National Consumer Disputes Redressal
Tarun Parekh vs Divisional Manager, Oriental ... on 24 May, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 62 OF 2015 (Against the Order dated 12/12/2014 in Complaint No. 225/2012 of the State Commission Maharashtra) 1. TARUN PAREKH PROPRIETOR OF M/S. BRITOLITE INDUSTRIES, HAVING OFFICE AT FLAT NO. 2, 1ST FLOOR, GANJAWALE ENCLAVE, GANJAWALA LANE, BORIVALI WEST, MUMBAI-4000092 ...........Appellant(s) Versus 1. DIVISIONAL MANAGER, ORIENTAL INSURANCE CO. LTD. MAKER BHAVAN NO. 1, 5TH FLOOR, NEW MARINE LINES, MUMBAI-4000020 ...........Respondent(s)
BEFORE: HON'BLE MR. C. VISWANATH,PRESIDING MEMBER
For the Appellant : Mr. S.S. Kulshrestha, Sr. Advocate with
Mr. Ajit Pandey, Advocate For the Respondent : Ms. Sakshi Gupta, Advocate
Dated : 24 May 2022 ORDER
1. This Appeal is filed against the order dated 12.12.2014 of the Maharashtra State Consumer Disputes Redressal Commission, Mumbai (hereinafter referred to as "the State Commission") in Consumer Complaint No. 225/2012.
2. The Complainant/ Appellant is a proprietor of M/s Britolite Industries, engaged in trading business of acrylic sheets, off cut and rod in wholesale and retail market. The Complainant took Standard Fire and Special Peril Policy No. 121700/11/2012/155 from the Opposite Party/ Respondent Insurance Company to insure his godowns situated at 10, Qureshi Compound, Near Himalaya Hotel, S.V.Road, Jogeshwari (West), Mumbai - 400102 and at 50, Ashirwad Industrial Estate, Building No. 5, Ram Mandir Road, Goregaon (West), Mumbai -400104, valid from 10.05.2011 to 09.05.2012.
3. The case of the Complainant/Appellant is that on 19.10.2011, fire broke out in the godown at 10, Qureshi Compound, Near Himalaya Hotel, S.V.Road, Jogeshwari (West), Mumbai - 400102 belonging to the Complainant. The Complainant informed the fire brigade as well as the Police Officers about the incident. The Divisional Manager of the Opposite Party was also informed of the fire incident and requested to appoint Surveyor to assess the loss. According to the Complainant, goods worth Rs. 71,50,513.75 were in the godown before the fire broke out and the goods worth Rs.26,90,000/- were lost in the fire. The Opposite Party appointed M/s Amar Obhan as Surveyor to assess the loss. The Surveyor visited the site of the Complainant on 19.10.2011 and submitted the Survey Report dated 14.02.2012, estimating the loss of the Complainant on account of damage to the Stock to the tune of Rs. 94,611/- as against the claim of Rs.26,90,000/-. The Surveyor mentioned in the report itself under the caption "Survey & Assessment", the godown used by the Complainant was completely destroyed along with the stock in the godown. The Surveyor after observing the damage due to the fire had arbitrarily reduced the claim of the Complainant from Rs. 26,90,000/- to Rs. 94,611/- without considering the facts, figures and evidences put forth by the Complainant. The offer of Rs. 94,611/- by the Opposite Party Insurance Company was, therefore, rejected by the Complainant. Since all efforts to get compensated adequately under the Insurance Policy did not yield any result, the Complainant filed Consumer Complaint No. 225 of 2012 in the State Commission with the following prayer:
"(a) that this Hon'ble Commission be pleased to direct the opposite party to rectify the defects in its service as insurer and to pay the complainant's legitimate claim of Rs. 26, 90,000/- together with interest @ 12% per annum on the said amount from 19.10.2011 (six months concession as per IRDA guidelines) till date of filing the present complainant, i.e., as per the particular of claim annexed and marked as Exhibit "J" and further interest @ 12% on the said amount of Rs. 26,60,000/- from the date of complaint till realization.
(b) that the opposite party be directed to pay to the complainant a sum of Rs. 1,00,000/- on the ground of deficiency of service and also on the ground of failure on the part of opposite party to favourably consider the complainant's legitimate claim;
(c) that the cost of Rs. 50,00,000/- be provided for filing the respect claim;
(d) for such other and further relief as the nature and circumstances of the case may require."
4. The Complaint was resisted by the Opposite Party/ Respondent by filing a Written Version wherein it was stated that the Complainant had fraudulently escalated the claim, which was not payable under the Policy. The Surveyor assessed the loss to the tune of Rs.94,611/- after a proper and thorough investigation. The amount of loss assessed by the Surveyor was offered to the Complainant and the Complainant refused to accept the same and instead filed a Consumer Complaint in the State Commission without there being a legitimate cause. Since the offer of the Opposite Party was not accepted by the Complainant, the claim was closed by the Opposite Party.
5. The Opposite Party submitted that the report of the Surveyor assessing the damage cannot be ignored since the Surveyor was duly appointed as per statute. Moreover, in support of contentions of the claim, the Complainant failed to adduce documentary evidence establishing a loss of Rs. 26,90,000/-. It is settled law that the claim must be supported by documentary evidence and unreasonable claim cannot be considered. The Complaint is liable to be dismissed.
6. The State Commission after hearing the Learned Counsel for the Parties and carefully perusing the record, dismissed the Complaint. Aggrieved by dismissal of the Complaint, the Complainant has filed the instant First Appeal with the following prayer:
"(a) set aside the impugned order dated 1th December, 2014;
(b) the appellant should be allowed the amount Rs.26,90,000/-; of
(c) any other order, direction, which may be deemed fit and proper under the circumstances of the case and in the interest of justice."
7. Heard the Learned Counsel for the Parties and carefully perused the record. Learned Counsel for the Appellant submitted that the State Commission did not consider the documents filed by the Complainant and made observations contrary to the records that the Complainant had not filed any supporting documents. Such, non-consideration of documents resulted in serious miscarriage of justice. The Appellant placed its reliance on the case of United India Insurance v. Roshan Lal, (2000) 10 SCC 19 in support of his contention, where it was held:
"Non-consideration of this important document resulted in serious miscarriage of justice and vitiates the judgment passed by the Commission - The case has therefore, to be sent back to the Commission for a fresh hearing."
It was averred by the Appellant that the report of the Surveyor filed before State Commission is self-contradictory. He observed in his report, "due to fire there occurred severe damage to stock of acrylic goods". The relevant extract is cited herein under:
".....I had climbed upto mezzanine floor of the insured godown to inspect and record the impact of fire on the stock of acrylic pipes, off cuts and other items. This part of godown was giving a devastating and deserted look. The obnoxious smell emanating from burnt and blackened object's which were under the splash of water by fire fighters a day before was eminent. The walls of the godown were found blackened with carbon and boot. The cutting machine was found charred. The stock of acrylic sheets off-cuts was found broken & blackened and which became redundant for any commercial use.
Entire stock of acrylic pipes of various dimensions placed in m.a. racks installed at the centre and Northern side of the godown were found blackened, wilted and totally destroyed. Most of the acrylic pipes got melted and stuck with each other and became difficult to be separated. Some items of stock were reduced to ashes."
Such was the position of the goods lying in the godown. It was also admitted by the Surveyor by observing as under:
" (2) ACRYLIC SHEETS OFF CUTS
(i) Block of acrylic sheets off cuts which was lying at the mezzanine floor and destroyed due to fire and which was put in 8 juts bags, was weighed at 802 Kgs. The insured insisted that since acrylic pipes & acrylic sheets being petroleum products, there is bound to be same weight loss due to evaporation after quitting. Insured's view are not unfound and hence 10% addition is made to the quantity of damaged stock of acrylic sheets off cuts."
The State Commission solely relied upon the Survey Report without examining the reasons which were merely speculative. It is important to note that the Survey Report is not final in itself, as held by Hon'ble Supreme Court in the case of New India Insurance Corporation Vs. Prapdeep Kumar, (2009) 7 SCC 787 as under:
"Although assessment of loss by approved surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, yet surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyors report may be basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured."
With regard to the authenticity of the bill vouchers, only a vague reply has been given in the Survey Report that the claim was exaggerated but nothing is said with regard to genuineness of these bill vouchers.
8. Learned Counsel for the Respondent submitted that the State Commission rightly relied upon the Survey Report wherein after detailed consideration of the facts and circumstances of the case, the Surveyor assessed the loss at Rs. 94,611/-. Perusal of the record of the State Commission shows that the report of the Surveyor was received by the Appellant before filing the Complaint and the Appellant never challenged the calculations and observations made by the Surveyor in any of the correspondence made before the Complaint. The Surveyor observed in his report that the appellant insured did not maintain any stock records. It was further noted by the Surveyor that the sale and purchase registers were updated only at the time of filing quarterly Sales Tax/CST returns. This observation is further fortified from the fact that the Appellant had not filed the stock register, sales and purchase register. On the date of accident the Appellant lodged the claim with the Respondent intimating the estimated loss between Rs. 6 lakhs and Rs. 8 lakhs. However, subsequently he raised the claim to Rs. 26,90,090/- The Appellant Insured did not submit the Purchase Bill file to the Surveyor despite several requests. The Appellant also failed to submit the delivery challan, freight receipts and Form No. 402 to establish the genuineness and authenticity of purchases. The Surveyor also observed in his report that the huge volume of purchases by the Appellant 18 days prior to the date of loss and the inflated stock inventory on the date of loss was not found to be bona fide purchase transactions. Further, the Appellant himself stated before the Fire Brigade Officer at the time of incident that he suffered an approximate loss of Rs. 1.00 lakh in the fire. Thus, in the absence of any evidence in rebuttal on the part of the Appellant contrary to the Survey Report, the State Commission had rightly dismissed the Complaint. As such the order passed by the State Commission called for no interference by this Commission.
9. Facts of the case are that the Appellant Tarun Parekh, Sole Proprietor of M/s Britolite Industries, obtained 'Standard Fire & Special Perils- Floater Insurance Policy No. 121700/11/2012/155' to cover goods lying in godown, for a sum of Rs. 1.10 Crore. The Policy cover was for a period of one year commencing from 10.05.2011 to 09.05.2012. During the subsistence of the Policy, fire incident took place on 19.10.2011 at the insured premises at Shop No. 10, Qureshi Comm. Nagar, Himalaya Hotel, S.V. Road, Mumbai. Information with respect to fire was immediately given to the Insurance Company, Mumbai Fire Brigade and to the Police. The Respondent Insurance Company, after receiving the claim intimation deputed Surveyor, Shri Amar Obhan, who submitted his report on 14.02.2012 assessing the loss at Rs. 94,611.00. The said amount was offered to the Appellant by the Respondent. The Appellant refused to accept the same and filed Complaint with the State Commission on 13.09.2012.
10. The Surveyor had assessed the loss as follows:
Gross Assessed Loss (Total):
Rs. 1,04,611/-
Less: Excess as applicable Rs. 10,000/-
Net Assessed Loss Rs. 94,611/-
The Surveyor Report reads:
"1. It is to be noted that Proprietor Mr. Tarun Parekh first estimated the loss and damage to stock (say) approximately at Rs.7.00 lakhs and intimated the same to the Insurers. He also informed almost the same amount of loss to stock to the police authorities.
The Insured later without intimating to the Insurers, directly submitted claim papers to the undersigned enhancing the claim figure from Rs.7.00 lakhs to Rs.27.00 lakhs.
2. On some pretext or the other, the Insured refused access to the purchase bills file when the undersigned first visited the godown on 20/10/2011 for inspection thus avoiding endorsement of purchase invoices prior to date of loss (i.e. 18/10/2011).
3. Effected huge volume of purchases (as alleged) during 18 days prior to incidence of fire (on 18/10/2011) disproportionately and without any logic, that too without establishing the authenticity.
4. Denied entire stock of acrylic sheets etc. lying at Ashirwad Industrial Estate at Goregaon (west) i.e. 2nd location covered under the same fire insurance policy (and the reason for opting a floater policy) as his own.
5. Effected insurance cover for stock for Rs.1.10 Crores (and Rs.80 00 lakhs for preceding year) when the Insured's stock for last 4 and half years was between Rs.11,25,670/-& Rs.24,66,780/-."
11. The Survey Report admits the severity of loss and damage caused by the fire in the mezzanine floor, however, it questions the quantity of stock in the godown prior to the occurrence of fire. The main question here, therefore, is with regard to the genuineness of the claim of the Appellant. As per the Survey Report, the inflated stock during the period of 18 days prior to the occurrence of the fire incident to the extent of Rs. 30,44,485/- was not found to be bona fide, and hence was not considered for the purpose of assessment. The Insured could not establish the authenticity and genuineness of the abnormal purchases in that short period. The State Commission, with respect to the contention of the Appellant observed that:
"However, Ld. Advocate for The Complainant could not come forward with explanation as to why the insurer should ignore the survey report, which is carried out as per the provisions of the Insurance Act, 1938. The complainant also could not address as to what other mechanism could have been adopted to assess the loss by the Opponent. Depending solely on the income tax returns and certain purchase vouchers of the goods without relevant details for payments as submitted by the Ld. Advocate for the complainant is an unimaginable proposition to assess the loss."
Since the Appellant did not adduce any further evidence during the arguments on this Appeal, I do not find any substance in this Appeal. Further, it is settled proposition that the report submitted by a Surveyor is an important piece of evidence and has to be given due weight, though it is not sacrosanct and can be ignored, provided there is cogent evidence otherwise. In the absence of any evidence to the contrary, the amount assessed by the Surveyor, as has been accepted by the Opposite Party Insurance Company is to be accepted. Consequently, the allegation of the Complainant that the Surveyor arbitrarily reduced the assessment amount does not stand and is rejected. The judgement relied on by the Appellant in cases of Roshan Lal Oil Mills (supra) and Pradeep Kumar (supra) is not applicable in present case, since the document relating to the purchase of Acrylic Pipes bought from two suppliers 14 days prior to the fire incident produced by the Complainant was considered by the State Commission as well as by the Surveyor and has been elaborately discussed. Also, there is no question involved in the present case with respect to the integrity of the Surveyor in performance of his duties or genuineness of Survey Report prepared by him. Further, it was held in the judgement of Khatema Fibres Ltd. vs New India Assurance Company Ltd., 2021 SCCOnline SC 818 by the Hon'ble Supreme Court that:
"Once it is found that there was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the surveyor, in a manner prescribed by the Regulations as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop."
12. In view of the above, I find that the State Commission has given a detailed and well-reasoned order. The Appellant failed to point out any illegality or irregularity in the impugned order warranting interference in Appellate jurisdiction. The Appeal is accordingly dismissed with no order as to costs.
...................... C. VISWANATH PRESIDING MEMBER