National Consumer Disputes Redressal
United India Insurance Co. Ltd. And Ors. vs Ambuja Laboratories Ltd. on 17 February, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI APPEAL NO. 81 OF 2007 (Against the Order dated 03/11/2006 in Complaint No. 73/2003 of the State Commission Andhra Pradesh) 1. UNITED INDIA INSURANCE CO. LTD. AND ORS. REP BY ITS CHAIRMAN & MANAGING DIRECTOR 24, WHITE ROAD, CHENNAI 2. The Divsional Manager United India Insurance Co. Ltd . Divisional Office at IV PosenttBhavan Chrch Buildings , Tilak Road Hyderabad Andhra Pardesh -500001 3. The sr.Branch Manager, United india Insurance Co.ltd Branch office at IInd Floor Church Buildings , Tilak Road Hyderabad Andhra Pardesh -500001 ...........Appellant(s) Versus 1. AMBUJA LABORATORIES LTD. DIRECTOR, DR S PARKASH REDDY REGD & ADMN OFFICE AT D NO 5-9-1112 CHURCH ROAD, GUNDOUNDRY, HYDERABAD ...........Respondent(s) APPEAL NO. 338 OF 2007 (Against the Order dated 03/11/2006 in Complaint No. 73/2003 of the State Commission Andhra Pradesh) 1. AMBUJA LABORATORIES LTD. D NO 5-9-1112 CHURCH ROAD GUNFOUNDRY HYDERABAD ...........Appellant(s) Versus 1. UNITED INDIA INSURANCE CO.LTD. AND ORS. 24 WHITES ROAD CHENNAI CHENNAI ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
For the Appellant : For the United India : Mr. Maibam N. Singh, Advocate For the Respondent : For the Ambuja Laboratories Ltd.: Mrs. Radha, Advocate
Dated : 17 Feb 2016 ORDER
PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
These appeals arise out of single order of learned State Commission, hence, decided by common order.
2. Appeal No. 81 of 2007 has been filed by OP and Appeal No. 338 of 2007 has been filed by complainant against order dated 03.11.2006 passed by the learned A.P. State Consumer Disputes Redressal Commission, Hyderabad (in short, 'the State Commission') in CD Case No. 73/2003 - Ambuja Laboratories Ltd. Vs. United India Ins. Co. Ltd. & Ors.by which, complaint was partly allowed.
3. Brief facts of the case are that the complainant is a limited company managed by Three Board of Directors. The complainant company obtained a policy bearing No. 050405/11/13/16/1156-2000 from the opposite parties for a period of one year from 11.10.2000 to 10.10.2001 for Rs.72,00,000/- covering its building for Rs.2,00,000/- Machinery & accessories for Rs.30,00,000/- and Stocks & Stock in process Rs.40,00,000/-. The machinery and stock were under hypothecation with State Bank of India, SIB Branch, Saifabad and Hyderabad. During the currency of the policy on 25.3.2001 at about 2.00 a.m. fire was noticed by the watchman Mr. Afsar, who immediately informed the Managing Director Sri P.V. Krishna Reddy and also fire station. The fire tenders reached the premises by 2.45 a.m. and put off the fire after working nearly for three hours. The complainant also informed the Abids Police Station and the same was registered as Cr. No. 87/2001. After investigations the S.I. of Police, Abids, Hyderabad issued a note to the effect that the fire occurred due to electrical short circuit. The Mandal Revenue Officer, Nampally after spot inspection also issued a certificate on 4.4.2001 stating that the premises of the complainant gutted in the fire accident on 25.3.2001 due to short circuit. Fire Services Department also issued a certificate on 29.3.2001 that the supposed cause of fire was of electrical origin. The complainant submitted the claim form for Rs.54,96,575.03 along with required documents to opposite party no. 3 on 30.3.3002. The surveyor appointed by the opposite parties visited the premises from 25.3.2001 to 28.3.2001 and verified the available records and assessed the loss at Rs.43,67,317/- after deducting the depreciation. It was alleged by the complainant that the Managing Director of the complainant company addressed the opposite party no. 3 on 21.6.2001 and on20.7.2001 to settle the claim for which the opposite party no. 3 sought for production of certain documents/information to process the claim and the same has been furnished to the opposite party no. 3 on 23.8.2001. In the meanwhile Sri P.V. Krishna Reddy, Managing Director of the company faced serious domestic problems and was suffering from serious emotional disorder (severe Psychotoic Depression reactive) during the period of December, 2001 to July, 2002. He was bed ridden for most of the time and under the influence of sedatives. His daughter who was involved in the domestic problems was attending on him. It was alleged by the complainant that during the 2nd week of March, 2002 the Officers of opposite parties approached the daughter of Sri P.V. Krishna Reddy, Managing Director and handed over a typed letter for obtaining the signature of her father intimating to them that on account of personal reasons, Sri P.V. Krishna Reddy, Managing Director wishes to withdraw the claim submitted to them on account of fire accident occurred on 25.3.2001. In those disturbed circumstances she obtained the signature of her father Sri P.V. Krishna Reddy on the said letter and handed over the same to the opposite party No. 3 on 11.3.2002. The opposite party no. 3 intimated to the company by way of letter dated 19.3.2002 informing that in view of letter dated 11.3.2002 the claim is closed and no further correspondence will be entered and marked a copy of the same to the Chief Manager, State Bank of India, SIB, Saifabad Branch, Hyderabad. The said fact was not known to the Board of Directors of the complainant company and when the other Directors of the Company came to know about the same, they questioned the Managing Director and he submitted a detailed explanation on 30.6.2002 stating that due to his domestic problems involving his daughters family life, he was not in a fit state of mind and developed suicidal tendency and in those circumstances his daughter, at the instance of opposite parties pressured him to execute the letter of withdrawal and in those circumstances he had signed the letter. Sri P.V. Krishna Reddy, Managing Director had no authority on his own to withdraw any claim on behalf of the Company. The Board of the Company met on 9.9.2002 and discussed the matter at length and while condemning the action of the Managing Director authorised the two working Directors to file an application with the opposite parties for reopening the file and consider the claim. The company also authorised the Directors to request the State Bank of India to follow up the matter with the opposite parties to use their good offices for reopening the fire claim. The Bank, on its own addressed a letter on 4.4.2002 to the Branch Manager, Untied India Insurance Co. Ltd. to settle the claim as the Bank was interested in the insurance policy and beneficiary of the claim following by another letter to the Regional Manager of United India Insurance Co. Ltd., on 7.8.2002. A remainder was also issued by the Bank to the Branch Manager on 9.8.2002. The Directors of the Complainant Company addressed a letter on 12.9.2002 to the opposite party no. 2 to ignore the letter of withdrawal of Sri P.V. Krishna Reddy, Managing Director and to re-open the claim file and settle the claim at the earliest. The Bank also again addressed a letter on 25.1.2003 to the opposite party no. 2 and Sr P.V. Krishna Reddy, himself addressed on 20.6.2003 to reopen the claim and process the claim further. It was alleged by the complainant company that in spite of aforesaid correspondence the opposite parties did not re-open the file and failed to settle the claim of the complainant company. Alleging deficiency on the part of OP, complainant filed complaint before learned State Commission.
4. OP resisted complaint, admitted issuance of Fire policy for a period of 12 months covering a risk of Rs.72 lakhs, but denied the complaint averments describing the occurrence of alleged fire accident causing damage to the goods etc. On receipt of claim form from the complainant, the opposite party appointed a surveyor by name Mr. Zuber who made a detailed investigation of the bills of the plant and machinery and the stocks and upon his verification, he found that the bills of purchase of machinery produced by the complainant are all fake and that the companies alleged to have supplied the materials were non-existing. The total loss assessed for machinery was Rs.5,52,159/- out of which the amount assessed for Spectra Photo Meter is Rs.5,16,955/-. The quotation and a letter from M/s. Beta Engineering, Mumbai dated 9.4.2001 for replacement of the damaged Infrared Spectra Photometer found to be false document. The invoices raised by Riddhi Siddi Enterprises dated 11.1.2001, 25.1.2001, 16,8,2001 and 24.2.2001 are fake since they are obtained from a non-existing firms. The bills of M/s. Vipul Trading are not genuine since the Sales Tax Nos. are not matching and they belong to M/s. Pramnik Trading Company. Further, the bills submitted by the insured relating to M/s. R.V. Chem and M/s. Arunodaya Enterprises are not genuine as per the information furnished by the concerned Sales Tax authorities. The insured submitted fabricated/false bills in support of his claim to the tune of Rs.46,32,723/- as shown below:
Beta Engineers Rs. 5,16,159/- Riddhi Siddi Enterprises Rs. 8,53,904/- Vipul Trading Company Rs. 7,86,772/- R.V. Chem Rs. 4,34,405/- Arunodaya Enterprises Rs. 20,41,483/- Total Rs. 46,32,723/-
The opposite party further contended that during the course of meetings with the complainant/insured on 8.3.2002 and 10.3.2002 it was made clear to the complainant that the bills submitted by the insured are false and fabricated for the sole purpose of making a claim. As per condition no. 8 of Fire "C" Policy the opposite party is not liable for such fraudulent claims and the complainant accepted the same and submitted a letter dated 12.3.2002 withdrawing the claim. It was contended by the opposite party that Mr. P.V. Krishna Reddy, Managing Director all through from the date of submission of claim form till the date of withdrawal of the claim was in a healthy condition. During the course of investigations made by the Investigator Sri P.V. Krishna Reddy was present in the premises and actively participated in the discussions held with Mr. Zuber. He himself admitted that Spectra Photometer was not damaged and it was an L&T Dot-matrix printer that was shown as Spectra Photometer. The other bills and information produced by the complainant were fake and obtained from non-existent firms. As the investigator secured the entire information and having knowledge of the same the Managing Director volunteered himself and gave a letter dated 11.3.2002 withdrawing the claim of the fire accident alleged to have occurred on 25.3.2001. On receipt of letter from the complainant, the opposite party addressed a letter dated 19.3.2002 informing the complainant that no further correspondence will be entertained in respect of the alleged fire claim as the complainant has withdrawn the claim on its own and the claim was closed. Hence, there was no deficiency of service on the part of opposite parties and the claim was not repudiated though it being a fit case for repudiation under Condition no. 8 of Fire "C" Policy but closed by the Insurance Company as the same was withdrawn by the complainant and prayed for dismissal of complaint. Learned State Commission after hearing both the parties observed that Managing Director had no power to withdraw the claim and allowed complaint partly and directed OP to pay Rs.43,67,317/- with 9% p.a. interest to the complainant along with cost of Rs.10,000/-. Both the parties filed appeals along with application for condonation of delay.
5. Heard learned Counsel for the parties and perused record.
6. There is delay of 45 days in filing appeal in F.A. No. 81 of 2007 and there is delay of 96 days in filing F.A. No. 338 of 2007. As both the parties have filed appeal with delay, I deem it appropriate to condone delay for the reasons mentioned in the application.
7. Learned Counsel for the OP submitted that inspite of proof of forged documents, learned State Commission committed error in allowing complaint partly; hence, appeal be allowed and impugned order be set aside and complaint be dismissed. On the other hand learned Counsel for the complainant submitted that learned State Commission has committed error in not allowing complaint in toto; hence, appeal be allowed and impugned order be modified and compensation be enhanced.
8. Learned State Commission after hearing at length observed that Managing Director Mr. P.V. Krishna Reddy had no authority to withdraw the claim under the Company's Act and further observed that later on he had withdrawn earlier letter for withdrawal of claim and expenditure and in such circumstances, claim requires adjudication. Learned Counsel for the OP could not place any law to substantiate that Managing Director had authority to withdraw claim and once claim has been withdrawn, no cause survives for complainant to file complaint. For the sake of argument even if it is presumed that Managing Director submitted letter for withdrawal of claim there is no estoppel in filing claim on the basis of subsequent resolution passed by the Managing director. In such circumstances, complaint filed by complainant was maintainable before learned State Commission.
9. As regards amount of compensation is concerned, complainant claimed compensation of Rs.80,52,482.30. First surveyor assessed loss to the tune of Rs.43,67,317/0, but investigator/surveyor Mr. Zuber appointed by OP observed that complainant submitted fabricated bills worth Rs.46,32,723/-. Learned State Commission while allowing complaint partly has not given any reason for dismissing complaint partly and for allowing complaint partly. Learned State Commission while allowing claim observed as under:
"For all the aforementioned reasons the complaint is allowed directing the opposite parties to pay Rs.43,67,317/- after deducting the depreciation as assessed by the Surveyor appointed by the opposite parties".
No reason has been given by learned State Commission for allowing claim for Rs.43,67,317/- where OP vehemently opposed the claim on the ground of forged and fabricated bills coupled with evidence of concerned Sales Tax authorities. As both parties have challenged the impugned order, I deem it appropriate to set aside non-speaking impugned order and remand the matter back to the learned State Commission to decide complaint by a speaking order instead of allowing complaint without any reason simply on the basis of first surveyor's report particularly when second surveyor has observed that most of the claims are based on fabricated bills.
10. Consequently, both the appeals F.A. No. 81 of 2007 - United India Ins. Co. Ltd. & Ors. Vs. Ambuja Laboratories Ltd. and F.A. No. 338 of 2007 - Ambuja Laboratories Ltd. Vs. United India Ins. Co. Ltd. & Ors. are allowed and order dated 3.11.2006 passed by learned State Commission in C.D. No. 73 of 2003 Ambuja Laboratories Ltd. Vs. United India Ins. Co. Ltd. is set aside and matter is remanded back to learned State Commission to decide amount of compensation by a speaking order after giving an opportunity of being heard to both the parties.
11. Parties are directed to appear before learned State Commission on 29.3.2016.
......................J K.S. CHAUDHARI PRESIDING MEMBER