State Consumer Disputes Redressal Commission
Sree Sree Madan Mohan Rice Mill. vs New India Assurance Co. Ltd. on 15 January, 2018
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. CC/82/2010 1. Sree Sree Madan Mohan Rice Mill. A partnership firm, Vill. Sukur, P.O. Bantir, Dist. Burdwan, Being represented by one its partner Mr. Srimanta Roy. ...........Complainant(s) Versus 1. New India Assurance Co. Ltd. Branch Office - Burdwan, 70, B.C. Road, Kalitala, Dist. Burdwan, Pin - 713 101. 2. New India Assurance Co. Ltd. Chinsurah Divisional Office, Khadina more, Chinsurah - 712 101. 3. The Chairman-Cum-Managing Director, New India Assurance Co. Ltd. 87, Mahatma Gandhi Road, Mumbai - 400 001. 4. State Bank of India Khosbagan Branch, R.B. Ghosh Road, Burdwan. ............Opp.Party(s) BEFORE: HON'BLE MR. SHYAMAL GUPTA PRESIDING MEMBER HON'BLE MR. UTPAL KUMAR BHATTACHARYA MEMBER For the Complainant: Mr. Sujoy Kumar Basu., Advocate For the Opp. Party: Mr. N. R. Mukherjee., Advocate Mr.N. R. Mukherjee.., Advocate Mr. N. R. Mukherjee.., Advocate Dated : 15 Jan 2018 Final Order / Judgement Sri Shyamal Gupta, Member
Present complaint is filed by M/s Sree Sree Madan Mohan Rice Mill u/s 17 of the Consumer Protection Act, 1986 against non-settlement of its claim by the OP Insurance Company.
In a nutshell, case of the Complainant is that it took a Standard Fire & Special Perils Policy from the OP Insurance Company being no. 512502/11/09/11/00000199 for a sum insured of Rs. 3,05,50,000/- to indemnify its stock of paddy and paddy under process, paddy godown, boiler shed, office room, jute bags, chimney and plant & machinery etc. During currency of the said policy (policy period 07-05-2009 to 06-05-2010), a devastating fire broke out in its office-cum-manufacturing unit in the wee hours of 13-05-2009 causing severe damage to the stock items, plant & machinery etc. The building structure of the paddy godown also sustained damage. Immediately thereafter, local Police Station and fire brigade were duly informed. Ultimately said fire was extinguished by two fire tenders. The incident of fire was reported to the local Police Station on 14-05-2009 in writing. The OP Insurer was also apprised of the matter on 13-05-2009. On the basis of said information, one Surveyor visited the site and carried out due inspection. However, the OP Insurer arbitrarily sat tight over its claim for long despite repeated persuasion of the matter by both the Complainant as well as its financier, i.e., State Bank of India. Hence, the complaint.
OP Nos. 1,2&3 contested the case by filing WV. It is the case of these OPs that the complaint was filed before this Commission in the month of January, 2011 when the instant claim was under consideration. Ultimately after considering the entire aspect of the claim, the Insurance Company decided to repudiate the claim. Accordingly, by a letter dated 04-01-2011, the insurance claim of the Complainant was repudiated. It is stated that the policy was issued on 07-05-2009 and within few days of such issuance of policy, the alleged fire took place which according to the OP Insurer Company does raise eyebrows. The Surveyor, M/s Apex Surveyors (P) Ltd. assessed the loss at Rs. 98,95,855/-. It is stated that the photographs submitted by the Insured, allegedly taken by it while the mill was on fire, did not show flame save and except in only photograph. Suspecting that the said photograph was doctored picture, the same was sent to an expert photographer for examination and opinion. Subsequently, one Sri Rupak Chatterjee, professional photographer by his letter dated 10-02-2010 confirmed that the same was computer generated fabricated photo. Regional office of the OP, taking into consideration various anomalies in the survey report, decided to appoint an Investigator to look into the claim, survey report, photographs and other relevant documents. Accordingly, one Sri Dilip Kumar Saha, Chartered Accountant was appointed for this purpose. After considering all aspects, said Sri Saha pointed out several loopholes in the survey report, based on which the Insurance Company ultimately repudiated the instant claim.
The moot point for consideration is whether the Complainant deserves any relief, as prayed for or not.
Decision with reasons Ld. Advocates for the parties were heard at length and also we have gone through the material on record carefully.
On scrutiny of the documents on record, it becomes apparent that in a bid to scuttle the instant claim of the Complainant by hook or crook, the OP Insurer left no stone unturned. To achieve such objective, unfortunately, they even did not mind beating about the bush.
It appears that dissatisfied with the first survey report, the OP Insurer appointed a second Surveyor, Sri Dilip Kumar Saha, Chartered Accountant. First, let us see, whether such appointment of Second Surveyor is permissible under the law or not.
It appears, the matter was duly delved into by the Hon'ble National Commission in R.P. No. 488/1998 [National Insurance Co. Ltd. vs. New Patiala Trading Company] wherein the Hon'ble Commission observed that Sec.64UM of the Insurance Act, 1938, prescribes the manner in which a Surveyor or a Loss Assessor is given a licence to practice. Surveyors and Loss Assessors are required to comply with the code of conduct in respect of their duties, responsibilities and other professional requirements so specified by the Regulations made by the Controller of Insurance (prior to 1999)/the IRDA (since 1999). There is provision for taking stringent action against a Surveyor or Loss Assessor who is guilty of breach of his duties or who willfully makes a false statement or acts in a fraudulent manner, which may even results in cancellation of licence to practice issued to him.
Sub-section (3) of Sec. 64UM provides for the IRDA to call for an independent report from any other approved Surveyor or loss assessor, but this power is not vested with the Insurance Company.
Thus, on a careful consideration of the provisions of Sec. 64UM, the Hon'ble National Commission held that the Insurer cannot appoint a second Surveyor just as a matter of course. If the report of the Surveyor or Loss Assessor is not acceptable to the Insurer, it must specify reasons, but it is not free to appoint second Surveyor.
A Surveyor or Loss Assessor is duty-bound to give a correct report. If the Insurance Company finds that a Surveyor or Loss Assessor has not considered certain relevant points or has considered irrelevant points or for any other account, it has reservations about the report, it can certainly require the Surveyor or Loss Assessor to give his views and then come to its own conclusion, but the Insurer, under any circumstances, cannot appoint a second Surveyor to counter or contradict or rebut the report of the first Surveyor.
Thus, we find that the report of Sri Dilip Kumar Saha has got no legal footing. On this score alone, repudiation of Complainant's claim by the OP Insurer is a nullity in the eye of law.
From the very beginning, the OP Insurance Company did not act to the true spirit of the Insurance Act. Although due intimation about the peril was conveyed to the OP Insurer on 13-05-2009 itself, they appointed Surveyor only on 15-05-2009, who visited the spot on 16-05-2009. It is naïve to believe that they were not oblivious of the significance of early inspection of affected site.
In terms of the IRDAI (Protection of Policyholders' Interests) Regulations, 2002, if an Insurer, on receipt of a survey report, finds that it is incomplete in any respect, it shall require the Surveyor, under intimation to the insured/claimant; to furnish an additional report on certain specific issues as may be required by the Insurer. Such request requires to be made within 15 days of receipt of the final survey report.
The said Regulation also stipulates that on receipt of the final survey report or the additional survey report, as the case may be, and on receipt of all required information/documents that are relevant and necessary for claim, an Insurer shall within a period of 30 days offer a settlement of the claim or reject the same.
In this case both the above Regulatory directives were thrown to the windows by the OP Insurer.
Although the OP Insurer, taking shelter under the report generated by Sri Dilip Kumar Saha, repudiated the instant claim, it appears that the same is beset with multiple defects.
To site few examples, it is reported by Sri Saha in his report that no incident of fire took place at the factory premises. If we are to trust such statement, then we would have to discard the report of the Fire Brigade dated 08-06-2009 that it submitted before the Presidency Magistrate/Magistrate, Burdwan, as also media report regarding the occurrence of the incident of fire.
Sri Saha sought to pick hole with the survey report observing that although the Surveyor observed in his main report dated 15-09-2009 that police remained present while fire fighting was going on, according to the GD lodged on 14-05-2009, the police station was apprised of the matter for the first time on 14-05-2009 while lodging the GD. However, on going through the survey report, we do not come across any such noting. It is merely mentioned in the said report that Fire Brigade as well as Raina Police Station was informed of the matter. It was but natural that at the material time when the incident of fire was detected by the Complainant, the owner of the mill was not in his proper frame of mind to lodge official police complaint, but attached more importance to supervise the fire control exercise personally. It was also possible that such information was communicated over phone. Lodging a GD only signify the fact that formal complaint was lodged on that particular day. It is futile to read too much into it.
Even if it is assumed that indeed there was discrepancy in the status report submitted by the Surveyor vis-à-vis GD about exact timing of knowledge of concerned Police Station in respect of the peril, it does not take away the fact that the Police Station was duly informed of the matter and there is nothing on record to show that the concerned Police Station dubbed the incident as fake.
Sri Saha mentioned in his report that the mill remained closed for the last 4/5 months. In case the mill indeed remained closed for such long duration, of course the Complainant did not pay any wages to workers during that time; it was also natural that during the said period, there was drastic cut in electricity bill amount. However, no such proof is furnished by the OPs to substantiate such report of Sri Saha. On the other hand, it appears from the survey report that every month officials from Burdwan Food & Supply Department used to visit the mill and after due scrutiny of stock, put their signature on the register. According to the survey report, the last stock taking was done by F&S officials on 06-05-2009.
In the light of above findings, we have no qualms holding that the instant claim was illegally repudiated by the OP Insurance Company.
The complaint, thus, succeeds.
Hence, O R D E R E D The case stands allowed on contest against the OP Insurance Company with cost Rs.10,000/-. OP Insurer is directed to pay Rs. 98,95,855/- to the Complainant/OP Bank within 40 days hence along with simple interest @ 12% p.a. from the date of filing of this complaint till full and final payment is made. [HON'BLE MR. SHYAMAL GUPTA] PRESIDING MEMBER [HON'BLE MR. UTPAL KUMAR BHATTACHARYA] MEMBER