State Consumer Disputes Redressal Commission
Sai Om Sanitary Wares vs United India Insurance Company Ltd. on 10 August, 2022
Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.585 of 2019
Date of institution : 31.07.2019
Reserved on : 11.07.2022
Date of decision : 10.08.2022
M/s Sai Om Sanitary Wares, C-24 and C-11, Focal Point, Patiala
through its Proprietor Gursharan Goyal.
....Complainant
Versus
United India Insurance Company Limited, NRG Complex, First Floor,
City Road, Sunam, District Sangrur through its Branch Manager.
.....Opposite Party
Consumer Complaint under Section 17
of the Consumer Protection Act, 1986.
Quorum:-
Mr. Harinderpal Singh Mahal, Presiding Judicial Member
Mrs. Urvashi Agnihotri, Member Argued By:-
For the complainant : Sh. Sanjeev Goyal, Advocate
For the OP : Sh. Neeraj Khanna, Advocate
HARINDERPAL SINGH MAHAL, PRESIDING JUDICIAL MEMBER The present complainant-M/s Sai Om Sanitary Wares has filed this complaint, under Section 17 of the Consumer Protection Act, 1986, (in short "C.P. Act") seeking following directions to the opposite party:-
(i) To release the balance amount of Rs.61,52,063/-
alongwith interest @ 9% per annum from the date of incident i.e. 30/31.12.2013 till realization.
(ii) To pay Rs.5,00,000/- as compensation for mental agony and harassment.
Consumer Complaint No.585 of 2019 2
(iii) To pay Rs.1,00,000/- as litigation expenses.
2. Brief facts culminating to the institution of the present complaint are that complainant is running the business under the name & style of M/s Sai Om Sanitary Wares. Complainant obtained the services of OP by getting insured his material lying in godowns situated at C-24, Focal Point, Patiala and C-11, Focal Point, Patiala for a sum of Rs.1,00,00,000/- vide policy No.111702/11/12/13/0000904 valid for the period from 31.01.2013 to 30.01.2014. The said policy was taken from ING Vysya Bank Limited with whom the complainant was having C.C Limit. The copy of the policy is attached as Ex.C-1. Unfortunately during the policy period on the intervening night of 30/31.12.2013 suddenly a fire broke out in godown No.C-11 and the entire stock lying in the said godown engulfed in the fire. The intimation regarding the same was given to the Police, Fire Brigade. The official of fire brigade immediately reached the spot and controlled the fire, however, the complainant suffered heavy loss. Regarding the incident, a DDR No.7 dated 01.01.2014 was lodged at P.S Sadar, Patiala. The copy of the DDR and Fire Brigade Certificate are attached as Ex.C-2 & Ex.C-3. Complainant immediately informed the OP regarding the occurrence and thereafter the OP appointed surveyor for assessing the loss. Complainant submitted the claim to the tune of Rs.66,00,000/- with OP and also submitted all the documents i.e. Balance sheet, stock register etc. required for releasing the claim amount. The building of the godown was also badly damaged in the said incident. The copy of the estimate of loss in fire (Ex.C-4), Balance sheet (Ex.C-5) & balance stock in the godown No.C-11 (Ex.C-6) are on record. OP assured the Consumer Complaint No.585 of 2019 3 complainant to release the entire claim amount within one month. Thereafter, complainant approached the OP number of times for releasing the amount, but OP put off the matter on one pretext or the other and ultimately on 13.03.2015, OP credited the amount of Rs.4,47,927/- through NEFT directly in the bank account of the applicant. Complainant was shocked to receive the said meagre amount of Rs.4,47,927/- against the total claim amount of Rs.66,00,000/-. After getting the amount, complainant again approached the OP for releasing the balance amount and the OP assured the complainant to release the balance amount within one month, but OP failed to release the whole claim amount to the complainant despite the repeated requests and visits of the complainant to OP. When OP failed to release the claim amount then the complainant got served the legal notice dated 27.05.2016 through registered post (Ex.C-7) through his counsel calling upon the OP for releasing the balance payment of Rs.61,52,073/-. But despite that the claim was not released and thereafter the complainant filed application No.108 dated 21.03.2017 U/s 22 C of Legal Services Authority Act before the Permanent Lok Adalat for claiming the balance claim amount. Copy of the application is Ex.C-8. OP appeared before the PLA and filed the written statement/reply on 14.06.2017 in which they stated that the claim was not payable as the loss was not covered. Complainant was not aware about the said fact as the reason for non- payment of balance amount of Rs.61,52,073/- was never communicated to him. The reply was filed by OP before the PLA and the complainant first time came to know about the reason for not Consumer Complaint No.585 of 2019 4 paying the balance amount. OP supplied the surveyor's report dated 03.02.2015 and from the reply as well as from survey report, the complainant was shocked to know that his claim of Rs.61,52,073/- has been wrongly and illegally declined by OP on the ground that the fire started in Acrylic manufacturing unit, which was manufacturing sanitary accessories and the claim for the acrylics goods in process were not considered. OP wrongly deducted the huge amount because the complainant only claimed the amount of stock/material which were lying/stored in the godown and never claimed any amount of machinery of acrylics. No manufacturing unit was installed in the godown. The machine was installed in the godown only for finishing acrylics stock. The stock of acrylics goods in the store was not more than Rs.10,00,000/-. The surveyor with malafide intention only to benefit the OP mentioned wrong facts in his report. The copy of the reply dated 14.06.2017 (Ex.C-9) and survey report dated 03.02.2015 (Ex.C-10). At the time of filing the application before the PLA, the applicant/complainant was under bonafide belief that his case shall be decided within six months, but the matter was not decided after passing of more than two years and ultimately the complainant decided to withdraw the application before the PLA to file the same before his Hon'ble Commission. Accordingly, the complainant moved the application before the PLA for withdrawing his case with liberty to file before this Commission. Thereafter, the PLA vide order dated 11.07.2019 allowed the application filed by the applicant/complainant and permission was granted to file the fresh application wherever he wants, subject to costs of Rs.2000/-. Complainant deposited the said Consumer Complaint No.585 of 2019 5 cost before the District Legal Service Authority as ordered by the Hon'ble PLA. The present complaint has been filed immediately without any further delay. The copy of the order dated 11.07.2019 is attached as Ex.C-11 and receipt of payment of cost is attached as Ex.C-12. Alleging deficiency in service and unfair trade practices on the part of the opposite party, the complainant has filed the present complaint.
3. After admitting the present complaint, notice was issued to the OP, OP appeared through counsel and filed written reply, raising preliminary objections that complaint is not maintainable before this Commission and the same is liable to be dismissed at its threshold. Complainant received the amount of Rs.4,47,927/- in full and final settlement without any protest and complaint is liable to be dismissed. Complainant filed the application before Permanent Lok Adalat Sangrur for getting the claim amount with regard to same cause of action. However, the complainant withdrew that complaint with liberty to file afresh. But the Hon'ble Permanent Lok Adalat observed that the application for withdrawal was filed at the arguments stage when both the parties led their respective evidences. Hon'ble Court observed that the precious time of the Court had been wasted without any reason. It was relevant to mention here that the incident of fire occurred in the godown of the complainant on 30/31.12.2013 and the complaint was filed on 31.07.2019. As such, the present complaint is not within limitation and the same is liable to be dismissed. On merits, it was submitted that at the request of ING Vysya Bank Ltd, the respondent company issued a Standard Fire and Special Perils Policy (Floater Consumer Complaint No.585 of 2019 6 basis) w.e.f. 31.01.2013 to 30.01.2014 A/c M/s Sai Om Sanitary Wares. The sum insured was Rs.1,00,00,000/-. After receiving intimation regarding loss due to fire, the respondent company appointed Sh. Sanjeev Mahajan, Surveyor and Loss Assessor for assessing the loss. The said surveyor observed that total value of stocks were Rs.1,25,76,352.69 paisa and the sum insured was Rs.1,00,00,000/- only and the stocks were under insurance to the tune of 20.54/%. After examining the entire record, the said surveyor assessed Rs.7,48,357/- and after applying under insurance 20.48% on stocks the said surveyor assessed gross loss of Rs.5,95,094/-. The said surveyor after deducting variation 10%, dead stocks 10% and policy excess 5% finally assessed net loss to the tune of Rs.4,47,927/- subject to terms and conditions of the policy. The surveyor submitted his report dated 03.02.2015 to the company subject to terms and conditions of the policy. The insured was not maintaining any stock register at the place of occurrence. Therefore, the opening stock considered as per the balance sheet 31.03.2013 and purchases were added and sales were deducted to arrive at the closing stock figure. As per policy, stocks in godown were covered but the fire started in Acrylic Manufacturing unit, which was manufacturing sanitary accessories and the said surveyor did not consider damages to the acrylic goods since they were in process, hence not covered under policy. Rest of the averments have already been re-iterated in the above preliminary objections, hence no need to discuss it again. Consumer Complaint No.585 of 2019 7
4. The complainant has filed rejoinder alongwith document to the reply of the opposite party denying the averments of opposite party. Further prayed for acceptance of the complaint.
5. The complainant, along with the complaint filed affidavit of Gursharan Goyal, Proprietor M/s Sai Om Sanitary Ware as Ex.CA alongwith documents Ex.C-1 to Ex.C-12. Whereas, to rebut this evidence OP tendered in evidence affidavit of Ms. Shama Arora Mittal, Assistant Manager (Legal), UIIC Ltd alongwith document.
6. We have heard the contentions of learned counsel for the parties in the present case.
7. The written arguments have been submitted by the complainant are on the lines of the pleas and averments in the complaint. However, oral arguments were also addressed and sum and substance of oral and written arguments are that the complainant has claimed the insurance policy which he took from the OP for a sum of Rs.1,00,00,000/- vide policy No.111702/11/12/13/0000904 valid for the period from 31.01.2013 to 30.01.2014. This policy was issued by ING Vysya Bank Limited where the complainant was having C.C limit. The copy of the policy is Ex.C-1. During the pendency of the policy period fire broke out in Godown No.C-11 and the entire stock of the complainant was engulfed in fire for which he filed DDR No.7 dated 01.01.2014 at P.S Sadar Patiala. The copy of the DDR and Fire Brigade Certificate are Ex.C-2 & Ex.C-3. Information was also given to the OP who appointed the surveyor to assess the loss whereas complainant has submitted the claim to the OP to the tune of Rs.66 lacs alongwith relevant documents as required i.e. the copy of Consumer Complaint No.585 of 2019 8 estimate in the fire as Ex.C-4, balance sheet Ex.C-5, balance stock as Ex.C-6. Despite the claim presented by the complainant before the OP after much delay ultimately on 13.03.2015, OP credited an amount of Rs.4,47,927/- through NEFT directly in the bank account of the complainant which was very unreasonable against the claim raised by the complainant to the tune of Rs.66 lacs. After repeated requests of the complainant OP failed to release the amount despite a legal notice as Ex.C-7.
8. Written arguments were also submitted by the OP to the defence taken by them in their written reply. The sum and substance of oral and written arguments are alleging that the claim is not payable because as per policy, stocks in godown were covered but the fire started in Acrylic Manufacturing unit, which was manufacturing sanitary accessories and the surveyor did not consider the damage to the acrylic goods since they were in process and were not covered under the policy. The surveyor assessed the loss to the tune of Rs.5,95,094/- after deducting the variation of stock policy assessed the final assessment was made to the tune of Rs.4,47,927/- subject to the terms and conditions of the policy. It is further alleged that the complainant was not maintaining any stock register at the place of occurrence and ultimately prayed for dismissal of the complaint.
9. It is important to see that if the complainant obtained the said policy to the tune of Rs.1,00,00,000/- for his stock in his business premises falls under the definition of 'consumer, as defined in the Act, as he was running the business for carrying out commercial activities, is concerned, it is relevant to mention that the Hon'ble National Consumer Complaint No.585 of 2019 9 Commission in case "M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd. First Appeal No.159 of 2004 and other connected appeals decided on 03.12.2004, observed that a person, who takes insurance policy to cover the envisaged risk, does not take the policy for commercial purpose. Policy is only for indemnification of actual loss. It is not intended to generate profits. In view of the ratio of the law laid down above by the Hon'ble National Commission, the objection of OP is rejected, as the insurance policy was purchased from the Insurance Company just for indemnifying the risk under the same.
10. Admittedly, insurance policy No.111702/11/12/13/0000904 was valid for the period from 31.01.2013 to 30.01.2014 to the tune of Rs. One crore was taken by the complainant from the OP i.e. United India Insurance Company Limited through ING Vysya Bank Limited with whom the complainant was having CC Limit. During the validity of the period of the said policy the fire took place in the godown of the complainant on the intervening night of 30/31.12.2013 for which he lodged the DDR No.7 dated 01.01.2014 Ex.C-2 and fire brigade was also called and the certificate given by the fire brigade is Ex.C-3 stating therein the cause of fire due to short circuit. Intimation of this incident was given to OP who appointed their surveyor Sh. Sanjeev Mahajan to visit the spot and assess the loss. After surveying the spot of incident and examining the other documents produced by the complainant, surveyor gave his report Ex.C-10, in his report the surveyor has assessed the value of stocks lying/stored to the tune of Rs.1,25,76,352.69 paisa and the sum insured was Rs.1,00,00,000/- and the stocks under insurance to the tune of 20.54%. In the surveyor Consumer Complaint No.585 of 2019 10 report a note has been given by the surveyor " as per policy stocks in godown are covered but the fire started in acrylic manufacturing unit, which was manufacturing sanitary accessories and are not considered damages to the acrylic goods since they were in process hence not covered under policy. Learned counsel for the OP lays much stress to the findings of the surveyor in his report alleging that since the acrylic goods were lying in the unit which were not covered under the policy, so the surveyor has rightly assessed the damage of those goods. Whereas, the learned counsel for the complainant refuted these arguments of the learned counsel for the OP alleging that acrylic goods were not in the process of manufacturing but they were stocked in the godown and the acrylic goods were very much covered under the insurance policy Ex.C-1. The perusal of the policy reveals that it covers all the stocks lying in the godown irrespective of its nature and when the policy covers all the stocks in the godown then at this stage the OP cannot take the plea that acrylic goods not covered under the policy, and the mentioning by the surveyor in his report that the acrylic goods are not covered under the policy is totally against the terms and conditions of the policy.
11. Learned counsel for the OP further contended that the complainant filed an application before Permanent Lok Adalat, Sangrur for getting this claim regarding this very cause of action. Further submitted that the said complaint was withdrawn by the complainant with liberty to file fresh one, whereas, observations were made by the Permanent Lok Adalat that the applicant had withdrawn the complaint at the time of final arguments and has wasted the precious time of the Consumer Complaint No.585 of 2019 11 Court. No doubt the occurrence took place on 30/31.12.2013 and the present complaint was filed on 31.07.2019. However, it is admitted fact that the complainant has already filed a claim before PLA which were later on withdrawn by him on 11.07.2019 and while making said observations Permanent Lok Adalat gave the liberty to the complainant to approach any other Forum upto 31.07.2019. The copy of the order is Ex.C-11. In this way, the complainant was within his right to file the complaint till 31.07.2019 as per the permission granted by the PLA and very much within limitation.
12. Learned counsel for the complainant at the very outset pleaded that OPs has wrongly and illegally denied the claim of the complainant on the ground that fire started in the acrylic manufacturing unit, which was manufacturing sanitary accessories by claiming that the goods which were damaged in the fire were not considered. Complainant only claimed the amount of stock/material which were lying/stored in the godown and never claimed any amount of machinery of acrylics. No manufacturing unit was installed in the godown. He further pointed out that all these facts were mentioned by the complainant in his complaint in para No.7 and the learned counsel for the OPs pointed out that admittedly the policy was taken for Rs. One crore and stock which was observed by the surveyor and total value of stock was Rs.1,25,76,352.69 and the stocks were under insurance to the tune of 20.54% and the surveyor after examining all the records assessed loss of Rs.7,48,357/- and after applying under insurance 20.48% on the assessed stocks, the surveyor assessed gross loss of Rs.5,95,094/- and said surveyor after deducting variation of 10%, dead stocks 10% Consumer Complaint No.585 of 2019 12 and policy excess 5% finally assessed net loss to the tune of Rs.4,47,927/- and said amount was very well paid to the complainant.
13. Both the parties are relying upon the report of the surveyor, it is very important to go through the report carefully which reveals that as per the report, value of the stock has been mentioned as Rs.1,25,76,352.69 paisa, value of the stock saved Rs.65,05,260.81/- value of the damaged Rs.57,12,134/-.
14. On the contrary in his assessment sheet surveyor has deducted certain sanitary goods and made the assessment on remaining sanitary only, surveyor has mentioned the value of the stock damaged in fire as Rs.57,12,134/- and saved stock as Rs.65,05,260.81 but it has not been explained by the OPs anywhere that how even sanitary goods are excluded by the surveyor, so taking these figures to be correct then applying the formula of all deductions under insurance 20.54%. In this case the incident of fire took place on 30/31.12.2013 at the godown of the complainant which was covered under the policy No.111702/11/12/13/0000904 was valid for the period from 31.01.2013 to 30.01.2014. The main reliance which has been laid down by both the parties on the report of the surveyor who was appointed immediately by the OP after the incident. The IRDA has formulated "Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000", which regulate the licensing and the work of surveyors which stipulate that the surveyor shall investigate, manage, quantify, validate and deal with losses arising from any contingency and carry out the work with competence, objectivity and professional integrity, by strictly adhering Consumer Complaint No.585 of 2019 13 to the said Regulations. The assessment of loss, claim settlement and relevance of survey report depends on various factors. Whenever issue is reported by the insured, a Surveyor and Loss Assessor is deputed, who assess the loss and prepares survey report. On the basis of the survey report submitted by the Surveyor, the fate of the insurance claim is ascertained. The Surveyors are appointed under the statutory provisions and they are link between the insurer and the insured when the question of settlement of loss or damage arises. The report of the surveyor could become the basis for settlement of the claim by the insurer in respect of the loss suffered by the insured. The Surveyor/Surveyors is/are appointed by the Insurance Company under the provisions of Insurance Act and their reports are to be given due importance, unless rebutted by cogent and convincing evidence.
15. An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. The four essentials of a contract of insurance are,
(i) the definition of the risk, (ii) the duration of the risk, (iii) the premium and (iv) the amount of insurance. Since upon issuance of insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer. The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court Consumer Complaint No.585 of 2019 14 while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy. We rely upon the judgment passed by the Hon'ble Apex Court in Civil Appeal No.6527 of 2002 titled 'Sikka Papers Ltd. Vs. National Insurance Company Ltd. & Ors.'
16. Similarly, in the present case the contentions of both the parties are based on the survey report Ex. C-10. The careful perusal of the survey report reveals that he has mentioned the value of the stock Rs.1,25,76,352.69 paisa, value of the stock saved Rs.65,05,260.81/- value of the damaged stock Rs.57,12,134/-. He has also assessed under insurance as 20.54%, dead stocks 10%, variation 10% and policy excess 5%. We are also inclined to assess the loss of the complainant on this formula by considering the value of damaged stock Rs.57,12,134/- because the surveyor in his assessment report has not given any cogent and convincing evidence that why he has excluded the acrylic goods while calculating the damages when the acrylic goods were already covered under the policy. Secondly, the assessment made by him regarding the stock (b) is also not clear that why he has excluded so many sanitary items left unexplained.
17. So on the basis of the above said calculations and by applying the said formula on the amount of Rs.57,12,134/- calculated, on the basis of submission of claim bill, by the surveyor, the complainant is entitled to Rs.31,10,830/- (Rs.57,12,134 - 20.54% + 10% + 10% -5%). The opposite party-Insurance Company has already credited a sum of Consumer Complaint No.585 of 2019 15 Rs.4,47,927/- in the Bank account of the complainant through NEFT on 13.03.2015, therefore, the payable amount to the complainant comes to Rs.26,62,903/-.
18. Sequel to the above discussions, the complaint filed by the complainant is partly allowed and opposite party is directed as under:
i) to pay Rs.26,62,903/- as insurance claim along with interest at the rate 6% per annum from the date of filing of the complaint till realization;
ii) to pay Rs.25,000/- as compensation on account of mental agony and harassment as well as litigation expenses.
19. The compliance of the above order shall be made by the opposite party within a period of 45 days from the receipt of certified copy of the order.
20. The complaint could not be decided within the statutory period due to heavy pendency of work.
(HARINDERPAL SINGH MAHAL) PRESIDING JUDICIAL MEMBER (URVASHI AGNIHOTRI) MEMBER August 10th ,2022 Sk /parmod