State Consumer Disputes Redressal Commission
S.J.Shah & Sons vs The United India Insurance Company ... on 14 September, 2009
CONSUMER DISPUTES REDRESSAL COMMISSION CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE CONSUMER COMPLAINT NO.132/2000 Date of Filing:-31/03/2000 Date of Order:-14/09/2009 S.J.Shah & Sons, A firm carrying on business At Gaumukh Bhavan, 2nd Floor, Masjid Bunder Road, Mumbai-400 009 ... Complainant -Versus - The United India Insurance Company Limited, D.O.No.9, Rohit Chambers, 3rd Floor, Janmabhumi Road, Mumbai-400 001 ... Opponent Corum :- Mr.P.N.Kashalkar,Honble Presiding Judicial Member, Mrs.S.P.Lale,Honble Member. Present :- Mr.Baliram Kamble, Adv. for the Appellant. Mr.J.D.Karanjkar, Adv.for the Opponent. O R D E R
Per Mr.P.N.Kashalkar,Honble Presiding Judicial Member
1) This complaint has been filed by the complainant firm alleging deficiency in service and unfair trade practice on the part of O.P./United India Insurance Company Limited. According to the complainant the firm is carrying on business in the name of S.J.Shah & Sons at Masjid Bundar Road, Mumbai. To protect its stock and cash, the complainant used to obtain insurance policy from O.P. since last several years. The complainant purchased policy bearing No.020900/46/03/16/0439 by paying requisite premium. When policy was in force, on 2/3/1998 there was theft of stock worth Rs.4,41,000/-. Hence, the complainant lodged report with the police. The claim was preferred with the insurance company. The O.P./insurance company appointed M/s.P.P.Dalal & Company as Surveyor. The Surveyor informed the insurance company that they had not received documents from the complainant firm and therefore it had not assessed the loss. As per Sec.64 UM of Insurance Act finding of the surveyor is not binding on the insurance company. The insurance officials have to apply their judicial mind after perusing all the documents and the finding given by the surveyor and after hearing insured too, it has to decide the claim preferred by the party. According to the complainant firm without giving any hearing after receipt of survey report by letter dated 31/3/1999 the O.P./insurance company repudiated the claim on the ground that complainant has not submitted the documents and therefore they closed the file. The complainant pleaded that they had submitted all the documents and proofs in support of their claim to the surveyor and surveyor assessed the loss. But, since unlawful and illegal demand was not met by the complainant, the surveyor in his report vaguely mentioned that complainants had not submitted documents. The complainant met concerned officials of the insurance company and explained the true and correct facts and also gave letter dated 3/6/1999 placing all the facts on record. But, the insurance company did not settle the claim. The complainant therefore filed consumer complaint alleging deficiency in service and unfair trade practice on the part of the O.P./insurance company. The complainant alleged that in not giving the claim as per policy the insurance company is guilty of deficiency in service and unfair trade practice. Thus, the complainant prayed that O.P./insurance company should be ordered to pay to the complainant sum of Rs.5,41,000/- with interest at the rate of 18% from 1/7/1998 till actual payment.
2) The O.P./insurance company filed written statement and denied most of the averments made by the complainant. The O.P. pleaded that as per Sec.64 UM it is not mandatory that report of surveyor should be accepted by the insurance company. The complainant has twisted the facts and therefore complaint should be dismissed with cost. The insurance company further pleaded that story of the complainant that he had the stock worth Rs.4,41,000/- on 2/3/1998 was not proved by tendering documentary evidence. From the survey report, it is clear that he failed to substantiate the loss of stock worth Rs.4,41,000/- in the said theft. He had not produced any evidence that surveyor had demanded extraneous consideration as alleged. According to the O.P., as per Sec.64 UM it was not necessary for the insurance company to call complainant for any discussion when claim itself is not payable. It pleaded that it repudiated the claim due to non cooperation of the complainant to submit documents demanded by surveyor. It further pleaded that exclusion clause was rightly applied to the instant case because complainants factory was closed due to labour problem and the surveyor could not carry out investigation on 10/3/1998 and he was required to revisit factory on 12/3/1998. In the F.I.R. the complainant had reported that loss had occurred on 2/3/1998 but offenses U/s 454,457 & 380 of I.P.C. had been committed any time between October-1997 to 7 a.m. on 2/3/1998. So, the complainant himself was not aware when the loss occurred but he lodged F.I.R. on 2/3/1998 alleging theft of his stock. The insurance company further pleaded that complainant had taken out insurance policy on 17/2/1998 concealing the fact that factory was under labour problem and regular production work was not being carried on and therefore it was very much doubtful whether complainant was at all holding stock of Rs.4,41,000/-. The insurance company also relied upon condition no.2 of the policy and pleaded that since all the facts were not disclosed by the insured, the policy shall be void and the premium paid thereon shall be forfeited by the insurance company in the event misrepresentation, misdescription or nondisclosure of any material fact. The insurance company also relied upon condition no.3 & 4 of the policy and pleaded that complainant had not taken reasonable care to safeguard the stock in trade and had not disclosed loss of stock immediately as required under policy conditions. The insurance company pleaded that the complainant had not cooperated with the surveyor in carrying out survey by tendering material documents demanded by the surveyor such as bills, books of account, sales tax assessment order, income tax returns etc. All the letters sent by the surveyor or insurance company were not responded to by the complainant and he withheld material documents and therefore it was ultimately held by surveyor that they could not assess loss as material documents were not produced by the complainant. Hence, the file was closed as No Claim by the insurance company. It pleaded that it was not guilty of deficiency in service or unfair trade practice. It therefore pleaded that the complaint is devoid of any substance and it should be dismissed with cost.
3) Both the parties filed affidavits and documents on record. We heard submissions of Mr.Baliram Kamble, Adv. for the complainant and Mr.J.D.Karanjkar, Adv. for the O.P./insurance company. Upon hearing rival counsels, following issues arise for our determination. The issues and our findings thereon are as under.
Sr. No. Issues Findings
1) Whether the O.P./insurance company is guilty of deficiency in service or unfair trade practice as alleged by the complainant in repudiating the complainants insurance claim ?
No
2) What order if any ?
Complaint stands dismissed.
REASONS
4) Issue No.1 :-
The complainant had filed this complaint alleging deficiency in service on the part of insurance company. According to the complainant, there has been theft of some stock kept in his factory and he had lodged complaint (FIR) with police station on 3/3/1998 for the theft of stock and material worth Rs.4,41,000/-Complainant had reported to police that factory was closed from October-1997 to March-1998 and during this period many times some unknown thieves has stolen the stock material. So, admittedly, the factory of the complainant was in closed condition and material lying in the factory was not properly guarded by posting security guards at the factory premises of the complainant. The insurance company has rightly taken objection to the insurance claim of the complainant on the ground that there has been violation of conditions no.3 & 4. Under condition no.3 of the policy, the reasonable care is required to be taken by the insured to protect and safeguard its stock in trade and other materials kept in the insured premises. On the complainants own showing there were series of thefts at the factory premises for which one singular complaint was lodged by the complainant with the police. How can there be an insurance claim when there were series of thefts at the factory premises of the complainant. After every theft it was the duty of the complainant company to lodge F.I.R. in every instance of theft and then to lodge insurance claim after every theft. But, the complainant company thought it fit to cover all the thefts together and for the first time lodged only one F.I.R. in police station on 3/3/1998. As per condition No.8 (a), of the policy the policy shall cease to attach if the premises shall have been left uninhabited by day and night for more than seven consecutive days and nights. As per survey report the complainant did not produce before Surveyor the attendance registrar of watchman allegedly posted at the factory premises. Therefore, the surveyor and insurance company rightly held that the policy claim can not be allowed because factory premises was left unattended and exclusion clause no.8(a) of the policy would be attracted and claim would not be payable.
5) The insurance company rightly pleaded and submitted that complainants factory was closed since October-1997 due to labour problem and this fact was not conveyed to the insurance company and as such there was breach of policy condition no.2 duty of disclosure. The surveyor mentioned in his survey report that he had called for books of account, stock record, gate passes, delivery challan, purchase and sales register, goods receipt and other relevant record by sending reminder letter on 28/3/1998, 8/5/1998, 28/8/1998, 13/10/1998 and 23/03/1999 and finally the surveyor met complainant on 27/3/1999 but complainant could not comply with the requirement of the surveyor and he was told by the complainant that Central Excise Department had seized their books of account and record on 17/9/1997. In any view of the matter, it was the duty of the complainant to make available all the documents demanded by the surveyor or its certified copy obtained from central excise department but the complainant company preferred not to produce those documents asked for by the surveyor and therefore in his report he rightly reported that he could not assess damages since documents were not made available to him. He has even filed affidavit before this Commission on 10/1/2008. Therefore, in his final survey report he mentioned as No Claim and acting upon the said surveyors comment the insurance company sent repudiation letter dated 31/3/1999 vide Exh.B. The insurance company also pleaded that there was violation of condition no.4(c) on the part of complainant company. When claim is submitted, insured is required to tender to insurance company all reasonable information assistance and proofs in connection with any claim under the policy. But, as is mentioned by the surveyor in his survey report, the complainant company did not render reasonable assistance and proofs in respect of stock statement and other documents asked for the surveyor and therefore there was breach of condition no.4(c).
6) Thus, after examining the affidavits and documents placed on record by rival parties, we are of the clear cut view that complainant company himself was guilty of not producing relevant documents before the surveyor despite reminders sent to the complainant company. The co-operation, necessary assistance was not rendered by the complainant company to the surveyor and to the insurance company to assess the loss caused to the complainant company because of theft and there has been violation of material conditions of the policy by the insured (complainant) firm. Thus, in the totality of the circumstances we are inclined to hold that there has not been deficiency in service on the part of the insurance company in repudiating the insurance claim of the complainant company. The complainant has miserably failed to prove its case against the insurance company. In fact, in the instant case there appears to be many holes in the case presented by the complainant company. The singular fact that complainant company did not prefer insurance claim for every theft committed at the factory premises but waited for series of thefts to be committed and then filed only one complaint covering Rs.4,41,000/- loss and preferring such a claim with the insurance company which in itself a procedure unheard of in the market parlance. So, the consumer complaint as filed by the complainant is appearing to be without any substance and we have no hesitation in dismissing the complaint. We clearly hold that in the facts and circumstances obtainable in this complaint, the insurance company was not guilty of deficiency in service in repudiating the claim of the complainant. Hence, complaint will have to be dismissed with compensatory cost. As such, we pass following order.
O R D E R 1) Complaint stands dismissed
with cost of Rs.10,000/- payable by the complainant to the O.P./insurance company.
2) This cost is being awarded to the O.P. since the complaint appears to be frivolous and vexatious as envisaged in Sec.26 of Consumer Protection Act, 1986.
3) Inform the parties accordingly. ( Mrs.S.P.Lale ) (P.N.Kashalkar ) Member Presiding Judicial Member Malve/-