National Consumer Disputes Redressal
Royal Sundaram Alliance Insurance Co. ... vs M/S. Dr. Mobile & Anr. on 10 April, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 172 OF 2014 (Against the Order dated 20/01/2014 in Complaint No. 10/2013 of the State Commission Andhra Pradesh) 1. ROYAL SUNDARAM ALLIANCE INSURANCE CO. LTD. A BLOCK, 5TH FLOOR, JEWEL PAVANI TOWERS, RAJ BHAVAN ROAD, SOMAJIGUDA, HYDERABAD 2. ROYAL SUNDARAM ALLIANCE INSURANCE CO. LTD., SUBRAMANIAM BUILDING, II FLOOR, NO. 1, CLUCB HOUSE ROAD, ANNASALAI, CHENNAI-600002 ...........Appellant(s) Versus 1. M/S. DR. MOBILE & ANR. REPRESENTED BY ITS PROPRIETOR MR. M. NAVEEN KUMAR GOUND, S/O. SHRI M. RAMCHANDER GOUD, 16-2-741/B/1, ASMANGADH, MALAKPET, HYDERABAD-36 2. STATE BANK OF INDIA REPRESENTED BY ITS BRANCH MANAGER, GADDIANNARAM BRANCH, 16-2-740/75/13, V.K. DHAGE NAGAR, HYDERABAD- ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MR. VINAY KUMAR, MEMBER HON'BLE MRS. M. SHREESHA, MEMBER For the Appellant : For Appellant : Mr. P.K. Seth, Advocate. For the Respondent :
Dated : 10 Apr 2015 ORDER O R D E R (Pronounced on 10th April, 2015) D.K. JAIN, J., PRESIDENT IA No. 1796/2014 (For condonation of delay).
For the reasons stated in the application, delay of 20 days in filing the First Appeal is condoned.
FA NO. 172 OF 2014 In this Appeal under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), Royal Sundaram Alliance Insurance Company Ltd. (for short "the Insurance Company") questions the correctness and legality of order dated 20.01.2014 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, at Hyderabad (for short "the State Commission" ) in CC No. 10 of 2013. By the impugned order, the State Commission, while accepting the Complaint filed by Respondent No. 1, a proprietorship concern, has directed the Insurance Company to pay an amount of ₹3,73,781/- along with interest @ 9% p.a. from the date of filing of the complaint till payment to Respondent No. 2 Bank, to be adjusted against the outstanding dues of loan account of the Complainant as also costs for litigation, quantified @ ₹5,000/-.
2. The Complainant, who was engaged in the business of sales and services of Mobile phones, availed loan facility from Respondent No. 2 Bank and got its premises insured by obtaining Standard Fire and Special Perils Policy, covering the property, other infrastructure and stocks for a total assured amount of ₹19,61,000/-. The policy was valid for the period from 10.02.2011 to 09.02.2012. The particulars of the items insured are as follows:-
"Contents (as per specification) S.No Description of property Sum Insured Rs 1 Computers - 3 nos 1,00,000 2 Printer - HP 20,000 3 Air conditioners - 2 Nos 60,000 4 TV CLD 32,000 5 Wall mount fans 3,600 6 Infrastructure 4,50,000 7 Mobile machinery 50,000 8 Glow Sign Boards - 6 Nos 20,000 9 Glass work 30,000 10 Partitions 12,000 Total 7,77,600 b. Specifically covered Property S.No Description of property Sum Insured Rs 1 Chairs - 6 Nos 14,000 2 Mobiles for Repairs 2,50,000 3 Stocks of Mobile 9,00,000 4 Electrical Fittings 20,000 11,84,000
3. Unfortunately, on 10.04.2011, at about 10.00 p.m., when the shop was closed, fire broke out in the premises and the entire infrastructure and the stocks lying therein were burnt/damaged. The fire was reported to the Fire Department by an outsider. According to the Fire Department the cause of fire was 'electric origin'. The Complainant lodged his claim with the Insurance Company for indemnification of loss due to fire for a sum of ₹21,14,100/-. On receipt of the said information, the Insurance Company appointed one Mr. M.V. Subba Rao as the Surveyor to assess the loss. The Surveyor vide his report, received by the Corporate Claims Department of the Insurance Company on 19.03.2012, while opining that the cause of loss was because of electric circuit, assessed the net liability at ₹3,23,781/- only as according to the Surveyor the Complainant had not submitted the bill books, invoices, proof of purchases to establish the availability of goods and books of accounts for the claim made by him. On 09.05.2012, the Insurance Company repudiated the claim on the ground that the accident was not conclusively established, stating thus:-
" It is noted in the Final Survey report that bill books/invoices/purchase proof and the like were not submitted and the existence of property claimed to have been lost could not be conclusively established. The surveyor confirms that except statement of claims no proper books of accounts were submitted to them. The nature of trade being 'dealing with the mobile handsets' - no proof of identity of those lost and their IMEI NOs which are unique to each handset, were submitted. The sale bills did not have the handset serial nos and purchase bills were unsigned. In respect of mobile held for repairs, inward register, and duplicate acknowledgment slips were not submitted.
We also utilized the service of M/s Sathyan Investigations to investigate on genuineness of occurrence, existence of material claimed to have been lost and other aspects of loss. The investigating firm comprising of a Retired Superintendent of Police and Retired Additional Superintendent of Police. The Investigators have highlighted that there had been defaults in repayment of the loan taken and the business was not economically viable.
Considering the circumstantial evidences and based on the reports of Sathyam Investigators and Final Survey Report of MVS Associates, it is observed the loss of property as claimed has not been established conclusively. In the absence of such conclusive documentary proof and failure to establish the extent of loss, we regret, we are not in a position to consider the claim.
In the present circumstances, we are restrained to convey that the claim is not being considered. In case, if there are any other facts to the contrary and if the existence of the property and their subsequent loss could be established, you may place them before us, so that the decision might be revisited, if so required." (Emphasis Supplied)
4. Thus, the claim came to be rejected primarily on the ground that the extent of loss to the property, on account of fire had not been established conclusively.
5. Being aggrieved, the Complainant filed Complaint before the State Commission, claiming compensation of an amount of ₹21,14,100/- with interest @ 18% p.a. with a further direction to the Respondent Bank to settle his account of ₹5,00,000/-. A claim of ₹5,00,000/- towards compensation and ₹20,000/- towards costs was also made. Upon consideration of the pleadings and material placed before it, the State Commission has held that the Insurance Company has not assigned any reason for not settling the claim in so far as assessment of the loss of the insured items, made by the Surveyor is concerned. According to the State Commission, non-consideration of the report of the Surveyor tantamounted to deficiency in service on the part of the Insurance Company. Accordingly, the State Commission allowed the Complaint with the afore-stated directions. The State Commission has also granted liberty to the Complainant to approach the Civil Court for the remaining claim. Hence, the present Appeal by the Insurance Company.
6. Having heard Mr. P.K. Seth, Learned Counsel appearing for the Insurance Company, we are of the opinion that the Appeal is devoid of any substance and hence does not merit admission.
7. It is not in dispute that there was a fire in the shop. The extent of fire is stated in the final Survey Report of the Surveyor nominated by the Insurance Company, in the following words:-
" The fire was very severe in nature. The contents - Furniture, False Ceiling, Electrical Fittings, Office Equipment, Partitions, Cup Boards, etc. totally burnt/charred. Most of the office equipment were beyond identification. Various accessories such as Mobile Chargers etc. that were traced in the South Wall Cub Board were also found burnt, melted/formed as a lump. Some of the Mobiles retrieved from this area were beyond identity and mostly the plastic panels were found melted and formed as a lump. The Electrical wiring in the premises was also burnt/charred and hanging loose....."
8. The above observations by the Surveyor leave little scope for doubt that the insured items, be it the furniture, computers, etc. valued at more than ₹9,00,000/-, or the stocks of Mobiles (valued at ₹9,00,000/-) were in the premises and had suffered extensive damage on account of the fire. Evidently, because of non-production of the documents asked for by the Surveyor resulted in his assessing the loss at only ₹3,73,781/- as against the claim of over ₹20,00,000/-. From the afore-extracted letter of repudiation, we are unable to decipher any reason as to why the loss assessed by their own Surveyor did not find favour with the Insurance Company.
9. In this regard, it would be apposite to comment on the relevance of the report of a Surveyor nominated by the Insurance Company, in settlement of claim preferred under the Standard Fire & Perils Policy. The role of a Surveyor figures in Section 64-UM(2) of the Insurance Act, 1938 which reads as follows:-
" 64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as 'approved surveyor or loss assessor'):
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor."
10. The said provision came up for consideration of the Hon'ble Supreme Court in New India Assurance Company Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787, wherein it was observed as follows:-
" The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is Rs 20,000 or more, the loss must first be assessed by an approved surveyor (or loss assessor) before it is admitted for payment or settlement by the insurer. The proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor).
In other words although the assessment of loss by the approved surveyor is a prerequisite 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 the 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."
11. Though it is true that in view of the above enunciation of Section 64 UM (2) of the Insurance Act, a Surveyor's Report is not the last word and it is not binding upon the Insurer and the insured, yet it needs little emphasis that an Insurance Company cannot brush it aside without any cogent and legitimate reason, to be recorded in writing, for departing from such a report.
12. In the present case, as noticed above, the claim was repudiated mainly on the ground that the Complainant has failed to submit the proof of identity of the lost mobile handsets, details of the mobiles received for repairs, inward register and duplicate acknowledgement slips, etc. Assuming for the sake of argument that the Complainant did fail to furnish precise details in respect of each and every mobile set, new or old, yet in light of report of the Surveyor, there was no valid reason to deny compensation for the damage to the furniture, computers, Air-Conditioners and other insured items, mentioned in the opening paragraph of this order, on account of the fire, which according to the Surveyor was 'severe in nature'. We may note that the insured value of other insured articles, excluding the value of the mobiles was approximately ₹8,00,000/-. In our opinion, rejection of claim atleast in respect of these articles, on the ground that the precise details of the stocks of mobiles, etc. were not furnished to the Surveyor, was wholly unjustified. We are convinced that the State Commission has not committed any illegality, legal or factual, in setting aside the decision of the Insurance Company, repudiating the entire claim of the Complainant.
13. Resultantly, the appeal, being bereft of any merit, is dismissed in in limini. The amount of compensation awarded by the State Commission and deposited by the Insurance Company in this Commission in terms of the order dated 22.05.14 shall be directly remitted by the Registry to Respondent No.2 Bank forthwith. However, the statutory deposit of ₹35,000/- shall be transferred to the Consumer Welfare Fund.
......................J D.K. JAIN PRESIDENT ...................... VINAY KUMAR MEMBER ...................... M. SHREESHA MEMBER