State Consumer Disputes Redressal Commission
M/S Asian Agro Industries vs The United India Insurance Company ... on 31 October, 2012
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
Consumer Complaint No.33 of 2007.
Date of Institution 14.08.2007.
Date of Decision: 31.10.2012.
M/s Asian Agro Industries, Atwal Palace Road, Khanna, District Ludhiana
through its Proprietor Labh Din.
.....Complainant.
Versus
1. The United India Insurance Company Limited, having its
Registered & Head Office at 24-Whites Road, Chennai through its
Chairman-cum-Managing Director.
2. The Chief Regional Manager, United India Insurance Company
Limited, 136, Feroze Gandhi Market, Ferozepur Road, Ludhiana.
3. The Divisional Manager, United India Insurance Company Limited,
Divisional Office No.II, 35-Dharam Singh Market, Amritsar.
4. The Branch Manager, United India Insurance Company Limited, 26-
Dharam Singh Market, Amritsar.
...Opposite parties.
Consumer Complaint U/s 17 of the
Consumer Protection Act, 1986.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Baldev Singh Sekhon, Member.
Present:- Sh. Sandeep Khunger, Advocate, counsel for the complainant.
Sh. Gopal Mittal, Advocate, counsel for the opposite parties. INDERJIT KAUSHIK, PRESIDING MEMBER:-
M/s Asian Agro Industries, complainant has filed this complaint u/s 17 of the Consumer Protection Act, 1986 (hereinafter called as "the Act") against the United India Insurance Company Limited & others.
2. Facts in brief are that the complainant obtained two insurance policies from opposite party no.2 i.e. one for the stock of the cattle feed and the raw material in the shape of cotton seed, scrap of chips, broken/damaged grains of all kinds including wheat, husk and other raw material in the shape Consumer Complaint No.33 of 2007 2 of finished/semi-finished/stocks while in process and lying stored in the premises, and the other for the entire building occupied as Oil Extraction Plant-cum-Cattle Feed factory and the insurance was valid from 26.09.2006 to 25.09.2007.
3. In the intervening night of 21/22.10.2006, on the eve of Diwali, a fire broke out in the premises of the complainant and the employees informed the complainant and the proprietor immediately reached the spot and found that due to fire, the godown belonging to the complainant, in which the raw material and the packaging material was stored, was completely destroyed and the roof of the godown had fallen. The Fire Brigade was informed about the incident of fire and Fire Brigade reached at the spot and fire was extinguished by the fire staff of the Municipal Corporation, Khanna. A 'fire call report' was made by the concerned authority.
4. On 22.10.2006 in the morning, the matter was reported to the police and DDR was entered in the Police Station, Sadar, Khanna. Incident of fire was also reported by the press and the news item appeared in the newspaper. On 22.10.2006, the opposite party insurance company was also informed vide intimation letter dated 22.10.2006. The opposite party insurance company appointed the investigator Hari Charan Kalia, who vide letter dated 29.10.2006, directed the complainant to submit the questionnaire and vide another letter dated 29.10.2006, asked the complainant to supply the following documents:-
a) Bills for the purchase of material which was damaged in fire.
b) Balance stocks position item-wise after the fire.
c) Trading account.
d) Who was responsible for watch and ward arrangements?
e) What preventive measures were taken by you in the factory to
meet any incident of fire before 21st instant?
5. The complainant vide letter dated 04.11.2006 informed the Divisional Manager that the Surveyor and Loss Assessor had already visited Consumer Complaint No.33 of 2007 3 the factory and the photographs had been taken and the damaged stock was checked, and sought permission to start the factory to avoid further loss and through the same letter, request was also made to settle the claim at the earliest possible.
6. Thereafter, letter dated 07.11.2006 was received from Rajesh Nakra & Company, Surveyors and Loss Assessors, Ludhiana, who also directed the complainant to furnish the details of the estimate of loss of building and to supply the supporting evidence and in order to comply with the directions of the surveyor, the complainant appointed Bhambri Associates to evaluate the loss of the building and they submitted the report dated
05.12.2006 and the information was also supplied to the surveyors. After receipt of the requisite documents, the surveyor was satisfied and asked the proprietor of the complainant that no other document is required, but demanded Rs.2.00 lacs from him but the complainant refused to accept his illegal demand and the surveyor threatened that without payment, the complainant will not get a single penny out of the loss suffered by him. Later on, said surveyor was arrested by the police in a corruption case, relating to the insurance company. The complainant visited the office of the opposite party insurance company a number of times, but instead of getting any relief from the surveyor or from investigator appointed earlier, the opposite party insurance company appointed one Harjit Singh, Retired Supdt. of Police as investigator. Said investigator visited the factory premises and other relatives and employees along with 4-5 gunmen at difference places and started threatening the complainant and other relative and employees to record their statements as per wish of the investigator. Said investigator also visited the village of Avtar Singh along with 4-5 gunmen and threatened his sister-in-law, his children and old aged mother and directed them to get their statements recorded, or else Avtar Singh shall be put behind bars. Due to the said threats, the family members of Avtar Singh signed/thumb marked the statements recorded by the investigator. The investigator also recorded Consumer Complaint No.33 of 2007 4 statements of Labh Din, proprietor; Hakam Din, brother of the proprietor; Sarabjit Kaur, sister-in-law of Avtar Singh; Jaspal Singh, minor son of Avtar Singh; Shingara Singh, brother of Avtar Singh; Charanjit Kaur, mother of Avtar Singh; Surinder Singh alias Kala who was a former employee of the complainant. Said statements were recorded after threatening them by the investigator with the help of his gunmen and using his influence and submitted the report dated 11.12.2006, holding that the fire was not accidental and it could be a deliberate action.
7. After the expiry of considerable period, when no action was taken by the insurance company to settle the claim, the complainant vide letter dated 20.01.2007 intimated the opposite party insurance company that the surveyor has already completed the survey, but the claim of the complainant has not been settled and requested that it may be settled at the earliest.
8. The letter dated 20.04.2007 was received by the complainant from opposite party no.3, wherein as per the report of S.P. Harjit Singh dated 11.12.2006, the claim was repudiated. The complainant requested opposite party no.3 to supply copy of report along with statements recorded by the investigator Harjit Singh, but the copies were not supplied and the complainant through his counsel got a legal notice served on opposite party no.3 to supply investigation report under the Right to Information Act. In response to the said legal notice, copy of the investigation report was sent to the complainant vide letter dated 28.06.2007. From the perusal of the report of the investigator, it is clear that the said report is based on conjectures and surmises. The investigator raised objection that insurance was raised from Rs.29.00 lacs to Rs.45.00 lacs and the bank limited was also enhanced from Rs.15.00 lacs to Rs.22.00 lacs. Most of the bills submitted by the complainant were got verified by the investigator and were found to be genuine and wrong observation was made. The investigator verified the bills from various firms/mills. A report from Punjab Singh Jandu was also obtained as an expert Consumer Complaint No.33 of 2007 5 opinion, but the said report is also based on conjectures and surmises. The report was prepared with a pre-determined mind to repudiate the claim. The opposite parties are deficient in rendering services.
9. It was prayed that the opposite parties be directed to pay a sum of Rs.25.83 lacs as loss suffered by the complainant in the fire which took place in the intervening night of 21/22.10.2006, along with interest @12% from the date of lodging the claim till the date of payment and Rs.50,000/- as compensation and Rs.22,000/- as litigation expenses.
10. In the written statement filed on behalf of opposite parties no.1 to 4, preliminary objections were raised that there is no deficiency in service on the part of the answering opposite parties and the claim of the complainant has been repudiated after due application of mind and conducting of survey and investigation and other material collected by the surveyor and investigator and the complaint is not maintainable. The complainant has set up a fraudulent claim. He has not provided the proof of the occurrence of the events and has also not cooperated with the surveyor in submitting to them a proper estimate of loss, indicating the nature and extent of loss to each item. The complainant has claimed exorbitant amount without any basis to make undue profit out of insurance. The claim involves complicated questions of facts, evidence, examination of the accounts books and other documents and cross examination of the witnesses and civil court is competent.
11. The insurance is purely a privity of contract executed in between the insurer and insured. It is a pious duty and obligation on the part of the insured to disclose the actual and factual position and as per Condition No.8, if the claim is based upon fraud or false declaration made or used, then all the benefits under the policy are liable to be forfeited.
12. Immediately after receiving the intimation about the occurrence of the said fire in the night of 21/22.10.2006 in the premises of the complainant, the answering opposite parties deputed investigator M/s Rajesh Nakra Company Surveyor and Loss Assessor, who visited the premises of Consumer Complaint No.33 of 2007 6 the complainant on 22.10.2006 at 1.00 p.m. and carried out the survey of the alleged reported loss and it was concluded that the fire occurred on 21/22.10.2006 at Agro Asian Industries was stage-managed by selecting Diwali night. The claim is, thus, false and fraudulent. The complaint is liable to be dismissed as the sketchy affidavit has been filed and it cannot be read into evidence.
13. On merits, it was admitted that Annexure C-1 and Annexure C-2 were issued by the answering opposite parties to the complainant for stock of the cover feeds and raw materials in the shape of cotton seed etc. The complainant had taken the policy for machinery for Rs.9,00,000/- and for stock for Rs.20.00 lacs in March, 2005 and the present policy was obtained after the gap of six months on 29.06.2006 with building for Rs.10.00 lacs and stocks for Rs.35.00 lacs. The complainant could not explain the jump from Rs.20.00 lacs to Rs.35.00 lacs for stock and reason for excluding machinery from insurance. It was admitted that the fire broke out in the premises of the complainant but as per the survey report, the fire was not incidental, rather it was manipulated. The complainant started purchasing raw material heavily after taking insurance cover note and particularly in October, 2006, raw material of more than Rs.10.00 lacs was purchased within 25 days and the factory caught fire after 25 days it was insured. Most of the purchase bills submitted by the complainant were proved to be bogus. The photographs were managed. The complainant is habitual in getting the claim from the opposite parties. Bharat Saw Mills belongs to Gulam Mohd. and Sultan Mohd., uncles of the insured proprietor and that too also caught fire in the Diwali night in few years. Kohinoor Saw Mills belongs to Dilber Mohd. and the same was situated at the same place and that also caught fire some time back. A letter of fire was duly received by the officials of the answering opposite parties and the investigator was appointed.
14. The brother of the complainant namely Dilber Mohd. did not call the fire brigade even after the information and also did not inform his brother Consumer Complaint No.33 of 2007 7 Labhdin, who is proprietor of the complainant firm. He saw the fire from outside and went back to his house without making any effort to extinguish the fire. Receiving of letter dated 04.11.2006 was also admitted. Appointment of M/s Rajesh Nakra & Company was also admitted. The complainant stated that watchman Deepak @ Ramu had left the service about a month back before the loss, but his attendance is marked in the attendance register for the month of September, which could not be explained. The investigator visited the premises and other relatives and employees of the complainant at different places and submitted the report. The consumption of voltage showed that there was decline in manufacturing of cattle feed since June, 2006. There was a lot of variance in the loss reported to the police on 22.10.2006 and to the press on 24.10.2006 and during the investigation on 06.11.2006. The investigator recorded the statements of the persons without any threat or coercion and they recorded their statements voluntarily and the report submitted by the investigator on 11.12.2006 is in detail and self explanatory and on the basis of that, the claim was repudiated. The bills were fake. Some of the bills were correct, but most of the bills were not genuine and the repudiation of the claim was as per law and as per terms and conditions of the policy. The surveyor as well as the investigator after considering each and every point raised by the complainant, verified the entire valid stock etc. from different persons as named by the complainant and came to the right conclusion and submitted the report and the claim was repudiated. All other allegations of the complaint were denied and it was prayed that the complaint may be dismissed with heavy costs.
15. Rejoinder was filed in which the averments of the complaint were reiterated and that of the written reply were denied.
16. The complainant has filed affidavit of Sh. Labh Din, its proprietor along with documents Annexure C-1 to Ex.C-36. The complainant along with the complaint has also filed a number of other documents. Consumer Complaint No.33 of 2007 8
17. The opposite parties have filed affidavit of Sh. O.P. Kanava, Deputy Manager of the United India Insurance Company Limited along with documents Ex.R-1 to Ex.R-11.
18. We have heard the learned counsel for the parties as well as perused the written arguments filed on behalf of the parties and have minutely examined the entire record placed on the file.
19. The complainant M/s Asian Agro Industries was insured with the opposite parties for the period 26.09.2006 to 25.09.2007. The building of the factory was insured for Rs.10.00 lacs and stocks for Rs.35.00 lacs. Fire broke out in the factory premises during the intervening night of 21/22.10.2006 and it happened to be a Deepawli Day. Fire Brigade, Khanna was informed and as per Occurrence Register of Municipal Corporation, Khanna, the Fire Brigade was sent and an entry was made and on coming back, the detail was mentioned as per which, fire broke out in M/s Asian Agro Industries in which D.O.C., rice bran, wastage chips, chura, plastic bags, bardana etc. were burnt to ashes and the godown measuring 70 x 35 feet was totally damaged (fallen), but there was no loss of life. The photographs Annexure C-3 show the condition of the damaged building, stock etc. A DDR Annexure C-6 was also recorded by the proprietor Sh. Labhdin on 22.10.2006 at P.S. Sadar, Khanna regarding the breaking out of the fire in M/s Asian Agro Industries, Khanna. A news item Annexure C-7 was also published which has reproduced the loss mentioned by the proprietor due to fire as 900 quintals chips chura, bardana about 20,000 bags, plastic bags about 4 quintals and other miscellaneous articles. The fire was stated to have occurred either due to short circuit or by crackers.
20. The complainant intimated the respondent insurance company about the fire vide Annexure C-8 on 22.10.2006 and the insurance company deputed Sh. Hari Charan Kalia, Investigator and vide Annexure C-9, he demanded the documents. As per the complainant, the documents were supplied. The respondent insurance company thereafter deputed Rajesh Consumer Complaint No.33 of 2007 9 Nakra & Co., Surveyors and Loss Assessors and the said surveyor also demanded the documents vide Annexure C-12 and Annexure C-13. The complainant also asked Bhambri Associates, Valuers, who submitted the valuation report and gave the net loss of the building as Rs.3,89,051-58. Rajesh Nakra & Co. gave the Status Report Ex.R-3 and the Final Survey Report Ex.R-4 and relying upon the policy condition no.8, concluded that the claim is not maintainable. The respondent insurance company again deputed Sh. Harjit Singh, Investigator and he submitted the detailed report Ex.R-2 and concluded that the fire occurred on 20/21.20.2006 at M/s Asian Agro Industries was a stage managed by selecting the Diwali night.
21. The version of the complainant is that the said investigator recorded the statements of the witnesses under coercion and gave a favourable report to the respondent insurance company. The respondents' plea is that the fire was a stage managed, just to get the insurance claim and the claim was rightly repudiated.
22. The surveyor Rajesh Nakra was summoned by this Commission, because inspite of survey conducted by him, he has not given the detail of the damage and only filed the Final Report, stating that the claim is not maintainable. Sh. Hari Charan Kalia also did not give any report regarding the loss. It appears that the respondents were bent upon to somehow or the other repudiate the claim, ignoring the fact that the fire occurred during the intervening night of 21/22.10.2006 and the photographs clearly prove that the loss to building and the stock was caused by the fire. Rajesh Nakra submitted his assessment report regarding the fire loss dated 21/22.10.2006. As per the report of said Rajesh Nakra, Surveyor, the insured has raised a claim of Rs.25,83,034/-. He has assessed the loss of building as Rs.1,32,442/- and stocks to the extent of Rs.6,94,640/- and in all, the total assessment was made of Rs.8,27,082/-. The complainant has made the exorbitant claim because during investigation also, some of the bills produced were not found genuine by Sh. Harjit Singh, investigator and some of the bills Consumer Complaint No.33 of 2007 10 were genuine. The surveyor Rajesh Nakra in his report dated 11.07.2012 has given the detail of the loss of the building as well as the stock and has considered the genuine bills and ignored the bills which could not be verified by the Investigator Sh. Harjit Singh and has assessed the loss to building and stock, as mentioned above. The complainant has raised objections to the said report, but in our opinion, the objections raised are without any basis and the loss assessed by the said surveyor is genuine. The complainant has not led any evidence to prove the genuineness of bills, nor has filed affidavit of those persons, who issued the bills. Therefore, the claim of the complainant is exorbitant and the loss assessed by Sh. Rajesh Nakra & Co. is reasonable and is based upon the documentary evidence, including the investigation report submitted by the investigator appointed by the respondents.
23. In view of above discussion, the complaint is partly allowed and the respondents are directed to pay in all Rs.8,27,082/- within two months from the receipt of copy of the order, failing which they shall be liable to pay this amount along with interest @ 9% per annum from the date of filing the complaint till realization.
24. Arguments in the complaint were heard on 23.10.2012 and the order was reserved. Now, the parties be communicated about the same.
25. The complaint could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member October 31, 2012.
(Gurmeet S)