National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs M/S. Strutech Computers & 2 Ors. on 3 January, 2020
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 579 OF 2012 (Against the Order dated 17/08/2012 in Complaint No. 72/2011 of the State Commission Chandigarh) 1. NEW INDIA ASSURANCE CO. LTD. THROUGH ITS AUTHORISED SIGNATORY, REGIONAL OFFICE-1, 5TH FLOOR, TOWER-2, JEEVANBHARTI BUILDING, CONNAUGHT PLACE, NEW DELHI ...........Appellant(s) Versus 1. M/S. STRUTECH COMPUTERS & 2 ORS. THROUGH ITS PROPRIETOR SHAMMI GARG, S.C.O. 332, 1ST FLOOR, SEC-9,PANCHKULA, HARYANA(present address S.C.O.7, First Floor, Sec-15) PANCHKULA HARYANA 2. CONSOILDATED SURVEYORS PVT. LTD., THROUGH ITS DIRECTOR SH. N.S. SINDHU, 171, SECTOR-36-A, CHANDIGARH-160036 3. SH. SANJAY GUPTA, INVESTIGATOR HOUSE NO. 2243, SECTOR-38-C, CHANDIGARH ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MR. DINESH SINGH,MEMBER For the Appellant : Ms. Rekha Aggarwal, Advocate Mr. Pankaj Changothia, Advocate For the Respondent : For the Respondent No. 1 : Mr. Kapil Chawla, Advocate For the Respondent No. 2 : ex parte For the Respondent No. 3 : ex parte Dated : 03 Jan 2020 ORDER HON'BLE MR. DINESH SINGH, MEMBER
1. This Appeal has been filed under Section 19 of The Consumer Protection Act, 1986, hereinafter referred to as the 'Act', impugning the Order dated 17.08.2012 in C.C. No. 72 of 2011 passed by The State Consumer Disputes Redressal Commission, U.T. of Chandigarh, hereinafter referred to as the 'State Commission'.
2. The Complainant before the State Commission, M/s Strutech Computers, is the Respondent No. 1 herein, and is hereinafter being referred to as the 'Complainant Firm'.
The Opposite Parties No. 1 and No. 2 before the State Commission, The New India Assurance Company Ltd., is the Appellant herein, and is hereinafter being referred to as the 'Insurance Co.'.
The Opposite Party No. 3 before the State Commission, Consolidated Surveyors Pvt. Ltd., is the Respondent No. 2 herein, and is hereinafter being referred to as the 'Surveyor'.
The Opposite Party No. 4 before the State Commission, Mr. Sanjay Gupta, Investigator, is the Respondent No. 3 herein, and is hereinafter being referred to as the 'Investigator'.
3. The Appeal has been filed within limitation.
4. Vide Order dated 28.03.2016, the Surveyor and the Investigator were proceeded against ex parte.
5. We heard the learned Counsel for the Insurance Co. and the Complainant Firm, and perused the entire material on record, including inter alia specifically the impugned Order dated 17.08.2012 of the State Commission and the Surveyor's report dated 23.12.2010.
6. The facts, succinctly put, are that the Complainant Firm is in the business of computers and allied products. It took insurance for its stocks in trade at its premises at Panchkula, Haryana for Rs. 40 lakh. It paid the premium of Rs. 4,412/- on 11.06.2009. The policy was valid from 28.06.2009 to 27.06.2010. Burglary was committed at its said premises on 20/21.11.2009. An F.I.R. was registered on 21.11.2009 under Sections 457 (Lurking house-trespass or house-breaking by night in order to commit offence punishable with imprisonment) and 380 (Theft in dwelling house, etc.) of the I.P.C. A list of stolen items worth Rs.27,14,052/- was appended with the report made with the Police. The Insurance Co. was telephonically intimated of the burglary on 22.11.2009, followed by a written communication on 24.11.2009. A claim for Rs.27,14,000/- was lodged with the Insurance Co. The Insurance Co. approved the claim for Rs.9,20,052/- and made payment of the said amount vide a cheque dated 28.06.2011. Aggrieved with the partial approval of its claim, the Complainant Firm filed a Complaint before the State Commission on 25.10.2011. The State Commission partly allowed the Complaint vide its Order dated 17.08.2012. Aggrieved therewith, the Insurance Co. filed the instant Appeal before this Commission.
7. In its Award made vide para 23 of its Order dated 17.08.2012, the State Commission has directed the Insurance Co.:
[a] (i) to pay a sum of Rs.15,56,323/- i.e. Rs.24,76,375/- (Total Value of Stolen Items assessed by the Surveyor) minus Rs.9,20,052/- (the amount already paid vide cheque dated 28.06.2011);
(ii) with interest at the rate of 9% per annum on Rs.15,56,323/- (the residual amount) from 30.09.2010 (six months after the date of supplying all requisite documents by the Complainant Firm to the Insurance Co.) till its realisation and on Rs.9,20,052/- (the amount already paid on 28.06.2011) from 30.09.2010 (six months after the date of supplying all requisite documents by the Complainant Firm to the Insurance Co.) till 28.06.2011 (the date of payment); and
(iii) Rs.20,000/- as cost of litigation.
[b] to pay penal interest at the rate of 12% per annum if payments at [a] (i) & (ii) are not made within 45 days of receipt of a certified copy of its Order.
8. Apart from its insured premises at (i) Panchkula, Haryana, the Complainant Firm also has two other premises situated at (ii) Manimajra, Chandigarh and (iii) Mohali, Punjab.
9. The Surveyor made its VALUE AT RISK for the three premises as below:
Total value of stock at Chandigarh W/H = Rs. 57,07,280.13 Total value of stock at Punjab W/H = Rs. 9,26,691.75 Total value of stock at Panchkula = Rs. 41,45,042.88 1,07,79,014.76 Less : Dead Stock 10% 10,77,901.48 VALUE AT RISK 97,01,113.28
10. The Surveyor determined that the stock of all three places, that is, (i) the insured premises at Panchkula, Haryana, (ii) the premises at Manimajra, Chandigarh and (iii) the premises at Mohali, Punjab was stored only at the insured premises at Panchkula, Haryana, and that the other two premises did not hold any stock. It made its ASSESSMENT OF LOSS by treating the total stock averred by the Complainant Firm to be at the respective three premises to be actually only at the insured premises at Panchkula, Haryana:
ASSESSMENT OF LOSS Total Value of Stolen items = Rs. 24,76,375.00 Less :Dead Stock 10% 2,47,637.50 22,28,737.50 Less : Under Insurance 58.77%* 13,09,829.00 NET ASSESSED LOSS 9,18,908.50 * We note that the formula adopted for computing Under Insurance is as below:
{22,28,737.50 - (22,28,737.50 x 40,00,000 ÷ 97,01,113.28)} x 100 ÷ 22,28,737.50 = 58.77% This is as per the 'AVERAGE' clause in the Policy.
11. We may first note that, having paid for the services, the Complainant Firm was a 'Consumer' within the meaning of Section 2(1)(d) of the Act.
12. We may also note that the claim was within the pecuniary jurisdiction of the State Commission. We agree with the State Commission's findings on this issue (paras 9 to 12 of the impugned Order).
13. We may further note that it is admitted that the premium had been paid; the policy was valid; burglary was committed on 20/21.11.2009; an F.I.R. was lodged with the Police on 21.11.2009; telephonic communication to the Insurance Co. was given on 22.11.2009, followed by a written communication on 24.11.2009; the Police did not take any action against the Complainant Firm for lodging false F.I.R. etc.; the Investigator did not question the incident of burglary.
As such, the claim had to be duly settled.
14. The short point in dispute, and as principally argued before us in Appeal, is regarding the quantum at which the claim should be (correctly) settled.
15. The learned Counsel for the Insurance Co. argued that after first having accepted an amount of Rs. 9,20,052/-, which had been paid vide cheque dated 28.06.2011, the Complainant Firm was estopped from thereafter filing its Complaint before the State Commission on 25.10.2011.
We find this argument to be totally untenable. The Complainant Firm was disadvantageously placed. The mere fact of having accepted part payment of its claimed amount did not in any way affect or compromise its right to agitate for the residual amount along with interest / compensation / cost of litigation.
We, thus, endorse the State Commission's findings on this issue (paras 17 and 18 of the impugned Order).
16. The Total Value of Stolen Items, as reported to the Police with the F.I.R., was Rs. 27,14,052.
The Surveyor has taken the loss reported to the Police with the F.I.R. as the basis for arriving at its Net Assessed Loss ("the assessment of the loss has been carried out on the basis of FIR lodged by the insured and loss reported to the police"). The same has been agreed to by the State Commission.
We find no need to go into this question in the Appeal before us.
17. In making its computation, the Surveyor, however, deducted the following:
[a] Rs. 2,37,677 for recoveries made by the Police i.e. 27,14,052 (Total Value of Stolen Items as reported to the Police with the F.I.R.) minus 24,76,375 (Total Value of Stolen Items after adjusting the recoveries made by the Police);
[b] 10% for Dead Stock; and [c] 58.77% for Under Insurance.
18. The State Commission, in making its Award,:
accepted the deduction of Rs. 2,37,677 made on count of recoveries made by the Police; and not accepted the deductions of 10% on count of Dead Stock and 58.77% on count of Under Insurance.
19. In this context we may first note that Investigation and Survey are fundamental in determining the amount to be paid to the insured. As such, a Survey, based on Investigation, cannot be disregarded or dismissed without cogent reasons.
However, having said that, it also goes concurrently that the rationale recorded in the Survey for making deductions etc. and arriving at the Net Assessed Loss should be convincing and pass credence in scrutiny.
20. Regarding deduction for recoveries made by the Police, the Surveyor has indicated in para 13.6 of its report that: The Police authorities had arrested few miscreants and some recoveries have also been made from them. The recoveries made has been considered and the loss of the same has not been allowed.
This is erroneous. Firstly, it cannot be presumed that the items (of computers and allied products) recovered by the Police would be undamaged and in saleable / usable condition. Secondly, it takes natural time for the police and court processes to obtain the recovered goods. At best, the Insurance Co. could have laid claim on the said recoveries / salvage, and that, too, at the then due time, and while concomitantly settling the claim without deductions on this count. It could not and should not have outright deducted the value of the recoveries in arriving at the Net Assessed Loss. Also, significantly, the Survey is silent on the computation of the actual value of the recoveries made by the Police, it only states that "some recoveries have also been made".
We, therefore, do not agree that deduction should have been made in this perfunctory manner for 'recoveries made by the Police'.
We note that the State Commission has overlooked and ignored this aspect while passing its impugned Order.
21. In respect of deduction of 10% for Dead Stock, the Surveyor has indicated in para 13.5 of its report that: The insured is dealing in the computers and laptops and other electronic accessories. There is a tendency that the prices of all such items maintain a descending trend. Moreover the electronic items become obsolete very fast. Therefore, 10% deduction on account of dead stock is reasonable in our opinion.
This is arbitrary and whimsical. It cannot be said offhand, without facts and rationale to substantiate it, that 10% of the Stock would be Dead Stock. Neither is it specified as a condition in the insurance contract, nor is it rationally and reasonably arrived at in the Survey.
We, thus, agree with the State Commission that 10% deduction for Dead Stock was unwarranted.
22. In respect of 58.77% deduction for Under Insurance, the Surveyor has indicated in para 13.4 of its report that: The insured informed that they were operating from two other premises also situated at Motor Market, Manimajra and Zoo Road, Chat for catering the market of Chandigarh UT and Punjab Respectively. Accordingly, we visited both the premises next morning and observed that both the premises were lying vacant and only some old packing material was stored there. The Investigator too has visited both the premises and has also found no stock stored there. As such we are of the opinion that the insured was maintaining the above Branches only on papers and no actual stock was lying there. As per the records maintained by insured Stock worth Rs.57,07,280.00 was stored at their Manimajra warehouse and stock of Rs.9,26,691.75 was lying at Chat warehouse. But against this the insurance cover was opted only for the Panchkula showroom wherein the value of stock, as per the books of the insured, was quite lower in comparison to that at Manimajra. It clearly establishes that the stock was actually stored at Panchkula and therefore while arriving at the value at risk, the entire stock has been considered at Panchkula only and the loss has been assessed on the basis of the estimate submitted by the insured.
We note that the Complainant Firm had three premises, at (i) Panchkula, Haryana, (ii) Manimajra, Chandigarh and (iii) Mohali, Punjab.
The three premises had different locations, one situated in the State of Haryana, another in the U.T. of Chandigarh and the third in the State of Punjab, but proximal to each other, in the tricity of Mohali - Chandigarh - Panchkula.
The three premises had different books and record, different sales tax registration.
The books and record of the location at (i) Panchkula, Haryana showed stock worth Rs.41,45,042.88p.
The books and record of the location at (ii) Manimajra, Chandigarh showed stock worth Rs.57,07,280.13p.
The books and record of the location at (iii) Mohali, Punjab showed stock worth Rs.9,26,691.75p.
The Surveyor in its site inspections found both the latter two premises, at (ii) Manimajra, Chandigarh and at (iii) Mohali, Punjab, to be lying vacant with only some old packing material stored therein. It found no stock at these two premises.
It is significant that the Surveyor took the information supplied by the Complainant Firm itself for arriving at the value of the stock stored at the said three premises. The Surveyor did not question the authenticity of the information furnished by the Complainant Firm, it accepted the value of stock at the three locations in accordance with the information maintained and provided by the Complainant Firm.
It is also significant that the Surveyor made its observation that no stock was stored in the two locations at (ii) Manimajra, Chandigarh and (iii) Mohali, Punjab after duly conducting site inspections.
It is further significant that the premises at (ii) Manimajra, Chandigarh and (iii) Mohali, Punjab were not insured.
The comparative situation of the three premises is as below:
Premises Stock Insured / Uninsured
(i) Panchkula, Haryana Rs.41,45,042.88p Insured
(ii) Manimajra, Chandigarh Rs.57,07,280.13p Uninsured
(iii) Mohali, Punjab Rs. 9,26,691.75p Uninsured It is beyond reason and logic that the Complainant Firm, dealing in computers and allied products, and if keeping stock at three different locations, would get only one of the locations insured and leave the other two locations uninsured, moreso when it has separate books and record for the other two locations and the same show stock of substantial value kept therein.
We therefore find no reason to disbelieve the Surveyor when it affirms that on site inspections it found the premises at the two uninsured locations to be vacant, and we accordingly agree with the Surveyor's conclusion that the stock of all the three premises was actually stored only at the insured premises at Panchkula, Haryana. We, thus, find nothing wrong with the Surveyor adopting Under Insurance in its computation.
The State Commission has mis-appreciated the facts and evidence in this respect and has erred in disregarding and dismissing the Surveyor's reasoned report on this count.
23. We note that the State Commission has awarded interest from six months (30.09.2010) after the date (31.03.2010) of supplying all requisite documents by the Complainant Firm to the Insurance Co.
This is fair and reasonable. An insurance company cannot sit indefinitely on deciding a claim, it has to make its decision within a reasonable time-period. A period of six months, in the facts of this case, was more than adequate for the Insurance Co. to decide the claim.
We also find the rate of interest of 9% per annum from the said date i.e. 30.09.2010, awarded by the State Commission, to be just and equitable.
24. Based on the foregoing examination, we sum-up our findings on the five issues that are inherent in computing the quantum at which the claim should be correctly settled:
Carrying out the assessment of loss on the basis of the F.I.R. lodged and the loss reported to the Police:
Go with the Surveyor / Insurance Co.
Go with the State Commission.
Recoveries made by the Police to be adjusted in the Total Value of Stolen Items:
Disagree with the Surveyor / Insurance Co.
The State Commission ignored and overlooked this point.
Deduction for Dead Stock:
Disagree with the Surveyor / Insurance Co.
Agree with the State Commission.
Deduction for Under Insurance:
Agree with the Surveyor / Insurance Co.
Disagree with the State Commission.
Interest from 6 months (30.09.2010) after the date (31.03.2010) of supplying all requisite documents by the Complainant Firm to the Insurance Co.:
__ Agree with the State Commission.
25. Accordingly, the quantum at which the claim requires to be correctly settled works out to be:
ASSESSMENT OF LOSS Sum Insured 40,00,000 Total stock as per the Record maintained by the Insured 1,07,79,014.76 Total Value of Stolen Items as per the F.I.R. 27,14,052 Less : Under Insurance 62.89%* 17,06,867.30 NET ASSESSED LOSS 10,07,184.70 say Rs. 10,07,185/-
* {27,14,052 - (27,14,052 x 40,00,000 ÷ 1,07,79,014.76)} x 100 ÷ 27,14,052 = 62.89%
26. The Award made by the State Commission is accordingly modified as below:
(i) to pay a sum of Rs. 87,133/- i.e. Rs.10,07,185 (the Net Assessed Loss) minus Rs.9,20,052 (the amount already paid vide cheque dated 28.06.2011);
(ii) with interest at the rate of 9% per annum on Rs. 87,133/- (the residual amount) from 30.09.2010 (six months after the date of supplying all requisite documents by the Complainant Firm to the Insurance Co. ) till its realisation and on Rs.9,20,052/- (the amount already paid on 28.06.2011) from 30.09.2010 (six months after the date of supplying all requisite documents by the Complainant Firm to the Insurance Co.) till 28.06.2011 (the date of payment); and
(iii) Rs.20,000/- as cost of litigation.
27. In compliance of this Commission's Order dated 17.10.2012, an amount of Rs.15,56,323/- was deposited with the Registry of this Commission by the Insurance Co. The said amount, along with interest if any accrued thereon, shall be forthright sent by the Registry of this Commission to the State Commission. The State Commission shall utilize the said amount to first satisfy the Award made herein in para 26 above and then release the balance amount to the Insurance Co. as per the due procedure.
......................J R.K. AGRAWAL PRESIDENT ...................... DINESH SINGH MEMBER