State Consumer Disputes Redressal Commission
Adf Foods Ltd. vs National Insurance Co. Ltd. on 12 October, 2021
Details DD MM YY
Date of Judgment 12 10 2021
Date of filling 07 08 2009
Duration 05 02 12
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,
GUJARAT STATE AT AHMEDABAD.
Court-3
Complaint NO. 39 of 2009 Dt: 12.10.2021
The Secretary,
ADF Foods Limited,
C/23/24, Acme Industrial Estate,
3rd Floor, Sewree Bunder Road,
Sewree, Mumbai. ...Complainant
Vs.
The Branch Manager,
National Insurance Co. Ltd.,
Direct Agent Branch,
2nd Floor, Contractor Building,
Above Corporation Bank,
Ghodia Bazar, Nadiad. ...Opponent
Appearance: Mr. Rajiv Mehta, Ld. Advocate for the Complainant
Mr. M. J. Shelat, Ld. Advocate for the Opponent
Coram: (Shri S. N. Vakil, Judicial Member)
(Smt. J. Y. Shukla, Member)
Order by Shri S. N. Vakil, Judicial Member
1. The complaint is that the complainant - ADF Foods Ltd. obtained (1) Floater Policy bearing No. 321303/11/06/3300000008 for the period from 01.04.2006 to 31.03.2007 for Rs. 6,00,00,000/- covering risk of stock fruit products condiments factories (including pulp making) for location: Shed c/1-4, 41, 42, 43 GIDC, Nadiad, Plot No. 83-86, GIDC, Nadiad.; (2) Std. Fire and Spl. Peril Policy bearing No. 311303/11/06/3300000009 for the period from 01.04.2006 to 31.03.2007 for Rs. 1,50,00,000/- covering risk of ED Raw Material and/or semi finished and/or finished goods, and/or packing materials, K.S.P CC-09-39 Page 1 of 38 and/or Insured trade goods for location Road, Land and S&Vanamalinagar, 387001; (3) Std. Fire and Spl. Peril Policy bearing No. 311303/11/06/3300000160 for the period from 02.05.2006 to 01.05.2007 for Rs. 2,75,00,000/- covering risk of buildings only for Rs. 1,60,00,000/- Plant and Machinery for Rs. 1,15,00,000/- for location Plot No. 83-86, GIDC, Nadiad; (4) Std. Fire and Spl. Peril Policy bearing No. 311303/11/06/3300000166 for the period from 02.05.2006 to 01.05.2007 for Rs. 10,00,000/- covering risk of Building only for location Plot No. 83-86, GIDC, Nadiad; (5) Std. Fire and Spl. Peril Policy bearing No. 311303/11/06/3300000168 for the period from 02.05.2006 to 01.05.2007 for Rs. 80,00,000/- covering risk of Building and F/F/F Building for Rs. 50,00,000/- Furniture, Fixture and Fittings for Rs. 30,00,000/- for location Plot No. 83-86, GIDC, Nadiad; and (6) Std. Fire and Spl. Peril Policy bearing No. 311303/11/06/3300000167 for the period from 02.05.2006 to 01.05.2007 for Rs. 2,15,00,000/- covering risk of Building Rs. 70,00,000/- Plant and Machinery Rs. 1,45,00,000/- for location Plot No. 40, 40/1, 40/2, GIDC, Ind. Estate, Nadiad, Dist: Kheda, from the opponent - The National Insurance Company Ltd., alleging that on 18.03.2007 at about 4.20 p.m., fire took place at first floor of the factory building at 83-86, GIDC Nadiad with spread over entire first floor area. It could not be put off, the complainant reported it to the opponent immediately and information about the loss due to fire. The insurer then appointed surveyor about making assessment of situation and to submit their report for the assessment of loss. The complainant after removal of debris and saved salvage estimated loss and reported it to the opponent. The surveyor so appointed visited the factory premises, seen the site where the loss occurred, also took photographs and issued certain K.S.P CC-09-39 Page 2 of 38 instructions for separation of materials etc. to assess the actual loss suffered for submission of report to the insurer for final settlement of claim under the policy. The complainant also gave all such information at the earliest opportunity as asked by the surveyor. The complainant after verifying the records and through application of reasonable criteria submitted its claim for loss to the extent of Rs. 2,48,77,493/- as (1) Loss of building Rs. 30,31,000/-, (2) Loss to Plant and Machinery Rs. 49,51,500/-, (3) Stock (Packing Material) Rs. 1,64,51,034/-, (4) Stock (Raw material, intermediate, Finished goods) Rs. 1,87,509/-, (5) Cost of removal of debris Rs. 2,60,950/-, (6) Consultancy fee and value of replacement cost Rs. 2,50,000/-, totaling to Rs. 2,48,77,493/-. All the details, prints, layout plans, estimates of experts, bills, vouchers, supporting documents and proofs were provided to the surveyor so that they can assess the claim and verify the genuineness of claim amounts. The surveyor had made several visits, took measurements, asked for explanations and also seen the past record to understand and verify the system of accounting etc. The damage being on higher side, being the first incident of fire the company suffered heavy financial crises, requested for immediate ad-hoc payment till the claim is finally assessed and decided by the insurer, but the surveyor turned it down. As such the principle of indemnification always supports that further loss requires to be prevented and ad-hoc payment would provide better indemnification to insured rather than little higher amount is paid after a long period of time. The surveyor raised false query as to coverage under the policy and refused to hear anything. The insurer could have provided interim finance however they chose shelter of surveyor‟s refusal though it was not based on any concrete reasoning. The complainant requested for ad- K.S.P CC-09-39 Page 3 of 38 hoc payment by its letter dated 02.05.2007, 21.06.2007, 04.08.2007, 14.09.2007. The surveyor and insurance company were duty bound to take immediate steps for early settlement of claim so as to prevent the insured from recurring loss. The insurer was duty bound to settle claim within reasonable period of time say in this case six months, however the opponent and the surveyor remained silent for about six months and no communication was received from either of them. The complainant received the letter from insurance company dated 06.08.2008 after about 15 months of the incident and offered a sum of Rs. 1,31,45,309/- towards the settlement of claim. The insurer asked the complainant to sign the voucher on dotted line and to return so as to enable them for issuance of cheque for the said amount. Since the loss was on higher side than the amount offered, the complainant initially refused to accept the same and insisted that the insurer should review the claim and should offer as per the claim put forward by the complainant. The complainant also tried to convince that transactions of the complainant company are transparent in nature, has nothing to hide and never tried to inflate the claim amount, and under such circumstances the insurer should not make unreasonable deductions from the claim amount. Though few personal discussions and meetings were arranged to explain the difficulty faced by the complainant in case of acceptance of lesser amount towards the settlement of claim. The opponent was asked repeatedly for showing the surveyor report so as to find out the deductions wrongly applied if any but the opponent turned down the request saying that report cannot be shown as it is confidential document. On one hand the stringent financial crises, pressure from bankers etc. due to limited cash flow whereas on another hand the K.S.P CC-09-39 Page 4 of 38 insurer was delaying the release of fund for want of final discharge for the claim under the policy. As such insurer ought to have issued the above amount and then ought to have asked the complainant to establish any further claim if payable under the policy. But on the contrary the insurer company fraudulently suppressed the correct information about the basis of deductions applied in the final assessment of claim. Thus the insurer has enjoyed its mightless due to hard pressed financial condition of the complainant company. After series of communication, requests and explanations, the insurer then agreed only to the extent of supplying information as to how figure of Rs. 1,31,45,309/- has arrived and the amount sanctioned under different head. Information as provided was not throwing any light on the manner and mode of calculation made by the surveyor. When the complainant asked for details of calculation the opponent did not supply it for the reason best known to them and willingly chosen to keep the complainant in dark about the basis of assessment finalized by the surveyor. The complainant being insured has got all rights to know and verify the correctness of the figure taken, manner in which deduction applied and also the procedure applied to arrive at just and fair assessment. It was necessary as the insured has to suffer loss for no fault on its part and all supporting documents having been submitted for fair assessment. Under these hard pressed circumstances, the insurer company insisted for discharge for which the insured was never agreeable but as it was left with no other option but to sign the voucher and accept the cheque unwillingly, under duress, under the oppressive and overwhelming influence and had to passed through coercive bargain and was compelled to issue discharge. While obtaining discharge from the insured it is very much necessary that it should be K.S.P CC-09-39 Page 5 of 38 valid and by lawful means. However in the instant circumstances, the insurer company obtained discharge under compulsion and such discharge is never tenable in the eyes of law. When the discharge voucher was submitted to the insurer company the insurer then release the fund though the complainant company was not satisfied with the assessment made by the surveyor. The complainant thereafter tried to know the correctness of the amount assessed by the surveyor and for that utilized the provisions of Right to Information Act for supply of copy of surveyor's report, which was supplied to the complainant company's director in the month of October 2008. While going through the surveyor's report, it has been observed that there are numerous and apparent errors, omissions made by the surveyor and that has not been considered by the opponent insurer company while offering the above said amount. If the errors and omissions have been considered at the time of final settlement of claim by the company the figure would have been different and the aforesaid amount would have been increased to a large extent. It is true that since the opponent insurer has appointed qualified surveyor recommendations made by him are generally acceptable to parties but it does not mean that insurer should blindly follow the recommendations of the said surveyor. On the contrary, the insurer has to apply its mind and to assess the actual loss suffered and then to offer the claim amount for final settlement being contracting party has to take decision and not the surveyor. The errors and omission could have been detected if the documents supplied by the complainant would have been perused minutely. Not only had that but the said surveyor also adopted wrong method to work out the assessment of loss. The methods of calculation well accepted in the trade practice were knowingly ignored and just to K.S.P CC-09-39 Page 6 of 38 bring the assessment on lower side, the surveyor had accepted the method which is nowhere in practice and also then tried to declare it scientific method of calculation. The complainant was also shocked to learn that arbitrary method had been applied to work out the assessment and therefore written a letter dated 31" December 2008 and also explained in detail how the surveyor had committed mistake in assessment of claim. The surveyor had wrongly assessed the loss on lower side and an amount of Rs. 13,46,166/- is still payable on this count and by wrong deduction because of errors, omissions on his part of surveyor caused loss of Rs, 48,39,907/- to the complainant company. The surveyor also reduced the amount of Rs. 61,861/- which is payable as 1 % of claim for removal of debris. Thus in all, the opponent paid less Rs. 62,47,934/- to the complainant. The details thereof are given in the aforesaid letter dated 31 December, 2008. Even after the error and omissions were brought to the notice of the opponent it remained silent on the issue and gave no reply which indicates that the actions taken by the insurer company were intentional one and since they were in knowledge of the fact they willingly did not offer the copy of survey report or they were so negligent in their duties that they did not care to look into the surveyor's report. Had it been supplied to the complainant before acceptance of the amount towards settlement the complainant would not have accepted the lesser amount and the insurance company would have been made further liable for Rs. 62,47,934/-. When no reply was received from the opponent, the complainant wrote letters dated 07.02.2009 and 18.03.2009 (the complainant has acknowledgement for the same) but these letters were not replied. Legal notice dated 15.04.2009 asking the balance amount of Rs. 62,47.,934/- together with interest @ 12 % from K.S.P CC-09-39 Page 7 of 38 the date of voucher through which settlement was offered, the reply thereto was vague and baseless since there was no reply as to how the complainant's claim for wrong and arbitrary assessment made by surveyor is unjustified. The only stand taken by the opponent insurer is that the complainant has signed voucher without any objection, notice given after lapse of months and wrongly stated that calculations were communicated to the complainant company. Hence the complainant gave another legal notice dated 28.05.2009, but no reply has been received till date. The insured being consumer had all rights to verify the correctness of calculations, genuineness of the method adopted and also to see that whether assessment made is based on concrete basis or not. For which, it was very much necessary for the insurance company to disclose all material facts within their knowledge and then asked the insured for complete discharge. However, the opponent knowingly and with mala fide intention withheld the surveyor's report and prevented the complainant to find out the mistakes committed by the surveyor. It has restricted the scope of just and fair decision from the complainant either to accept or to refuse the amount. This is nothing but clear case of deficiency in service. Wherein the opponent insurer had acted beyond the well known principles of utmost good faith. Conduct of the officers of the opponent insurer company to compel the insured to accept whatever amount was offered should be received without any protest is reprehensible as it takes away the right of the insured consumer to approach appropriate authority for claiming adequate being reimbursement. Officer of the insurance company cannot harass the insured by compelling to sign a voucher and accept whatever amount of reimbursement is offered by the insurance company in full and final settlement of claim. The complainant K.S.P CC-09-39 Page 8 of 38 submits Hon'ble Supreme Court in the case of Central Water Transport Corporation Ltd Vs. Tarun Kant Sengupta, and United India Insurance company Vs. Ajmersingh Cotton & General Mills, observe that the opponent insurer has enjoyed the benefits of its mightiness and compelled the complainant insured to accept in wrong assessment and thereby cause deficiency in service and also unfair practice and for which complainant is entitled to claim compensation from the opponent insurance company. For of this the opponent insurer company claims Rs. 62,47,934/- with 12% interest from 06.08.2008 till realization and Rs. 5,00,000/- towards compensation for causing harassment and for indulgence in unfair trade practice.
2. The defence of the insurance company limited vide affidavit in reply - written version is of denial. The complaint is not maintainable as there is a full and final settlement between the complainant and the opponent insurance company. The complainant has not disputed the assessment of loss made by surveyor but it is disputing calculation of value at risk made by surveyor for arriving at loss. Hence, complaint is for calculation error as alleged in arriving at loss which is not maintainable. The complaint involves disputed question of fact and law which may be relegated to civil court for such calculation error as alleged. The complainant has received a sizeable amount from the opponent without raising any objection at relevant point of time accepted the amount as full and final settlement. After receiving the report of surveyor quantifying the damages of Rs. 1,31,46,523/- net loss, Rs. 1,214/- has been deducted therefrom towards Re-instatement premium and the insurance company has intimated the complainant vide its letter dated 05.08.2008 along with the voucher of amount i.e. Rs. 1,31,45,309/. The complainant K.S.P CC-09-39 Page 9 of 38 a mighty company with open eyes signed the discharge voucher of the said amount in which it has accepted the said amount as full and final settlement of its claim. The complainant vide its letter dated 06-08-2008 has sent discharge voucher to opponent insurance company along with the No Objection Certificate of two different bankers namely State Bank of India and State Bank of Hyderabad, so the said amount under the claim can be issued in favour of Bank of Baroda account A.D.F. Foods Limited. The complainant vide said letter has also asked about details of assessment for its review along with the cheque to be sent to it. Therefore, opponent company vide its letter dated 07.08.2008 has not only sent cheque of said amount but also supplied the details of assessment of loss as per surveyor's report to complainant, as desired by it. Had there been any coercion, undue pressure, influence etc. as alleged, the complainant could have immediately protested such assessment of loss but complainant remained silent for such a long time and for the first time raised the dispute about calculation made by surveyor vide its letter dated 31.12.2008. So, the say of complainant that opponent has taken undue advantage of the situation of the complainant as alleged, is totally false, frivolous, and baseless, far away from truth. It is not true and not admitted that opponent has not supplied the report of surveyor to complainant prior to making payment and or signed discharged voucher. The insurance company has never denied to complainant for giving report of surveyor but it was never asked by the complainant and vide its letter dated 06.08.2008 when complainant had asked about details of assessment for its review, then vide letter dated 07.082008, opponent company has supplied such details. The opponent company has never hidden anything from complainant. After receipt of K.S.P CC-09-39 Page 10 of 38 said the letter, the complainant has remained silent for quite long almost 4 months which itself suggested/proved that there was no undue influence, pressure, coercion etc. played by opponent company as alleged. The complainant has not disclosed all the said facts before this Commission. The complaint may be dismissed on the ground of suppression of material fact. After receipt of the said discharge voucher as well as No Objection Certificate from the Bankers, the insurance company has immediately issued a cheque of Rs. 1,31,45,309/- being full and final settlement of the claim amount and same has been received by the complainant. Therefore, once the complainant has accepted sizeable amount against the claim in question, the complainant cannot be permitted to re-open the claim under the guise of undue influence, coercion, unfair trade practice as alleged. Once there is a full and final settlement and the complainant being a registered public limited company having all infrastructure and businesses as mentioned in the complaint, no prudent person would accept that complainant had no other option but to sign the voucher and accept the cheque unwillingly, under duress and overwhelming influence and had to pass through coercive bargaining. The complainant could have registered its protest prior to offer of the opponent insurance company and could have easily prayed for report of surveyor which is admittedly not done by the complainant. Neither at the time of receiving discharge voucher for full and final settlement sent by opponent company nor immediately thereafter, the complainant had ever shown its unwillingness or dissatisfaction against the loss calculated by the surveyor. However, for the first time vide its letter dated 31.12.2008, it has shown its dissatisfaction against the calculation made by the surveyor for arriving K.S.P CC-09-39 Page 11 of 38 at loss. This is nothing but an after-thought and subsequent communications, notices and letters of the complainant is to get more amounts from the opponent company. Surveyor was immediately appointed after receipt of a report of surveyor under Section 64 (UM) (2) of the Insurance Act, the insurance company has settled the claim with complainant. Therefore, once offer of opponent company has been accepted as a full and final settlement by the complainant without any protest and received payment accordingly then such contract is concluded and it will not lie in the mouth of the complainant that it has received such amount in compelling circumstances due to pressure from all quarters. Nothing has been produced except the bare words of the complainant that it was under duress coercion and/or facing financial problem etc. as alleged and same is contrary to what is stated in para-1. The observation and expression made by Hon'ble Apex Court in respective decisions are not applicable to facts of present case. As per the decisions of Hon'ble Apex Court and National commission, if the insured has not objected delay in receipts of amount prior to its acceptance then such insured cannot subsequently complain of about delayed payment, undue influence etc. and not entitled for grant of any such reliefs as prayed in present complaint. The complainant has admitted in para-9 of complaint that it being not an expert in the subject i.e. calculating loss, then is not competent to make any comments on such report. The complainant has vide its letter dated 31.12.2008 given its calculation, which is based on its own presumption and assumption, far away from calculation ought to have been made in such type of loss. The surveyor has been appraised about said letter and in that connection, all points have been clarified by surveyor in his affidavit to be produced along with K.S.P CC-09-39 Page 12 of 38 this reply which may be treated as part of this reply. The complainant has deliberately not produced copy of insurance policies and instead placed details of such policies prepared by it. It ought to have placed copy of such policies on record but with an oblique motive, same have not been produced on record. The insurance company has decided claim in question according to the report of surveyor and such report of the surveyor being an expert opinion cannot be brushed aside unless contrary evidence has been laid by the other side. The complainant has failed to place on record and/or supplied to the insurance company any such expert opinion/report of the surveyor to be treated as part of this reply. The complainant being a public limited company and had availed insurance services for commercial purpose, complainant is not maintainable before this Commission. The judgment of Hon'ble National Commission in a case of National Insurance Company Ltd. Vs. Harsolia Motors Ltd. has been approved by the Supreme Court, therefore, in view of judgment of this Commission, complaint is required to be dismissed. There is no deficiency in services. The complaint be dismissed.
3. Heard Learned Representative Shri Rajiv N. Mehta, for the complainant and Advocate Shri M. J. Shelat, for the opponent - The National Insurance Company Ltd.
4. For the complainant - Sakarlal J. Golvala has filed affidavit and for the insurance company - Pratapsingh B. Sisodhiya and surveyor Kalyan Prasad Sen have filed affidavit in turn. The cross examination by interrogatories to Pratapsingh B. Sisodhiya was answered by H.H.Desai.
5. The complainant put claim for Rs. 2,48,77,493/- for damages by fire in its premises 83/86 GIDC Assets, Nadiad, Dis. Kheda, Gujarat as follows: K.S.P CC-09-39 Page 13 of 38
Sr. Description Amount Value of Net
No. (Rs.) Salvage Amount of
(Rs.) Claim (Rs.)
1. Building 30,31,000
2. Plant & Machinery 49,51,500
3. Stocks (Packing Materials) 164,51,034
4. Stocks (R.M/IM/FG) 187,509
254,500 248,77,493
5. Removal of debris 260,950
6. Consultancy fees for reports on 250,000
loss asses & value of
replacement cost
Total: 251,31,993 254,500 248,77,493
6. The insurance company gave details of assessment of loss as per survey report for Rs. 1,31,45,309/- as under:
Sr. Description Gross Adjusted Net Assessed
No. Loss (Rs.) Loss (Rs.)
1. Building 11,06,420 5,30,250
2. Plant & Machinery 14,59,775 9,62,474
3. Packing Material 1,16,63,799 1,16,63,799
Total 1,42,29,994 1,31,56,523
The Net Assessed Loss (Rs.) 1,31,56,523
Less : Excess as per Policy 10,000
Re- Instatement 1,214
The Net Claim Amount Rs. 1,31,45,309
7. The complainant pleads its letter dated 31.12.2008 to be read as part of this complaint whereby the amount of Rs. 62,47,934/- is claimed (A) as loss to the buildings by surveyor‟s errors and omission amounting to Rs 5,76,171/-, (B) loss to the plant and machinery by his error/omission amounting to Rs. 2,01,021/-, (C) loss to the stock of raw material, intermediate and finish goods by surveyor‟s omission amounting to Rs. 1,87,509/-, (D) loss towards consultancy fees by error/omission of surveyor amounting to Rs. 2,50,000/-/, (E) amount on account of ad- hock arbitrary deduction Rs. 48,39,907/-, and (F) costs of removal of debris by error/omission amounting to Rs. 1,31,465/-, totaling into exact 61,86,073/- + removal of debris at 1% thereon exact Rs. 61,861/-, K.S.P CC-09-39 Page 14 of 38 totaling 62,47,904/-. For the complainant-Dilip S. Golwala has filed affidavit below the complaint that he has competent officer of the complainant company, authorized to file this complaint against the insurance company for un-paid insurance claim, is presently well conversion facts of the case, have perused the documents relating to this case, the contents of the complaint petition are to incorrect and has been corrected recorded as per their specific instructions in this regard, have not conceal any part of documents and has been produced as it is without any interpleading or manipulation therein, and is ready and willing to produced original copies as and when asked for. The complainant company was not given copy of survey report for verification of assessment and related details, the copy of survey report was received through application under RTI Act. Thereafter the insurer company was informed about the mistakes, omission and error etc. but did not take any care for review of claim. And that insurer company did not make payment discharge voucher is signed. Along with the complaint the documents produced are: Complainant‟s letter dated 31.12.2008, letter dated 18.03.2009 asking for positive and prompt response to it, legal notices dated 15.04.2009, insurance company reply thereof dated 15.04.2009, complainant‟s further reply to it through its advocate dated 28.05.2009 and report by surveyor of the insurance company dated 12.03.2008. In his further affidavit Ext:4 denies that the complainant company has disputed calculation of value at risk made by surveyor for arriving at loss. The manner and the mode in which calculation has been made is not standard and as per excepted practice. He denies that even in case of calculation error especially when the same has been considered when put to their notice, the complaint cannot lie as canvassed by the K.S.P CC-09-39 Page 15 of 38 opponent. And also denies that merely because some complicated issues are involved and requiring illegal evidence the matter would not be maintainable. Demand of survey report was made and only extract was supplied. Surveyor‟s report was obtained through another route and after studying the same necessary notices were prepared and approval of higher management was obtained. In this administrative procedure few days have spend and therefore dispute was raised in December 2008 but merely because some delay, the entire genuineness of the claim cannot be doubted and that too alleging falsely to take disadvantage of misdeed of surveyor. He denies that merely because the insurer company has adopted certificate to assess, the complainant company cannot make any comment on the report of the surveyor. Errors and omissions are always acceptable at any stage. The insurance company does not want to consider even the genuine mistake of calculation of the surveyor and denies that the calculation made by the complainant company is not as per the standard practice and therefore not admissible as alleged. Such calculation is based on presumption and assumption or far away from the calculation ought to have been made in such type of cases. Affidavit of surveyor places on record does not explain the queries raised by the complainant company and the answers given therein are far from the truth and therefore his affidavit is of no value. He denies that the copy of insurance are deliberately not produced. Facts stated in the affidavit of the surveyor are also not correct and therefore not admitted. In cross- examination by interrogatories, he answers that he is holding post of General Manager (Accounts and Finance) in the complainant‟s company. The claim was prepared and lodged under his supervision to the insurance‟s company. Mr. Maheshbhai R. Patel was holding post of K.S.P CC-09-39 Page 16 of 38 Manager Accounts, Nadiad, had prepared and lodged claim under his supervision. He is ready and willing to produce statement of accounts for the financial year 2006-07, 2007-08, and 2008-09 and the copies of annual accounts are attached herewith. The letter dated 31.12.2008 was signed by Mr. Dhiren Shah in his capacity as Chief Financial Officer of the company. He had left the company thereafter. He admits that complainant has not obtained any expert opinion to controvert the report of the surveyor appointed by the opponent but it was not necessary since the question is of interpretation of the policy. With reference to the question regarding the evidence to establish the error on the part of the surveyor of the opponent, he says that contents of policies are sufficient and over and above this there is a letter from the complainant which is self explanatory in nature. With reference to the question as to the assessment made by surveyor was in accordance with the terms and condition of the policy, he says that it was not within coverage under the policy and the method adopted are contrary to well accepted and established procedure of loss assessment.
8. The surveyor assesses the loss for building (Cl. 13.1). He writes that the insured has claimed total amount of Rs. 30,31,000/- towards estimated costs of repair/re-construction of the fire affected/damaged building. The abstract from the Insured‟s claim is:
Sr. Description Particulars of Amount (Rs.)
No. Quotation
1. Construction of triangle godown Quot . No. 13,50,000
shed including supply of GC/07/08/007
material, fabrication, erection & dated 04.04.2007 of fitting of roof sheet M/s. Bharat Electro Instrument Mfg. Co., Nadiad
2. Construction of damaged area of Quot. Dated 16,81,000 1st floor 23.04.2007 of M/s.
Er. Shalin K. Shah,
K.S.P CC-09-39 Page 17 of 38
Nadiad
Total: 30,31,000
And that insured have also claim amount of Rs. 2,60,950/- as cost of removal of debris and Rs. 2,50,000/- towards the consultancy fees for report on loss assess and value of replacement cost. It is says that the loss is being assessed with the considerations as regards basis of indemnification, depreciation, salvage cost towards removal of debris, architect, surveyor and consulting engineer‟s fees and assess the loss for building as 13.1.6:
Total extensively burnt/damaged area as measured by us (725.29 sq. mtr. x 10.74) : 6,753.16 sq.ft. Partly affected area 526.78 sq.mtr. as quantified by us Allowable 40% of 526.78 sq.mtr.
(i.e, 210.71 sq.mtr. x 10.74) :2,263.02 sq.ft.
_________________
Total Damaged Area :9,016.18 sq. ft.
__________________
Allowable Reconstruction cost of damaged
structure 9,016.18 sq.ft. x Rs. 200/- per sq.ft.
[as discussed at para 13.1.1 above] :Rs. 18,03,236
Less : Average Depreciation of 2.5% totalying to 32.5% :Rs. 5,86,052
for utilization of around 13 years
[as discussed at para 13.1.2 above] _______________
: Rs. 12,17,184
Less : Salvage of 10%
[as discussed at para 13.1.3 above] : Rs.1,21,718
_______________
:Rs.10,95,466
Add: Removal of debris 1%
[as discussed at para 13.1.4 above] :Rs.10.955
_______________
Net Assessed Loss :Rs.11,06,420
_______________
Therefore,
(13.1) Net Assessed Loss for Building :Rs. 11,06,420
K.S.P CC-09-39 Page 18 of 38
9. The complainant as in its letter dated 31.12.2008 states „while we accept assessment of loss calculated in para 13.1.6, we do not agree with the calculation of Value at Risk calculated in para 13.1.7.
10. The surveyor stated as to value at risk (13.1.7) as:
Sr. Policy No. Location
Period of Sum Insured
No. Insurance (Rs.)
1. 311303/11/06/3100000160 Plot No. 83 to 02.05.2006 1,60,00,000 86, GIDC, to Industrial Estate, 01.05.2007 Nadiad, Dis:
Kheda
2. 311303/11/06/3100000166 GIDC, 02.05.2006 10,00,000 Industrial to Estate, Nadiad, Dis:
01.05.2007 Kheda
3. 311303/11/06/3100000168 GIDC, 02.05.2006 50,00,000 Industrial to Estate, Nadiad, Dis:
01.05.2007 Kheda
4. 311303/11/06/3100000167 Plot No. 4., 02.05.2006 70,00,000 40/1, 40/2, to GIDC, Industrial 01.05.2007 Estate, Nadiad, Dis:
Kheda Total: 2,90,00,000 And writes, in absence of any specific capitalized cost for the spocific Building /Blocks location-wise, he has taken into consideration the Fixed Asset Register as furnished by the Insured and from the Fixed Asset Register the present day Market Value of the insured Buildings for all locations at Nadiad, are evaluated as under:
Sr. Description Year of Original Price Average New No. Construction/ Capitalized Index as Price Reconstruciton capitalization Cost at the Index at Cost at March time of March 2007 Inst. / 2007 Capital
1. Factory Building 02.06.1991 2000,000.00 199 519 5,216,080.40 1
2. Factory Building 31.08.1992 1696,202.61 223 519 3,947,664.37 5
3. Factory Building 31.08.1992 23,877,081.46 223 519 5,55,70,427.25 at C-40-41
4. Factory Building 30.06.1993 3736,575.00 244 519 7,947,878.79 K.S.P CC-09-39 Page 19 of 38 2
5. Factory Building 01.04.1994 1672,680.00 259 519 3,351,818.22 3
6. Factory Building 01.04.1994 3665,078.59 259 519 7,344,308.06 4
7. Factory Building 29.11.1997 100,000.00 331 519 156,797.58 9
8. Shed 01.07.2001 134,267.50 426 519 163,579.42
9. Roofing Shed 31.03.2002 735,729.15 426 519 896,346.08 Building
10. Borwell 30.05.2002 77,970.00 447 519 90,528.93
11. Completion of 30.06.2002 685,271.07 447 519 795,650.30 Work
12. Factory Building 30.11.2003 13,750.00 463 519 15,413.07 6
13. Factory Building 07.03.2005 773,433.38 480 519 836,274.84 7
14. Factory Building 26.03.2006 3173,260.19 497 519 3,313,726.44 8 Total: 18,464,217.49 8,96,46,493.75 Less: Average Depreciation 32.5% : 2,91,35,110.46 Market Value of the complete Building as in the date of loss : 6,05,11,383.29 Since the loss is being assessed on Market Value basis, therefore for looking into the aspect of adequacy of insurance coverage the Sum Insured is to be compared with the respective Market Value of the insured buildings as at the time of loss/fire.
As against the Sum Insured of Rs. 2,90,00,000/-, the Market Value of the insured Factory Buildings as evaluated above comes to Rs. 6,05,11,383.29 and accordingly the application of under-insurance is resorted to and the Net Assessed Loss of Rs. 11,06,420 is adjusted as under:
Rs. 2,90,00,000.00
------------------------x Rs. 11,06,420 Rs. 6,05,11,383.29 Therefore, (13.1) The Gross Adjusted Loss for Building : Rs. 5,30,250
11. Now, the point of grievances is that the fire took place in unit 83/86 factory building situated at a distance of approximately half a kilometer from the unit 40, 40/1, 40/2 factory building; they are separate factory buildings which are at different locations each having their own separate fire insurance policies for the buildings; the Surveyor states that "in K.S.P CC-09-39 Page 20 of 38 absence of specific capitalized costs for the specific building/blocks location wise, he has taken into consideration the fixed asset register as furnished by insured"; but in the fixed asset register there is a specific mention about the building/block for unit No. 40, 40/1, 40/2 factory building, and hence, while calculating the present day market value of insured buildings, factory building No. 40, 40/1, 40/2 should not have been considered. Therefore, while taking into consideration total sum of insured affected polices, policy No. 311303/11/06/3100000167 amounting to Rs. 70,00,000/- which is a sum insured covered of the unaffected factory building at plot No. 40, 40/1, 40/2 should not have been taken into consideration. Similarly, present day market value of insured‟s buildings under the affected policies should not calculate factory building at plot No. 40, 40/1, 40/2 having new construction costs of Rs. 5,55,70,427.25/-. This point was brought to the notice of surveyor at meeting with surveyor at Baroda and New Delhi which he has grossly ignored while arriving at assessment of loss to the building. In cross-
examination surveyor of the company Mr. Kalyan Prasad Sen answered that value of building at plot No. 40, 40/1, 40/2 at Rs. 5,55,70,427.25/- was not inclusive but exclusive of the value of the loss (Q-37); that in the said fixed asset registered so furnished by the insured the location was specified only for the factory building at C-40, 40/1 (not 41) at one of the 14 entries for capitalization of the factory building of the insured (Q-35); and that in case of discarding costs of building at plot No. 40, 40/1, 40/2 from the Value at Risk there would be corresponding reduction in Sum Insured to the extent of insurance coverage for building at plot No. 40, 40/1, 40/2 and the ration of under-insurance would change accordingly (Q-38). Now, the complainant‟s this contention is not acceptable. It is for K.S.P CC-09-39 Page 21 of 38 the reason that the insurance company asked to pay for the loss, can always adjust any amount due to it, not necessarily from the some policy. Policy condition - 6 (i)(b) as to Particulars of all other insurances, if any, the insured shall also at all times at his own expense produce, procure, and give to the Company all such further particulars, plans, specification, books, vouchers, Invoices duplicates or copies thereof, documents, Investigation reports (internal/ external) proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the Company as may be reasonably required by or on behalf of the Company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith. No claim under this policy shall be payable unless the terms of this condition have been complied with. Therefore, in view of above underlined provided, the surveyor has not committed any error in considering the value of factory building at C-40, 40/1 under the policy ~00167.
12. Now, with respect to insurance claim for plant and machinery, the surveyor has arrived at Net Assured Loss in clause-13.2.5 at Rs. 14,59,775/- and in 13.2.6 Value at Risk to Rs. 9,62,474/-. Complainant‟s letter states that it accepts assessment of loss calculated in para-13.2.5, however it does not agree with calculation of Value at Risk calculated in para-13.2.6. The surveyor has considered the original purchase costs of plant and machinery from 31.12.2008 to the date of loss at Rs.5,82,97,630/- which in fact was Rs. 4,83,87,630/-. It has calculated at Rs. 11,63,495/- and therefrom deducted assessment by the surveyor at Rs. 9,62,474/- and claims Rs. 2,01,021/-. Now, Kalyan K.S.P CC-09-39 Page 22 of 38 Prasad Sen, surveyor of the insurance company in his affidavit deposes that the original purchase costs from 1992 to as on the date of loss was taken as Rs. 5,82,97,630.17/- in final survey and assessment report was in accordance with the details of fixed asset register placed before him by the insured. The total plant and machinery under the fixed register comprised of : (i) General Machinery - gross block value of Rs. Rs. 4,74,48,456.45/- (ii) Various Machines - Gross Block Value of A Rs. 26,50,000.00/- (iii) Various Electric Motors -- Gross Block Value of Rs. 69,06,033.00/-, Totaling for Plant Machinery to Rs.5,70,04,489.45/- and at the time of finalization of the Survey Assessment Report mentioned some minor machines amounting to about to Rs. 3.54 Lakhs and accordingly the Gross Block after deletion/Sales was taken as Rs. 5,73,58,456.45/- as reflected on Page No. 20 of the survey report. Unfortunately the details of said Rs. 3.54 Lakhs is not available in his file records, but the details of Fixed Asset Register corresponding to Rs. 570.05 Crore cited above, are available and copy of the same is enclosed herewith for ready reference. The Gross Block Value of Rs. 4,83,87,630/- being stated by the Insured corresponds to purchase cost of General Machinery only and in case the argument of the Insured is to be accepted, the damaged Electric Motors and Machines other than General Machinery which have been considered in the Net Assessed Loss for Plant and Machinery in the Final Survey and Assessment Report, are to be excluded from the purview of Assessment. In cross-examination by interrogatories he denies that there was calculation error on his part while assigning loss of plant and machinery and answered that Rs. 26,50,000/- is for various machines within the machinery and value of Rs. 69,07,033/- is for electric motors which are part of machinery. As K.S.P CC-09-39 Page 23 of 38 against this there is no documentary evidence produced by the complainant to substantiate, that the gross block value of plant and machinery was confined to Rs. 4,74,48,456.45/- only, to the exclusion not even from the annual report of the 2006-07 of Rs. 26,50,000/- and Rs. 69,06,033/- for various machines and various electric motors. Therefore, the ground raised for in claim for Rs. 2,01,021/- is not proved.
13. With respect to the claim on stock of raw material, intermediate and finish goods amounting to Rs. 1,87,509/-, the grievance is that it was brought to the notice of surveyor in meeting held at their Baroda Office on 21.2.2008 but the same was not at all considered by them and no reason for justification is given in the surveyor report. The surveyor Kalyan Prasad Sen has stated on oath [page-116] that the said claim of Rs. 1,87,509/- for raw material, intermediate and finished goods was not substantiated by the insured with appropriate records/documents for verification of the said claim and all along the damage to the stock of packing material was placed forth for consideration in the assessment of loss. This fact was also communicated to the insurer‟s Kolkatta Head Office vide E-mail communication dated 21.07.2008. He repeats the same answer in his cross-examination. As against this the claimant has not produced any proof to contracdict the surveyor or to substantiate the claim. Accordingly, the claim for Rs. 1,87,509/- deserves to be held as not proved.
14. With respect to the claim on Architect, Surveyor and consulting engineers fees amounting to Rs. 2,50,000/- was discussed with the surveyor in meeting held on 21.02.2008 at their Baroda Office and on their request forwarded copy of the three bills, totaling to Rs. 2,50,000/- on 28.02.2008. The surveyor held that the volume of work so involved K.S.P CC-09-39 Page 24 of 38 would certainly not require the services of any qualified architect, surveyor or consulting engineer, but during reconstruction the claimant has to plan layout since it is a manufacturing unit as well as storage space on the same floor and the claimant is an ISO Certified company. Therefore, the surveyor erred in holding so. The surveyor denies that, the three bills now being mentioned by the insured, have been received by him till date, and further that he has also mentioned at para 13.1.5 on page No.14 of the final Survey and Assessment Report KPS/CL/2829 dt. 12.03.2008 that the volume of work so involved keeping in view the extent/nature of damages observed by us and repairs/reconstruction work so necessitated for the damage building structure, would certainly not require the service of any qualified Architect, Surveyor or Consulting Engineer. It can well be appreciated that any claim has to be substantiated and justified for its tenability and we reiterate that the claim of the Insured under this head is not considered justified and tenable. It would also be relevant to point out that even if the amount under the head of Architect, Surveyor and Consulting Engineering Fees, is considered tenable by the Underwriters, the same will have to be limited to 3% of the Gross Assessed Claim Amount as per the terms & condition of the relevant Standard Fire & Special Perils Policy under reference. And in cross-examination, he answers to the Question No.45 that the three bills mentioned by the insured have not been received by us. And the same as above. As against this the complainant has not produced proof to show that the said three bills were in fact received by the surveyor. General exception-8 is to the effect that expenses necessarily incurred on architect, surveyor and consulting engineer‟s fees in excess of 3% of the claim amount are excluded but as held there is no K.S.P CC-09-39 Page 25 of 38 proof of any such expenses incurred. In absence of proof of expenses necessarily to have been incurred, it cannot be held as proved by the claimant.
15. With respect to the claim for removal of debris the grievances that they are entitled to Rs. 1,31,465/- being 1% of the net adjusted loss. The surveyor has depose that 1% of the gross assess claim amount is to be considered for removal of debris only under the head where it is considered reasonable and justified. He has appropriately allowed 1% towards same under assessment of loss for building as considered justified in the instant case, vide page-14 of his report. It has not been questioned, accordingly the claim is not proved. It has under para-13.1.6 as to the loss towards building after arriving at Rs. 10,95,466/- has deducted towards removal of debris at 1% Rs. 10,995/-. Exception-8 is to the effect that debris removal in assess of 1% of the claim amount is executed excluded. We do not find any error in deducting Rs. 10,995/- from the amount of as aforesaid because the word amount claim in the policy mean respective loss here. For the plant and machinery if any would certainly be not make it to Rs. 1,31,465/-.
16. As to claim on account of ad-hock and arbitrary method of working, under „loss for building‟ the surveyor has taken eligible reconstruction costs of damaged structure at 200 per square feet (para- 13.1.1) at Rs. 18,03,234/- instead of Rs. 300 square feet without any justification. The surveyor deposes that in the survey report he has explicitly stated that on examination of the insured claim, it has been observed that insured estimate issue costs of repair/reconstruction is on the higher side looking into the extent/nature of damages. Accordingly we have to taken into consideration the covered area of the damage/affected portion which K.S.P CC-09-39 Page 26 of 38 needs to be reconstructed/repaired and as for the time of construction based on the market enquiry we have considered the unit of Rs. 200/- Sq. Ft. considering the existing type of construction. The policy provides for reconstruction of the damaged building, structure in the manner of the same kind or type but not super or more extensive than the insured property at the time of loss. He denies that bills and receipts for construction costs incurred by the insured have been verified by him and answered that the same is based on quotations/ estimates and not on actual bills for construction costs (Q-46). He reiterates the same to (Q-
48). There is nothing to put aside or replace a finding of the surveyor on the point. Accordingly it is denied. It is pertinent to note that the complainant has in its letter on page-3 also categorically stated that they accept the assessment of loss calculated in para-13.1.6, which has taken it at Rs. 200.
17. With respect to claim on stock of packing material the insured claimed Rs. 1,64,51,034/-. The surveyor‟s observation is that the quantity of packing material which was stored as at the time of loss can easily be kept/stored in the insured‟s first floor of the factory building keeping in view the space required would be 5113.34 cubic feet. Due to collapse of roof of the first floor and due to extensive fire the packing material was damaged so extensively that the tale-tell piece of packing material could not possibly be segregated out. Hence administering caution we have allowed 90% of the claim amount for assessment of loss in respect of packing material. In his affidavit he states that despite our request and various communication the insured have not furnished the Proforma Trading Account for the period from 1.04.2006 to the date of loss i.e. 18.03.2007 and in absence of the same, we had resorted to the trend K.S.P CC-09-39 Page 27 of 38 analysis of available records as outlined at page Nos. 22 to 26 of survey report. The aspect of the insured having not furnished the Proforma Trading Account for the same period has been explicitly stated at the initial sentences on page No. 24 of the Report. That consideration of the 90% of estimated value of the damaged packing material was justified in absence of any correlation with the remnants of the extensively damaged packing material to suggest the efficacy of the said estimated value (Q-51) To Q-50 he states that it does not necessarily mean that at the time of loss this much material had been actually stored and in that of question 51 he states the same in his affidavit as above. There is nothing to show that Proforma Trading Accounts was submitted and therefrom to show that the reasoning of the surveyor is not justified. There is equally nothing on record to show that the deduction of 10% towards non- segrability or that 10% towards same could not have been deducted. Therefore, the amount claimed in this regard is held to be as not proved.
18. With respect to ad-hock deduction on account of dead and slow moving stock at 18.75%, the grievance is that the complainant is manufacture and processor of food products and it experts, products in 8 brands of the company and 8 to 10 brands in customer brands. Designed and description of packing material will change from several country to country and customer to customer. It produced more than 300 products and more than 500 varieties and have to order packing materials, for all products and variants and to keep in stock. Such packing materials have shelf life for quite a long period, the estimate whereof can be made on the basis of the fact that the product life ranges from 18 to 24 months. The company introduces periodically various schemes as per market demand i.e. buy one get one free, buy two get one free etc. It also takes physical K.S.P CC-09-39 Page 28 of 38 stocks four months in a year and have any stock which is not utilizable/variances in physical stock and book stock are adjusted in books of accounts regularly. It also gives year wise and product wise purchases of loss claim on packing material for gelatin, labels, boxes, bags, tray, cartoon, caps, cans etc. and totals of that of stocks prior to March 2004 which is three year old are Rs. 6,58,669/- which can only be 4% of the total packing material stocks. These facts were explained to the surveyor and there is no reason for him not to believe complainant‟s argument. The surveyor has not given any valid reason while on ad-hock basis, he has deducted 18.75% towards dead stock, prices, variation and rejection etc. though pointed out and assured to reconsider in meeting held at Vadodara in February, 2008. The company is required to follow various mandatory accounts standard prescribed by ICAI and also its books are audited by joint statutory auditors. Physical inventory are also taken every quarter and hence question of dead and slow moving stock does not arises. Therefore, added to this above 10% towards packing material 18.75% deduction on account of dead and slow moving stock. They are argued to be unjust and false, and Rs. 48,39,907/- is claimed. It is calculated on basis of damage packing material at Rs. 1,62,76,015/- deducts salvage at 2% Rs. 3,25,520/- totaling to Rs. 1,59,50,495/- and deducts therefrom Rs. 1,16,63,799/- to arrive at Rs. 42,86,696/-.
19. Now, the report of the surveyor says that insured have claimed Rs. 1,64,51,034/- which is comprised of packing material Rs. 1,47,23,746/- and Excise Duty, CST and VAT of Rs. 17,27,288/-. The insured have not furnished Proforma Trading Account in the period from 1.04.2006 to date of loss. In absence of which he has taken into consideration the admitted balance stated as on 31.03.2007, the sales/turnover was Rs. K.S.P CC-09-39 Page 29 of 38 37,79,44,534/-. Looking at the trend of packing material to the export as well as domestic sales/turnover of packing material consumption during the period from 1.04.2006 to 31.05.2007 as approximately 15.99% (and not 18.75% as complainant says) of the said export/domestic sales of Rs. 37,79,49,534/- and the same comes to Rs. 6,04,33,331/-. Accordingly, the closing stock value of packing material at the time of loss/fire is estimated as :
Opening Stock of Packing Material as :Rs. 1,71,29,666 on 01.04.2006 (as per the Closing Stock Value given in Audited Balance Sheet of 2005-06) Add : Purchases during the period : Rs. 6,92,30,786 O1.04.2006 to 31.03.2007 (as per the Audited Balance Sheet of 2006-07) -------------------------------
Total :Rs. 8,63,60,452
Less : Cost of Packing Material
consumed during the period : Rs. 6,04,33,331
01.04.2006 to 31.03.2007 (as
estimated above)
----------------------------------
Closing Value of the Stocks of Packing : Rs. 2,59,27,121
Material as at time of fire on 31.03.2007 ----------------------------------
This value of Rs. 2,59,27,121/- for the total Inventory of Packing Material as at the time of loss/fire estimated above, is quite realistic looking at the fact that the Closing Stock Value of Packing material as at the end of last 4 years has been of the order of Rs. 259 Lacs. The relatively undamaged packing material was duly inventorized and as per the enclosed statement furnished by the Insured the value of the same comes to Rs.
1,13,60,048.62. Accordingly the value of damaged Packing Material is estimated to be Rs. 1,45,67,072/- [i.e. Rs. 2,59,27,121.00 less Rs. 1,13,60,048.62]. Insured's claim of Rs. 1,47,23,445.82 appears to be slightly on higher side. Accordingly Rs. 1,45,67,072/- plus proportionate payment of Central Excise, CST & VAT is considered with this : hence the K.S.P CC-09-39 Page 30 of 38 total value of Packing Material comes to Rs. 1,62,76,015/-. As stated in the previous section of this Report that due to collapse of the roof of first floor and due to extensive fire the packing material was damaged so extensively that the tale-tell pieces of the packing material could possibly not be segregated out. Hence administering caution we have allowed 90% of the claimed amount for assessment of loss in respect of the Packing Material.
20. He was cross-examined and suggested that from total value of packing material of Rs. 1,62,76,015/-, 10% of its total value was reduced for no- plausible reason. He answers the same as answered to Q-50, 51 herein above. They are found to be for valid reasons. Accordingly, the objections deserves to be not acceptable as there is nothing to show that the calculation and deduction were unjustifiable. Accordingly, this claim of Rs. 48,39,907/- is held to be not proved.
21. United India Insurance Co. Ltd. Vs. Ajmersingh Cotton & General Mills and Ors., II (1999) CPJ 10 (SC) has held: "The mere execution of the discharge voucher would not always deprive the consumer from preferring claim with respect to the deficiency in service or consequential benefits arising out of the amount paid in default of the service rendered. Despite execution of the discharge voucher, the consumer may be in a position to satisfy the Tribunal or the Commission under the Act that such discharge voucher or receipt had been obtained from him under the circumstances which can be termed as fraudulent or exercise of undue influence or by mis-representation or the like. If in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, misrepresentation under influence or the like, coercive bargaining compelled by circumstances, the authority K.S.P CC-09-39 Page 31 of 38 before whom the complaint is made would be justified in granting appropriate relief. However, where such discharge voucher is proved to have been obtained under any of the suspicious circumstances noted hereinabove, the tribunal or the Commission would be justified in granting the appropriate relief under the circumstances of each case. The mere execution of the discharge Voucher and acceptance of the insurance claim would not stop the insured from making further claim from the insurer but only under the circumstances as noticed earlier. The Consumer Disputes Redressal Forums and Commissions constituted under the Act shall also have the power to fasten liability against the insurance companies notwithstanding the issuance of the discharge voucher. Such a claim cannot be termed to be fastening the liability against the insurance companies over and above the liabilities payable under the contract of insurance envisaged in the policy of insurance. The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy, being covered by the provisions of Section 14 of the Act."
22. For the complainant affidavit of Dilip S. Golwala is that at time of the Insurance claim the complainant was not given copy of survey report of verification of assessment and related details. Copy of survey report was received through application under RTI Act whereafter the insurer company was informed about mistakes, omissions, errors etc. but did not take any care for review of the claim. Insurer company did not make payment till discharge voucher is signed in. That at the time of finalization of insurance claim, the claimant was not given copy of survey report for verification of assessment related details, which copy of survey report was received through application under RTI Act. By further K.S.P CC-09-39 Page 32 of 38 affidavit, that if any discharge has been received through suppression of correct facts undoubtedly amounts to misrepresentation as to fact and denies that merely because discharge voucher once signed, the misrepresentation as to the content of survey report cannot be challenged. Especially when the said document was not given before executing discharge. Demand for survey report was made and only extract was supplied. He denies in cross-examination that the complainant has not asked for report of surveyor in letter dated 6th August, 2008, agrees that the complainant has not applied for surveyor‟s report until RTI before 7th August, 2008 and gives reason that prior to that there was no question of denial or delay in supply of information sought from the opponent. Application to RTI was the last course of action to seek information from the opponent. It was applied in September 2008, and replied was received in October 2008.
23. Now, the surveyor‟s report mentioned at almost every point that the point was discussed with the complainant. The complaint in its para-5 states to the effect that estimates of experts‟ together with all details, proofs, layout, plans, bills, vouchers, supporting documents and proofs were provided to the surveyor so that they can assess claim and verify the genuineness of the claim amount. Complainant by letter dated 31.12.2008 also speaks of as meeting with the surveyor at Baroda and Delhi.
24. Surveyor‟s report is dated 12.03.2008. Pursuant to the interrogatories to Pratabsinh B. Sisodia as to what is suppressed by the complainant, and to question No.16 as to when did the insurer company first offer any amount for indemnification of the loss under policies, the answer Shri Hemant H. Desai, Pratapsinh Sisodia having been transferred, was vide K.S.P CC-09-39 Page 33 of 38 E-Mail communication of 24th July, 2008 followed by letter dated 25.07.2008, both of which is enclosed herewith. The E-Mail dated 24.07.2008, addressed to [email protected], is to the effect that competent authority has approved the claim for Rs. 1,31,46,523/- in full and final statement of claim subject to collection of difference of premium towards rate to be charged under policy No. 311303/11/06/330000009; and letter to accounts manager dated 25.07.2008 is to the same effect, with addition of words and „reinstatement of premium‟. Letters by State Bank of India, dated 05.08.2008 are issued to the effect that it has no objection for the payment of claim to be issued in favour of Bank of Baroda Account ADF Foods Limited and that it has been issued on specific request of ADF Foods Limited. The complainant by its letter dated 06.08.2008 to the opponent, in reference to opponent letter dated 04.08.2008, writes to the opponent, "We have received your above referred letter on 5th August, 2008 along with loss voucher for Rs. 1,31,45,309/- (Rupees One crore thirty one lac forty-five thousand three hundred and nine only) requesting us to sign the same and return back to you. We are enclosing the said voucher duly signed from our side. Please note that we had made a claim for the loss of to Rs. 2,5131,993 and since we are being paid Rs.1,31,45,309 we request your goodself to provide the details of the assessment for our review along with the cheque. We request your good self to issue a cheque in favor of Bank of Baroda A/c ADF FOODS LIMITED and our account number with the bank is 03810200000082. We hope above meets with your requirements." In this letter it is clear it nowhere asked for any report of the surveyor.
K.S.P CC-09-39 Page 34 of 38
25. Now, the opponent writes in its letter dated 07.08.2008 „we give details of assessment of loss as per survey report as desired‟ and writes that „they are enclosing herewith cheque for Rs. 1,31,45,309/- being a full and final settlement of claim amount which please receive and acknowledge‟. These negatives the ground that the discharge voucher was obtained by misrepresentation more particularly complainant‟s letter nowhere asked for any copy of the survey report before signing and returning discharge voucher in full and final settlement.
26. Affidavit and cross-examination, Mr. Dilip S. Golwala nowhere gives any details of fraud. It only says that the opponent fraudulently suppressed the correct information of assessment of claim. It is not acceptable, for the reason that as held there were discussions by the surveyor or by the complainant with the other at every material concept, hence no case could be held to have been made out of fraudulent suppression.
27. The letter by the complainant dated 06.08.2008, it is clear, nowhere reflects that the amount was received „subject to review‟ as answered in para 5, 6, and 7 of answers to interrogatories. There is no evidence to show that there was initial refusal of amount offered, on the contrary, the aforesaid communication clearly shows that it was accepted without any objection.
28. He deposes that withholding sizable amount of claim for getting discharge itself, amounts to coercion and indulging in such practice amounts to unfair method, resulting into unfair trade practice.
29. He deposes that it was condition for making payment to give the discharge voucher without any alternative or to put any condition therein for payment under protest makes clear that if insured is not discharging his voucher, no payment will be made to him and this puts insured into K.S.P CC-09-39 Page 35 of 38 difficulty, as he had to suffer for more days for his legitimate funds. The claimant was hard-pressed of circumstances. This is a clear case of coercion, undue influence, coercive bargaining. To the question that the complainant has not produced any documentary evidence to show that the complainant was facing a lot financial crises and alleged to have been served from the bankers, he answers that a huge amount of Rs. 24,87,44,93/- was held up due to loss under the claim, and is suggestive of the fact that companies working capital was at stake and therefore no specific evidence is required to establish the same as it can be understood.
30. Now, Genus Power is to the effect that, "a bold plea of fraud, coercion, duress or undue influence is not enough and the party which set up a plea, must prima facie establish the same by placing material ......." Order 6 Rule 4 of CPC is also on the same line that "in all case, in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading." Even by principles contained therein the complainant was plead the details, but has not given any particulars thereof. Even when specifically asked to show documentary evidence of stringent financial crises and alleged pressure from the bankers, the complainant did not produce any, and chose to answer as aforesaid. In para-12 when he was asked to produce statements of the accounts of the financial year 2006-07, 2007-08, and 2008-09 he has produced copies of the annual reports, but therefrom also it has not been shown how the financial condition of the complainant was stringent or was so precarious K.S.P CC-09-39 Page 36 of 38 that it was left with no alternative but to accept the amount. Asking for ad-hock payment is not by itself any evidence of stringent condition. When the pleading by the complainant is to bereft of any details and particulars it cannot be anything but a bold assertions as was held in Genus Power‟s case (Supra).
31. For the complainant Dilip S. Golwla deposes that after receipt of the surveyor‟s report the insurer company was informed about the mistakes, omissions, errors etc. but did not take any care to review the claim. Affidavit of Kalyan Prasad Sen in its para-2 states that he had been informed of the complainant‟s objections vide letter dated 31.12.2008 as to disputated calculation made by the surveyor for loss in question, he offered his parawise remarks though before this Commission. The evidence shows that the surveyor was not asked to see the grievances made by the complainant by its letter dated 31.12.2008, as the defence of the insurance company was payment in full and final settlement by its reply dated 19.05.2009 to complainant‟s notice through advocate Shri Sharvil G. Pathak dated 15.04.2009. Therefore, the point raised has no merit.
32. For the insurance company Hemant H. Desai, Pratapsingh B. Sisidhiya having been retired, states that the receipt of survey report is not an end in itself, and the procedural requirements needs to be completed, claim scrutinized, the matter has to be cleared from each stage till it is put up before the Competent Authority for decision and in this case the same has been smooth and without any hold up at any stage. Considering this it must be and is found that there was no delay and thereby no any deficiency in services.
K.S.P CC-09-39 Page 37 of 38
33. Accordingly, the grounds of fraud, misrepresentation, undue influence or like, coercive, bargaining compelled by circumstances, are all found to be missing in this case; on the contrary the amount as settled for is found to have been accepted willingly. It is, apart from the reasons given, more particularly for the reason that it was after the expert estimates submitted to the surveyor right in the beginning, and opponent‟s conveying to the complainant final figures of Rs. 1,31,46,523/- by E-mail dated 24.07.2008 and letter dated 25.07.2008, there is no any adverse move or conduct, but the complainant sends the discharge voucher duty signed with request to send the cheque and lastly saying "we hope above meets with your requirements" which undoubtedly confirms that the amount was requested and accepted willingly. The complaint therefore is without merit. Equally arguments of signing on dotted line by force are also without merit. Each and every claim advanced by complainant‟s letter dated 31.12.2008 were also found to have been disproved hereinbefore.
34. The principles of citations submitted on point of delay, value of report of surveyor are kept in mind.
35. For the reasons stated the complaint deserves to be dismissed, for which following order is passed.
FINAL ORDER
i) Complaint No. 39 of 2009 is dismissed.
ii) No order as to costs.
iii) Copy of the judgment be provided to the parties free of charge.
Pronounced in the open Court today on 12th day of October, 2021.
(J.Y.Shukla) (S.N.Vakil)
Member Judicial Member
K.S.P CC-09-39 Page 38 of 38