National Consumer Disputes Redressal
M/S. Btm Industries Ltd. vs New India Assurance Co. Ltd. on 15 January, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 86 OF 2010 1. M/S. BTM INDUSTRIES LTD. 13th Miles Stone, Gangapur Road Bhilwara Rajasthan ...........Complainant(s) Versus 1. NEW INDIA ASSURANCE CO. LTD. Divisional Office, Balaji Market, Azad Chowk Bhilwara Rajasthan ...........Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE DR. B.C. GUPTA, MEMBER
For the Complainant : Mr. Sameer Nandwani, Advocate with Mr. Dinesh Kabra, Advocate For the Opp.Party : Mr. Abhishek Gola, Advocate with Mr. Hirdesh Gupta, Surveyor Dated : 15 Jan 2016 ORDER JUSTICE V.K. JAIN, PRESIDING MEMBER
The complainant company obtained a standard Fire and Special Perils plus Earthquake Policy from the opposite party to the extent of Rs. 7,00,00,000.00 (Rupees seven crores) in respect of stock of grey and finished fabrics, suitings & shirtings, threads, yarns, stock in process and/or colour and chemical, coal and wood, fuel and gas, diesel and petrol, spares and stores, inventories and motors, packing material and polythenes, electric equipment and wiring and office equipment, computer and accessories and lab equipment etc. A fire broke out in the finished goods godown of the complainant at about 05:15 am on 15.03.2008. On intimation being given to the insurance company, one Mr. G.P. Singh was appointed as the preliminary surveyor, followed by appointment of M/s. Associated Surveyors and Consultants as the final surveyor. Though the complainant lodged a claim of Rs. 6,16,90,843.02, the insurance company paid only an amount of Rs. 3,59,20,590/- after obtaining a discharge voucher whereby the complainant company accepted the aforesaid amount in full and final discharge of its claim. The complainant also gave an undertaking to the insurance company accepting the report of the final surveyor and undertaking not to raise any dispute in future, as far as the quantum of the claim was concerned. Before submission of the aforesaid undertaking and payments, pursuant thereto, the insurance company had written a letter dated 11.09.2009 to the complainant intimating it that the competent authority had approved 'on account' payment of Rs. 2.00 crores, subject to its giving an undertaking that it will not take any legal recourse after accepting the said payment, will accept final surveyor's report in toto and not raise any dispute in future as far as the quantum of the claim was concerned. Vide its letter dated 18.09.2009, the complainant objected to the insurance company requiring the furnishing of undertaking in terms of letter dated 11.09.2009 and stated that submission of such a consent letter would be unjustified. The insurance company was requested to pay the entire claim amount immediately. The complainant however, submitted the undertaking desired by the insurance company on 14.10.2009 and the said undertaking was stated to be without any force or coercion. After releasing part payment of Rs.2.00 crores on 23.10.2009 (Rs.1,99,99,999/-), the insurance company released the balance payment of Rs.1,59,19,073/-, less Rs.1,518/- to the complainant on 17.03.2010.
2. Since the complainant is not satisfied with the payment made to it by the insurance company, the company is before this Commission, seeking payment of the balance amount of Rs.2,57,70,253/-, along with interest till filing of the complaint quantified at Rs.2,60,92,000/-, compensation quantified at Rs.2,70,00,000/- and cost of litigation quantified at Rs.5,00,000/-, thereby making a total claim of Rs.7,93,62,263/-.
3. The complaint has been resisted by the insurance company which has taken a preliminary objection that having settled the claim at Rs.3,59,20,590/- in accordance with the assessment made by the surveyor in full and final satisfaction and unconditional discharge of its claim, the complainant is precluded from demanding any further amount from the insurance company. On merits, the insurance company has sought to justify the assessment made by the final surveyor and the payment made to the complainant.
4. The principal claim made in the complainant can be divided into the following four heads:-
(a) Payment in respect of the fabric of Suntana Textile Mills Pvt. Ltd. (Rs.39,82,021/-)
(b) Salvage value of Rs.5,05,236.12 deducted by the surveyor
(c) Difference as regards quantity of the undamaged stock (value of the differential stock being Rs.71,62,807.70)
(d) Deduction of Rs.1,41,20,188.58 on account of the alleged underinsurance.
Fabric of Suntana Textile Mills Pvt. Ltd.
5. The case of the complainant, which used to process the fabric belonging to other persons is that 91730.49 mtr. Fabric, belonging to Suntana Textile Mills Pvt. Ltd. was burnt in the fire. The claim in respect of the aforesaid fabric was rejected by the surveyor, noticing that the complainant did not provide to them the insurance policy which M/s. Suntana Textile Mills Pvt. Ltd. had taken in respect of its stock nor were they provided with the details of the stock kept by Suntana Textile Mills Pvt. Ltd. at various locations. The complainant submitted a letter to the insurance company purporting to be written by Suntana Textile Mills Pvt. Ltd. on 12.12.2008. It was stated in the aforesaid letter that their (Suntana's) insurance policy did not cover the fabric in BTM Industries Ltd. The insurance company was requested to pay the amount of the burnt fabric to the complainant. Based upon the aforesaid letter, the complainant claims to have adjusted Rs.39,82,021/- out of the processing charges which Suntana Textile Mills Pvt. Ltd. had to pay to it. However, no documentary evidence in the form of account books, invoices etc., has been produced by the complainant before this Commission to prove that Suntana Textile Mills Pvt. Ltd. owed atleast Rs.39,82,021/- which it had adjusted against the value of the stock of Suntana Textile Mills Pvt. Ltd. which allegedly got burnt during the fire on 15.03.2008.
6. During the course of hearing before us, the learned counsel for the insurance company produced, from the file of the surveyor, a letter dated 24.12.2008 purporting to be written by the complainant to the insurance company on its letterhead. The surveyor was present at the time the said letter was produced. A copy of the letter was provided to the learned counsel for the complainant, who, on instructions, did not dispute the authenticity of the said letter but claimed that it was written by the complainant as per the instructions and dictation of the surveyor. The aforesaid letter dated 24.12.2008 reads as under:
"To, New India Assurance Co. Ltd. Div: Bhilwara Dear Sir, Regarding claim of Fabric (finished) A/c M/s. Suntana Textile Mills Pvt. Ltd. textile trade centre Bhilwara under our Fire Claim dated 15.03.2008.
With reference to the above, we inform you that the Suntana Textile Mills Pvt. Ltd. was having their insurance policy against the stock lying in our factory premises, on the date of fire, part of which had got burnt in fire the party had lodged their claim with their insurers M/s. Bajaj Allianz Insurance Co. Ltd. thereafter they withdrew their claim without informing to us any reason of the same as we cannot provide any evidence in respect of their claim from Bajaj Allianz. Therefore, we are not claiming their amount of Rs.39,82,020.07. Hence the aforesaid amount can be excluded from our total claim amount".
For BTM Industries Ltd.
Sd/-
Director
7. The complaint contains absolutely no reference to the aforesaid letter dated 24.12.2008 and no copy of the aforesaid letter was filed either by the complainant or by the insurance company at any point of time. When we asked the learned counsel for the complainant as to why the aforesaid letter dated 24.12.2008 has not been filed by the complainant, he claimed that the complainant had not retained a copy of the said letter. We however, are not inclined to accept the aforesaid explanation. The complainant company was unlikely to write such an important letter practically giving up the claim to the extent of more that Rs.39,00,000/- without even retaining a photocopy of the said letter. In any case, even if the complainant had not retained a copy of the aforesaid letter, it ought to have disclosed the factum of writing the said letter in the complaint filed by it. The inevitable inference therefore is that the complainant deliberately withheld the aforesaid letter from this Commission in order to ensure that its claim of Rs. 39,82,021/- is not rejected by this Commission on account of having its given it up by way of the aforesaid letter dated 24.12.2008.
8. In the absence of averment to this effect, we are not inclined to accept the plea taken by the complainant that the aforesaid letter was written by it at the behest of the surveyor. The complainant knew that by writing such a letter it was practically giving up its claim for more than Rs.39,00,000/- and therefore, there could be plausible reason for it to write such a letter at the behest of the surveyor unless, it genuinely intended to give up the aforesaid claim. The complainant had nothing to gain from the alleged suggestion of the surveyor to write such a letter unless it was convinced that the claim in respect of the fabric of Suntana Textile Mills Pvt. Ltd. was not a genuine claim.
9. The learned counsel for the complainant submitted during the course of arguments that they had withdrawn the claim because they were unable to furnish any evidence of Suntana Textile Mills Pvt. Ltd. having lodged a claim with Bajaj Allianz Insurance and having later withdrawn the said claim. We however, find no merit in the aforesaid explanation. There could be no logic in withdrawing the claim on the ground that the complainant was unable to furnish evidence of Suntana Textile Mills Pvt. Ltd. having lodged a claim with Bajaj Allianz Insurance and having later withdrawn the said claim and then filed a complaint, without collecting such evidence. In any case, as noted earlier, the complaint contains absolutely no reference to the aforesaid letter dated 24.12.2008, not to speak of giving any explanation for writing the said letter.
10. Despite having withdrawn the claim of Rs. 39,82,021/- in respect of the fabric of Suntana Textile Mills Pvt. Ltd., the complainant kept on pursuing its entire claim inclusive of the aforesaid amount with the insurance company. Presumably, this could be possible on account of a later understanding between the complainant and the insurer that the aforesaid letter dated 24.12.2008 will not be made part of the survey report. The aforesaid letter dated 24.12.2008 was not referred by the complainant even in the letters written to the insurance company from time to time after the said letter had been delivered to the surveyor. In the letter dated 09.10.2009 sent to the insurance company, the complainant sought payment of Rs. 39,82,021/- in respect of the fabric of Suntana Textile Mills Pvt. Ltd. 135 declarations were submitted to the insurance company along with the aforesaid letter. The claim for the fabric of Suntana Textile Mills Pvt. Ltd. was also included in an earlier letter dated 05.10.2009.
11. Condition No.8 of the General Conditions of the Standard Fire & Special Perils Policy (Material Damage) was taken by the complainant reads as under:
"8. If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof or it any fraudulent means or devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act, or with the connivance of the insured, all benefits under this policy shall be forfeited".
The claim lodged by the complainant with the insurance company became fraudulent to the extent of Rs.39,82,021/- after the letter dated 24.12.2008 withdrawing the aforesaid claim was written by it and delivered to the surveyor, since neither the aforesaid letter was brought to the knowledge of the insurance company nor was the claim reduced to the extent it was withdrawn vide aforesaid letter dated 24.12.2008. The complainant therefore, contravened Clause 8 of the General Conditions of the Policy and consequently, all benefits available to it under the insurance policy stand forfeited. On this ground alone, the insurance company is entitled to deny any payment to the complainant.
12. As noted earlier, this complaint contains claims a principal amount of Rs. 39,82,021/- towards price of the fabric of Suntana Textile Mills Pvt. Ltd. which the complainant alleges to have adjusted out of the processing charges payable to it by Suntana Textile Mills Pvt. Ltd. The letter dated 24.12.2008 finds no reference in the complaint and no copy of the said letter was filed before this Commission. In our view, considering the relevance and importance of the aforesaid letter dated 24.12.2008, the least required from the complainant was to disclose the factum of the writing such a letter, in the complaint and file a copy of the said letter before this Commission. Even if we presume that the copy of the letter was not retained by the complainant, it ought to have necessarily disclosed the factum of writing that letter and delivering it to the surveyor, in the complaint. That having not been done, there is no escape from the conclusion that the complainant has not approached this Commission with clean hands and has deliberately withheld an important material fact from this Commission.
13. It is settled proposition of law that a person approaching the Court for redressal of his grievance must place all the relevant facts before the Court clearly, candidly and frankly without any reservation even if those facts are against him. If the person approaching the Court does not disclose all the material facts fairly and truly or states them in a distorted manner or otherwise tries to mislead the court, the Court has inherent power to proceed further with the examination of the case on merits. The Court / Tribunal certainly has to take into consideration the conduct of the party which invokes its jurisdiction and if it finds that the litigant has tried to mislead or hoodwink, it must necessarily prevent him from abusing its process by refusing to hear him on merits of the case. Such a person, by his very conduct, disentitles himself from getting any relief from the Court even if it is otherwise made out on merits.
In Dalip Singh V. State of Uttar Pradesh & Others (2010) 2 SCC 114, it was found that the appellant while approaching the High Court had made a misleading statement in para 3 of the writ petition by giving an impression that the tenure holder did not know of the proceedings initiated by the prescribed authority and by doing to, he succeeded in persuading the High Court to pass an interim order. Finding that it was an effort to mislead the authorities, which had been transmitted to the Court, the Supreme Court was of the view that the petitioners belong to the category of persons, who had succeeded in polluting the course of justice and, therefore, there was no justification for interfering with the order, which had been passed against them.
In P. Seshadri Vs. S. Mangati Gopal Reddy & Ors. 2011 5 SCC 484, the Supreme Court reiterated the otherwise settled proposition of law that a person approaching the Court needs to do so come with clean hands".
14. In Oswal Fats & Oil Vs. Additional Commissioner (2010) 4 SCC 728, it was found that the petitioner had withheld a lease agreement from the Additional Commissioner. Deprecating such a practice the Hon'ble Supreme Court inter-alia observed as under:
"20. It is settled law that a person who approaches the court for grant of relief, equitable or otherwise, is under a solemn obligation to candidly disclose all the material/important facts which have bearing on the adjudication of the issues raised in the case. In other words, he owes a duty to the court to bring out all the facts and refrain from concealing/suppressing any material fact within his knowledge or which he could have known by exercising diligence expected of a person of ordinary prudence. If he is found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the court not only has the right but a duty to deny relief to such person". (emphasis supplied).
15. In Kishore Samrite Vs. State of U.P. & Ors. (2013) 2 SCC 398, the Hon'ble Supreme Court inter-alia observed as under:-
"33. ..... While approaching the court, a litigant must state correct facts and come with clean hands. Where such statement of facts is based on some information, the source of such information must also be disclosed. Totally misconceived petition amounts to abuse of the process of the court and such a litigant is not required to be dealt with lightly, as a petition containing misleading and inaccurate statement, if filed, to achieve an ulterior purpose amounts to abuse of the process of the court. A litigant is bound to make "full and true disclosure of facts"."
35. No litigant can play 'hide and seek' with the courts or adopt 'pick and choose'. True facts ought to be disclosed as the Court knows law, but not facts. One, who does not come with candid facts and clean breast cannot hold a writ of the court with soiled hands. Suppression or concealment of material facts is impermissible to a litigant or even as a technique of advocacy. In such cases, the Court is duty bound to discharge rule nisi and such applicant is required to be dealt with for contempt of court for abusing the process of the court. (K.D. Sharma Vs. Steel Authority of India Ltd. & Ors. (2008) 12 SCC 481).
16. In Bhaskar Laxman Jadhav & Ors. Vs. Karamveer Kakasaheb Wagh(2013) 11 SCC 531, the Hon'ble Supreme Court inter-alia has observed as under:
"46. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the facts of a case and leave the decision making to the Court".
48. More recently, in Ramjas Foundation Vs. Union of India (2010) 14 SCC 38 the case law on the subject was discussed. It was held that if a litigant does not come to the Court with clean hands, he is not entitled to be heard and indeed, such a person is not entitled to any relief from any judicial forum. It was said:
"The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums. The object underlying the principle is that every court is not only entitled but is duty bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have a bearing on adjudication of the issue(s) arising in the case".
17. Since the complainant withheld material fact from this Commission not only while filing this complaint but also during pendency of this complaint, it is not entitled to any relief whatsoever through the process of this Commission. We therefore, need not examine the claims of the complainant on their merit.
18. For the reasons stated hereinabove, the complaint is hereby dismissed with no order as to costs. We see no justification for the surveyor not even referring to the letter dated 24.12.2008, in his report. We therefore, direct the Managing Director of the Insurance Company to look into the matter and take such action as may be deemed appropriate by him.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER