State Consumer Disputes Redressal Commission
Jayadurga Steel Industries vs Divisional Manager,National ... on 4 June, 2007
STATE CONSUMER DISPUTES REDRESSAL COMMISSION:ORISSA:CUTTACK
STATE CONSUMER DISPUTES REDRESSAL COMMISSION:ORISSA: CUTTACK
C.D. CASE NO.12 OF 2001
Jayadurga Steel Industries,
represented by its Proprietor,
Maheswar Mohapatra,
S/o.
Late Purnananda Mohapatra,
At-
Kumari, P.O- Jaraka,
P.S-
Dharmasala, Dist- Jajpur.
Complainant.
-Versus-
1. Divisional
Manager,
National
Insurance Co. Ltd.,
At/P.O-
Mangalabag, Dist- Cuttack.
2. Branch
Manager, National Insurance
Co.
Ltd., At/P.O/P.S- Jajpur
Road,
District-
Jajpur.
Opposite Parties.
For the Complainant : M/s.
G.P. Mohapatra & Assoc.
For the Opposite Parties : M/s.
B.N. Udgata & Assoc.
P
R E S E N T :
THE HONBLE SMT. BASANTI DEVI,
MEMBER
A N D
SHRI
SUBASH MAHTAB, MEMBER.
O R D E R
DATE: - 04TH JUNE, 2007.
M/s. Jaydurga Steel Industry, situated at Jaraka in the district of Jajpur represented through Proprietor has filed this case demanding Insurance Claim due to burglary and compensation and cost of litigation against the opposite parties.
2. The facts of the case in brief is that admittedly Burglary Policy No.153101/7500086/87 (Annexure-1) has been issued in favour of O.S.F.C., Cuttack and M/s. Jayadurga Steel Industries from 4.30 P.M. on 15.06.1987 for a period of one year i.e. from 15.06.1987 to 14.06.1988 by the National Insurance Company Limited. The total sum insured is rupees 1,62,000/- in respect to stock of machineries and equipments.
3. The specific case of the complainant in brief is that he has deposited premium of rupees 648/- on 15.06.1987 with the Insurance Company and has obtained receipt (Annexure-4). There was a theft of machineries worth rupees 50,000/- for which he lodged F.I.R. on 16.06.1987 at the Dharmasala P.S. and G.R. Case No.416 of 1987 was registered. Complainant informed the Branch Manager of Insurance Company viz. the opposite party No.1 about the burglary and submitted claim Form on 03.07.1987 (Annexure-5). Surveyor visited the Factory of the complainant on 03.07.1987 and asked complainant to supply certain documents on 07.07.1987, opposite party No.1 had also requested for the same vide letter dated 12.11.1987. But, as the I.O. had not submitted the charge sheet and it was not possible to collect necessary documents, complainant requested the authority on 20.11.1987 for one month time. Complainant got certified copy of the Final report of the police (Annexure-6 series) on 17.04.1988 and submitted the same to the Surveyor on 25.04.1988.
But, opposite party no.1 vide letter dated 29.04.1988 intimated complainant on receipt of his representation dated 25.04.1988 that they cannot reopn the file at this stage as he has not complied with the requirement as per their letter dated 12.11.1987. Complainant had taken loan from O.S.F.C., Cuttack for running his factory and could not pay towards loan dues due to theft of machineries on 15.06.1987 night. The Branch Manager, O.S.F.C. had written letter dated 06.05.1988 (Annexure-8) requesting opposite party No.1 to take early action for settlement of claim of the complainant which is within the insurance coverage, so that his unit would be revived. Vide said letter, Branch Manager has explained the delay in providing necessary papers by the complainant to opposite party no.1 that as the police had submitted final Form before the S.D.J.M. on 14.04.1988 the complainant obtained copy thereof on 17.04.1988 and submitted the same on 25.04.1988 and police has reported the value of the stolen articles rupees 50,000/-. In spite of this when opposite parties did not care to settle the claim and the complainant was harassed and was mentally tortured, he filed C.D. Case No.21 of 1991 before this Commission. The opposite parties had filed written version and had contested the case. Surveyor had not enquired into the matter though he had produced documents before him on 25.04.1988. Vide final orders dated 29.02.1992 (Annexure-2), in C.D. Case No.21 of 1991, this Commission had directed the opposite parties to examine the claim afresh and intimate the final result after obtaining assessment report from the Surveyor within three months from the date of receipt of the copy of this order failing which the opposite parties are to pay compensation @ rupees 150/- per day to the complainant till the finality of the claim is intimated to the complainant.
But opposite parties did not comply the aforesaid orders. Therefore, he filed Execution Case No.60 of 1998 against them.
In the Execution Case, in short, the E.P. Case, opposite parties took a stand that as the Insurance cover was antedated as is revealed from the investigation report, they expressed inability to settle the claim. Though opposite parties have issued claim form in his favour on 03.07.1987 yet opposite parties have received premium from him at 4 P.M. on 15.06.1987 through Cheque No.690595. Thus the aforesaid plea of the opposite parties is nothing but to avoid payment of burglary policy. However, vide order No.16 dated 07.02.2001 in E.P. Case (Misc. Case) No.60/1998 this Commission recalled its aforesaid final order dated 29.02.1992 and directed complainant to file a fresh complaint against opposite parties as fresh cause of action arose in view of letter dated 05.06.1992. Thus, the complainant filed this case on 26.02.2001 claiming loss due to burglary rupees 50,000/- with interest @12% per annum till date and interest on the O.F.C. loan amount with working capital from Bank, labour charge and financial loss and compensation for mental torture in total rupees 5,10,000/- against the opposite parties.
4. Both opposite parties have stated as per their written version that they issued claim form to the complainant about alleged burglary 16 days after, they were informed and called upon him to send the claim form after duly filled in with necessary documents. Complainant should have immediately informed about burglary when the Branch Office of the Insurance Company situated at Jajpur Road. Opposite parties deputed Surveyor Sri R.C. Patnaik for survey / investigation and assessment of loss. It is stated by them that the complainant is not entitled to burglary claim under the insurance policy because the F.I.R. of G.R. Case No.416 of 1987 discloses that the burglary took place in the intervening night of 14/15.06.1987 before taking out the insurance policy by the insured at 4.30 P.M. on 15.06.1987 i.e. after the alleged loss. The complainant also did not cooperate with the surveyor and did not produce documents before him. However, the Surveyor submitted his report on 30.04.1992 assessing loss at rupees 29,819.08 paise stating therein that burglary had taken place on 14/15.06.1987 whereas the insurance cover was at 4.30 P.M. on 15.06.1987. Moreover, a cash memo towards purchase of machinery from M/s. Nathu Jaiswal by the insured found as fake. Complainant also admitted in the claim form that his watchman was on leave from 14.06.1987, whereas the police report discloses that the watchman is involved in the alleged burglary. Thus complainant is guilty for non-discloser of material facts and has violated Condition Nos.4(a), 3 and 2 of the Insurance policy. Their further case in brief is that the copy of the orders dated 29.02.1992 in C.D. Case No.21 of 1991 was communicated to them on 06.03.1992. They have repudiated the claim and have intimated about the same to the complainant since 05.06.1992. Opposite Parties claim that the burglary as alleged and loss claimed by the complainant are all false and fabricated. There is no cause of action to file a fresh case and the case is barred by limitation.
Therefore, the C.D. case should be dismissed.
5. We have heard the learned counsels appearing from both sides and perused the pleadings of the parties and documents produced by them.
6. The opposite parties refused complainant to settle the claim as per their letter of repudiation dated 05.06.1992 (Annexure-7) on the ground that the cover was antedated, as it is revealed from the investigation. This means, the alleged burglary took place prior to the policy in question which is established from the police investigation report. The opposite parties also refuse to settle the claim in favour of complainant as per their written version since he has violated condition 4(a) of the insurance policy in not informing about the burglary to the nearest office with a copy to policy issuing office and violation in view of Exclusion Clause 2 of the policy condition as in view of the police investigation report the watchman of the complainant is involved in the burglary.
Besides this, complainant did not produce required documents on demand before the Surveyors and did not cooperate with him in the investigation and has suppressed material facts.
7. Since the opposite parties have repudiated insurance claim on the ground that the insurance cover is antedated, the main point for determination. Therefore, in this case is as to whether the cover note is antedated. As a matter of fact, the Burglary policy, cover note and proposal form of the policy in question leave no room for doubt that on 15.06.1987 complainant entered into Burglary policy for rupees 1,62,000/- in respect to stock of machinery, equipments etc. till 14.06.1988 with the National Insurance Company and first premium has been paid on 15.06.1987 at 4.30 P.M. by him. Except the First Information report dated 16.06.1987 under Rule 143 of the O.I.C., Dharamasala P.S. submitted before the S.D.J.M., Jajpur in none other important documents like written report dated 16.06.1987 of the complainant before said O.I.C, Final Report dated 02.03.1988 under section 173 Cr.P.C. of the I.O. before the S.D.J.M., Police case diary (Annexure-6 series), the claim Form (Annexure-3), the date of burglary is in the nigh on 14/15.06.1987. At page 4 of his investigation report, the independent surveyor has stated that said burglary of various machineries, motors, Air compressors and other assessories etc. was taken place in the factory in question in the night of 15.06.1987. However, at page he has stated that he found from F.I.R. and Final Report that police has reported the hour of occurrence as 14/15.06.1987. Basing on this particular information, the opposite parties say that the occurrence took place in the night of 14/15.06.1987. Hence the occurrence is earlier to the time of alleged burglary.
But Final report under section 173 Cr.P.C. and police case diary which are based on regular police investigation disclose the occurrence took place in the night of 15/16.06.1987 which is more authentic. In the Final report, police found on regular investigation that actually burglary worth rupees 50,000/- of machinery of stock / equipments etc. has taken place in the night of 15/16.06.1987. The surveyor does not speak out of his own investigation that occurrence took place in the night of 14/15.06.1987. In this end of the view in no circumstance, opposite parties would be accepted that the claim of burglary is antedated and Insurance Company is justified in repudiating the claim for this reason.
8. Now the question arises as to whether complainant has violated condition No.4(a) of the policy, for which he is not entitled to insurance claim. Undisputedly the complainant has reported about the occurrence of burglary to the police forthwith as per requirement of this condition. This condition speaks about giving information in writing about burglary to the nearest office with a copy to the policy issuing office of the Company immediately. Opposite parties claim that complainant has violated this condition in intimating the Company 16 days after the occurrence i.e. on 03.07.1987 though their Branch Office situated at Jajpur Road which is at a short distance from the industry. Though the complainant has not given immediate notice as such to the Company yet he has only caused about 4 days delay in giving defaulted statement of loss and damage due to burglary in view of Condition 4(b) of the policy. Nowhere the policy speaks about deprivation of insurance claim to the insured for non-compliance of Condition 4(a). On this ground also complainants claim has not been repudiated. Therefore, failing to comply this condition shall not prohibit complainant to lodge claim for loss due to burglary.
9. Coming to application of condition No.2 of Exclusion clause of the policy, Company shall not be liable in respect to loss due to theft and burglary in case any member of the business, business staff or any person lawfully concerned to the premises for business are involved in theft or burglary or asserted culprit in theft or burglary in view of this condition.
With reference to Final report submitted by the I.O. suspecting watchman Uchhaba Swain of complainant involved in the said act of burglary, opposite parties have claimed that complainant is not entitled to burglary claim for violation of said condition No.2. No other materials have been produced by opposite parties to prove otherwise that watchman Uchhaba Swain is involved in the burglary. In the Final report, I.O. has simply suspected Uchhaba Swain. However, strong a suspicion may be, it can not take the gravity of truth and evidence. I.O. did not find direct evidence against the watchman. Had I.O. found prima-facie case and supporting materials, he would have submitted charge-sheet against the watchman declaring him as an absconder.
But as the I.O. has not done so, it cannot be said that complaint is not entitled to burglary claim due to violation of this condition.
10. In respect to none production of required documents during investigation by the surveyor and non co-operation to him by the complainant it may be stated that complainant had admittedly requested for time vide letter dated 20.11.1987 for production of required documents. It is not disputed that complainant could collect copies of police report, F.I.R. etc. (Annexure-6 series) on 17.04.1988 and submitted the same vide letter dated 25.04.1988. In spite of receipt of the same, opposite party no.1 instead of utilizing those documents in causing investigation, intimated complainant vide his letter dated 29.04.1988 that they cannot reopen the file at this stage in view of his letter dated 25.04.1988. But this is not at all a reasonable ground in the circumstance not to reopen the file.
Opposite party no.1 also did not like to reopen the claim file even if the Branch Manager, O.S.F.C. as per his letter dated 06.05.1988 (Anenxure-8) requested him to settle the claim explaining the circumstance, for which complainant could not supply required documents. In spite of this, opposite parties were bent upon not to take up the matter of burglary claim. Therefore, we do not hesitate to opine that in absence of any fault and latches of the complainant, opposite parties have shifted responsibility on the complainant for non-settlement of burglary claim in his favour.
11. It may be repeated here that opposite parties do not dispute about occurrence of burglary in respect to machineries, equipment etc. in the unit of complainant during the period of policy. Vide his report dated 30.02.1992 surveyor Sri R.C. Pattnaik deputed by opposite parties has assessed burglary loss rupees 29,819.08 paise. The opposite parties in the worst case, could have settled the claim as per the loss assessed by the surveyor instead of refusing the same vide letter dated 05.06.1992 (Annexure-7) in view of the final order dated 29.02.1992 in C.D. Case no.21 of 1991.
The complainant however does not admit investigation by the surveyor and objected to the amount of loss assessed by him in the present C.D. case. No sufficient and satisfactory evidence has been produced by opposite parties to establish that complainant had produced before the surveyor fake cash memos towards purchase of machineries and equipments etc. At page 4 of his report, the surveyor does not say that cash memos issued by P.N. Machineries and tools, Cuttack and M/s. Nathuram Jayswal in respect to complainants industry are false or fake. On the other hand, surveyor has reported that certain machines, motors, Air compressors etc. purchased from aforesaid Farms have been utilized in complainants unit. Thus question of production of fake cash memos before surveyor and suppression of material facts by the complainant as alleged by opposite parties does not arise.
12. The complainant has claimed loss due to burglary rupees 50,000/-, though police could not submit charge-sheet in the case as the actual culprit could not be detected yet the I.O. has stated in the final Form that was a true case of burglary under sections 457 and 380 I.P.C.
The complainant had stated before him the cost of the stolen motors, equipments and tools at rupees 50,000/-.
I.O. did not find discrepancy in respect to the stolen articles and price thereof. It appears that the surveyor has not investigated the case giving due notice of the complainant and in his knowledge. Therefore, it is not proper to accept the amount of loss assessed by him. On the other hand, I.O. does not find discrepancy during investigation in respect to stolen articles worth rupees 50,000/-. The present C.D. case has been filed afresh in view of the aforesaid orders dated 07.02.2001 in Misc. Case No.60 of 1998 and opposite parties, instead of challenging said orders appeared and contested the claim as per the C.D. case.
It would have been proper on their part to investigate the matter of loss due to burglary with reference to the documents filed by the complainant and disposed of the claim. Instead of doing so, in the meantime, opposite party no.2 tricked to their decision vide letter dated 05.06.1992 (Annexure-7) and refused to entertain the liability as per the advice of Divisional Manager (opposite party no.2). We have dealt earlier that the cover was not antedated on which ground the claim has been repudiated. By refusing to entertain the burglary claim not only opposite parties neglected to the complainant but also have caused serious deficiency in service. In the circumstance, we feel for out responsibility towards complaint to compensate the loss due to burglary in this Industry and mental agony and harassment in wrong for justice to legal Forum time and again.
13. In the result, the complaint is allowed on contest with cost against the opposite parties. The opposite parties are directed to pay to the complainant rupees 50,000/- the amount of loss due to burglary of machineries, equipments etc. as against the insurance policy in question with interest @9% per annum from the date of repudiation of claim i.e. from 05.06.1992 until the date of payment of loss amount. The opposite parties are further directed to pay to the complainant compensation of rupees 2,000/- towards mental torture for wrong to legal forums seeking justice and cost of litigation rupees 1,000/-. This order shall be carried out within two months from the date of receipt of the copy of this order, failing which the rate of aforesaid interest shall be enhanced to 12% per annum and the complainant shall take recourse to law to enjoy the fruit of the order.
SHRI SUBASH MAHTAB, MEMBER, I agree.