State Consumer Disputes Redressal Commission
Vijay Kumar Trehan vs Manager,Hdfc Ergo Gic Ltd. And Ors. on 15 February, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.310 of 2020
Date of institution : 17.12.2020
Reserved on : 08.02.2022
Date of decision : 15.02.2022
Vijay Kumar Trehan son of Sh. Hans Raj Trehan, M/s Trehan Traders,
Garshanker Road, Royal Palace, Tehsil Nawanshahr, District SBS
Nagar.
....Appellant/Complainant
Versus
1. Manager, HDFC ERGO General Insurance Company Limited,
Branch Office, IIIrd Floor, Eminent Mall, 261, Lajpat Nagar, Near
Guru Nanak Mission Chowk, Jalandhar-144001.
2. Karan Sareen, Agent, HDFC ERGO General Insurance
Company Limited, Tehsil Nawanshahr, District SBS Nagar,
having his office in HDFC Branch, Chandigarh Road, Tehsil
Nawanshahr, District SBS Nagar.
3. General Manager, HDFC ERGO General Insurance Company
Limited (Formerly HDFC General Insurance Limited), Registered
Corporate Office, 1st Floor, HDFC House 165-166, Backbay
Reclamation, HT Parekh Marg, Mumbai-400020.
.....Respondents/Opposite Parties
First Appeal against the order dated
28.10.2020 passed by the District Consumer
Disputes Redressal Commission, Shaheed
Bhagat Singh Nagar.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mrs. Urvashi Agnihotri, Member
First Appeal No.310 of 2020 2
1) Whether Reporters of the Newspapers may be
allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Argued by:-
For the appellant : Sh. Sarju Puri, Advocate
For respondents No.1&3 : Sh. Vishal Aggarwal, Advocate
For respondent No.2 : Sh. A.S. Gill, Advocate
.................................................................................. JUSTICE DAYA CHAUDHARY, PRESIDENT The appellant/complainant-Vijay Kumar Trehan has filed the present appeal under Section 41 of the Consumer Protection Act, 2019 (in short "Act") for setting aside the impugned order 28.10.2020 passed by the District Consumer Disputes Redressal Commission, Shaheed Bhagat Singh Nagar (in short the "District Commission"), whereby the Consumer Complaint filed by the appellant/complainant under Section 12 of the Consumer Protection Act, 1986 (now repealed) against the opposite parties (hereinafter called as "OPs") was dismissed. A prayer has also been made for allowing the complaint.
2. Briefly, the facts of the case as made out in the complaint are that the appellant/complainant filed the consumer complaint before the District Commission for issuance of directions to respondents/OPs to pay a sum of Rs.10,00,000/- in respect of insured articles/tyres and also to pay damages/compensation to the tune of Rs.2,00,000/- on account of deficiency in service. It was further mentioned in the complaint that the complainant was engaged in the business of construction material as well as sale of new tyres (Apollo). All the First Appeal No.310 of 2020 3 articles were lying in the shop, insured by respondents/OPs-Insurance Company on 27.07.2018. The theft took place in the shop during night of 18.04.2019. An FIR No.0056 dated 19.04.2019 was registered under Sections 457 and 380 of IPC at Police Station City, Nawanshahr. It has further been mentioned that the appellant/complainant was never given any policy documents by the respondent-Insurance Company, but received subsequently through courier on 26.04.2019, which was after few days of the occurrence of theft. A claim arising out of insurance policy was submitted before the respondent-Insurance Company but it was repudiated on the ground that no security guard was deputed at the premises where goods were lying.
3. It was further mentioned that the policy i.e. Business Suraksha Classik No.2949202333443500002 was valid for the period from 27.07.2018 to 26.07.2019. After receiving the information the Insurance Company deputed IRDA registered independent Surveyor i.e. M/s Skaad Insurance Surveyor and Loss Assessors Pvt. Ltd. to conduct the survey of loss to the insured stock of the firm and final report was submitted on 30.10.2019. It was mentioned in the final survey report that no security guard was deputed at the insured premises and the incident of theft frequently happened. Finding the incident in violation of special condition with regard to the warranted 24 hours security at the premises, the claim was rejected.
4. After issuing notices to the OPs, a joint reply was filed wherein the preliminary objections were raised regarding maintainability of the complaint. It was also mentioned in the reply that First Appeal No.310 of 2020 4 the complainant failed to disclose any deficiency in service on the part of the OPs. As per the terms and conditions of the Insurance Policy, the claim was not maintainable.
5. On appraisal of evidence available on the record and in view of report submitted by the Surveyor, the complaint filed by the appellant/complainant was dismissed vide order dated 28.10.2020, which is subject matter of challenge in the present appeal. There was a delay of 3 days in filing of the appeal, which was condoned vide order dated 22.12.2020 by this Commission.
6. Learned counsel for the appellant/complainant submits that the appellant/complainant never received the policy documents, as the same was not supplied for a longer time and it was sent through courier on 26.04.2019 when the theft had already taken place. Learned counsel also submits that the insurance claim of the appellant/complainant has been repudiated only on the ground that no security guard was deputed at the premises where goods were lying. Learned counsel further submits that the District Commission has not properly appreciated the evidence available on the file. The complaint was dismissed on the grounds that the complainant had failed to prove the factum of receipt of policy through courier on 26.04.2019. It is also the argument of learned counsel for the appellant that the District Commission has overlooked the fact that at no stage the salient terms and conditions of the policy were neither communicated nor explained by the agent of the company at the time of obtaining the insurance policy. The finding recorded by the District Commission with regard to provision of 24 hours security is not only erroneous but misconceived First Appeal No.310 of 2020 5 as in case 24 hours security was provided then there was no necessity for the insurance policy. Learned counsel also submits that the appellant/complainant insured provided adequate security by installing double shutter and locking the same during night. It cannot be said that the appellant/complainant had violated any specific condition of the policy. It is also the arguments of learned counsel for the appellant that the complainant had no means to gain knowledge of any terms and conditions of the policy, as the policy documents were never supplied immediately, but it was received by the complainant on 26.04.2019. All these factors have not been taken into consideration while dismissing the complaint. Learned counsel also submits that the appellant/complainant also filed rejoinder to the reply filed by the OPs, wherein it was specifically stated that despite repeated requests by the appellant/complainant, the policy documents were not supplied to him. It has further been submitted that the original cover/envelope of the insurance reflecting the date of policy documents as 26.04.2019 clearly proves the exact date of issuance and receipt of the policy documents. It was not required to prove by the appellant/complainant still the complaint has been dismissed. Learned counsel for the appellant/complainant has relied upon judgments of cases "United India Insurance Co. Ltd. Vs. M/s Harchand Rai Chandan Lal", Civil Appeal No.6277/2004, decided on 24.09.2004, "Bharat Watch Company Vs. National Insurance Co. Ltd." Civil Appeal No.3912/2019, decided on 12.04.2019 and "New India Assurance Co. Ltd. & others Vs. Paresh Mohanlal Parmar" Civil Appeal First Appeal No.310 of 2020 6 No.10398/2011, decided on 04.02.2020 by the Hon'ble Supreme Court, in support of his arguments.
7. Learned counsel for respondents No.1 & 3 has opposed the submissions made by the learned counsel for the appellant. The order of dismissal passed by the District Commission is well reasoned and has been passed after considering the evidence produced by both the parties. Learned counsel further submits that claim of the appellant/complainant has rightly been repudiated on the ground that there was no security guard at the premises. Learned counsel further submits that the complaint filed before the District Commission was rightly dismissed by observing that it was the duty of the complainant to install CCTV cameras, which was the utmost requirement for the purpose of security as well as to protect and safeguard of the premises where the articles were lying. Neither the complainant installed CCTV cameras in his shop nor arranged any security for 24 hours, as per terms and conditions of the policy. It has specifically been mentioned in the terms and conditions of the policy that 24 hours security was warranted at each premises. The insured has specifically been mentioned in the complaint that the terms and conditions of the policy were received on 26.04.2019 and policy was valid for the period from 27.07.2018 to 26.07.2019. The theft had taken place on 18.04.2019 i.e. after a period of approximately nine months. It has further been submitted that nothing is on record to show that the insured ever made any complaint or sent any letter to say that he did not receive the terms and conditions of the policy. In this regard, he has relied upon judgment of the Hon'ble National Commission of case "Gas Ghar Vs. First Appeal No.310 of 2020 7 Oriental Insurance Co. Ltd." 2006(3)CPJ-377. Learned counsel has also relied upon judgments of the Hon'ble National Commission of cases "M/s Satya International Vs. New India Assurance Company Ltd." CC No.75 of 2005, decided on 04.08.2020 and "Jignesh Natwarsing Solanki Vs. I.C.I.C.I Lombard General Insurance Company Ltd." Revision Petitions No.1084 and 1085 of 2012, decided on 12.01.2016 in support of his submissions.
8. Learned counsel for respondent No.2 has reiterated the same arguments, as raised by learned counsel for respondents No.1 and 3.
9. Heard the arguments of learned counsel for the parties. We have also carefully perused the impugned order and other documents available on the file as well as the written submissions submitted by the parties.
10. Facts relating to purchase of policy, incident of theft, repudiation of claim, filing of complaint before the District Commission and dismissal thereof are not disputed. Admittedly the theft took place on 18.04.2019 and the goods were lying in the shop including different types of tyres and other articles were stolen by the thieves from the shop. An FIR (Ex.C-1) was registered with the police under Sections 457 and 380 IPC on 19.04.2019 at Police Station City, Nawanshahr. The appellant/complainant also submitted the details of stocked items to the police showing the total loss of the tyres, vide Ex.C-2 dated 19.04.2019.
11. Admittedly, the appellant/complainant got insured the articles lying in his shop from respondent-Insurance Company on First Appeal No.310 of 2020 8 27.07.2018. The theft had taken place in the business premises of the appellant/complainant during night on 18.04.2019 and FIR dated 19.04.2019 was registered under Sections 457 and 380 IPC at Police Station City, Nawanshahr. As per stand taken by the appellant/complainant, the policy documents including terms and conditions were not supplied and the same was received on 26.04.2019 i.e. after a few days of incident of theft. The claim of the appellant has been repudiated on the ground that no security guard was deputed at the premises and no CCTV cameras were installed. The appellant/complainant has relied upon copy of FIR Ex.C-1, item wise stock report Ex.C-2, copy of policy Ex.C-3 and cover/envelope (Ex.C-6), through which the policy documents (Ex.C-3 and C-4) were received as well as the accounts statements of the firm (Ex.C-7) reflecting the payment of premium amount of Rs.7151/-, paid through cheque in favour of OP-Insurance Company. However, respondent- Insurance Company has placed on record the copy of Insurance Policy Ex.OP-1/1, copy of final survey report dated 30.10.2019, copy of repudiation letters dated 19.09.2019 and 31.10.2019 Ex.OP-1/3 and Ex.OP-1/4.
12. The complaint filed by the complainant was dismissed by the District Commission on the ground that the complainant had failed to prove that he received the policy through courier on 26.04.2019. It is a specific plea raised by the appellant/complainant that he never received the policy document despite repeated requests to the agent of the Insurance Company and said documents were ultimately received by him after the incident of theft i.e. on 26.04.2019. The First Appeal No.310 of 2020 9 appellant/complainant has placed on record the original cover/envelope, whereby the OP-Insurance Company had sent the policy documents, reflecting the date of receipt of policy documents on 26.04.2019. Now, the onus of proving the exact date of issuance and receipt of policy has shifted upon the respondent-Insurance Company, that the policy documents were supplied to the appellant immediately after commencement of the insurance policy or even before the incident of theft. The averment made by the appellant/complainant with regard to non-receipt of policy document in time has not been specifically denied by the respondents/OPs neither in the arguments nor in the reply/written statement. No cogent evidence of sending the policy documents in time to the appellant/complainant like postal receipt/courier receipt has been produced on record. However, no date has been mentioned by the OP-Insurance Company on the covering letter (Ex.OP-1/1), which raises adverse inference against them, whereas the OP-Insurance Company has mentioned the date on the repudiation letter as 31.10.2019. Even it has not been proved on record that the terms and conditions of the policy were communicated or explained by the agent of the Insurance Company at the time of filling up the proposal form to the appellant/complainant by taking his signatures on the documents in this regard. The Insurance Regulatory and Development Authority of India issued notification dated 22.06.2017 is relevant i.e. Regulation No.6(4) which is re-produced as under:-
"6. Point of Sale:First Appeal No.310 of 2020 10
4. Where for any reason, the proposal and other connected papers are not filled in by the prospect, the insurer or the distribution channel shall explain the contents of the form, and a certificate shall be incorporated at the end of the proposal form from the prospect that the contents of the proposal form and connected documents have been fully explained to him and he has fully understood the significance of the proposed contract."
The respondent-Insurance Company has not placed on record any evidence/proposal form to the effect that the agent of the Insurance Company fully made aware of the terms and conditions of the policy to the appellant/complainant at the time of taking the policy.
13. As far as special condition of 24 hours security at the insured premised is concerned, there is no condition in the policy documents which lays down that there is any necessity of employing the security guard for providing 24 hours security. However, the respondent-Insurance Company has not explained the wordings of special conditions i.e. "Warranted 24 hrs security of each premises." before the District Commission as well as before this Commission. The same issue was there before the Hon'ble Supreme Court in judgment of case M/s Harchand Rai Chandan Lal, the relevant para No.16 of the said judgment is reproduced as under:-
"16. But before parting with the case we would like to observe that the terms of the policy as laid down by the Insurance Company should be suitably amended by the Insurance Company so as to make it more viable and facilitate the claimants to make their claim. The definition is so stringent in the present case that it gives rise to difficult situation for the common man to understand that in order to maintain their claim they will have to necessarily show evidence of violence or force. The First Appeal No.310 of 2020 11 definition of the word burglary should be given meaning which is closer to the realities of life. The common man understands that he has taken out the policy against theft. He hardly understands whether it should precede violence or force. Therefore, a policy should be a meaningful policy so that a common man can understand what is the meaning of burglary in common parlance. Though we have interpreted the present policy strictly in terms of the policy but we hope that the Insurance Companies will amend their policies so as to make them more meaningful to the public at large. It should have the meaning which a common man can easily understand rather than become more technical so as to defeat the cause of the public at large."
The Hon'ble Supreme Court has held in said judgment that policy wordings should be simple, so that common man can easily understand the same. Whereas, the walls, shutters and gates are used for security purposes and the complainant has specifically pleaded in the complaint that he provided adequate security to the premises by installing double shutter and putting the lock on the same at night and OP-Insurance Company failed to rebut the same.
14. It is pertinent to mention here that there is a one special condition in the insurance policy that "Burglary Warranted that all entry/exits of the premises are secured with locking system,- applicable for office & shop occupancy. Warranted that all entry/exits of the premises are secured with iron grills and locking system - for other occupancy."
15. In the present case, the appellant had duly secured his shop/premises by putting double shutters and by locking the same. Accordingly, the appellant/complainant fulfilled the special condition for securing the premises by putting double shutters and by locking the First Appeal No.310 of 2020 12 same. This special condition is fully applicable in the present case, as the Surveyor admitted the loss caused due to 'Burglary', but he has not mentioned this special condition in his final survey report (Ex.OP- 1/2).
16. In view of this, it appears that the Surveyor has prepared the report as per wish of the OP-Insurance Company and the OP- Insurance Company has repudiated the claim of the complainant by relying upon the same. Hon'ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 held that "It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. Nothing has been brought to the notice of this Commission or to the District Commission that the complainant had violated the relevant special condition with regard to Burglary.
17. The Surveyor vide his report dated 30.10.2019 (Ex.OP-1/2) has admitted the loss occurred due to incident of burglary, but has rejected the claim due to non-compliance of warranty of policy i.e. "Warranted 24 hrs security at each premises". In the terms and conditions of the policy, nowhere it has been mentioned that security guard is required for the purpose of 24 hours security. As per report of the Surveyor, he discussed the estimate of loss on telephone with the insured, which was to the tune of Rs.6-7 lakhs and he reserved the loss to the tune of Rs.5,00,000/-. It appears that the Surveyor was not interested to assess the loss properly, as he left the price of some of the items on account of non-supplying of invoices and further deducted First Appeal No.310 of 2020 13 20% on account of non submission of balance and at the end, he assessed the net payable amount as "Nil". In view of above, we are of the opinion that the report of the Surveyor is not conclusive one in the present case. The same issue was there before The Telangana State Consumer Disputes Redressal Commission of case "M.Thirupathi Reddy Vs. Bajaj Allianz General Insurance Co. Ltd." C.C. No.213 of 2015, decided on 17.04.2017, wherein it has been held that:-
"19. Coming to the report of the Surveyor, it may be stated here, that it is settled principle of law that the same is neither binding on the parties nor the Consumer Foras. Though the report of the Surveyor has got evidentiary value, yet, it cannot be said to be the final word."
The Hon'ble Supreme Court in judgment of case "New India Assurance Company Limited vs. Pradeep Kumar" (2009) 7 SCC 787 has held in para No.22, which is as under: -
"22. In other words although the assessment of loss by the approved surveyor is a pre- requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured."
Finding no force in the final survey report of the Surveyor, we hereby set aside the same.
18. The appellant/complainant could have been aware/conscious in case any such requirement of employing security guard was there in the policy documents, but the documents were not First Appeal No.310 of 2020 14 received well in time. The policy documents were received on 26.04.2019, which was after a period of 5 days of the incident of burglary and appellant/complainant had no means to have knowledge of any terms and conditions of the policy. Hon'ble Supreme Court in para No.14 of judgment of case Bharat Watch Company (Supra) held as under:-
"14. Having held this, the SCDRC also came to the conclusion that the exclusion would in any event not be attracted. The finding of the SCDRC in regard to the interpretation of such an exclusionary clause is evidently contrary to the law laid down by this Court in Harchand Rai (supra). However, the relevance of that interpretation would have arisen provided the conditions of exclusion were provided to the insured. The NCDRC missed the concurrent findings of both the District Forum and the SCDRC that the terms of exclusion were not made known to the insured. If those conditions were not made known to the insured, as is the concurrent finding, there was no occasion for the NCDRC to render a decision on the effect of such an exclusion."
In judgment of case Paresh Mohanlal Parmar (Supra), Hon'ble Supreme Court has held that in absence of insured being made aware of terms of exclusion, Insurance Company cannot rely upon exclusion clause to repudiate the claim.
19. In view of above discussion, notification issued by IRDA and judgments, we are of the considered view that the OP-Insurance Company has wrongly repudiated the claim of the complainant, which amounts to 'deficiency in service' and 'unfair trade practice' for which the appellant/complainant is entitled to insurance claim, compensation for mental harassment and agony as well as to litigation expenses. Accordingly, we set aside the repudiation letter dated 31.10.2019 issued by the OP-Insurance Company. Keeping in view of facts and circumstances of the case, the judgments relied upon by the First Appeal No.310 of 2020 15 respondent-Insurance Company are not applicable to the present case.
20. The appellant/complainant has claimed Rs.10,00,000/- on account of loss of insured articles, tyres and other articles and damages to the tune of Rs.2,00,000/- for mental agony and harassment. It is relevant to mention here that the complainant submitted item wise stock report to the police, vide Ex.C-2, wherein, he mentioned the loss of stolen stock to the tune of Rs.6,98,230/-. The OP-Insurance Company has failed to rebut this stock report before the District Commission as well as before this Commission. Accordingly, the appellant/complainant is entitled to an amount of Rs.6,98,230/- on account loss suffered by him due to said Burglary with interest. The Hon'ble Supreme Court in judgment of case "National Insurance Company Ltd. Versus M/s Hareshwar Enterprises (P) Ltd. & others" Civil Appeal No.7033/2009, decided on 18.08.2021 has held in para No.17 as under :
"17. One other aspect of matter which arises for consideration herein is with regard to the rate of interest. The learned counsel for the appellant contended that the interest rate at 12% per annum is excessive. The learned counsel for the respondent, however, contended that there was delay in payment of the amount payable to the respondent No.1 which was necessary to be compensated appropriately and the NCDRC was justified in that regard. Having considered this aspect, the rate of interest to be awarded in a normal circumstance should be commensurate so as to enable the claimant for such benefit for the delayed First Appeal No.310 of 2020 16 payment. There is no specific reason for which the NCDRC has thought it fit to award interest at 12% per annum. Therefore, the normal bank rate or thereabout would justify the grant of interest at 9% per annum. Accordingly, the amount as ordered by the NCDRC shall be payable with interest at 9% per annum instead of 12% per annum. To that extent, the order shall stand modified."
In view of above judgment of the Hon'ble Supreme Court, we are of the considered view that the grant of interest @9% per annum on the claim amount is sufficient to meet the ends of justice. Accordingly, the appellant/complainant is entitled to interest @9% per annum on the claim amount from the date of repudiation of the claim till actual realization.
21. In view of above discussion and judgments, we allow the appeal of the appellant/complainant by setting aside the impugned order dated 28.10.2020 passed by the District Commission. Resultantly, the complaint is allowed and the impugned order dated 28.10.2020 is set aside. The OPs are directed:-
(i) to pay Rs.6,98,230/- as loss suffered by the complainant with interest @ 9% per annum from the date of repudiation of the claim till actual realization for delaying the claim;
(ii) to pay Rs.20,000/- as compensation for mental harassment and agony; and
(iii) to pay litigation expenses to the tune of Rs.30,000/-.
The compliance of the order be made by the OP-Insurance Company within a period of 45 days from the date receipt of certified copy of the order, failing which, the appellant/complainant shall be entitled to First Appeal No.310 of 2020 17 receive interest @12% per annum on the awarded amount instead of interest @9% per annum.
22. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases and non-sitting of this Commission due to pandemic of Covid-19.
(JUSTICE DAYA CHAUDHARY)
PRESIDENT
(URVASHI AGNIHOTRI)
February 15, 2022 MEMBER
MM