State Consumer Disputes Redressal Commission
M/S Kiran Collection And Boutique vs Branch Manager, National Insurance ... on 23 October, 2013
M FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
Consumer Complaint No.43 of 2012.
Date of Institution: 31.05.2012.
Date of Decision : 23.10.2013.
M/s Kiran Collection and Boutique, opposite Muktsar Club, Kotkapura
Road, Muktsar, through Mrs. Kiranpal Kaur Marrar, Proprietor.
.....Complainant.
Versus
1. Branch Manager, National Insurance Company Limited, Branch
Office, Civil Lines, Kotkapura Road, Muktsar (Punjab).
2. National Insurance Company Limited, Chandigarh, Regional
Office-1, SCO No.332-334, Sector 34-A, Chandigarh, through its
Regional Manager.
....Opposite Parties.
Consumer Complaint U/s 17 of the
Consumer Protection Act, 1986.
Before:-
Shri Inderjit Kaushik, Presiding Judicial Member.
Shri Vinod Kumar Gupta, Member.
.................................................... Present:- Sh. Rajesh Sood, Advocate, counsel for the complainant.
Sh. Rahul Sharma, Advocate for Ms V.A. Talwar, Advocate, counsel for opposite parties.
INDERJIT KAUSHIK, PRESIDING JUDICIAL MEMBER M/s Kiran Collection and Boutique, through its proprietor Mrs. Kiranpal Kaur Marrar, complainant (hereinafter called "the Consumer Complaint No.43 of 2012 2 complainant") has filed this complaint U/ 17 of the Consumer Protection Act, 1986.
2. The complainant has filed the present complaint, making the averments that the complainant is running the business of trading of all types of clothes, readymade garments and other allied jobs plus stitching job/embroidery etc., for earning her livelihood. The opposite parties are the general insurer and approached the complainant through Muktsar Central Cooperative Bank, for getting the shop with goods and other items, including furniture, fixtures etc., covering various risk of fire and other perils and the complainant took the Standard Fire and Special Perils Policy bearing No.401703/11/1 0/3100000187, valid from 14.03.2011 to 13.03.2012 and the sum insured was Rs.50.00 lacs for the Boutique-cum-Shop, situated at Kotkapura Road, Muktsar. Another policy for traditional business under burglary insurance was issued by opposite party no.1 bearing no.401703/46/10/7500000085 valid from 14.03.2011 to 13.02.2012 for the items mentioned therein. The opposite party insurance company persuaded the complainant and sold another Misc. Policy called 'Plate Glass Insurance' vide policy No.401703/46/10/9500000084 for the same period, covering 230 plate glasses as mentioned in the schedule of the policy.
3. The business of the complaint was flourishing and on the advice of the opposite parties, she got increased the sum insured and made payment of additional premium to the opposite parties. The opposite parties failed to supply the complete policy of insurance with terms and conditions and exceptions etc. till date. The complainant is a consumer under the Act.
Consumer Complaint No.43 of 2012 3
4. The complainant is an income tax and VAT assessee, enjoying credit facility from Muktsar Central Cooperative Bank and CC Facility from HDFC Bank, Muktsar while the day to day affairs are being managed by the complaint herself and Manager and others, engaged in the business.
5. In the intervening night of 19/20.09.2011, in the early hours, a fire took place in the insured premises which was noticed by chowkidar of the market which in turn, informed the residents of the area and the Fire Brigade arrived at the spot within 10 minutes and started extinguishing the fire. The complainant along with other staff members and other respectable as well as residents extended full cooperation in blowing off the fire in order to save the stock/goods stored in the premises and to avoid the losses. A DDR No.06 dated 20.09.2011 was lodged by the insured with Police Station, Muktsar Sahib. The fire seems to have originated due to short circuiting from the electrical installations/AC which engulfed the building, goods, machines, furniture, fixtures, wooden racks and other things including embroidery/clothes etc. and caused the loss. The complainant lodged the claim of Rs.95.00 lacs vide intimation letter dated 20.09.2011.
6. The opposite party insurance company deputed M/s N. Kumar, Surveyors Pvt. Ltd., Surveyors and Loss Assessors, Chandigarh who visited the premises to assess the loss. All the requisite documents were submitted by the surveyor and the complainant extended full cooperation. The details of sale purchase and other accounts were submitted and the surveyor submitted the report to the opposite party insurance company, but the texts of the same were not disclosed to the complainant nor the copy was supplied. The complainant was made to sign a number of papers on the Consumer Complaint No.43 of 2012 4 assurances to settle the claim. The complainant was surprised to receive a letter dated 26.12.2011 vide which it was informed that the claim to the tune of Rs.11,34,433/- has been approved and before release of the cheque, the complainant should return the voucher duly discharged, but no copy was found. The complainant suffered the loss due to unfair trade practice committed by the opposite parties, by arbitrarily allowing the claim partly against the claim of Rs.95.00 lacs. The opposite parties mischievously and with malafide intention asked the complainant to submit the duly discharged voucher as full and final settlement and then only the amount would be released. The complainant immediately contacted opposite party no.1 and lodged protest orally as well as vide letter dated 04.01.2012 which was duly received by the office of opposite party no.1 and letter dated 06.02.2012 was sent to opposite party no.2, but the opposite parties did not bother. The complainant is claiming the balance amount of Rs.83,67,858/- along with compensation.
7. It was prayed that the opposite parties may be directed to make payment of Rs.83,67,858/- in addition to the amount already paid, to pay Rs.5.00 lacs as compensation for harassment, Rs.1.00 lac towards exemplary costs along with interest @ 18% p.a. from the date of loss till payment and Rs.55,000/- as litigation expenses.
8. In the written version filed on behalf of the opposite parties, preliminary objections were taken that the complainant is a proprietary concern in the name of M/s Kiran Collection & Boutique and the complainant was insured under the 'Standard Fire and Special Peril Policy' valid from 14.03.2011 to 13.03.2012 for having insured the stocks and other plant and machinery/FFF valuing Rs.50.00 lacs. Immediately on receipt of intimation, the opposite party insurance Consumer Complaint No.43 of 2012 5 company appointed Sh. N. Kumar, Surveyors Pvt. Ltd. as Surveyor/ Loss assessor, Investigators in the case, who visited the spot and gave final survey report dated 25.10.2011 and assessed the loss to the tune of Rs.11,34,433/- subject to the terms and conditions of the policy. The competent authority of the opposite party insurance company examined the entire case, including the report of the surveyor and various documents on record and concurred with the report of the surveyor and settled the claim of Rs.11,34,433/- vide letter dated 26.12.2011. Offer of settlement of claim was accepted by the complainant towards full and final settlement and accepted the amount by way of cheque no.71939 for Rs.11,34,433/- without any protest and now the present complaint is not admissible as per the law.
9. On merits, it was admitted that the policies were issued and the fire incident took place in the premises of the complainant. The surveyor was appointed and settled the claim as mentioned above. Similar other pleas as taken in preliminary objections were repeated and it was prayed that the complaint may be dismissed with costs.
10. Learned counsel for the complainant tendered into evidence of the complainant, affidavit of the complainant as Ex.C-A along with documents Ex.C-1 to Ex.C-15.
11. Learned counsel for the opposite parties tendered into evidence affidavit of Sh. S.L. Rikhi, Manager of the opposite parties as Ex.RW-1/A along with documents Ex.R-1 to Ex.R-5.
12. We have heard the arguments advanced by the learned counsel for the parties and have gone through the entire record carefully.
13. The complainant obtained the policy Ex.C-1 and it covered the risk of stock of all kinds of clothes and other goods of similar nature Consumer Complaint No.43 of 2012 6 as well as other handwork material & wood work and furniture and other goods as per the detail attached and for Earthquake (Fire and Shock) for a sum of Rs.50.00 lacs and the policy was valid from 14.03.2011 till midnight of 13.03.2012. Ex.C-2 is the another policy covering stock of all kinds of clothes, readymade stitched/unstitched and machinery, embroidery etc. and the sum insured was Rs.39.34 lacs and the policy period was also w.e.f. 14.03.2011 to midnight of 13.03.2012. Ex.C-3 is the another policy schedule covering plate glass and the sum insured was Rs.1.50 lacs. Ex.C-6 is the copy of the DDR which was lodged immediately on 20.09.2011 regarding the fire incident. Ex.C-7 is the fire report. Ex.C-8 is the newspaper cutting. Ex.C-9 is the application given to SHO, City Muktsar Sahib. Ex.C-11 is the letter written by the opposite party insurance company to the complainant regarding approval of the claim for Rs.11.34,433/-. This approval was conditional because of the following reasons:-
"Before we release you the cheque of payment, you are requested to return us the enclosed receipt voucher duly discharged."
14. Ex.C-12 is the letter written by the complainant to the Branch Manager of the opposite party, taking the amount under protest. Another letter Ex.C-13 was written to the Branch Manager of the opposite party by the complainant which is reproduced as follows:-
"That you have made the assessment of our loss & send the cheque dated 30.12.2011 which is not justified & our loss is much more against your assessment. It is requested please issue the surveyor report your have made the assessment of our loss." Consumer Complaint No.43 of 2012 7
15. Letter Ex.C-15 is also to the same effect.
16. The opposite parties have also relied upon the policy Ex.R1, survey report Ex.R-2, receipt Ex.R-3 and the affidavit of surveyor Ex.R-5.
17. Learned counsel for the opposite parties laid much stress on the receipt Ex.R-3 and argued that the cheque for a sum of Rs.11,34,433/- was received by the complainant as full and final settlement of the claim and, as such, now the complaint is not maintainable. Learned counsel for the opposite parties has relied upon a number of judgments mentioned in the written version itself, including the judgment of the Hon'ble Supreme Court Ex.R-4 in case "Nathani Steels Ltd. Vs Associated Constructions", 1995 (Sup3)SCC-324. Hon'ble Supreme Court in Para-3 (relevant portion) observed as follows:-
"In the circumstances, we think that in the instant case, since the dispute or difference was finally settled and payments were made as per the settlement, it was not open to the respondent unilaterally to treat the settlement as non est and proceed to invoke the Arbitration clause. We are, therefore, of the opinion that the High Court was wrong in the view that it took."
18. The above authority of the Hon'ble Supreme Court is not applicable to the facts and circumstances of the present case, because in that case, the parties had arrived at settlement, but later on arbitration clause was invoked but that was not allowed. In the present case, there is no settlement between the parties, but it is only unilaterally settlement as the opposite parties, relying upon the report of the surveyor, have settled the claim through their competent authority, Consumer Complaint No.43 of 2012 8 who has never consulted the complainant or took the consent of the complainant for any settlement.
19. The receipt Ex.R-3 much relied upon by the opposite parties is dated 29.12.2011 whereas, as discussed above, vide letter Ex.C-11, the conditional offer was made and before release of the cheque, the receipt voucher duly discharged was demanded, but there is no duly discharged voucher brought on record by the opposite parties and even otherwise, the protest was immediately lodged vide letter dated 04.01.2012 Ex.C-12 by the complainant and the complainant was not satisfied with the amount and it was taken under protest. Even thereafter, the complainant wrote letters Ex.C-15 dated 06.02.2012 and Ex.C-13 dated 13.02.2012 and mentioned that the assessment of Rs.11,32,142/- is not justified against its loss. Thus, the document Ex.R-3 cannot be considered to be a duly discharged voucher taken after full and final settlement of the claim.
20. The surveyor appointed by the opposite parties has given a detailed survey report and both the parties have relied on the same and the same is Ex.C-16/Ex.R-2 on record. As per the surveyor, the type of policy was 'Standard Fire and Special Perils Policy' and the sum insured was Rs.50.00 lacs and vide Endorsement No.1 and Endorsement No.2, the other amounts were added as mentioned by the surveyor and the total sum available for stock coverage was Rs.64.34 lacs.
21. As per the surveyor, the complainant started making purchases from a new party MAA LAXMI Textiles, Bathinda w.e.f. 01.07.2011 and purchases amounting to Rs.29,55,250/- have been made during the period 01.07.2011 to 05.08.2011, but the surveyor observed that the purchases are not genuine, because there is no VAT Consumer Complaint No.43 of 2012 9 on clothes and purchases can be shown/booked upto any amount and heavy purchases are shown on credit. The payments have been made in cash of Rs.20,000/- per transaction. Being a new party, such heavy credits are not offered by the party in the running course of business and some of the bills are not date-wise. Under the head "Bank", the surveyor showed the value of the stocks as on 31.08.2011 as Rs.66,58,694/-. Under the head 'Stock Held on Trust', the stock was shown of Rs.5,51,000/-. The surveyor also rejected the 'stock held on trust' as unauthenticated. Under the head 'Plant & Machinery, Furniture, Fixture Fitting', the total amount was shown as per the books of the insured as on 31.03.2011 as Rs.2,75,932/-. Under the head 'Value of Stock considered as the total loss', the surveyor has reduced the figures to Rs.1,69,813/- and ultimately, assessed the loss of Rs.11,34,433/-.
22. The surveyor in its report under the head 'Verification/Evaluation of Records", observed as follows:-
"Insured has submitted the audited financial statement for the period ending 31.03.2010, 31.03.2011 & provisional financial statement for the period 01.04.2011 to 19.09.2011 along with copies of VAT returns.
On the verification of financial records, salient data is derived as follows:-
Sr. Particulars 2009-10 2010-11 2011-12
No. (Audited) (Audited) (Provisional)
(01.04.2011 to
19.09.2011)
1. Sale 46.53 54.36 26.27
2. Purchase 45.37 54.01 72.60
3. Gross Profit % 12.11 14.89 30.00
4. Purchase/Sale 97.51 99.36 27.64
Ratio %
Consumer Complaint No.43 of 2012 10
5. Sale/Purchase 102.56 100.65 36.18
ratio %
6. Closing Stock 4.47 12.22 65.86
7. Sundry 0.91 4.60 34.99
Creditors
23. The surveyor observed that in the sale-purchase ratio, there was abnormal variation during 2011-12 from 99.36% to 27.64% and the sale-purchase ratio from 100.65% to 36.18% which shows that the purchases were abnormally high, as compared to the same. He further observed that against the total purchases shown at Rs.72.60 lacs for the period 01.04.2011 to 19.09.2011, the purchases for the quarter ending 01.04.2011 to 30.06.2011, as per VAT Returns, comes to Rs.24.90 lacs, which shows that the purchases shown for the period 01.07.2011 to 19.09.2011 are Rs.47.70 lacs. The surveyor has also raised objections to the purchases made from MAA LAXMI Textiles, Bathinda for the period 01.07.2011 to 19.09.2011 and as per the chart prepared by the surveyor, the debit is shown as Rs.4,36,802/- and the credit is shown as Rs.29,55,250/- and the entire amount was not considered by the surveyor, simply on the ground that there is some difference of dates in the bills and the purchases are not genuine.
24. The surveyor has shown the above figures on the basis of audited financial statement for the period ending 31.03.2010 to 31.03.2011 and provisional financial statement for the period 01.04.2011 to 19.09.2011 along with copies of VAT Returns. There was no reason to doubt the purchases on the higher side as all the records were audited. Again under the head 'Bank', the surveyor has mentioned the stock value declared by the insured as follows:-
Sr. No. Particulars Amount (Rs.)
1. As on 30.04.2011 2173000
Consumer Complaint No.43 of 2012 11
2. As on 31.05.2011 2553000
3. As on 30.06.2011 2944308
4. As on 31.07.2011 6246000
5. As on 31.08.2011 6658694
25. The surveyor has again raised an eyebrow on the above figures that there is abnormal increase in July/August, 2011. Rather, these declared stock values are in consonance with the audited amounts and the complainant has not anticipated any fire to its stock in September, 2011. The Surveyor has further assessed the loss to the Plant and Machinery, Furniture, Fixtures, fittings, value of stock as total loss, partial loss and fixtures and fitting, plant and machinery, electrical fittings and against the loss claimed to the tune of Rs.95.00 lacs, the surveyor by its own imaginations and ignoring the official records, came to the conclusion that net loss is only Rs.11,34,433/-, but this figure is not, at all, reconcilable in view of the value of the stock which was evaluated on the basis of the record as well as declaration made by the insured to the Muktsar Central Cooperative Bank, Muktsar and as on 31.08.2011, the stock value was shown as Rs.66,58,694/-, but the surveyor has ignored both these important documents and refused to consider the same only on the ground that the purchases are on higher side, but this observation is not tenable.
26. The complainant has claimed the loss of Rs.95.00 lacs, but the complainant has not placed on record any documentary evidence, but has relied upon the survey report only. The opposite parties have also relied upon the survey report Ex.C-16/Ex.R-2. As per the Evaluation of Records and Financial Statement, the closing stock as on 19.09.2011 was of Rs.65.86 lacs and as per the stock value declared to Consumer Complaint No.43 of 2012 12 the Muktsar Central Cooperative Bank, Muktsar, the value as on 31.08.2011 was Rs.66,58,694/- and as per the survey report, the stock held on trust was for Rs.3,02,000/-. The depreciated value of furniture, fixture, sewing machines, electrical appliances, computers, cameras, as per books of the insured as on 31.03.2011 was calculated as Rs.2,75,932/- by the surveyor. After calculating the various deductions and depreciation etc., in our opinion, the compensation of a sum of Rs.60.00 lacs (Rupees Sixty Lacs) to the complainant will meet the interest of justice.
27. Sequel to the above discussion, the complaint filed by the complainant is accepted and the opposite parties are directed to pay to the complainant, a sum of Rs.60.00 lacs (Rupees Sixty Lacs) on account of loss suffered by the complainant due to the fire and Rs.1.00 lac (Rupees One Lac) as compensation and Rs.10,000/- (Rupees Ten Thousand) as litigation expenses, within 45 days of the receipt of copy of the order, failing which the entire amount shall earn interest @ 7.5 per annum from the date of loss till realization.
28. The arguments in this complaint were heard on 10.10.2013 and the order was reserved. Now the order be communicated to the parties.
29. The complaint could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Judicial Member (Vinod Kumar Gupta) Member October 23, 2013.
(Gurmeet S)