National Consumer Disputes Redressal
Purar Textiles Pvt. Ltd. vs New India Assurance Co. Ltd. on 25 October, 2002
ORDER
Rajyalakshmi Rao, Member The original petition has been filed by M/s. Purar Textiles Pvt. Ltd., a Company carrying various kinds of yarns and fabrics whose insurance claim for losses suffered in an accidental fire at his factory at village Chidana, District Sonepat, Haryana, was repudiated by the opposite party, New India Assurance Co. Ltd.
Brief facts are as follows :
1. The complainant took from the opposite party a Fire Policy 'C' for Rs. 22.5 lakhs, covering his assets including raw materials, semi-finished and finished goods etc., at his factory, covering the period 11th February, 1994 to 10th February, 1995. On the night of 13th January, 1995 at about 1.00 p.m. when the Reg. Teaser machine was switched on, there was electrical short-circuit resulting in fire, which soon engulfed and cpnsumed the whole factory by the time the fire brigade from Panipat and Sonepat could reach the site at 2.30 p.m. On the next day, the FIR was registered with the local police and the opposite party was also informed of the fire. Opposite party also appoined on 14th January, 1995 itself one M/s. R.L. Aggarwal & Sons for survey and assessment of loss. On 27th January, 1995, the complainant lodged a formal claim for Rs, 12,24,561/- towards actual loss suffered, with the respondent.
2. The Surveyors thoroughly checked and verified the entire record of the complainant and also interrogated the customers and dealers having dealings with the complainant and also verified such customer's records. Ultimately, the Surveyor gave his report to the respondent on 25th June, 1995, assessing the net loss at Rs. 14,24,005/-. Even though the complainant went on reminding the respondent to settle the claim quickly as his factory had to be closed due to the serious fire, and that he had been suffering heavy losses, the claim was not settled and ultimately in response to the last reminder of 12th October, 1995, the opposite party replied on 20th October, 1995 that they are seeking some information from the Surveyor and would revert back. As nothing was heard from the opposite party, M/s. Purar Textiles Pvt. Ltd. filed a complaint before this Commission on 9th February, 1996.
3. It is seen from record that soon after the opposite party's letter of 20th October, 1995 to the complainant, on 10th November, 1995, they appointed an Investigator, one Mr. J.D. Guliani, to investigate certain specific points and no evidence has been led to show what exactly are these specific points referred to, by opposite party. Mr. Guliani submitted his report on 19th December, 1995 in which he has not cast any doubts about the fire being accidental or about the extent of the loss. He made personal enquiries from 5 dealers of Panipat who supplied shoddy yarn to the complainant and obtained letters from them confirming their supplies to as well as their purchases of yarn from the complainant.
4. The opposite party, within a week of appointing Mr. Gulianuon 17th November, 1995 appointed another Surveyor and Loss Assessor, Mr. Daleep Kumar, to verify the genuineness of the bills of the above 5 dealers of Panipat. Mr. Daleep Kumar gave three reports on 10th January, 1996, 29th January, 1996 and 3rd May, 1996 to the opposite party. The opposite party relying on these reports ultimately repudiated the claim of the complainant vide registered letter dated 3rd September, 1996, that is during the pendency of the proceedings before the Commission alleging that the complainant had lodged a wrong, false, fabricated and concocted claim.
5. We have gone through the evidence on record, affidavits filed by both the parties and others and heard the arguments. It is contended by the opposite party, repudiation of the claim by the Insurance Company is essentially based on the reports of the last Surveyor, Mr. Daleep Kumar in regard to the purchases and sales by the complainant from the 5 dealers of Panipat referred to paras 3 and 4. These 5 dealers are :
(i) Jai Jyoti Spinning Mills;
(ii) Govind Spinners;
(iii) Rahul Traders;
(iv) Spinners India and
(v) Navin Spinning.
The Investigator, Mr. J.D. Juliani in his report submitted that these parties were contacted at Panipat at the addresses given and that they have in writing confirmed the sales and purchases to and from the petitioner.
6. It is further argued by the opposite party that there was discrepancy in the bills of the complainant and thus they referred these very cases and one additional case of Om Goyal Spinners to the third Surveyor Daleep Kumar. Mr. Daleep Kumar stated in his report that he could not locate Jai Jyoti Spinning Mills, Spinner India and Navin Spinning at the addresses given on the bills are not complete. However, he located a Company, Jay Jyoti Woolen Mills whose name closely resembles that of Jai Jyoti Spinning Mills. The Jai Jyoti Woolen Mills however denied having purchased or sold any goods to the petitioner. In the case of Rahul Traders, whose address is given in H-11, Industrial Area, Panipat, on spot verification, he found that there is no Rahul Traders, but there is one R.M. Gupta Industries at the said address who denied having sold or purchased any goods from the complainant. Similarly, in the case of Govind Spinners, whose address is given as M-5, Industrial Area, Panipat, spot verification revealed that there is no Govind Spinners but one M/s. Govind Ram Jindal & Sons, who denied having sold or purchased any goods from the petitioner. Since the bills of 5 companies issued to the petitioner have Sales Tax numbers, enquiries were made with the Deputy Excise & Taxation Commissioner, Sonepat who informed the Surveyor, Mr. Daleep Kumar that the Sales Tax numbers quoted by these companies do not belong to them but are assigned to some other companies. It is essentially on the basis of enquiries regarding these 5 companies, from whom the complainant claims to have purchased material for processing and returned the same, the opposite party repudiated the insurance claim.
7. It would be seen that in this case, it is not one or two but three independent people appointed one after the other as Surveyors or Investigators. The first took place on 13th January, 1995 and the final repudiation had come only on 3rd September, 1996, that is, after one year and 8 months. The report of the first two, namely, M/s. R.L. Aggarwal & Sons and Mr. J.D. Guliani, support the case of the complainant. It is true that Mr. J.D. Guliani in his report made some adverse comments about the complainant, namely, that the party has been continuously suffering financial losses in their trade, that the party does not enjoy good reputation in business circles and that all the bills seems to have been prepared by one person in the same handwriting but have been signed by different persons. These general adverse comments can by no stretch of imagination be interpreted to mean that the complainant has created a false fire or made a bogus or fraudulent claim against the Insurance Company.
8. Both these companies, namely, M/s. R.L. Aggarwal & Sons and Mr. J.D. Guliani have been exclusively selected by the opposite party. No specific reasons have been attributed as to why the survey report of M/s. R.L. Aggarwal & Sons is rejected. Almost simultaneously with the appointment of Mr. J.D. Guliani, the opposite party appointed another Surveyor, Mr. Daleep Kumar. Mr. Daleep Kumar's observations that he could not locate three companies and the names of two companies are different and that the Sales Tax numbers of the 5 companies are not genuine cannot prove any fraud or mischief on the part of the complainant. An order passed by the Deputy Excise & Taxation Commission, Sonepat on 21st January, 1997 has been placed on record. It appears that on receiving information that certain purchases and sales made by the complainant to the 5 companies referred to above, the Deputy Excise & Taxation Commissioner issued a notice on 16th May, 1996 to the complainant to produce complete account books. On a thorough verification, he has come to the conclusion that all these purchases and sales with the said 5 companies have been properly and duly recorded in the books of account regularly kept in the course of business.
9. We agree with the conclusion arrived at by the Deputy Excise & Taxation Commission that as the complainant M/s. Purar Textiles Pvt. Ltd., is a Sales Tax exempted unit, there can be no attempt on his part to evade tax. We see merit in the argument of the petitioner that if certain companies have issued fictitious bills quoting wrong Sales Tax numbers, they might have done so for their own reasons.
10. It is common knowledge that some dealers issue fictitious bills for sales and purchases to evade tax. We feel the actions of the three parties cannot be a base for drawing adverse inferences against the complainant especially when all the transactions are duly recorded in the regular books of accounts kept as a matter of course and when there can be no motive to evade tax in the hands of the complainant. This Commission has repeatedly held in the past that Insurance Companies cannot go on appointing Surveyors one after the other endlessly till such time one of them carried out some fishing enquiries and raised some adverse inference against the insured to suit the requirements of the Insurance Companies. The Surveyors and Loss Assessors are issued licences by the Controller of Insurance, Government of India. The Insurance Companies need to exercise greater care and vigilance in appointing and licensing the Surveyors. They cannot routinely make allegations that the licensed Surveyors appointed by them are in collusion with the insured.
11. For the reasons stated above, we allow the complaint. The opposite party should settle the claim for Rs. 14,24,005/- which is the net loss assessed on 25th June, 1995 by the first Surveyor at the rate of 9% from 1st August, 1995 till the date of payment within a month. The complaint is allowed with Rs. 5,000/- as costs.