State Consumer Disputes Redressal Commission
Stitchers India vs National Insurance Co. Ltd. on 8 February, 2011
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI Date of Decision : 8.2.2011 Complaint No. C-132/2007 M/s Stitchers India, 2/23, Sarva Priya Vihar, New Delhi 110 016 Through Prop. Sunil Kumar Bhalla .. Complainant. VS The Divisional Manager National Insurance Co. Ltd. Division No.XXIII, 106, Palika Bhawan, R.K. Puram, New Delhi-110 066 Respondent CORAM Justice Barkat Ali Zaidi, President Kanwal Inder, Member
1. Whether reporters of local newspaper be allowed to see the judgment?
2. To be referred to the reporter or not?
KANWAL INDER, MEMBER This complaint u/s 17(a) (i) of the Consumer Protection Act, 1986 has been filed on 12th July, 2007 seeking direction to the respondent Company to pay Rs.32,77,647/- with interest @ 18% p.a. on the principal amount of Rs.16,38,287/- with cost.
2. The complaint is being contested by the OP who has filed reply to which the complainant filed rejoinder. Evidence has been led by way of affidavits. We have heard arguments and have gone through the record.
3. There is no dispute regarding the fact that the entire stock of the complainant company in trade, covering stock as semi-finished goods, finished goods and raw material were insured against burglary and fire vide two separate policies No.360900/46/03/7500180 and No.360900/11/03/3100379 with the OP Co. for sum of Rs.50,00,000/- each. Both the policies were valid from 18.11.2003 to 17.11.2004.
4. On 22.7.2004 the complainant lodged FIR No.210 in Police Station, Udyog Vihar, Gurgaon regarding burglary having taken place in its factory premises during the night between 21.7.2004 and 22.7.2004. Police registered the case u/s 457 IPC. On the same day, Shri Sunil Bhalla, Proprietor of the complainant through FAX No.9511-26873379 intimated about said burglary to the Divisional Manager of the OP Company, who informed the complainant that since value of the goods was more than Rs.10 lakhs, Surveyor will be appointed by the Regional Manager.
5. The OP Company appointed Surveyor Shri R.K. Singhal who visited the factory premises of the Complainant on 5th and 8th August, 2004 and carried out survey. The complainant on 8.8.2004 signed the claim of burglary form for an amount of Rs.16.38 lakhs. The Surveyor vide letters dated 9.8.2004 and 15.9.2004 requested the complainant to produce documents as per claim form and on 25.11.2004 demanded the untrace report from Police Station so that the claim is processed further, otherwise the claim will not be considered. On 25.1.2005 untrace report was given by the Police Station to the Complainant, who handed over the same to the Surveyor. The Surveyor vide letter dated 11.2.2005 requested the complainant to furnish documents in duplicate for processing the case further.
The OP Company vide letter dated 28.2.2005 asked the complainant to fulfill all the formalities as per Surveyor requirement letter dated 9.8.2004 and its letter dated 28.9.2004. On 9.5.2005, the Surveyor submitted his report to the OP Company approving the claim of Rs.14,31,944/-. The Complainant and his bank sent reminders/letters dated 9.6.2005 and 4.7.2005
6. The OP Company vide letter dated 29.12.2005 wrote to the Complainant that the claim file was being processed, however, untrace report issued by the Court is required as Section under which the case was registered has been changed. A reminder in this respect was issued by the OP Co. to the Complainant vide letter dated 20.2.2006. On 22.2.2006 Complainant wrote to the Surveyor that report was still awaited. On 17.6.2006, Shri Lakshman Dass Arora, Investogator informed the complainant/Claimant Co. that he had been appointed by the Insurer for investigation in respect of this claim and during clarification he found certain discrepancies, as several suppliers mentioned in the purchase bills provided in support of the claim did not exist on the address mentioned in the bills for clarification of which he had spoken to Mr. Bhalla, Proprietor but since there was no response, this formal letter was being issued to provide information/documents specified therein.
On 26.6.2006 the Complainant wrote to the OP that the document required by Shri Lakshman Dass Arora had already been submitted to the Surveyor Shri Ravi Singhal and that it failed to understand that under which Section of Law the OP had appointed another Investigating agency for the claim; further informing them that untrace report will be handed over as soon as courts are open after holidays; further requesting them to issue cheque in favour of Canara Bank a/c Stichers India. On 20.7.2006 & 4.8.2006 the Complaint wrote to the OP that they had received untrace report issued by the Court requesting for a cheque in favour of Canara Bank a/c Stichers India. On 8.8.2006 the OP wrote to the Complainant that the file has been referred to AZM for consideration and is in process. With reference to telecons of Sh. Bhalla, the OP vide letter dated 14.8.2006 confirmed the Complainant that Shri Lakshman Dass Arora had been deputed to investigate for verification of bills submitted by them, requesting them to cooperate with him and enclosing his letter dated 17.6.2006. Investigator Sh. Arora wrote letter dated 16.8.2006 to the Complainant requesting for reply to his letter dated 17.6.2006 stating that some of the concerns mentioned in the letter were not found at the given address. On 19.8.2006, the Complainant wrote to the OP that as per IRDA ruling, only one person can be appointed for assessment of the loss or investigation, asking for provision of Law which authorized the OP to depute a second Surveyor, stating that if claims are not settled within 15 days, it will have no alternative but to approach Court of Law for redressal of his grievance. On 22.9.2006 the OP again wrote to the complainant that Shri L.D. Arora was appointed for verification of the sections incorporated in final report and verification of the Fabric Bills. Vide letter dated 7,10.2006, the Complainant submitted that documents asked by Shri Arora were the same which were already submitted to the first Surveyor.
The complainant filed the complaint No.32/2007 This Commission vide order dated 14.3.2007 directed the OP to take decision on the claim positively within one month and if the complaint is still aggrieved, he shall have liberty to file fresh complaint. On 10.4.2007 the complainant received letter/order from the OP repudiating his claim
7. This complaint has been filed assailing letter/order of the OP dated 10.4.2007 whereby claim of the complainant has been repudiated. It reads as under:-
Please refer above claim, since you could not substantiate your loss and could not submit the untraced report from the court, the file was kept before the Competent authority along with the report of our investigator, the Competent authority repudiated the claim.
Hence the file is closed at our end.
8. As per this letter, the file was kept before the Competent Authority with the report of their investigator. The Competent Authority repudiated the claim. This letter of repudiation mentions two factors i.e. non-submission of untraced report from the court and the fact that the complainant could not substantiate his loss. Vide this complaint, however, the complainant is assailing only one factor i.e. non submission of untraced report. In fact its assertion in the complaint is that repudiation is on the sole ground of non-submission of untrace report from the Court, stating that the said untrace report had already been submitted to the OP vide letter dated 20.7.2006. The complaint is absolutely silent about the other factor mentioned in repudiation letter i.e. the complainant could not substantiate his loss. It nowhere assails contents of report of the investigator. Its submission that its claim has already been settled by the first surveyor does not help him as the Surveyor had calculated cost price of items on the basis of purchase bills and Investigator had been deputed to investigate for verification of bills submitted by the complainant/insured and his findings are that the concerns mentioned were not found at the given addresses and there was no evidence of firms operating. The submission that appointment of Shri L.D. Arora, the second Surveyor is contrary to the provision of law is of no avail as Sh. L.D. Arora was not a Surveyor but an investigator and was appointed to investigate the factum of loss. As per 1986-2009 Consumer 15871(NS) of Honble Supreme Court cited by Ld. Counsel for the Complainant himself, proviso to Sec. 64-UM(2) of the Insurance Act 1938 impliedly permits an insurer to obtain a second or further report where considered appropriate or expedient in the circumstances of the case and sub-section(3) provides the Authority the power to obtain an independent report from any other Surveyor and vests in the Authority the power to call for a second report. It has been observed that the Insurance Act only mandates that while settling a claim, assistance of Surveyor should be taken but it does not go further and say that insurer would be bound by whatever the Surveyor has assessed or quantified, the option to accept or not to accept the report is with insurer; however, if the rejection of the report is arbitrary and based on no acceptable reason, the courts or other forums can definitely step in and correct the error committed by the Insurer while repudiating the claim of the insured; the Insurance Company, however, cannot go on appointing Surveyor one after the other so as to get a tailor made report to the satisfaction of the concerned officer of the Insurance Company. Such is not a case over here. After getting the report of surveyor, which was all in the favour of insured, who went to the extent of saying that when site was visited on 5.8.2004 i.e. 15 days after the burglary, 4 locks were found lying in broken condition, out of them 2 locks were belonging to the Back Side Shutter, 1 lock belong to Iron Channel/Jali Gate and 1 lock belonging to Store Room Door. This is not believable as the surveyor could not have known this as a matter of fact, as FIR had already been lodged a fortnight ago and police and insured had already visited the spot. The Surveyor further found that closing stock as on 31.3.2004 was 4,09,000/-, while as on 21.7.2004 was 54,48,694.91, but recording that Bank Over Draft had increased from Rs. 3 lakh to Rs.38.24 lacs, has explained that increase might be treated as in order. The Surveyor had checked the purchase bills to calculate cost price of items. The OP appointed Investigator Sh. L.D. Arora for verification of bills who visited the places and submitted detailed reports.
He reported that addresses of several of suppliers, whose bills had been submitted by the insured in support of their claim, were found to be such where there was no evidence of firm operating, so he contacted the insured several times and sent him letter dated 17.6.2006 by registered post and thereafter by FAX, but there was no response. The investigator intimated the insurer that it appears that either the insured is unable to establish their loss or is not interested in pursuing the same and therefore recommended that the case may be closed as withdrawn/as no claim. The OP vide letter dated 14.8.2006 informed the insured that Mr. L.D. Arora had been deputed to investigate for verification of bills submitted by him for claims, and sent to the complaint letter of Mr. Arora dated 17.6.2006 for reply for proceeding further in the matter. The insured/complainant however, vide letter dated 19.8.2006 (Anexure A 20) questioned the authority of insurer to depute a second surveyor for investigating its claim again, threatened to approach Court of Law if its claim were not settled within 15 days, making it clear that now onwards it will not entertain any further correspondence with the insurer. The file with report of investigator was put up before the Competent Authority who repudiated the claim. In the circumstance, coming up with this complaint with the submission that claim of the complainant has already been settled by the first surveyor does not help the insured and does not make out any case of deficiency in service on the part of the OP/insurer.
9. The Complainant has placed on recoed list of some cheques issued by it in favour of some of those concerns but date of debit of most of these cheques is subsequent to the date of burglary and hence these will not be relevant and will not negate report of the investigator who has given all the details/particulars.
10. The complainant is having Packing Credit Limit with Canara Bank to whom monthly Stock Statement is submitted but even those statements have not produced to substantiate its contention regarding material lying in stock at the time of burglary.
11. As per Surveyors report, insured is Canara Bank.
The complainant himself has placed on record letter of Canara Bank to Insurer asking for cheque after settlement of claim. The complainant in its letter dated 20.7.2006 had requested the OP to consider the claim and issue cheque in favour of Canara Bank. Canara Bank, however, is not party to the case. This substantiate the preliminary objection raised in reply by the OP that Canara Bank is necessary party and the complaint is bad for non-joinder of necessary parties.
12. For the reasons stated above, we come to the conclusion that the complainant has not been able to make out any case under the Consumer Protection Act against the OP.
Therefore this Complaint is dismissed.
13. Copy of the order be sent to the parties as per rules and the File be consigned to Record Room after needful is done.
(Justice Barkat Ali Zaidi) President (Kanwal Inder) Member Arya