National Consumer Disputes Redressal
Rahul Khosla vs National Insurance Co. Ltd., on 2 August, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 209 OF 2013 1. RAHUL KHOSLA D-57 South City, Ayali kurd LUDHIANA.-142027 ...........Complainant(s) Versus 1. NATIONAL INSURANCE CO. LTD., Through its Branch Manager, SCO 38, Feroz Gandhi Market, LUDHIANA. ...........Opp.Party(s) BEFORE: HON'BLE MR. ANUP K THAKUR,PRESIDING MEMBER HON'BLE MR. C. VISWANATH,MEMBER For the Complainant : For the Opp.Party :
Dated : 02 Aug 2018 ORDER APPEARED AT THE TIME OF ARGUMENTS For the Complainant : Mr. Rahul Khosla, in person For the Opposite Parties : Mr. Yogesh Malhotra, Advocate PER MR. C. VISWANATH, MEMBER
Brief facts of the case are that the Complainant is engaged in the business of manufacturing and resale of hosiery goods/readymade garments, having factory and store cum godown at premises bearing No. B-XXXII-741/IA, Bhadure Ke Road, Taraf Karbara, Ludhiana, Punjab.
Bank of India A/c. Rahul Exports had taken a Standard Fire and Special Perils Policy No. 404502/11/10/3100000498 covering risk to the plant & machinery for a sum of Rs.22,50,000/- for the period 17.3.2011 to 16.3.2012 and Standard Fire and Special Perils Policy No.404502/11/11/3100000242 covering risk to the stocks of raw material and readymade garments for a sum of Rs.1,15,00,000/- for the period 29.8.2011 to 28.8.2012. Third Standard Fire and Special Perils Policy No.404502/11/10/3100000497 was taken by the Bank of India A/c. Davinder Pal covering risk to the building for a sum of Rs.1,00,00,000/- for the period 17.03.2011 to 16.3.2012.Insurance for the stocks, Plant and Machinery and Building were subsisting on the date of the fire, i.e., on 11.2.2012.
Fire broke in the factory on 11.02.2012 at about 3 am and gutted the stock and machinery and also damaged the factory premises. FIR of the incident was lodged by the Complainant with the Police Station Salem Tabri, Ludhiana vide DDR No. 33 dated 11.2.2012. OP Insurance Company was also informed about the incident. Officers of the Insurance Company from Chandigarh as well as from Ludhiana visited and inspected the site. The Complainant had also intimated the occurrence of fire to Bank of India.
< >n 12.02.2012, spot survey was conducted by Mr. N.S. Dhillon and loss was assessed at Rs.1.50 crores. Thereafter, the OP appointed M/s N. Kumar Surveyors Pvt. Ltd. to access the loss due to fire. The Surveyors came to the factory premises on 18.02.2012 and 23.02.2012. Detailed survey was conducted by the Surveyors and report dated 27.04.2012 was submitted. They arrived at a net adjusted loss of Rs.49,30,300/- say Rs.49.30 lakhs. They recommended that the insured had suffered loss due to accidental fire, a peril covered as per Policy.
The Complainant accepted the loss as assessed by Surveyors and gave consent for the same.The Divisional Office of the Insurance Company recommended the claim for settlement at Rs.49,30,356/- vide note dated 29.05.2012 and the same was sent to the Chandigarh Regional Office for consideration and approval by the competent authority.It is pertinent to note that the Divisional Office of the OP Insurance Company had recorded that the above loss assessed is justified and most reasonable. While the claim was under consideration, the Chandigarh Regional Office received an e-mail dated 20.06.2012 from one Mr. Davinder Pal Gaba.
Considering the complaint received from Mr. Davinder Pal Gaba, Chandigarh Regional Office of the OP Insurance Company on 25.06.2012 appointed S.A. Investigating & Consulting Agency, to conduct investigation into the points raised in the complaint.Investigations were carried out by the said investigators and their report is dated 04.10.2012.Upon consideration of the Investigation report, the claim of the Complainant was repudiated by the OP Insurance Company and the Complainant was intimated of the same vide letter dated 27.09.2013.
The Complainant contended that he is the sole proprietor of the Company, Rahul Exports and is earning his livelihood from the said business only.It is his sole source of income and he is the bread earner of the family.The complainant is, therefore, a consumer as defined in the Consumer Protection Act, 1986.Although he is engaged in business, services were availed by the complainant for the purpose of earning and safeguarding his livelihood in case of any calamity.
The insurance policy has been renewed from time to time and the Opposite Party was receiving huge sums as premium towards insurance.The said premium was paid without any delay.
Mr. N.S. Dhillon, surveyor was appointed on 12.2.2012 to conduct spot survey and a report was given by him on 14.2.2012.The surveyor assessed the loss to a tune of Rs.1.50 crores. OP Insurance Company appointed a second surveyor, namely, M/s. N. Kumar Surveyors Pvt. Ltd.He gave a report on 27.04.2012 wherein the net loss was assessed at Rs.49.30 lakhs.The OP Company, then appointed a private investigating agency and Mr. Sarv Daman Bhalla as the investigator.
It is also important to note that the OP has admitted that Divisional Office recommended for settlement of claim vide its note dated 29.05.2012.The Complainant has also through RTI got a copy of mail written by the Divisional Manager to Chandigarh Office stating that investigator's report is not supported by any concrete proof and, therefore, cannot be relied upon.
He contended that the insurance company had no legal authority to appoint a private investigative agency. That instead of satisfying the claim of the Complainant, the opposite party harassed the Complainant in different and every possible way, and appointed a private investigator on a complaint filed by Davinder Pal Gaba, in spite of fact that that OP Insurance Company's own surveyors M/s N. Kumar surveyors Pvt. Ltd., while assessing the loss, had already checked and verified each and every document along with the physical stock on site.He further contended that the investigator, i.e., Mr. Sarv Daman Bhalla had very hostile attitude qua the Complainant and he had reason to believe that his investigation was not impartial and suffered from undue pressure, may be monetary at the behest of Mr. Davinder Pal Gaba, who had a dispute with the Complainant with respect to the property.
So far as the dispute between Complainant and Davinder Pal Gaba is concerned, it pertains to section 138 of N.I. Act pending in the court of Sh. Rahul Kumar. JMIC at Ludhiana, and the OP Insurance Company had no concern with this dispute. The material boxes bearing logo 'MARK HOSIERY" were very few in number and were only empty boxes which Davinder Pal Gaba did not lift while vacating the premises which were lying as waste. The Complainant had never claimed any amount with respect to goods from mark hosiery, therefore his allegation/ objection is frivolous.
The Complainant met the opposite party several times for settlement of his claim.The opposite party, taking advantage of the constrained financial situation of the petitioner offered only Rs.49.30 lakhs as per the subsequent surveyor's report, which was much less than the preliminary surveyor report of Rs.1.5 crores, without assigning any cogent reason or basis for reducing the claim amount.
The Complainant filed consumer complaint seeking direction to admit the petition of the Complainant and direct the Opposite party to make payment of Rs. 1,50,00,000/- compensation for losses as per the preliminary report; direct the OP to pay the Complainants a sum of Rs.44,95,000/- towards loss of stock lying in the factory due to sealing by O.P. No. 2 and interest accrued thereon @ 18%; direct the OP to pay a sum of Rs.2 crores towards mental agony, harassment caused to the Complainants due to loss of business; direct the OP to pay sum of Rs. 50,000/- the complaints towards litigation expenses and/or direct the OP to pay interest 18% on the compensation amount of Rs.1.5 crores for loss till the date of payment.
Heard the Learned counsel for the Opposite Party.He contended that the Complaint is totally false, frivolous and malafide and the same is not maintainable.
Complainant is running a commercial organization and carrying on business for profit and gain and is not a consumer within the meaning of Section (2)(1)(d) of the Consumer Protection Act, 1986. There is no deficiency of service on the part of the OP Insurance Company as contemplated under the Consumer Protection Act, 1986 and the complaint is liable to be dismissed.
The Counsel for the OP Insurance Company relied mostly upon the Investigator's report.During the inspection done by the Investigator on 02.07.2012, remains of the packing material of Mark Hosiery were found in the premises of the factory.Further the burnt racks of the above fire loss were found lying at SAP Apparel at Rahon Road, Ludhiana, the new unit of Mr. Davinder Pal Gaba, alongwith unused packing material of Mark Hosiery. Mr. Davinder Pal Gaba has provided a copy of the phone call register of his children from where phones calls were made in the night to their relatives for help, but on the other hand Mr. Khosla has not been able to provide any such call register from his mobile phone company.This has its own importance because the person who owns the property will do his best to save the property and the phone calls by Mr. Davinder Pal Gaba show his concern for the property.
As regards the factory premises, it was only a Symbolic transfer of the property made against cheques issued by Mr. Rahul Khosla of Rahul Exports to the seller Mr. Davinder Gaba of Mark Hosiery at Ludhiana. The cheques issued by the insured have been dishonoured by the Bank and there is a dispute pending in the Court between both parties regarding the final payment.
The investigator has pointed out that Rahul Exports made huge purchases from three firms namely M/s Murizno, M/s Krishna Fabrics and Ms Surindra Dyeing immediately before the loss mostly in January and February. The Bill Serial Nos. and dates are continuous and without much gap which show that he tried to increase value of stock at the time of fire which amounted to misrepresentation and attracts repudiation of claim as per conditions No. 8 of the policy which states:
"If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or if any fraudulent means or devices are used in support thereof, all benefits under the policy are forfeited."
From the foregoing arguments and evidence by both parties, it is evident that a major fire broke out in the factory of Rahul Exports on 11.02.2012 and huge stocks and machinery, as also the factory premises got damaged.As on date of fire, the stocks, machinery and the factory were covered under insurance.The complainant duly informed all the concerned authorities, i.e., Police, Fire, Insurance and the Bank about the incidence of fire and the damages caused.The spot surveyor assessed the value of damage at Rs.1.5 crore and the Surveyor appointed limited the loss to Rs.49.30 lakh, which was accepted by the Complainant.The Divisional Office of the Insurance Company recommended settlement of claim of Rs.49,30,356/- to its Regional Office for approval by the Competent Authority.While the claim was under consideration, the Chandigarh Regional Office of the Insurance Company received a complaint on 20.06.2002 from one Mr. Davinder Pal Gaba.Consequently, the OP Insurance Company appointed an investigator and based on the investigation report, the claim of the complainant has been repudiated.The investigation report was totally relied upon by the OP as against all the previous surveyors' reports, while repudiating the claim of the Complainant.
The investigator has been appointed after four months of the actual fire, whereas the two earlier surveyors' reports were much closer to the date of occurrence of fire.The investigator's report was based on statements of several people and Mr. Davinder Pal Gaba.Much reliance cannot be placed on evidence of locals, four months after the occurrence of fire, especially of Mr. Davinder Pal Gaba, who had strained relations with the Complainant, as also admitted by the Investigator.The key witness to the fire, who first reported fire, Mr. Santosh Kumar (watchman) was not contacted.The investigator also tried to contact the office of the Police Commissioner, Ludhiana, Fire Brigade Ludhiana and the Chief Manager of Bank of India.They, however, did not give any information or report which goes against the Complainant or strengthens the contention of the Opposite Party.M/s Rahul Exports has availed cash credit stock limit and term loan for purchase of factory land and building and installation of machinery from Bank of India.The stocks, machinery and factory land and building are hypothecated/mortgaged to the Bank to secure credit facilities availed by the firm.The stocks, machinery and factory premises of the firm are under the insurance cover of the OP Insurance Company with Bank clause incorporated therein.
There was a dispute on the possession of property but the title of the property is registered by way of a sale-deed in the name of the Complainant.Mr. Davinder Pal Gaba has neither insured the machinery nor the stocks.The stocks belonged to the Complainant and he had duly insured the same alongwith the machinery.As the complainant was carrying on his operations in the premises, the damaged material of Mark hosiery possibly was only the left over stocks/packaging material of Mr. Davinder Pal Gaba, from whom the Complainant purchased the premises and who was still occupying of some area of the premises.
We are also unable to agree with the contention of the Ld. Counsel for the Opposite Party that Mr. Davinder Pal Gaba did his best to save his property.Phone calls made by his children to relatives is no proof of his concern for the huge damage of stocks, machinery and premises.Had he been really bothered about the loss of property, he would have immediately reported the matter to the Police and contacted the Fire services for help.While on the other hand, Mr. Rahul Khosla and his family made every effort to contact all the concerned authorities - Fire, Police, Bank and Insurance Company seeking the required relief.
From the above it is very clear that the OP Insurance Company relied only on the investigator's report to the exclusion of the previous two Survey Reports.Fire broke out in the premises on 11.02.2012 and there is no evidence to accuse the Complainant of having been responsible for the fire.He promptly reported the incident to all concerned authorities.The investigator report cannot be relied upon as it was conducted much after the fire incident and was based on manipulated evidence engineered by Mr. Davinder Pal Gaba, who had an ongoing dispute with the Complainant.The property dispute between the Complainant and Mr. Davinder Pal Gaba has been painted as a 'fraud' committed by the Complainant.The repudiation of the claim by the OP Insurance Company on 27.09.13, i.e., after 1 year 7 months from the date of occurrence of fire and after the complaint had been filed before this Commission, is, therefore, not justified. The report does not convince us of any fraud committed by the Complainant.As regards loss claim of the Complainant, the Surveyor had made a detailed assessment of the same.Wherever technical flaws were noticed in the bills, the same were disregarded and discounted and the final loss has been assessed at Rs.49.30 lakh to which the Complainant had also consented.
For the foregoing reasons, the complaint is partly allowed.The OP Insurance Company is directed to pay a sum of Rs.49.30 lakhs towards the claim of the complainant alongwith interest @9% p.a. from the date of repudiation of the claim till realisation, within 8 weeks from the date of passing of this order.There shall be no order as to costs.
...................... ANUP K THAKUR PRESIDING MEMBER ...................... C. VISWANATH MEMBER