National Consumer Disputes Redressal
M/S Wimplast Ltd., vs M/S Oriental Insurance Co. Ltd., on 10 December, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 195 OF 2014 1. M/s WIMPLAST LTD., Through its Chief Financial Officer, Shri Madhusudan Jangid, Admin Office: Cello House, Corporate Avenue, B-Wing, 1st Floor, Sonawala Road, Goregaon (E), MUMBAI - 400063. ...........Complainant(s) Versus 1. M/s ORIENTAL INSURANCE CO. LTD., Ground Floor, Sazan Villa, Opp. Hotel Presidency, Khariwad, Nani Daman, Daman, DAMAN & DIU - 396210. ...........Opp.Party(s) CONSUMER CASE NO. 196 OF 2014 1. M/s WIMPLAST LTD., Through its Chief Financial Officer, Shri Madhusudan Jangid, Admin Office: Cello House, Corporate Avenue, B-Wing, 1st Floor, Sonawala Road, Goregaon (E), MUMBAI - 400063. ...........Complainant(s) Versus 1. M/s ORIENTAL INSURANCE CO. LTD., Ground Floor, Suzan Villa, Opp. Hotel Presidency, Khariwad, Nani Daman, Daman, DAMAN & DIU - 396210. ...........Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Complainant : Mr. Dinesh Prakash Guchiya, Advocate For the Opp.Party : Mr. Rajesh K. Gupta, Advocate Dated : 10 Dec 2019 ORDER JUSTICE V.K.JAIN (ORAL) The complainant company, which is engaged in manufacturing plastic furniture and crates as well as in manufacturing plastic sheet fabrication, obtained two insurance policies from the OP, namely, Oriental Insurance Co. Ltd. One was Standard Fire & Special Perils Floater policy bearing No.171803/11/2012/348, whereby the plant and machinery of its factory at 7 Kachigam Village, Kachigam Swami Narayan, Gurukul, RD-Daman was insured to the extent of Rs.7.25 crores, the building and compound wall was insured to the extent of Rs.2.50 crores, furniture and fixtures were insured to the extent of Rs.10 lakhs crores and the computer equipment to the extent of Rs.5 lakhs. The second policy being No.171803/11/2012/347 was obtained in respect of plastic goods manufacturing stock to the extent of Rs.20 crores and in respect of plastic goods to the extent of Rs.10 crores.
2. During subsistence of the aforesaid two insurance policies, a fire broke out in the factory of the complainant on 23.4.2012 leading to damage to the building, plant and machinery as well as the stock of goods. Separate claims were lodged by the complainant with the insurer under the policies which had taken from them. M/s P.D. Desai were appointed as the first surveyor followed by the appointment of M/s Krij Consultants. An investigator, namely, M/s V.N. Associates were also engaged by the insurer to investigate the claim.
3. The surveyors M/s Krij Consultants, vide their final report dated 19.8.2013, opined that the loss sustained by the complainant due to fire which occurred on 23.4.2012 appeared to be genuine. The loss to the complainant in respect of building, plant and machinery etc. was assessed by the surveyor at Rs.5513756/- whereas the loss to the complainant on account of damage to the stock was assessed at Rs.6086766/-. The claim, however, was not paid despite the report of the surveyor. Being aggrieved, the complainant approached this Commission by way of two separate consumer complaints instituted on 19.6.2014.
4. After institution of the complaints, the claim were repudiated vide letter dated stated to be 19.9.2014 which to the extent it is relevant, reads as under:-
"On close scrutiny of the papers submitted by you in support of your claim, as well as investigation report & opinion of concerned surveyor i.e. KRIJ CONSULTANTS, AHMEDABAD, we regret to inform you that your both the claims are not tenable on the following ground by our Competent Authority.
"THERE IS BREACH OF WARARANTY AND THE CLAIM IS NOT ADMISSIBLE ACCORDING TO OUR SURVEYOR'S OPINION."
In view of the above we are left with no opinion but to REPUDIATE your claims. We regret the inconvenience caused to you.
S/d (Illegible) Branch Manager"
5. The complaints have been resisted by the opposite party which has taken a preliminary objection that this Commission lacks pecuniary jurisdiction to entertain the consumer complaints. On merits, it is stated in the written version filed by the insurer that the onus was upon the complainant to prove that the loss which occurred due to accidental fire but the complainant had failed to discharge the said onus. A reference is made to the report lodged by Head Constable Kanji Bhagwan Chauhan wherein he has interalia stated that in his opinion the management had set the factory on fire with malafide intention. It is also pointed out in the written version filed by the insurer that the police had recommended granting of "C" Summary which would mean that the claim was found to be neither true nor false by them.
6. As far as the pecuniary jurisdiction of this Commission is concerned, in terms of Section 21 of the C.P. Act, this Commission does possess the requisite pecuniary jurisdiction to entertain the complaint where the value of the goods or services as the case may be and the compensation claimed in the consumer complaint exceeds Rs.1 crore. In the present case, the complainant has claimed more than Rs.1 crore each in both the consumer complaints. It is submitted by the learned counsel for the insurer that the complainant had consented to payment of Rs.55 lakhs in CC/195/2014 and Rs.60 lakhs in CC/196/2014. This, in my opinion, by itself would not exclude the pecuniary jurisdiction of this Commission since the effect of the complainant agreeing to accept the above-referred amounts needs to be considered by this Commission on merits when admittedly, even the said amounts was not paid or offered to the complainant at any point of time. I, therefore, have no hesitation in holding that this Commission does possess the requisite pecuniary jurisdiction.
7. Coming to the merits of the claim, I find that the incident of fire is not disputed by the insurer. The case of the insurer is that the complainant has failed to establish that the fire which took place in the factory was an accidental fire and not an act of arson. In terms of the insurance policy, the loss suffered on account of fire would be covered under the said policy unless it can be shown that the fire was a handy work of none other than the complainant itself. In other words, even if it is presumed for the sake of arguments that the fire in the factory of the complainant was an act of arson by a third party, the loss to the complainant would still be covered under the insurance policies taken by it.
8. A perusal of the reports lodged by the Head Constable Kanji Bhagwan Chauhan would show that in both the complaints he noted that an unknown person had informed him about the fire in Wimplast Co. The person who allegedly gave the aforesaid information to the Head Constable Kanji Bhagwan Chauhan was neither named in the complaint lodged by him nor he has been produced by the insurer as a witness. Moreover, in neither of the reports he stated that the person who gave information about the incident of fire to him had also said to him that the fire was an act of arson on the part of the management of the complainant company. The complaint lodged by Head Constable Kanji Bhagwan Chauhan would show that it was his own opinion when he stated in one report that the management of the company had set the fire with malafide intention for their benefit and in the second report, he stated that an unknown person had set the first floor fire with bad intention. Therefore, the complaint lodged by Head Constable Kanji Bhagwan Chauhan does not either corroborate or contradict the case of the complainant or even of the insurer as regards the cause of fire. In any case, unless there is a direct evidence of the cause of fire, it has to be established by expert evidence such as the report of a forensic laboratory on the basis of the material lifted from the place of fire. In the present case, the insurer itself had obtained the report from Regional Forensic Science Laboratory, Surat which is a laboratory of the Govt. of Gujarat and the said Laboratory, after examination of the samples lifted from the spot and sent to the Laboratory, had reported that there was sign/mark of short-circuit in Sample No.3 sent to the Laboratory. It was also noted that there was effect of heat on the above-referred sample No.3 which was a bunch of zinc wire. Thus the report of the Regional Forensic Science Laboratory supports the case of the complainant that the fire had taken place due to short-circuiting and does not indicate any act of arson.
9. As noted earlier, the insurer had appointed an investigator to inquire into the claim, namely, M/s V.N. Associates who had interalia reported that the loss sustained by the complainant due to fire which occurred on 23.4.2012 appeared to be genuine. As regards investigation by police officials it was noted by the surveyor that the allegation of the Head Constable Kanji Bhagwan Chauhan was based on assumption though the actual cause of fire was due to short-circuiting which occurred in the copper wire of the first floor of the factory. It was also reported by the investigator that Daman Fire Service had left for the fire spot at 14-05 hours which indicated that the insured had informed the fire department within time/immediately. The report of the forensic laboratory coupled with the report of the investigator appointed by the insurer itself is sufficient to prove that the cause of fire was short circuiting in the copper wire on the first floor of the building and was not an act of arson. In my opinion, the onus would be upon the insurer to prove if it so alleges that the fire was an act of arson on the part of the insured himself. No material has been filed by the insurer from which an inference of arson on the part of the complainant may be inferred. Therefore, the insurer in any opinion was not justified in rejecting the claim on the ground that the fire had not been proved to be accidental.
10. As regards the "C" report submitted to the concerned Judicial Magistrate, the said report does not advance the case of either party and, therefore, is of no help in determining the cause of fire. What is material, however, is that the police during investigation did not find evidence of an act of arson on the part of the complainant. Had they found any evidence of arson on the part of the complainant, they would have charge sheeted the complainant instead of submitting a "C" report.
11. For the reasons stated hereinabove, I hold that the claim as assessed by the surveyor should have been paid to the complainant.
12. As far as the damage to the building, plant and machinery etc. is concerned, though the surveyor assessed the loss at Rs.5513756/-, the complainant accepted a lump sum amount of Rs.55 lakhs whereas for the loss on account of damage to the stock of goods, the complainant accepted the offer of Rs.60.86 lakhs made by the insurer. The insurer, therefore, needs to pay the aforesaid amount with appropriate interest it having wrongly withheld the payment of the said amounts from the complainant.
12. For the reasons stated hereinabove, the complaints are disposed of with the following directions:-
In CC/195/2014, the opposite party shall pay a sum of Rs.55 lakhs to the complainant alongwith simple interest @ 9% p.a. w.e.f. six months from the lodgment of the claim till the date of payment.
In CC/196/2014, the opposite party shall pay a sum of Rs.60.86 lakhs to the complainant along with interest @ 9% p.a. w.e.f. six months from the lodgment of the claim till the date of payment.
The payment in terms of this order shall be made within three months from today.
No order as to cost.
......................J V.K. JAIN PRESIDING MEMBER