra amount from OP in respect of incident.
10. Learned Counsel for the complainant submitted that surveyors report was given on 24.1.2005; so, there was no question of giving consent on 21.1.2005 and learned State Commission has also observed In its order that consent was taken from the complainant without free will as there was no basis for acceptance of aforesaid amount. This argument is devoid of force because surveyors report runs in 15 pages and surveyor must have intimated to OP about loss assessed by him and on that basis, complainant must have been intimated about assessed loss and complainant must have signed consent letter without any coercion or undue influence.
11. In the light of aforesaid discussion, it becomes clear that complainant received payment of Rs. 31,17,623/- in the light of consent letter dated 21.1.2005, but he consented for Rs.31,23,000/- and OP committed error in remitting payment of Rs. 31,17,623/- and complainant is certainly entitled to additional Rs.5,477/-.
12. In the light of aforesaid discussion, it becomes clear that learned State Commission has committed error in allowing claim of Rs.7,53,809/- inspite of receiving payment by complainant as full and final payment in pursuance to consent given by him and except to the extent of Rs.5,477/- as observed above, rest of the amount awarded by learned State Commission is to be set aside.
13. Even on merits of the case, we do not find any cogent reason for awarding aforesaid amount by learned State Commission. Perusal of survey report reveals that surveyor has rightly reduced claim on account of under insurance and not maintaining stock register properly. As per clause 10 of the terms & conditions of policy, if insured goods is of more value than the sum insured than insured shall be considered as being his own insurer for the difference and shall bear a ratable proportion of the loss accordingly. Learned Counsel for the complainant submitted that surveyor committed error in treating insurance coverage of Rs. 75 lakhs pertaining to stock whereas it was increased to Rs.85 lakhs. Perusal of survey report reveals that surveyor has considered insurance coverage of Rs. 85 lakhs pertaining to stocks, but he has reduced claim as complainant was having stock of Rs. 87 to Rs. 88 lakhs in preceding months and complainant submitted statement of stock showing stock of Rs. 90.10 lakhs on the date of incident. Surveyor also observed that complainant was not maintaining stock register in the desired manner as to clearly indicate the quantity of stock at different locations on different stages and on this ground he adjusted 15% of the assessed loss. Learned State Commission also observed in para 10 of judgment that rate of items have not been mentioned anywhere in the stock register and further observed that complainant did not maintain his stock register properly. In such circumstances, there was no deficiency on the part of surveyor in adjusting loss by 15% pertaining to stocks. In survey report, surveyor observed that plant & machinery was insured for Rs. 10 lakhs whereas plant and machinery on reinstatement basis was found to be of Rs.12,51,440/-; hence, rightly observed that plant and machinery was under insurance by 20% and rightly reduced net loss to Rs. 58,334/- against gross loss of Rs.73,000/-.
14. In the light of aforesaid discussion, we do not find any discrepancy in survey report and surveyor rightly assessed loss of Rs. 31.23 lakhs and complainant consented to receive aforesaid amount without any deduction, but OP was in error in remitting only Rs.31,17,623/- and complainant is entitled to additional Rs.5477/-.
15. It is also not disputed that consent letter was signed on 21.1.2005 whereas amount was remitted on 7.6.2005 after almost 4½ months and no reason has been given by OP in not remitting payment immediately after receiving duly signed consent letter from complainant. In such circumstances, complainant is certainly entitled to interest on aforesaid amount and we deem it appropriate to allow interest @ 15% p.a. on aforesaid amount from 21.1.2015 to 7.6.2015.
16. Consequently, Appeal No. 607 of 2013 filed by complainant is dismissed and Appeal No. 815 of 2013 filed by OP is partly allowed and amount of compensation ofRs.7,53,809/- awarded by learned State Commission is reduced to Rs.5,477/-, but OP is further directed to make payment of interest @ 15% p.a. on Rs.31,23,000/- from 21.1.2005 to 7.6.2005 and rest of the order of State Commission is upheld subject to payment of cost of Rs.5,000/- by OP to complainant pertaining to condonation of delay within 30 days. Parties to bear their costs.
......................J K.S. CHAUDHARI PRESIDING MEMBER ...................... PREM NARAIN MEMBER