State Consumer Disputes Redressal Commission
M/S Kashyap Departmental Store. vs United India Insurance Co. Ltd. & Anr. on 19 June, 2023
H. P. STATE CONSUMER DISPUTES REDRESSAL
COMMISSION SHIMLA.
Consumer Complaint No.: 19/2019
Date of Presentation: 26.04.2019
Order reserved on: 08.05.2023
Date of Decision: 19.06.2023
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M/s Kashyap Department General Store, Hamirpur road, Amb,
Una H.P. thorugh its proprietor Shri Ashish Kumar.
.......... Complainant.
Versus
1. United India Insurance Company Ltd. Branch Office, Una, Near
Punjab and Sind Bank, Amb, Una, through its Branch
Manager.
2. Punjab National Bank, Amb Branch, Amb, Una, H.P. through
its Branch Manager.
.......... Opposite parties.
......................................................................................
Coram
Hon'ble Justice Inder Singh Mehta, President
Hon'ble Ms.Sunita Sharma, Member.
Hon'ble Mr. R.K. Verma, Member.
Whether approved for reporting?1 Yes
For the complainants: Mr.V.S.Chauhan, Sr. Advocate
alongwith Mr.Rahul Chauhan, Adv.
For the Opposite party No.1: Mr.P.S.Chandel, Advocate.
For the Opposite party No.2: Ms.Anjana Thakur, Advocate vice
Mr.Vijay Kumar Arora, Advocate.
.............................................................................................
Justice Inder Singh Mehta, President
O R D E R:
The complainant has filed the instant complaint seeking directions to the opposite party No.1 to pay a sum of Rs.21,00,000/- lacs being the insured amount, Rs.2,00,000/- 1 Whether Reporters of the local papers may be allowed to see the order? M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 lacs on account of harassment and Rs.75,000/- as litigation charges.
Brief facts of Case.
2. Brief facts stated are that Sh. Ashish Kumar, sole proprietor of M/s Kashyap Departmental Store/complainant availed loan of Rs.5,00,000/- from Oriental Bank of Commerce, (now Punjab National Bank)/opposite party No.2. The complainant in order to secure the risk of karyana items from any untoward incident purchased Insurance policy No. 1109032617P113727520 to the tune of Rs.21,00,000/- from the opposite party No.1 (United India Insurance Co. Ltd). The said policy was effective w.e.f. 30.10.2017 to 29.10.2018. The complainant had initially insured the stock worth Rs.18,00,000/-, but later on same was enhanced to Rs.21,00,000/- due to increase in the stock. The opposite party No.2 (Bank) also purchased one more policy to secure the stock against the loan amount of Rs.5,00,000/-.
On the intervening night of 11/12.05.2018 at about 11:30 PM, fire took place in the shop resulting into loss/damage to the stock to the tune of Rs.25,00,000/-. The matter was reported to the police vide G.D. entry No. 004 dated 12.05.2018 and intimation to this effect was also given to Insurance Company. The place of incident was 2 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 preserved on the instruction of RFSL, Dharamshala for knowing the reason of fire and as per the report of RFSL, Mandi, the fire took place accidently. On receipt of intimation regarding fire incident, the opposite party No.1/Insurance company deputed Surveyor to assess the loss/damage. As per the directions of the Surveyor and the Insurance company, the complainant submitted all the relevant documents i.e. original insurance policy, bills, statement of stock etc. and also filled up claim form. But despite repeated requests and visits to the office of the opposite party No.1/Insurance company, the claim of the complainant was not considered. A legal notice dated 02.03.2019 was also served upon the Insurance company, but in vain. Hence, this complaint.
3. The complaint was contested by the opposite parties by filing separate replies.
4. The opposite party No.1 (Insurance company) in its reply has contended that on receipt of intimation about the occurrence, the opposite party/Insurance company had appointed spot surveyor and loss assessor Er. Satish Kumar to assess the loss/damage occurred to the shop, who visited the shop of complainant on 13.05.2018 and submitted his 3 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 report on 20.05.2018. After receiving the spot survey report, the Insurance company appointed Surveyor cum loss assessor namely Sh. Deepak Malhotra to conduct detailed survey. The said Surveyor has written many letters to the complainant to supply the requisite documents, but only on 08.02.2019, the complainant filled in and supplied the claim form. Surveyor cum loss assessor namely Sh. Deepak Malhotra submitted his final survey report and assessed the loss/damage to the tune of Rs.8,08,915/-. However, the share of opposite party No.1/Insurance company was Rs.6,45,223/-. The Insurance company has denied that the complainant had suffered loss/damage to the tune of Rs.25,00,000/-.
5. Opposite party No.2 (bank) in its reply has submitted that the complainant approached the opposite party No.2 (Bank) with the request to sanction a cash credit limit in his favour. After completing all formalities, the opposite party No.2 (bank) had sanctioned a cash credit limit of Rs.5,00,000/- on 26.07.2017 to the complainant for running his departmental store. The opposite party No.2/Bank in order to secure the cash credit limit of Rs.5,00,000/- purchased insurance policy of Rs.7,00,000/- from Cholamandalam General Insurance Company as per bank norms. No cause of action arises against the opposite party No.2/Bank. A prayer 4 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 is made for dismissal of complaint against the opposite party No.2/Bank.
6. In rejoinders, the complainant has reiterated the contents of complaint and refuted the objections put forth by the opposite parties.
7. Parties led evidence in support of their respective pleadings. The complainant Sh. Ashish Kumar has filed his affidavit Annexure C-1 in evidence, besides the documents Annexure C-2 to C-263. The opposite party No.1(Insurance company) tendered in evidence affidavits of Sh. Raj Kumar (Branch Manager of Insurance company) Annexure OP-13 and Sh. Deepak Malhotra (Surveyor and Loss Assessor) Annexure OP-14, besides the documents Annexure OP-1 to 12, whereas, opposite party No.2/Bank tendered in evidence affidavit of Sh. Saurav Sharma, its Branch Manager, Annexure Ex. OP-2/3 and also tendered the documents Annexure OP-2/1 and OP-2/2.
8. We have heard the learned counsel for the parties and have gone through the entire case file carefully and minutely.
9. Learned Senior counsel for the complainant has submitted that complainant is a General Store in the name and style of M/s Kashyap General Store Karyana Merchant, which was insured with the opposite party No.1/ United India 5 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 Insurance Co. Ltd. for the period from 30.10.2017 to 29.10.2018. Initially, the insured amount was 18,00,000/-, then it was enhanced to Rs.21,00,000/- due to increase of stocks. Learned Senior counsel for the complainant has further submitted that fire took place on the intervening night of 11/12.05.2018 and the entire stock which was lying in the shop gutted into fire. Thereafter, the matter was reported to the police vide G.D. entry No. 004 dated 12.05.2018 and intimation to this effect was also given to Insurance Company. He further submitted that the place of incident was preserved on the instruction of RFSL, Dharamshala for knowing the reason of fire and as per the report of RFSL, Mandi the fire took place accidently. Thereafter, Insurance Company deputed a Surveyor who conducted spot survey. Survey report is Annexure OP-9. Learned counsel for complainant has further submitted that dispute is pertaining to the quantum and there is no other dispute between the parties to determine a particular issue. Learned Senior counsel for the complainant has submitted that insured amount was amounting to Rs. 21,00,000/- as per the claim petition and opposite party assessed the value of risk as Rs.19,41,613/-. The variation is very meager between the amount claimed by the complainant and the amount assessed by the Surveyor. Learned Senior Counsel for the complainant has further 6 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 submitted that there is no explanation of less 10% variation in quantity and rate, less 10% variation in dead stock, less 25% in claim considered and less 5% in excess cost. Learned Senior counsel has relied upon judgments passed by Hon'ble Supreme Court of India 2010 STPL 1863 SC titled Noor Ali Vs. National Insurance Co. Ltd.
10. Learned counsel for the opposite party No.1/Insurance company has submitted that the amount as assessed by the surveyor has already been paid to the complainant. He further submitted that since the amount assessed by the surveyor has already been paid, therefore, nothing is due against the opposite party No.1/Insurance company. He further submitted that the shop in question was insured with the Opposite party No.1/United India Insurance Company for Rs. 21,00,000/- lacs and the said shop was also insured with Cholamandlam General Insurance Company for Rs. 5 lacs. Learned counsel of the opposite Party No.1 has further submitted that opposite party No.1 has paid Rs. 6,45,223/- to the complainant which is not disputed.
However, Cholamandlam Insurance Company has also insured the stock of the complainant for a sum of Rs.5,00,000/-. Learned counsel for the opposite party No.1 further submitted that Cholamandlam has also appointed 7 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 Surveyor who has assessed the loss to the tune of Rs.2,98,020/- and the said amount is to be deducted proportionately. Both the Surveyors assessed the loss and the amount assessed by the surveyor of the Cholamandlam Insurance Company is to be deducted proportionately in the present case. He further submitted that whatever amount so assessed by both the loss assessors has been paid to the complainant and nothing is due as on the date and complainant has not raised any objection for the same. He prays that complaint of the complainant be dismissed.
11. In rebuttal, learned Senior counsel for the complainant has submitted that the complainant has received an amount of Rs.6,45,223/- from the opposite party No.1, after filing the reply to the present complaint and remaining amount of Rs. 14,54,777/- is due. As per loss assessor, the loss is assessed at Rs.19,41,613/-. He further submitted that the deductions made by the Insurance company are not justified as per policy. He further submitted that in the instant case, the conclusion drawn by the loss assessor that the stock in trade was converted into ashes, meaning thereby, it was total loss and those ashes could not have been reusable for deductions. Therefore, the Insurance Company is liable to make the payment of the whole stock as assessed by the loss assessor and nothing more is required to be deducted. He 8 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 prays that complaint of the complainant be allowed and relied upon judgment of Hon'ble Supreme Court in Civil Appeal No. 83 of 2023 @ SLP (C) No.9049 of 2021 titled as M/s Oswal Plastic Industries vs. Manager, Legal Deptt. N.A.I.C.O. Ltd.
FINDING:
12. The admitted fact emerging on record is that Sh.
Ashish Kumar, sole proprietor of M/s Kashyap Departmental Store/complainant availed loan of Rs.5,00,000/- from Oriental Bank of Commerce, (now Punjab National Bank)/opposite party No.2. It is further an admitted fact that the complainant in order to secure the risk of karyana items from any untoward incident purchased the Insurance policy Number 1109032617P113727520, Annexure C-1 to the tune of Rs.21,00,000/- from the opposite party No.1 (United India Insurance Co. Ltd). The said policy was effective w.e.f. 30.10.2017 to 29.10.2018.
13. It is also an admitted fact emerging on record that on the intervening night of 11/12.05.2018 at about 11:30 PM, fire took place accidentally in the shop resulting into loss/damage to the stock lying in the shop.
14. The complainant in his complaint has claimed that on the date of fire incident he was holding stock of Rs.25,00,000/- in the shop. However, report of the Surveyor- 9 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 cum-Loss Assessor, Annexure OP-9 is otherwise. As per Annexure OP-9, value of the closing stock as on date of fire was Rs.19,41,613/-.
15. Relevant portion of his report is reproduced as under:-
"ASSESSMENT OF LOSS:
Keeping in view all the above facts like my verifications from the insured, Fire Brigade report, DDR, Preliminary report of Er. Satish Kumar and other investigations the insured suffered this loss certainly. As per preliminary surveyor report, it was not possible to quantify the stocks physically because it burnt/damaged badly and converted into ashes. As per trading account as on date of loss and as per this the value of closing stock as on date of loss i.e. 11.05.2018 is for Rs. 19,41,613.00 and accordingly loss is assessed as under; Stocks as per trading account 19,41,613.00 Less: 10% variations in qty. & rates 1,94,161.00 Less: 10% variations in dead stocks 1,94,161.00 15,53,591.00 Less:25% as claim considered as SUB STD 3,88,397.00
1. The insured did not account for any cash sales because in the type of business there are always cash sales on routine basis.
2. The insured could not produce any stock register and sales bills.
3. The purchase is on higher side as compare to sales and he could not give satisfactory reply.
11,65,194.00 Less: Excess Clause @ 5% 58,259.00 Total Loss assessed 11,06,935.00 Now liability of both insurers is determined as under: 10
M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 For United India 11,06,935.00 X 19,00,000/26,00,000.00 = 8,08,915.00 For Cholamandalam 11,06,935.00 X 7,00,000/26,00,000.00 = 2,98,020.00 So this loss is assessed as Rs.8,08,915.00 (Rupees Eight Lac Eight Thousands Nine Hundred & Fifteen Only) for United India Insurance Company Limited Amb Branch".
16. The contention of the learned counsel for the respondent No.1/Insurance company that complainant has also insured his stock with Cholamandalam Insurance company for a sum of Rs.7,00,000/- losses its significance in presence of the Insurance policy, Annexure C-1 executed between the complainant and respondent No.1/United India Insurance company. The said policy Annexure C-1 does not find mention about the policy of Cholamandlam Insurance Company in the present context. The Insurance policy, Annexure C-1 is independent in its nature which binds both the parties, i.e. the complainant and the Insurance Company for the accidental fire in the present complaint.
17. The Cholamandlam Insurance Company is not party in the present complaint and the respondent No.1/Insurance Company too has not raised any objection for not making Cholamandlam Insurance company as necessary party in the present complaint.
11 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019
18. Therefore, deduction of Rs.2,98,020/- made by the respondent No.1/Insurance company on account of share of Chollamandalam Insurance company is bad in law.
19. So far as the other deductions i.e. (i) Less:10% variations in qty. & rates Rs.1,94,161.00 (ii) Less: 10% variations in dead stocks Rs1,94,161.00, (iii) Less:25% as claim considered as SUB STD Rs.3,88,397.00 and (iv) Less:
Excess Clause @ 5% Rs.58,259.00, are concerned, the same are not justifiable in the present context too as entire stock gutted into accidental fire, which ashes were unusable for any other purpose i.e. deductions.
20. The report of RFSL, Mandi Annexure C-5 also strengthens the case of the complainant that on 11/12.05.2018, fire took place accidentally. Relevant portion of the report of RFSL, Mandi is reproduced as under:-
"Laboratory Examination and Result:-
The contents of above said parcels have been analyzed physically and chemically using chromatography methods. No inflammable material (petrol, diesel and kerosene) could be detected in the contents of the above said parcels."
21. Factum proved on record is that on the date of accidental fire, the complainant was holding stock of Rs.19,41,613/- (vide Annexure OP-9). The said stock was gutted into fire on the date of accidental fire and nothing remains except the ashes, which were unusable for any other 12 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 purpose. Therefore, any deduction so made by the respondent No.1/Insurance company is bad in law. Reliance in this regard is drawn from the judgment of the Hon'ble Supreme Court of India in Civil Appeal No. 83 of 2023 @ SLP (C) No.9049 of 2021 titled as M/s Oswal Plastic Industries vs. Manager, Legal Deptt. N.A.I.C.O. Ltd.
22. The complainant in his complaint has claimed to have the stock of Rs.25,00,000/- on the date of accidental fire. However, the complainant failed to supply the documents of the stock of more than Rs.19,41,613/- to the Surveyor. The complainant also failed to produce the same after filing of the complaint before this Commission. Holding of stock of the value of Rs.25,00,000/- on the date of accidental fire is not convincing as the insured amount in the policy is Rs,21,00,000/- only.
23. The complainant only able to prove in the present complaint that on the date of accidental fire, the complainant was holding the stock of Rs.19,41,613/- in his shop, which gutted into accidental fire. Thereafter, what remains were only the ashes and those ashes could not have been reusable for any other purpose i.e. deductions. Therefore, no salvage deductions in the present case is possible and as such, the complainant is entitled to the sum of Rs.19,41,613/-.
13 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019
24. During the course of arguments, learned Senior counsel appearing on behalf of the complainant has admitted that sum of Rs.6,45,223/- has already been paid by the opposite party No.1/insurance company to the complainant.
25. The value of stock on the date of accidental fire was Rs.19,41,613/- and out of the said amount, complainant has already acknowledged the receiving of Rs.6,45,223/-, the remaining amount comes to Rs.12,96,390/-. Therefore, the complainant is entitled to the sum of Rs.12,96,390/- only.
26. The respondent No.1/ insurance company has failed to pay the aforesaid remaining amount despite legal notice Annexure C-10 dated 02.03.2019, which act and conduct of the Insurance company amounts to deficiency in service and unfair trade practice.
27. Thus, in view of above discussion, present complaint is partly allowed. The opposite party No.1/Insurance company is directed to pay an amount of Rs.12,96,390/- (Twelve lacs ninety six thousand, three hundred ninety) (Rs.19,41,613/- minus Rs.6,45,223/-) to the complainant alongwith interest @ 9% per annum from the date of filing of the complaint till realization of entire amount.
28. The opposite party No.1/Insurance company is further directed to pay a sum of Rs.1,00,000/- (One lakh) as 14 M/s Kashyap Departmental Store vs. United India Insurance Co. Ltd. & Anr.
CC/19/2019 compensation for harassment in favour of the complainant alongwith litigation costs of 50,000/- (Fifty thousand).
29. The opposite party No.1/Insurance company is directed to comply the order within 45 days from the date of receipt of the copy of this order.
30. Certified copy of order be sent to the parties and their counsel(s) strictly as per rules. File after due completion be consigned to record room. Complaint is disposed of. Pending application(s), if any, also disposed of.
Justice Inder Singh Mehta President Sunita Sharma Member R.K. Verma Member Manoj 15