State Consumer Disputes Redressal Commission
M/S Arim Knit Fab vs M/S Cholamandalam Ms General Insurance ... on 28 September, 2022
Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
Consumer Complaint No.321 of 2019
Date of institution : 29.04.2019
Reserved on : 07.09.2022
Date of decision : 28.09.2022
M/s Arim Knit Fab (through its sole proprietor, Vivek Aggarwal), Plot
No.57, First Floor, Street No.3, New Subhash Nagar, Swatantar
Nagar, Ludhiana-141007, M-99880-06641, Mail ID:
[email protected]
....Complainant
Versus
1. M/s Cholamandalam MS General Insurance Co. Ltd., (Through its
Branch Manager), SCO 2463-64, 1st Floor, Sector -22C,
Chandigarh-160022, Mail ID: Kuldeep Singh, M.78087-76699,
[email protected], Mail ID: Pawan Preet, M-
99889-35126, [email protected]
2. M/s Puri Crawford Insurance Surveyors & Loss Assessors India
Pvt. Ltd. (Through its authorized representative/Branch Manager),
Sector-34A, Chandigarh-160022, 0172-4663433, Mail ID:
[email protected].
3. Central Bank of India (Through its Branch Manager), Daresi
Ground, Shivouri Road, Opp. Kewal Bakery, Ludhiana, Tel. 0161-
2701049, M-98885-51633, 99152-84718, Mail
ID:[email protected]
....Opposite Parties
Consumer Complaint under Section 17
of the Consumer Protection Act, 1986.
Quorum:-
Mr. Harinderpal Singh Mahal, Presiding Judicial Member
Argued By:-
For the complainant : Sh.Parveen Gupta, Advocate For opposite party No.1&2: Sh.J.P.Nahar, Advocate For opposite party No.3 : Sh.Naren Pratap Singh, Advocate Consumer Complaint No.321 of 2019 2 HARINDERPAL SINGH MAHAL, PRESIDING JUDICIAL MEMBER The present complainant-M/s Arim Knit Fab, through its sole proprietor Sh.Vivek Aggarwal has filed this complaint under Section 17 of the Consumer Protection Act, 1986, (in short "C.P. Act") seeking following directions to the opposite parties:-
(i) opposite party No.1 be directed to depute either the same surveyor - opposite party No.2 or any other firm of surveyors on its panel for reassessment of the loss of the plant & Machinery and the stock of cloth and yarn lying in the factory at the time of the fire incident on 15.07.2018 and to pay the balance compensation of Rs.42,41,452/-
with interest @ 12% p.a. from the date of fire till its payment.
(ii) opposite party No.1 be directed to pay compensation of Rs.24,00,000/- i.e. @ Rs.2 lacs for 12 months for the loss of business on account of delay in receipt of the compensation ever since the incident of fire dated 15.07.2018.
(iii) opposite parties be directed to pay Rs.2,00,000/- for mental harassment jointly and severally.
(iv) opposite parties be directed to pay Rs.50,000/- as litigation expenses jointly and severally; and
(v) any other relief which this Commission may deem fit.
2. Briefly stated facts of the complaint as narrated by the complainant in his present complaint are that M/s Arim Knit Fab, a sole proprietorship firm and Sh.Vivek Aggarwal is the proprietor who is Consumer Complaint No.321 of 2019 3 running this firm for earning his livelihood and in all purpose is a consumer as defined in the Consumer Protection Act. The complainant has a Current Account bearing No.3154446196 which has a CC limit granted to the complainant. The CC Limit of Rs.50 lacs was granted to the complainant and opposite party No.3-Central Bank of India on its own directed the Insurance Company i.e. Opposite party No.1 to issue the insurance to cover the risk of fire etc. for Rs.80 lacs and accordingly Policy No.2150/00003483/000/02 dated 29.07.2016 was issued by opposite party No.1-Cholamandalam MS General Insurance Co. Ltd. for the period 06.06.2016 to 05.06.2017 and the premium of Rs.24,866/- was deducted to the account of the complainant maintained by the Central Bank of India i.e. opposite party No.3. The particulars of the property of the complainant/borrower was provided by the Bank to the Insurance Company and the Bank paid the premium accordingly by deducting the same from the account of the complainant. A copy of the Insurance Policy is Ex.C-1. For next year also, opposite party No.3-Central Bank of India sanctioned the limit of Rs.50 lacs to the complainant and the Bank also directed the Insurance Company to cover the risk of fire etc. to the value of Rs.80 lacs and accordingly Insurance Policy bearing No.2150/00003483/000/02 dated 29.07.2016 was issued for the period of 17.08.2017 to 16.08.2018 and a premium of Rs.25,515/- was debited to the account of the complainant. The policy is Ex.C-2. After that a fire broke out in the factory premises of the complainant due to short circuit on 15.07.2018. Resultantly, the entire stock of yarn, cloth Consumer Complaint No.321 of 2019 4 and machinery on the first floor were destroyed in the fire. The intimation was given on 15/16.07.2018 to the following:
i) To Insurance Company/OP No.1 for deputing the surveyor.
ii) To Central bank of India/OP No.2 from where CC limit has been taken.
iii) DDR was lodged with the Police Station, Tibba, Ludhaina.
iv) To Commissioner of Police, Ludhiana
v) Fire Officer, MC, Ludhiana.
3. Thereafter, a mail dated 17.07.2018 was received from the Insurance Company i.e. opposite party No.1 that M/s Puri Crawford -
Opposite party No.2 has been appointed as surveyor to visit the premises in order to assess the loss. Accordingly, surveyor visited the factory on 17.07.2018. After that, a correspondence dated 28.07.2018 was received from opposite party No.2-Surveyor for supply of documents and again on 30.07.2018, another mail was received for supply of more documents and accordingly documents were supplied in compliance of the said mail by the complainant. The same is Ex.C-
5. On the same day, the complainant, vide email Ex.C-6, sought the permission from opposite party No.2-surveyor to clean the factory premises which was approved by the surveyor on the same date. The complainant, vide email dated 10.08.2018 sent the detail of the dead stock material as demanded by the surveyor. Further averred that on 17.08.2018, M/s HRB & Associates, CA's certified that the stock of 50515.282 Kgs. worth Rs.71,52,107.33 got damaged, vide Ex.C-9. Again on 28.08.2018, Ex.C-10, the surveyor demanded documents to assess the loss. Vide mail dated 18.10.2018, Ex.C-10A, the surveyor Consumer Complaint No.321 of 2019 5 gave the permission to the complainant to sell/dispose of the material of cloth and yarn etc. The complainant on 01.11.2018, sent an email to the Insurance Company mentioning that the claim has not been settled even after lapse of four months. Thereafter, vide e-mails dated 16.01.2019 and 17.01.2019 consent of the complainant was sought for total claim of Rs.32.59 lacs. On 08.01.2019, the opposite party No.2- surveyor intimated the Insurance Company-opposite party No.1 that the loss assessed on account of fire is only Rs.32.59 lacs and has submitted his calculation sheet, Ex.C-13. A lot of pressure was on the complainant to accept the loss of Rs.32.59 lacs and under that pressure the complainant gave his conditionally consent for Rs.32.59 lacs and it was made clear that conditional consent is only because of the fact that the complainant is in need of funds as he suffered heavy loss and the interest liability of the Bank was also piling up. Accordingly, on 29.01.2019, opposite party No.1 remitted Rs.32.59 lacs in the Bank account of the complainant. The same is Ex.C-14. On 11.02.2019, a mail was sent by the complainant to opposite party No.1-Insurance Company that as per the calculation of CA, the value of the material burnt in the fire is Rs.70 lacs against the calculation as assessed by the surveyor which was only Rs.29.80 lacs without GST. A request was also made to provide the calculation sheet of the surveyor, which is Ex.C-15. No reply was received in response to that mail, therefore, another mail dated 13.03.2019 was sent by the complainant to opposite party No.2-surveyor and request was made for payment of remaining amount. Copy of request letter is Ex.C-16. On 12.03.2019 and 13.03.2019, mails were received from the Consumer Complaint No.321 of 2019 6 surveyor-opposite party No.2 that the request is under consideration. Again on 24.03.2019, an email was sent to opposite party No.2 requesting for the payment of balance claim. The same is Ex.C-18. Thereafter, another mail dated 05.04.2019 was sent, Ex.C-19, by the complainant and the following points were highlighted:
"a) Two bills for the purchase of material in April, 2018 to Rs.6.68 lacs have not taken into account while calculating the purchase of material.
b) The material received for Job Work and 13319 KG of material returned after doing the job work, has wrongly been added in the sales. Hence the value of the sales has been overestimated and the value of the closing stock has been undervalued to that extent.
c) Closing balance of 1950 KG of Jon material work has not been taken into account while calculating the value of closing stock.
d) The value of the closing stock as assessed by the Chartered Accountant on the basis of FIFO method of calculating the inventory is Rs.71,46,020/- (Rs.69.32 lacs for the stock of cloth and yarn and Rs.2.13 lacs of the job work) but the closing stock as valued by the Surveyor is only for Rs.29.04 lacs, thus it is highly is undervalued by Rs.42.41 lacs."
4. It is stated that the assessment of loss assessed by opposite party No.2- surveyor is defective. Detailed calculation sheets are Ex.C- 20(colly), as per the detail below:
"1) Photocopies of two invoices from M/s Sidharth Yarns worth Rs.6.68 lacs not counted for in the Purchases.
2) Statement showing the receipt, return and balance of the Job work from M/s Bhagwati Enterprises, alongwith copies of the challans in respect of the receipt of the material from M/s Bhagwati Enterprises and copies of invoices in respect of the return of the material to M/s Bhagwati Enterprises.Consumer Complaint No.321 of 2019 7
3) Statement showing the receipt, return and balance of Cloth for the period from 01.04.2018 to 15.07.2018.
4) Statement showing receipt, return and balance of Yarn for the period 01.04.2018 to 15.07.2018.
5) Details of balance of Cloth & Yarn as on 15.07.2018.
6) Copy of the Balance Sheet and Profit & Loss Account as on 31.03.2018, duly certified by the CA.
7) Copy of the Balance Sheet and Profit & Loss Account as on 15.07.2018."
5. As per the comparative calculation sheet of the surveyors, Ex.C-13 and of CA of the complainant, the total difference of Rs.42,41,452/- is made out. Alleging deficiency in service and unfair trade practice committed on the part of the opposite parties and for not releasing the balance claimed amount, the complainant has filed the complaint before this Commission and sought the reliefs, as mentioned above.
6. Notice of the complaint was issued to the opposite parties. Opposite parties No.1 & 2 appeared and filed their written statement jointly, whereas opposite party No.3 filed its written statement separately.
7. Opposite parties No.1 & 2 filed their written statement by taking preliminary objections that Sh.Vivek Aggarwal, Proprietor of M/s Arim Knit Fab, himself agreed, subject to the terms and conditions of the policy, to accept the amount of Rs.29,80,000/- excluding GST amount of Rs.2,96,000/- for loss and damage to the stocks and P&M on depreciated value basis and in full and final satisfaction and discharge of the claim under Policy for the period 17.08.2017 to 16.08.2018 gave an undertaking which is as under:
Consumer Complaint No.321 of 2019 8
"We declare that there is no other insurance covering the loss and no other party has any interest in the subject matter of this claim except our bankers. We shall not raise any litigation in future against this claim. We acknowledge that any valuation used in calculating insurers liability for this loss does not constitute a valuation for prior and subsequent insurance or loss adjustment."
8. Subsequently, the complainant informed about the reversal of the GST on the damaged stocks, hence the surveyor issued addendum report dated 08.01.2019 and recommended for Net Adjusted Loss for Rs.32,59,345/- and after adjusting the premium of Rs.754/-for reinstatement of sum insured, Rs.32,58,591/- was paid through NEFT on 29.01.2019. The copy of the addendum report dated 08.01.2019 is Ex.OP-1&2/2. It is a settled law as held by the Hon'ble Supreme Court in United India Insurance Vs. Ajmer Singh Cotton and General Mills and Others (1999) 6 SCC 400 that in case discharge report has been obtained through undue influence, fraud or misrepresentation or the commercial bargaining compelled by the circumstances, the said discharge voucher can be challenged on these grounds. It is further submitted by the opposite parties No.1 & 2 that since the complainant has received an amount of the claim after voluntarily signing the consent letter so he cannot claim anything at this stage. It is further stated that the complaint is not maintainable as the complainant ceases to be a consumer as per the Consumer Protection Act as the claim was settled by the opposite parties after obtaining the discharge/consent letter dated 19.11.2018 and he also relied upon the judgment of Hon'ble National Commission passed in Revision Petition No.1927 of 2013 titled M/s MJRJ Medichem Consumer Complaint No.321 of 2019 9 Surgicals V. National Insurance Co. Ltd. decided on 22.01.2015. On merits, it is submitted that Plant and Machinery was insured for Rs.5 lacs and stock and stock in process for Rs.75 lakh aggregating to Rs.80 lakh as total sum insured. The Insurance Policy is subject to Agreed Bank Clause and a deductible of 5% of each claim, subject to minimum of Rs.10,000/-. Further submitted that the Certificate issued by the CA at the instance of the complainant has no value in the eyes of law. It is further submitted that the surveyor observed that the insured had increased the Gross Profit by adding expenses which were never the part of earlier Manufacturing & Trading Account as per audited Balance Sheets. The opposite parties denied all the averments made by the complainant in his complaint and stated that the calculations made by the surveyor are perfectly fine and the complainant voluntarily signed the discharge voucher without any pressure or coercion. Lastly, it is prayed for dismissal of the complaint with heavy costs.
9. Opposite party No.3 filed its written statement taking preliminary objections that the complaint is not legally maintainable in the present form. No cause of action has accrued in favour of the complainant to file the present complaint. The complainant has got no locus standi to the file the present complaint and has concealed the true and material facts from this Commission and has not approached this Commission with clean hands. It is submitted that the proprietor Sh.Vivek Aggarwal, availed the Cash Credit Limit of Rs.50 lacs from opposite party No.3 and on the request of Sh.Vivek Aggarwal, proprietor of M/s Arim Knit Fab, Ludhiana the Bank got secured the stocks of the Consumer Complaint No.321 of 2019 10 complainant with M/s Cholamandalam MS General Insurance Company Ltd. for an amount of Rs.80 lacs w.e.f. 17.08.2017 to 16.08.2018, which was agreed by the complainant and signed the Cover Note of Insurance Policy. Further submitted that as per the terms and conditions of Hypothecation of Goods and Book Debts to secure Cash Credit Facility Agreement was executed by the complainant in favour of the answering respondent and the answering respondent is not legally bound to keep the hypothecated stocks insured with the Insurance Company. The complaint is liable to be dismissed as the same is bad for non-joinder and mis-joinder of the necessary parties. The complainant has given discharge voucher for full and final settlement of the claim. On merits, it is admitted that the CC Limit of the Current A/C No.3154446196 was provided to by the complainant on the basis of valuation of the property from the Valuer. It is submitted that the premium of the insurance was debited from the account of the complainant as the goods insured were that of the complainant and within his premises. It is submitted that this Commission has got no jurisdiction to entertain the present complaint. The complainant is no more a consumer with the answering respondent. The other averments as averred by the complainant in his complaint were denied and prayed for dismissal of the complaint with costs.
10. The complainant in support of his averments filed the affidavit along with documents as Ex.C-1, Ex.C-2, Ex.C-3(colly) and Ex.C- 4(colly) and Ex.C-5 to Ex.C-19 and Ex.C-20(colly) to Ex.C-22. Consumer Complaint No.321 of 2019 11
11. On the other hand, the opposite parties No.1 & 2 filed the affidavit of Sh.Pradeep Pathak, Deputy Manager (Claims), along with documents as Ex.OP1&2/1 to Ex.OP1&2/4, whereas as opposite party No.3 filed the affidavit of Ashok Kumar, Branch Manager, Central Bank of India dated 25.10.2019.
12. I have heard the learned counsel for the parties at length and gave my thoughtful consideration to the contentions on the same. The parties have also filed their written arguments.
13. Learned counsel for the complainant has filed his written arguments on the averments as taken by the complainant in his complaint. Orally, learned counsel for the complainant vehemently contended that the opposite parties have not considered the claim of the complainant on the assessment made by the Chartered Accountant in his report dated 17.08.2018, Ex.C-9 and has wrongly disbursed the amount of Rs.32.59 lacs against a false consent/discharge voucher dated 19.11.2018, which was obtained under duress and threat which cannot be considered. He further submitted that the consent letter produced by the opposite parties, Ex.OP1&2/1 is not free from pressure as after broke out of the fire in the premises, the complainant became penniless and under the financial constraints he signed the discharge voucher which otherwise is not with free consent and it amounts to economic duress. Even after signing of the discharge voucher, a representation dated 13.03.2019, Ex.C-16, was sent to the opposite parties but no action was taken by the opposite parties on this request. Still the loss of the complainant was not fully addressed by the opposite parties which was upto to the Consumer Complaint No.321 of 2019 12 tune of Rs.71,46,020/-. He also referred to the claim of the complainant as detailed in the written arguments that the consent/discharge voucher for Rs.32.59 lacs was not given voluntarily but under pressure and coercion; the consent/discharge certificate has been obtained by fraud, coercion and undue influence; the claim received only Rs.32.59 lacs is not a clean discharge voucher and the accord is not by free consent. Learned counsel for the complainant also referred to the various Rulings of the Hon'blex Apex Court, which is as follows:
i) National Insurance Co. Ltd. Vs. Boghara Polyfab Pvt. Ltd.
decided on 18.09.2018,
ii) Associated Construction Vs. Pawanhans Helicopters Pvt.
Ltd., decided on 07.05.2018; and
iii) Oriental Insurance Co. Ltd. & Anr. Vs. Dicitex Furnishing Ltd., decided on 13.11.2019.
14. Learned counsel for opposite parties No.1 & 2 submitted their written arguments as per the pleas taken by them in their written statement. Orally, learned counsel for opposite parties No.1 & 2 submitted that the payment of Rs.29.80 lacs plus GST Rs.2.96 lacs has already been made and accepted by the complainant and now he has no right to raise the issue which was mutually settled and accepted by both the parties. He submitted that the present complaint is not maintainable as the complainant is not a consumer after signing of the discharge voucher. He also referred to the report of the surveyor, Ex.OP1&2/2 and urged that the surveyor, who is expert in assessing as per the IRDAI guidelines, is fully authorized to assess the loss and damage caused to the premises and his report cannot be Consumer Complaint No.321 of 2019 13 brushed aside merely on the averments of the complainant that the discharge voucher signed by the complainant was under coercion and duress without any cogent evidence. Moreover, the complainant in his complaint as well as in his arguments has not touched the surveyor's report and has not mentioned any discrepancy in the said report, which is otherwise tenable in the eyes of law. Lastly, learned counsel for opposite parties No.1 & 2 prayed for dismissal of the complaint.
15. The opposite party No.3 submitted its written arguments on the grounds as taken by it in its written statement. Orally, learned counsel for opposite party No.3 urged that opposite party No.3 has no concern with the present complaint because they are only a financial institution who gave the CC Limit to complainant to the tune of Rs.50 lacs after hypothecating the stocks and building of the complainant and as per the terms and conditions of that Cash Credit Facility Agreement was executed by the complainant in their favour. The Bank-opposite party No.3 was not legally bound to keep the hypothecated stocks insured with the Insurance Company. Meaning thereby, the complainant Sh.Vivek Aggarwal, Proprietor, himself got the stocks insured with opposite party No.1 for an amount of Rs.80 lacs w.e.f. 17.08.2017 to 16.08.2018 and also signed the Cover Note of the Insurance Company in which opposite party No.3 has no role to play and opposite party No.3 is not a necessary party in the present case and it mainly concerns with opposite party No.1 who insured the stocks of the complainant. It is prayed to dismiss the complaint against opposite party No.3.
Consumer Complaint No.321 of 2019 14
16. The opposite parties raised an objection that since the complainant is running the business for carrying out the commercial activities and the same is not covered under the Consumer Protection Act and he is not a consumer. In this regard, it is relevant to mention that the Hon'ble National Commission in case "M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd. First Appeal No.159 of 2004 and other connected appeals decided on 03.12.2004, observed that a person, who takes insurance policy to cover the envisaged risk, does not take the policy for commercial purpose. Policy is only for indemnification of actual loss. It is not intended to generate profits. In view of the ratio of the law laid down above by the Hon'ble National Commission, the objection of opposite parties is rejected, as the insurance policy was purchased from the Insurance Company just for indemnifying the risk under the same.
17. Undisputed facts of the present complaint are that a Policy bearing No.2150/00003483/000/02 was issued to the complainant by opposite party No.1 for the period 17.08.2017 to 16.08.2018, wherein the plant and machinery, stocks and stocks in process aggregating to Rs.80 lacs in total was insured. A copy of the policy is Ex.C-1 & Ex.C-
2. A fire broke out in the premises of the complainant on 15.07.2018 and the intimation was sent to the opposite party No.1 - Insurance Company, Central Bank of India-opposite party No.2, Police Station Tibba, Ludhiana for lodging the DDR, Commissioner of Police, Ludhiana and Fire Officer, M.C. Ludhiana. Thereafter, the opposite party No.1-Insurance Company sent an intimation dated 17.07.2018 that M/s Puri Crawford Insurance Surveyors & Loss Assessors India Consumer Complaint No.321 of 2019 15 Pvt. Ltd.-opposite party No.2 has been deputed for assessing the loss, who visited the factory premises on 17.07.2018 and an estimate of loss was also submitted by the complainant, as assessed by his Chartered Accountant, which was also considered by the surveyor while finalizing this report dated 24.11.2018. The surveyor has found that earlier a fire broke out in the premises of the complainant on 11.12.2012 and the claim was reported for Rs.37,68,744/-, out of which the complainant received a sum of Rs.30,50,040/- as settled claim amount and a difference of Rs.7,18,704/- was carried forward in books of accounts, whereas there was no stock in physical form for such value and it was burnt during the incident. The surveyor mentioned that the insured has increased the gross profit by adding the expenses.
18. The careful perusal of the complaint of the complainant as well as arguments advanced by the learned counsel for the parties, it is mentioned that there is no line of contention in the complaint by the complainant challenging this surveyor's report. Although, he has mentioned that the surveyor of M/s Puri Crawford Insurance Surveyors & Loss Assessors India Pvt. Ltd.-opposite party No.2 was appointed for assessing the loss on account of fire but he has not said anywhere in his complaint that how the assessment was made by qualified surveyor is of no consequence, vis-à-vis the report of the Chartered Accountant, who is associated with the complainant himself. The surveyor is appointed by the Insurance Company under the provisions of Insurance Act and their reports are given due importance unless rebutted by the cogent and convincing evidence. It cannot be termed Consumer Complaint No.321 of 2019 16 that surveyor works under the influence of the Insurance Company. They are licensed as per the guidelines of IRDAI and cannot be presumed that he would have given the favourable report to the Insurance Company.
19. The Hon'ble National Commission in a case reported in 2007(1) CLT 112 titled "New India Assurance Co. Ltd. Vs. Kamal Naryan", has held that "report of Surveyor is an important piece of document and evidence- cannot be brushed aside without sufficient reasoning."
20. The careful perusal of the surveyor's report reveals that he has given the minute details about the visit at the place and also attached the photographs and CCTV footage to support his report along with his report, vide Ex.OP1&/4 wherein he mentioned the details of the calculation as per the assessment, which is as under:
Sr.No. Description Gross Loss-Rs. Adjusted Loss -
Rs.
1. Stocks 3,513,594 2,990,000
2. Plant & Machinery 2,007,829 147,059
3. Total 5,521,423 3,137,058
4. Less:Policy Excess 5% 156,853 @
5. Net Adjusted Loss 2,980,206
21. Later on, the surveyor issued an addendum dated 08.01.2019, vide Ex.OP1&2/2 by stating that 'The insured has now reversed the GST on damaged stocks and provide us reversal proof of Rs.2.96 lacs as per GSTR-38 for the month of November, 2018. Hence, liability of insurers exists on the GST portion of damaged stocks involved in the claim. The surveyor also mentioned the revised and final computation in his addendum, which is as under:
Consumer Complaint No.321 of 2019 17
Sr.No. Description Gross Loss-Rs. Adjusted Loss -
Rs.
1. Stocks 3,513,594 2,990,000
2. Plant & Machinery 2,007,829 147,059
3. GST on damaged 293,831 293,831 stock (amount reversed by Insured or worked out by us as per Annexure #3 of report, whichever is lower).
4. Total 5,815,254 3,430,890
5. Less:Policy Excess 5% 171,545 @
6. Net Adjusted Loss 3,259,345
22. In the above said final computation, the surveyor has even deducted 5% towards Excess Clause as per the condition of the policy schedule. Considering this fact, the surveyor has made a calculation without any bias.
23. The complainant, vide his detailed e-mail dated 05.04.2019 mentioned about the Bills No.49 dated 24.04.2018 and Bill No.68 dated 30.04.2018, issued by Sidharth Yarn's for an amount of Rs.5,60,187/-. The complainant alleged that the surveyor has not considered those bills in his survey report. For proving their contention, the complainant has placed on record those bills as part Ex.C-19. To verify the same, we have also gone through the provisional balance sheet as on 15.07.2018 at page 127 of the paper book produced by the complainant, where the list of Sundry Creditors and Debtors have been shown and as per the bill produced on record , the name of Sidharth Yarn's is required to be mentioned in the list of sundry debtors but no such entry was there. Although, at page 126, Rs.2,50,000/- has been shown as advance taken but no detail with regard to the amount has also been shown, which creates suspicion. Consumer Complaint No.321 of 2019 18 Moreover, the said provisional balance sheet is not supported with any document and detail. The complainant also referred to the Certificate of his Chartered Accountant dated 17.08.2018, Ex.C-9, which is also not supported by any documentary evidence, on the basis of which he prepared the certificate.
24. The surveyor in his survey report has mentioned that 'The insured was maintaining Purchase & Sale bills, Cash Book, Ledger, whereas no manufacturing records were maintained. However, Insured was using local software to maintain stock &/or books of account on computer.'
25. The complainant himself has not raised any objection qua report of the surveyor in his complaint. Moreover, the balance sheet, to which he is talking about in his complaint, was provisional.
26. I find that the report of the surveyor, which is as per law, is quietly authorized document and seems to be genuine one and also the calculation made by the surveyor in his report is proper.
27. I rely upon the judgment of the Hon'ble National Commission in the case of Ankur Surana v. United India Insurance Co. Ltd., reported in I (2013) CPJ 440 (NC), wherein it has been observed that "it is well established by now that the report of the surveyor is an important document and the same should not be rejected by the Fora below unless cogent reasons are recorded for doing so. The State Commission has stated that it did not see any legal ground before the District Forum to reject the report of the Surveyor. The report of the surveyor should have been rebutted on behalf of the complainant/petitioner since the respondents/OPs had filed the Consumer Complaint No.321 of 2019 19 surveyor's report as their evidence."
28. Now the next question which has been raised by both the parties regarding the discharge voucher, and as disputed by the complainant that this discharge voucher was got signed from him under coercion, duress and a lot of pressure as he was under heavy loss and was compelled to sign the same and that cannot be taken as genuine one. For that purpose, we look into the language and body of the discharge voucher which is reproduced as under:
"...I, Vivek Aggarwal (Prop.) M/s Arim Knit Fab situated at 1st Floor, Plot #57, Street #3, Swatantar Nagar, Near Basti Jodhewal Chowk, Ludhiana 141007 hereby agree, subject to the final approval of Insurer, subject to terms and conditions of the policy & admission of liability by the Insurers accept the sum of Rs.2,980,000/- (Rupees Twenty-Nine Lacs & Eighty Thousand only) excluding GST amount of about Rs.2.96 lacs for loss/ damage to Stocks and P&M (On Depreciated Value Basis) (prior to adjustment for reinstatement premium) in full satisfaction and discharge of claim under Policy #2150/00003483/000/03 for the period 17.08.17 to 16.08.18 for loss due to fire in our aforesaid premises on 15 July 2018. The amount of Rs.2.96 lacs will be reversed by us in books of accounts in coming month which will then be paid by Insurers. Till then, Insurers can hold GST amount of Rs.2.96 lacs and reimburse Net Adjusted Loss amount of Rs.29.80 lacs (excluding GST).
We declare that there is no other insurance covering the loss and no other party has any interest in the subject matter of this claim except our bankers. We shall not raise any litigation in future against this claim. We acknowledge that any valuation used in calculating insurers liability for this loss does not constitute a valuation for prior and subsequent insurance or loss adjustment."
Consumer Complaint No.321 of 2019 20
29. Perusal of the discharge voucher reveals that the details of the claim settlement amount, as detailed in the discharge voucher, is admitted and is also having the declaration of the complainant which has been signed by the complainant under his seal. No cogent and convincing evidence has been produced by the complainant to rebut the same. However, learned counsel for the complainant has referred to the instructions of Ex.C-22 which deals with 'Discharge Voucher Issue', are as follows:
"i) Wherever there are no disputes by the insured/s or claimant/s to the amount offered by the insurer towards settlement of a claim, the present system of obtaining the discharge voucher may be continued. However, the insurers must ensure that the vouchers collected must be dated and complete in all respects while obtaining the signature/s of the insured/s or claimant/s.
ii) If the amount offered is disputed by the insured/s or claimant/s, insurers would take steps to pay the amount assessed without waiting for the voucher discharged by the insured/s or claimant/s.
iii) Under no circumstances the Discharge vouchers shall be collected under duress, by coercion, by force or compulsion."
30. Referring to these instructions, learned counsel for the complainant submitted that since the discharge voucher was collected under duress by coercion, by force or compulsion under Instruction No.3 so this discharge voucher cannot be taken into consideration as it was not with free consent. The definition of 'Free Consent' has been defined in Section 14 of the Indian Contract Act, 1872, which is as under:
Consumer Complaint No.321 of 2019 21
"14. "Free consent" defined Consent is said to be free when it is not caused by- (1) coercion, as defined in section 15, or (2) undue influence, as defined in section 16, or (3) fraud, as defined in section 17, or (4) misrepresentation, as defined in section 18, or (5) mistake, subject to the provisions of sections 20, 21, and 22. Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation, or mistake."
15. "Coercion" is the committing, or threatening to commit, any act forbidden by the Indian Penal Code (45 of 1860) or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
Explanation: It is immaterial whether the Indian Penal Code (45 of 1860) is or is not in force in the place where the coercion is employed.
16."Undue influence"
(1) A contract is said to be induced by "undue influence" where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another-
(a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in a position to dominate the will of the other.Consumer Complaint No.321 of 2019 22
Nothing in this sub-section shall affect the provisions of section 111 of the Indian Evidence Act, 1872 (1 of 1872).
17. "Fraud"
"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agents , with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:
(1) the suggestion as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it; (4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.
Explanation: Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.
18. "Misrepresentation"
"Misrepresentation" means and includes-
(1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
(2) any breach of duty which, without an intent to deceive, gains and advantage to the person committing it, or any one claiming under him; by misleading another to his prejudice, or to the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement."
31. Although the discharge voucher, Ex.OP1&2/1, executed by the proprietor of Arim Knit Fab but he has to strictly satisfy the Consumer Complaint No.321 of 2019 23 Commission under the Act that the said discharge voucher or receipt has been obtained from him under the circumstances which can be termed as fraudulent or undue influence and misrepresentation or the same. It is the duty of the complainant to satisfy the Commission under the Act that discharge voucher is the result of coercion, misrepresentation or undue influence and was compelled by the circumstances but he has miserably failed to discharge his onus and the evidence proving that this discharge voucher is the outcome of coercive pressure or misrepresentation is totally missing which was the prime ingredient to declare the discharge voucher as null and void and I do not find any force in the contention of the learned counsel for the complainant.
32. I, rely upon the judgment of the Hon'ble Supreme Court passed in Civil Appeal No.(s) 3284 of 2019 titled United India Insurance Co. Ltd. Vs. Antique Art Exports Pvt. Ltd., decided on 28.03.2019, wherein it has been held as under:
"21. In the instant case, prima facie no dispute subsisted after the discharge voucher being signed by the respondent without any demur or protest and claim being finally settled with accord and satisfaction and after 11 weeks of the settlement of claim a letter was sent on 27th July, 2016 for the first time raising a voice in the form of protest that the discharge voucher was signed under undue influence and coercion with no supporting prima facie evidence being placed on record in absence thereof, it must follow that the claim had been settled with accord and satisfaction leaving no arbitral dispute subsisting under the agreement to be referred to the Arbitrator for adjudication.
22. In our considered view, the High Court has committed a manifest error in passing the impugned order and adopting a mechanical process in appointing the Arbitrator without any Consumer Complaint No.321 of 2019 24 supportive evidence on record to prima facie substantiate that an arbitral dispute subsisted under the agreement which needed to be referred to the arbitrator for adjudication.
23. Consequently, the appeals are allowed and the order passed by the High Court is accordingly set aside. No costs."
33. In another judgment passed by the Hon'ble National Commission in Consumer Complaint No.36 of 2014 titled Garg Acrylics Ltd. Vs. United India Insurance Co. Ltd., decided on 16.12.2014, wherein it has been observed as under:
"5. In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, mis- representation or the like. In the absence of pleadings and evidence the State Commission was justified in dismissing their complaints."
34. There is no allegation of fraud against the Insurance Company and there is no allegation of concealment of material facts against the Insurance Company from the complainant with the view to obtain the discharge voucher and has accepted the amount as calculated by the surveyor, as such, these provisions, as narrated above, are not applicable. Although, the complainant is claiming that this discharge voucher was got signed from him under coercion as he was under
severe financial hardship and he has no option but to accept the same, however, no evidence has been led by the complainant to show his financial hardships at the time of signing of the discharge voucher and he could have approach the Commission by filing the complaint against the Insurance Company for seeking relief which he has not done by him. He accepted the amount voluntarily and slept over the Consumer Complaint No.321 of 2019 25 matter for a long time and then approached the Commission by filing the complaint which is not acceptable. The pleas of the complainant regarding coercion or pressure or duress are totally baseless and without any supporting evidence.
35. In view of the law laid down above and discussions, I do not find any merit in the complaint and the same is hereby dismissed.
36. The complaint could not be decided within the statutory period due to heavy pendency of court cases.
(HARINDERPAL SINGH MAHAL) PRESIDING JUDICIAL MEMBER September 28, 2022 parmod