State Consumer Disputes Redressal Commission
The Assistant Manager,Bajaj Allianz ... vs M/S.Gandhi Chemicals Through Its ... on 23 August, 2022
1 (A/19/415)
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
MAHARASHTRA, MUMBAI
FIRST APPEAL NO.A/19/415
(Arisen out of Judgement and Order dated 15/01/2019 passed by the District
Consumer Disputes Redressal Commission, South Mumbai in CC/12/232)
1. The Assistant Manager,
M/s. Bajaj Allianz General
Insurance Co.Ltd.,
Sadhna Rayon House,
4th Floor, Dr. D.N. Road,
Fort, Mumbai - 400 001.
2. The Fire Claims Department
Address : M/s. Bajaj Allianz
General Insurance Co.Ltd.,
Rustomji Aspire, 3rd Floor,
Everard Nagar No.2,
Next to Apex Honda Showroom,
Chunabhatti,
Mumbai - 400 022.
3. M/s. Bajaj Allianz General
Insurance Co.Ltd.,
Regd. & Head Office
GE Plaza, Airport Road,
Yerwada. Appellant(s)
versus
1. M/s. Gandhi Chemicals
(Through its Partners)
2. Mr. Mukundrai Dwarkadas Gandhi
3. Mr. Harit Prabhudas Sheth
4. Mr. Vikram Mukundrai Gandhi
All having Address at :
M/s. Gandhi Chemicals,
58/360, Katha Bazar,
2 (A/19/415)
Narsi Natha Street,
Mumbai - 400 009. Respondent(s)
BEFORE:
Mr.Justice S.P.Tavade, President
S.T.Barne, Judicial Member
PRESENT:
For the
Appellant : Advocate S.R.Singh
For the
Respondent : Advocate Kiran Patil
ORDER
(Dated: 23rd August, 2022) Per: Smt.S.T.Barne, Hon'ble Judicial Member-
[1] The appellant Bajaj Allianz General Insurance Company Limited has preferred this appeal against M/s Gandhi Chemicals through its partners against judgement and order in CC number 64/ 19 decided by District Consumer Redressal Forum South Mumbai, on 15 January 2019. The appellant is the opponent and the respondent is the complainant in the original consumer complaint before District Consumer Forum. The parties are hereinafter referred as per their status before District Consumer Forum.
[2] It is a case of complainant that the complainant no. 1 is partnership firm and the complainant Nos. 2 to 4 are its partners. They are running the chemical business. The opponent no. 1, is the assistant manager of Bajaj Allianz and opponent no. 2 is the fire claim department of Bajaj Allianz General Insurance Company. The complainants have taken the fire peril policy NO. OG1908-400300000098 for the period of 26/10/2008 to 25/10/2009, covering the risk of Rs 4 lakh. During the existence of policy on 5th October 2009 around 3 (A/19/415) 9:00 p.m. the incident of fire took place at M/s Kirit storing services Gala number l,4,6,7,8 of Bhambre Compound, Rahnal Bus Stop, Near Mahavir Compound, Behind Mukund Hotel, Valgaon, Taluka Bhiwandi, District Thane. In The said fire the stock and other chemical goods of complaints worth Rs.3,07,808/- were lying at delivery place, where the incident took place. Wherein all the valuable Chemicals of complainant were destroyed. The incident of fire was reported with police. The police have drawn spot panchnama and also recorded the statement of witnesses and prepared the list of the persons who had sustained the loss. The complainant has immediately intimated the incident to the opponent No. 1 and also he has given details of chemical goods and its value, which was kept with M/s Kirit storing services. The opponents have appointed surveyor on 11th November, 2009 who has issued letter to complainant calling upon him to produce documents. The complainant has sought time to furnish details, as the owner of the premises was absconding, and investigation by police was in progress. The complainant has provided the details of stock and value of the goods to the surveyor. However, the opponents on the report of the surveyor have concluded that the stock was old, non moving and of zero value. The opponents without applying mind rejected the claim of complainant. The complainant in the mean while called for the report of Bhaskarbhai Joshi a chemical engineer, of his expert advice and certificate. Who has issued report on 16/10/2010, that the chemicals in dispute, if stored and kept in Sealed containers, they can preserved for prolonged period. The complainant has also contacted The Dean of R & D, of Institute of Research and consultancy centre and Indian Institute of Technology Bombay, Powai vide letter dated 7th January 2018 and 25th February 2018 and requested the opponent to consider their claim. But the opponents have not considered their claim on merits and committed illegality by refusing their genuine claim. Hence, the complainants are constrained to file consumer complaint and they have claimed the amount of Rs.2,72,004/- towards Insurance claim, 4 (A/19/415) Rs.2,00,000/- towards mental agony with 18% interest from the date of incident i.e. from 5th October, 2009 till realisation of entire amount.
[3] The opponents in their written statement denied all adverse allegations in the complaint. It is the contention of opponent that the complainants are seeking damages without any basis. There is breach of conditions of policy in furnishing requisite information and documents though repeatedly claimed by opponents and the surveyor. Therefore, the opponents have rightly repudiated the claim as per policy. The opponents have issued standard fire and special perils policy, subject to terms and conditions mention therein. It is denied that in the incident of fire the goods/Chemicals of approximate value of Rs.3,07,808/- were stored at the said place. It is the contention of opponent that it was floating policy. Therefore, complainant was supposed to submit the location wise stock and in absence of it the bald statement of the complainant cannot be accepted. The surveyor has asked the complainant vide letter dated 11th October, 2009 to provide certain documents. However, complainant failed to comply the same. The complainant produced only few documents vide letter dated 7th December, 2009 & requested the opponent for some time to submit the documents. But in spite of giving time, the complainant failed to submit requisite documents. It is further contention of opponent that the surveyor has submitted detailed assessment, with letter dated 5th March, 2010, stock of chemical was old and non moving. Therefore, the opponent vide letter dated 01/06/2010 recorded that the complainant failed to furnish the documents showing visibility of affected stock and reason for holding stocks for such a long period, the complainant to give reason for the same. Thereupon, the complainant has submitted report of Bhaskar Joshi which was hypothetical and without any verification of material and or packing etc which has no scientific value. It is the contention of opponent that as the complaint failed to substantiate the claim the value of this stock is based on 5 (A/19/415) nature of stock and commercial aspect and within the ambit of insurance law and practice. The opponents denied that there is deficiency in service on the part of opponent and denied the claim of complainant.
[4] The District Commission on giving opportunity of hearing to the parties pleased to allow the claim partly and thereby awarded amount of Rs.2,72,004/- towards Insurance claim and Rs.10,000/- towards mental agony and Rs.5,000/- towards litigation expenses.
[5] Being aggrieved by the Judgment and Order of District Consumer Forum the opponent Bajaj Allianz General Insurance Company has preferred this appeal with following submissions.
[6] That, the complainant has obtained fire policy for the period of 26/10/2008 to 25/10/2009. He has submitted his claim regarding alleged incident of fire dated 05/10/2009 for alleged damage caused to his goods(chemicals) covered under the policy. After due scrutiny of all documents and information received from complainant the opponent has rejected the claim vide letter dated 25/03/2010 on the ground that, the stock of chemicals had out lived their shelf life and were of zero value. Therefore, the complainant has filed consumer complaint and the District Consumer Forum has partly allowed the complaint. There is apparent error in awarding amount of Rs.2,72,004/- is excess of invoice value of Rs.2,35,351/-. The District Consumer Forum has committed error in believing that there was value addition to chemical by virtue of long storage despite common knowledge that, chemicals are perishable and have self life for particular period. The District Consumer Forum wrongly relied upon the panchanama and unsustainable opinion of alleged expert without his affidavit. The District Consumer Forum failed to appreciate that, the complainant failed to submit requisite documents and information and failed to explain the reason for long storage of perishable chemicals, and comply the requirements. The District Consumer Forum ought to have appreciated that the 6 (A/19/415) surveyor has shared assessment vide letter dated 05/03/2010 with complainant by assessing the zero value for want of necessary documents and failed to consider the report of surveyor dated 06/03/2010 in consonance with the assessment shared with the complainant. The District Consumer Commission failed to consider the substantiate value at the time of loss. Therefore, the claim was rejected vide letter dated 25/03/2010. The complainant failed to submit plausible and expert opinion from reputed organisation. The learned District Commission completely misunderstood the concept of insurance/indemnity while observing that, "the company shall pay to the insured the value of the property at the time of happening of its destruction or ..........." The learned District Commission ought to have appreciated that the insurance policy is required to be strictly construed and nothing could be added or subtracted the claim is highly belated and submitted after long time. Hence, the opponent has prayed for setting aside the judgment awarding compensation to the complainant.
[7] Heard respective parties. They have made their submissions in the line of their respective pleadings. On perusal of record it clearly reveals that, it is not disputed that the complainant has obtained floating policy from the opponent for the period of 26/10/2008 to 25/10/2009 covering the risk of stock of chemical for Rs.4 lakhs. The happening of incident dated 05/10/2009 is also not disputed. It reveals from record that, after the incident it was reported to opponent. The opponent has appointed surveyor. The opponent as well as surveyor have demanded the documents from the complainant.
[8] The complainant has made correspondence with opponent seeking time to furnish the documents. The complainant has furnished the available receipts regarding purchase of stock, which was placed in the godown at spot and caught with fire. Moreover, the policy is floating policy. Hence, the incident and place is not disputed by opponent. The Surveyor has also made 7 (A/19/415) survey of the spot. His report also clearly states that the complainant has produced stock list of aforesaid chemicals, in the godown its value was Rs.2,75,351/- as per the receipts made available. The details of the same is attached to the Surveyor's report. Said report is at page No.189 to 193 of the compilation. He has observed in the report that most of the goods were not saleable and stored since last 4 years or more. The complainant also did not segregate the goods and reconcile the items or quantity of stock, held at the subject godown. The complainant has not submitted details as to whether the material was rejected or quality expired or received in damaged condition. What was the condition just prior to the fire or moved to the spot from where or since when. In the report he has given aforesaid reasons at page No.192 of the compilation. In the caption of loss, for holding the stock as non saleable the value is shown as 'Nil'.
[9] Further, in the caption of loss assessment at page 192, it is clearly mentioned that the date of purchase and particulars of the chemicals/items, its discount value and net value is shown by the Surveyor. In the said report, total value of the item is shown as Rs.2,75,351/- and discount value of almost all the articles is shown as 100% except one article Tetra Hydro Furan is shown with 60% discount value. Thus, total discount value is shown as Rs.2,57,241/- and net value of all articles is shown as Rs.10,804/-. Again out of which the salvage is shown of Rs.4202/- which is deducted from the valuation shown and Rs.420/- is deducted towards reconciliation of stock at the rate of 50% and 10% of amount is deducted as less as per policy excess and Rs.10,000/- is deducted as per policy and total loss value is shown as '0'. The Surveyor has concluded his report with '0' valuation of stock and submitted the report to the opponent Insurance Company.
[10] The opponent Insurance Company by relying upon the observation and report of surveyor pleased to reject the claim and informed the complainant 8 (A/19/415) about the said rejection on 1st June 2010. The Advocate for complainant gave emphasis on the point that the opponent without any expert's opinion and without giving opportunity to the complainant to submit the documents and the experts opinion obtained by him, pleased to repudiate the claim. The complainants have also produced the copies of correspondence with the opponent and experts on record, in support of its contentions. The report of the Chemical Engineer Shri. Bhaskar Joshi an expert in the said field is also produced on record, which is at page No.232, which states as follows-
"October 16, 2010 TO WHOMSOEVER IT MAY CONCERN We have been approached by M/s. Gandhi Chemicals, 358/360 Katha Bazar, Mumbai 400 009 about the shelf life of following chemical products and effect on their properties over prolonged storage. The chemicals are : Tetrahydrofuran - The product is water white liquid, sp.gr.0.888 at 20 deg.C is soluble in water and organic solvents. It has low toxicity. The product is stable at normal room temperature and does not deteriorate if store at room temperature in its original packing. Ethylene Dichloride - The product is derived by action of chlorine on ethylene and hence is a stable product since all the valency bonds are saturated. It can be stored for prolonged period if kept in its original sealed packing. Tartaric Acid - The product is derived by reaction of Maleic Anhydride with hydrogen peroxide. Since this is an oxidized product is very stable. It can be stored for prolonged period if kept in its original sealed packing. Dimethyl Sulfoxide - This is colorless hygroscopic liquid. If stored in humid environment, it can lose it stability. It is transported in bulk tank cars and packed in
9 (A/19/415) drums too. If in original sealed packing, it can be stored for a prolonged period. 10 (CC/232/2012) Aceto Nitrile - It is methyl Cyanide. It is a by product from Acrylonitrile manufacture. It is highly reactive and has high dielectric constant. The product can deteriorate in humid atmosphere, if not stored in an protected environment in sealed containers. N-Hexane - This is similar to gasoline (petrol). It being a hydrocarbon, is very stable and can be stored for a prolonged period time. The above information is been derived from standard chemical literature and based on signatory's experience and expertise as a chemical engineer. Issued without prejudice at Mumbai on 16th October 2010.
sd/-xxx BHASKAR JOSHI, B.Chem. Engg. Surveyor Licence No. SLA 3689"
Here it cannot be ignored that the complainant has obtained the Fire Peril Policy on stock since 29th April 2006, every year, in continuation of earlier policies. The policy covers the period of incident of policy. The opponent has accepted the premium considering the stock details given by the complainant every year. The opponent has insured the stock covering risk upto Rs.4 lakhs. The opponent cannot deny their responsibility against the stock insured at the relevant time. Moreover, it also clearly reveals from the copies of FIR, particulars and correspondence between the parties that incident is not disputed. It is only disputed that the stock was of expiry period or old one and it is not segregated in detailed list. The stock was old one and hence having zero value. In fact said report is without any basis or without any expert's opinion. The Surveyor has made such observation in survey report without giving opportunity to the complainant to submit the information and report collected
10 (A/19/415) by him from expert. It is also not considered that for aforesaid reason it has caused certain delay to complainant in giving certain documents.
[11] All the aforesaid aspects are needed to be considered in this matter, while settling the claim. It reveals from the Surveyor's report that the observation of surveyor in respect of stock is only on the basis of date of the purchase of stock and not assessed by obtaining expert's opinion. Moreover, the amount is wrongly shown to have been deducted as per policy for stock excess to policy, 10% and in addition to that again Rs.10,000/- amount is deducted as per the policy when in fact there was no excess stock. Salvage value is also deducted and value of loss item is concluded as zero. The goods valuation with discount value is also shown without any basis. At the most, only 10% of the policy or Rs.10,000/- whichever is less was supposed to be deduced from the actual value of the stock as per purchase receipt. Hence, assessment made by the Surveyor and the repudiation of the claim on the part of the opponent on the basis of sole survey report is wrong. It amounts to deficiency in service on the part of opponents. It has caused mental agony to the complainant and also constrained him to approach to the District Consumer Disputes Redressal Commission. The District Commission has rightly concluded that the Surveyor has shown zero value of the stock without any basis and the opponent has repudiated claim wrongly and pleased to award the amount as per purchase receipts provided by the complainant to the opponent of purchased stock. In the light of insured value of-course the District Commission at the most could have deducted only Rs.10,000/- from the amount awarded as per exclusion clause of policy and not beyond that. As the incident and loss occurred to the stock is not at all disputed. The District Commission ought to have awarded some more amount towards rate of interest on the amount of compensation awarded. However, there is no appeal filed by the complainant. In view of the quantum awarded towards the mental agony and 11 (A/19/415) costs of proceeding, there requires no interference in the order only to deduct Rs.10,000/- against the value of loss of goods. Hence, there requires no interference in the order. In the result, following order is passed-
ORDER
1] The appeal is dismissed.
2] No order as to costs.
Copy of order be supplied to the parties.
[Justice S.P.Tavade]
President
[S.T.Barne]
Judicial Member
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