State Consumer Disputes Redressal Commission
Oriental Insurance Company Limited vs Gopi Karyana Store on 2 September, 2020
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No.723 of 2019
Date of institution : 08.11.2019
Reserved on : 01.09.2020
Date of decision : 02.09.2020
1.Oriental Insurance Company Ltd., Near Satkar Palace, Amritsar Road, Tarn Taran through its Senior Branch Manager.
2. Oriental Insurance Company Ltd. having its registered office at Oriental House, A-25/27, Asaf Ali Road, New Delhi-110 002 through its M.D. Now through its Authorized Signatory, Gurupdesh Kaur, Manager, SCO No.109-110-111, Surendra Building, Sector 17- D, Chandigarh.
........Appellants-Opposite Parties Versus M/s Gopi Karyana Store, VPO-Sohal (Jhabal), District Tarn Taran through its Proprietor Amrik Singh son of Inder Singh, resident of Village Sohal Thathi, Tehsil and District Tarn Taran.
........Respondent-Complainant First Appeal against the order dated 23.9.2019 of the District Consumer Disputes Redressal Forum, Tarn Taran.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
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 First Appeal No.723 of 2019 2 Argued by:-
For the appellants : Shri J.P. Nahar, Advocate.
For the respondent : Shri Amit Arora, Advocate.
JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
The instant appeal has been filed by the appellants/opposite parties against the order dated 23.9.2019 passed by District Consumer Disputes Redressal Forum, Tarn Taran (in short, "District Forum") (now District Commission), whereby the complaint filed by M/s Gopi Karyana Store, respondent-complainant, under Section 12 of the Consumer Protection Act, 1986 (in short, "C.P. Act") was allowed and the appellants/opposite parties were directed to pay ₹7,00,000/- (Rupees Seven Lakh only) to the complainant along with compensation of ₹5,000/- (Rupees Five Thousand only) and ₹4,000/- (Rupees Four Thousand only) as litigation expenses. They were directed to comply with the order within one month from the date of receipt of copy of the order, failing which the complainant was held entitled to interest @ 9% per annum on the awarded amount from the date of complaint till its realization.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission. Facts of the complaint:
3. Brief facts, as averred in the complaint, are that Amrik Singh, complainant, was a proprietor of M/s Gopi Karyana Store and it was his only source of earning bread. The complainant is income tax assesse and had been maintaining books of accounts and had also First Appeal No.723 of 2019 3 been paying electricity bills of the power consumption. The complainant has got sanctioned credit limit up to ₹7 lakh with Punjab National Bank, Branch Jhabal, so as to meet cash requirements and, as such, the complainant was running a good turnover of Karyana Store. The rate of interest on the credit limit with Punjab National Bank is about 11% per annum alongwith other expenses of operating such like credit limit. The complainant had also insured his Karyana Store i.e. M/s Gopi Karyana Store against fire and other uncertainties with the opposite parties, vide insurance cover note No.174321 dated 14/15.3.2018 for an insurance cover of ₹9 lakh by paying premium of ₹3,292/-, which was valid for the period from 29.3.2017 to 28.3.2018. Unfortunately, the Karyana Store of the complainant caught fire on 15.3.2018 at about 1.00 A.M. and due to the said fire whole of the Karyana Store of the complainant was reduced to ashes and, as such, the complainant suffered a loss of ₹7 lakh approximately, as the stock of that much amount was lying in the Karyana Store at that point of time, which is very much evident from the stock turnover and other documents, such as, income tax return and the monthly stock registers submitted by the complainant with Punjab National Bank, Branch Jhabal and, as such, the complainant lost whole of his business in the said fire. The complainant immediately approached the police of P.S. Jhabal and lodged the incident, vide Rapat Rojnamcha No.28 dated 15.3.2018. The complainant also lodged a claim with the opposite parties so as to obtain the claim amount of ₹7 lakh towards loss suffered in the First Appeal No.723 of 2019 4 fire. The complainant also submitted all the required documents with opposite party No. 1 as per its requirement such as the insurance cover note, stock registers, copy of Rapat Rojnamcha, copies of balance sheets and income tax returns and stock register submitted with the Punjab National Bank Branch Jhabal and also the report of his Income Tax Consultant and, as such, the acknowledgment was supplied by the opposite parties in regard to lodging of claim. The opposite parties sent their surveyor at ground zero, who thoroughly inspected it and also completed formalities regarding the assessment of the claim and the report regarding the same was submitted by him to the opposite parties. The complainant approached opposite party No.1 several times to obtain the claim amount but it told him that the same will be released within a few days time but in-spite of several visits nothing was released to the complainant, rather the complainant was informed by opposite party No.1 that a claim of ₹13,994/- was passed and, as such, the complainant was very much embarrassed on hearing the same as he had suffered loss of ₹7 lakh due to fire in his Karyana Shop. The complainant again approached opposite party No.1 to release claim of ₹7 lakh to him and also told that he has been paying ₹7,500/-, as interest to the Punjab National Bank Branch Jhabal, on the credit which he had obtained from the said Bank and the complainant is unable to pay due to loss of business in the fire but all in vain. The opposite parties are guilty of fault, imperfection, abort coming and inadequacy in the quality of service, nature and manner of First Appeal No.723 of 2019 5 performance. The complainantt has sought directions to opposite party No.1 to pay ₹7 lakh i.e. loss suffered by the complainant due to fire in his Karyana Store along with compensation of ₹50,000/- and ₹50,000/-, as litigation expenses.
Defence of the Opposite Parties:
4. Upon notice opposite parties appeared and filed their reply by taking preliminary objections that the complaint filed by the complainant is bad for non joinder of necessary parties and causes of action. In this regard, it is submitted that Punjab National Bank is financer and a financier clause is incorporated in the insurance policy itself. Basically as per insurance manual, if there is financier clause, then amount is payable to the said financier and not to the insured. However, the complainant had failed to array the said bank as a party to the complaint. As such, the complaint being technically defective and is not maintainable. The complainant is estopped from filing the present complaint. The opposite parties had intimated the financer i.e. Punjab National Bank, vide letter dated 9.7.2018 that the loss in question was assessed at ₹13,994/- and discharge voucher duly signed by the bank was required to be submitted with the opposite parties. The complainant as well as the Bank failed to comply with the requisite formalities. Hence, the complainant is not entitled to the relief claimed for. As per report dated 22.6.2018 of CA Rajiv Arora, Surveyor & Loss Assessor, the payable liability of the opposite parties was assessed at ₹13,994/-. The loss assessed by surveyor is the best piece of evidence and same has to be taken as First Appeal No.723 of 2019 6 correct one unless the other party produces any cogent evidence to show that the said loss assessed by the surveyor is incorrect. This view has been taken by the Hon'ble National Commission in so many cases in which it has been held that the surveyor is the best person to assess the loss and the District Forum cannot assume role of surveyor. Hence, the loss assessed by the surveyor is to be taken as final one. The complainant has not approached District Forum with clean hands and has tried to conceal the material facts. The parties to the complaint are strictly governed by the terms and conditions of the policy in question. The contract of the insurance is based on utmost good faith. As per general conditions of the contract of insurance, it has been clearly held that the Insurance Company will not be liable to pay any claim if the claim is found to be in any respect fraudulent or if any false declaration is made or used in support thereof or if any fraudulent means or devices are used by the insured or any one act is done on his behalf to take benefit under the policy, all the benefits under the said policy shall be forfeited.
The public money cannot be thrown away by way of charity by the public sectors. The claim file of the complainant having been settled by the competent authority, the complainant is not entitled to relief claimed for. On account of claim being already settled at ₹13,994/- as full and final payment, there is no question of any delay or deficiency in service on the part of the opposite parties. On merits, it was pleaded that the report dated 22.6.2018 of CA Rajiv Arora, Surveyor & Loss Assessor was submitted to the opposite parties and First Appeal No.723 of 2019 7 the copy thereof was duly supplied to the complainant. Denying all other averments made in the complaint and denying any deficiency in service on the part of the opposite parties a prayer for dismissal of the complaint was made.
Evidence of the Parties:
5. Alongwith the complaint, the complainant has placed on record his affidavit Ex.C-1, Self attested copy of Insurance Cover Note Ex.C-2, Self attested copy of Rapat Rojnamcha Ex.C-3, Self attested copy of Fire Insurance Claim Form Ex.C-4, Self attested copy of Balance Sheet Ex.C-5, Self attested copy of acknowledgement of Income Tax Return for the Assessment year 2015-16 and 2016-17, Self attested copy of stock Register Ex.C-7, Self attested copy of letter dated 9.7.2018 Ex.C-8. On the other side, opposite parties alongwith their written version have placed on record affidavit of Naresh Singh, Sr. Manager, Oriental Insurance Co. Ltd., Divisional Office, I, Queens Road, Amritsar Ex.OP-5, Original Policy Ex.OP-1, Original Cover Note Ex.OP-2, Terms and conditions of the policy Ex.OP-3, Surveyor report of CA Rajiv Arora Ex.OP-4 and letter dated 9.7.2018, Ex.OP-6.
Finding of the District Forum:
6. After going through the evidence tendered by both the parties and after hearing the learned counsel for them, the District Forum allowed the complaint in the above mentioned terms, vide impugned order. Hence this appeal.First Appeal No.723 of 2019 8
7. I have heard learned counsel for the appellants and have carefully gone through the records of the case. I have also gone through the written arguments submitted by both the parties.
Contentions of the Parties:
8. The sum and substance of oral as well as written argument of the learned counsel for the appellants-opposite parties is that the District Forum has wrongly relied upon the balance sheet of the complainant-firm for the year 2016-2017 and the Income Tax Returns for the year 2015-2016 and 2016-2017 showing gross income of ₹3,57,000/- and ₹3,54,150/-, respectively, which are not relevant for assessment of loss; rather, the purchase bills, sale invoices and the stock registers are the relevant documents on which the assessment can be based. The complainant-firm claimed that the purchase bills, sales bills and all account books were burnt in the fire but in the surveyor's report dated 22.6.2016, Ex.OP-4, it is categorically mentioned that they could not find any such thing in the debris during the course of inspection. The total loss claimed by the complainant-firm is ₹7,06,450/-. The items of furniture, fixtures and fittings were not covered under the insurance policy, Ex.OP-1, and the balance comes to ₹3,11,450/-. A sum of ₹2,00,000/- has been mentioned on account of Karyane Ka Samaan, which is reduced and the loss is assessed at ₹1,11,450/-. Finally the Surveyor assessed the loss to the tune of ₹13,994/-, vide detailed report, Ex.OP-4 and the said amount has already been approved, vide letter dated 9.7.2018, Ex.OP-6. The survey report has to be given due credence First Appeal No.723 of 2019 9 unless rebutted by the party disputing the same with credible evidence. The complainant failed to rebut the same and there is no ground to discard the survey report prepared by IRDA licensed Surveyor. He placed reliance on the judgment of Hon'ble National Commission in "D.N. Badoni v. Oriental Insurance Co. Ltd."
1(2012) CPJ 272 (NC) that a Survyeor's report has significant evidentiary value, unless it is proved otherwise, the same has to be relied upon. The District Forum relied upon stock statements submitted to the Bank, which are nothing but a guess work to maintain the cash credit limit and no reliance can be placed on the same. The loss has to be ascertained on the date of loss and monthly statements submitted to Bank are totally irrelevant. The District Forum has wrongly and illegally passed the impugned order directing the appellants-opposite parties to pay a sum of ₹7,00,000/- to the complainant without referring to any evidence and without any justification. The District Forum has not discussed the evidence available on the record of the case and has not returned any concrete finding based on any reason. The impugned order passed by the District Forum is illegal and arbitrary and is liable to be set aside.
9. Per contra, the sum and substance of the written arguments of the learned counsel for the complainant is that the report of the Surveyor, Ex.OP-4, is solely based on the vague and baseless guesses as no actual assessment was carried out by him while assessing the loss. It has been clearly stated that the stock registers First Appeal No.723 of 2019 10 and account books were lying in the shop and the same stood destroyed in the fire. The Surveyor has wrongly made the calculations in order to reduce the assessed amount. It is apparently clear that in the chart separate column for Karyane Ka Samaan for ₹2 lakh was given in the survey report, Ex.OP-4, which were general articles and then details of some of the other costly items were given but the same has been wrongly deducted while assessing the total loss. It is further argued that income tax returns and balance sheet of the complainant clearly prove that the stocks of ₹6,35,690/- were there in the shop and the same have been corroborated with the stock registers duly verified by the Bank to show that the complainant-firm suffered a loss of about ₹7,00,000/-. As such, the District Forum has rightly awarded the said amount to the complainant and the order passed by it is perfectly legal and valid and deserves to be upheld. He made reference to the judgment of Hon'ble Supreme Court in "New India Assurance Company Limited v. Pradeep Kumar" 2011 (7) RCR (Civil) 395 to contend that the 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. 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 or insured. He also relied upon the judgment of Hon'ble Punjab and Haryana High Court in "New India Assurance Company Limited v. Smt. Usha Yadav and others" 2008(3) RCR (Civil) 111. It has First Appeal No.723 of 2019 11 been prayed that there is no merit in the present appeal and the same be dismissed with costs.
Consideration of Contentions:
10. I have given my thoughtful consideration to the contentions raised before me by the learned counsel for the parties.
11. A bare reading of the impugned order itself reveals that it is a non-speaking order without any reasoning. Only the facts, evidence and contentions of the parties have been mentioned. The District Forum had though made reference to judgments of Hon'ble Supreme Court and Hon'ble Punjab and Haryana High Court at Chandigarh in the impugned order but it failed to give any reason as to how the report of the Surveyor, Ex.OP-4, has been discarded by it. The District Forum should have pointed out each and every amount, which was to be allowed or disallowed by giving specific reasons. Straightway aforementioned directions have been given to the opposite parties. After all a huge amount of claim to the tune of ₹7,00,000/- is involved in the consumer complaint. The District Forum should have given some reasons before issuing the above directions. The strength of a judgment lies in its reasoning and it should be convincing. Clarity of exposition is always essential, specifically process of reasoning by which District Forum came to ultimate decision. The judgment must provide reasons for an appeal Court to consider. However, nothing has been discussed about the evidence of the parties. Very innocuous order has been passed by the District Forum, which is liable to be set aside. First Appeal No.723 of 2019 12
12. In view of my above discussion, this appeal is allowed and the impugned order passed by the District Forum is set aside. The case is remitted to the District Commission for deciding the same afresh after hearing the parties afresh and after appreciating the whole evidence on record by passing a speaking and reasoned order as early as possible. The parties through their counsel are directed to appear before the District Commission on 05.10.2020.
13. Before parting with the judgment I deem it appropriate to notice that it appears that the impugned order has been passed by the District Forum by not applying its judicious mind. The impugned order, on the face of it, is a non-speaking, sketchy and unintelligible order. The same is not based on the evidence on record. As discussed above, a perusal of the impugned order reveals that the evidence led by the parties has only been noticed in the impugned order and has not been discussed while allowing the insurance claim. Only findings have been given in the last para of the impugned order while issuing directions to the opposite parties. Reasons are soul of any order to sustain and to appreciate the same by the appellate authority. The District Forum is a quasi-judicial authority and must give reasons in support of the decision. The value of reasons and decision is a check upon arbitrarily use of powers. It would to a large extent help to ensure performance of duty to act judicially and excludes arbitrary exercise of power in discharge of their duties. The consumers/public should not be deprived of this only safeguard. So has been observed in a catena of judgments by First Appeal No.723 of 2019 13 the Hon'ble Supreme Court and Hon'ble National Commission. Reference may be made to "Madhya Pradesh Industries Ltd. v. Union of India and others" A.I.R. 1966 S.C. 671 and the order of Hon'ble Supreme Court in "Shyam Lal Suresh Kumar vs. State of Haryana and others" (2008) 149 PLR 262. Reference can also be made to judgment of Hon'ble Gujarat High Court in "Testeels Ltd. vs. Desai (N.M.)" reported in 1970(20) FLR 121. In such circumstances this order is required to be brought to the notice of the concerned President and Member of the District Forum, who will explain why the impugned order was passed in a casual manner and why action should not be taken against them in accordance with law. The Registry is directed to put up the matter on the administrative side on 15.10.2020. The copy of this order and the copy of the impugned order be sent to both the President and Member. They are directed to furnish their explanation within 15 days from receipt of the copy of the orders.
14. The complaint could not be decided within the statutory period due to heavy pendency of court cases and shortage of staff.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT September 02, 2020 Bansal First Appeal No.723 of 2019 14