State Consumer Disputes Redressal Commission
M/S Jsd Classic International Ltd. vs The New India Assu. Co. Ltd. on 14 August, 2013
IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 14.08.2013 Case No. C-172/10 M/S JSD CLASSIC INTERNATIONAL LTD. - COMPLAINANT Registered Office at 2365, Street No. 11 Raghubir Pura 1, Gandhi Nagar, Delhi, Head Office at 61, Shivaji Road, Meerut And Factory at 37 Mohakampur Industrial Complex, Phase II, Delhi Road, Meerut (UP) Vs THE NEW INDIA ASSURANCE COMPANY LTD. - OPPOSITE PARTY Registered & Head Office New India Assurance Building 87, Mahatma Gandhi Road, Fort Mumbai 4000 001. Having its Delhi Regional Office-2 Scope Tower-II, Laxmi Nagar, Delhi-92. Having its Meerut Divisional Office-12 339, Bomaby Bazar, Meerut 250001. Having its Meerut Branch Office 201-205, Metro Plaza, Delhi Road, Meerut - 250002 CORAM : S.A. SIDDIQUI - Member(Judicial) S.C. Jain - Member 1. Whether reporters of local newspapers be allowed to see the judgment? 2. To be referred to the Reporter or not? S.A. SIDDIQUI (ORAL) JUDGEMENT
1. M/s JSD Classic International Ltd. Through its Managing Director has filed this complaint under Section 17 of the Consumer Protection Act (hereinafter called as the Act) for the following relief(s):
(a) The award for a sum of Rs. 80 Lacs.
(b) Interest @ 18% p.a. on the aforesaid amount from the date of occurrence till the date of realization.
(c ) Award of additional interest @ 2%.
(d) Award of a sum of Rs. 10 Lacs as compensation towards mental agony, pain and harassment.
(e ) Award of cost of litigation.
2. Complainant is a Company incorporated under the Companies Act 1956 having its registered office at 2365, street No. 11, Raghubir Pura-1, Gandhi Nagar, Delhi; Head Office at 61, Shivaji Road, Meerut and Factory at 37, Mohakampur Industrial Complex, Phase-II, Delhi Road, Meerut. Sh. Ashish Jain is one of its Director and has been duly authorized to pursue the complaint. The factory of the complainant was financed by UP Financial Corporation, Meerut and Syndicate Bank, Meerut.
3. The OP is a Public Sector Undertaking engaged in the business of General Insurance, having its registered and Head office at New India Assurance Building, 87, Mahatma Gandhi Road, Fort, Mumbai-400 001; Delhi Regional office No. 2 at Scope Tower-II, Laxmi Nagar, Delhi-110092, Divisional Office No. 2 at 339, Bombay Bazar, Meerut-250001 and Branch Office at 201-205, Metro Plaza Delhi Road, Meerut-250002.
4. The factory of the complainant was insured with OP for a total sum of Rs. 80 Lacs against fire in respect of stock of jeans, shirts, baby suits (finished, unfinished and raw material) under two different Fire Insurance Cover Notes bearing Nos 0330484 valid for the period 22.4.1998 to 21.4.1999 and 0330485 valid for the period 23.4.1998 to 22.4.1999 on payment of premium of Rs. 7980/- each, total amounting to Rs.15960/-. The insurance policies bearing Nos. 1132220206174 and 1132220206175 were never issued by the OP.
5. During the intervening night of 2/3.06.98, a fire broke out in the premises of the factory of the complainant on account of short circuit, as a result of which more than 90% of the raw material, finished and semi-finished goods were gutted to the ashes and the remaining goods lying in press room adjacent to the Hall of first floor were damaged on account of smoke and water etc. Due to fire, not only aforesaid goods were gutted but costly machines installed at the first floor were also completed spoiled. Building was also damaged. The occurrence of the fire was immediately reported to the Fire Brigade. After fighting for 4-5 hours, they succeeded in extinguishing the fire and the complainant suffered huge losses to the tune of crores of rupees.
The matter was also reported to the Police Station Partapur, Meerut. Information was also given to the Financial Institutions and the OP In pursuance thereof, the OP appointed Surveyor M/s A.K. Govil and Associates, 114, Jor Bagh, New Delhi (herein after called as Surveyor) to assess the actual loss. The complainant preferred an insurance claim No. 11/322202/98/001 under the aforesaid insurance covers. The Surveyor visited the factory premises on 05.06.1998 for assessment of the loss. In terms of the policy conditions, the complainant lodged a claim of Rs. 89,78,921.67 as under:
1. Stock destroyed by fire:
a) Raw Material Rs.13,81,120.00
b) Finished Goods Rs.67,37,090.00
c) Work in Progress Rs. 6,93,125.00
d) Packing Material Rs.1,50,000.00 Rs.89,61,335.00
2. Fire Brigade Expd. Rs. 7,586.67
3. Segregation Expd. Rs. 10,000.00 Total Rs.89,78,921.67
6. The desired documents and information as required by the Surveyor were provided by the complainant from time to time on various dates during the period 6.6.1998 to 18.2.2000. There has been lots of correspondence during this period between the complainant and the surveyor and the copies thereof have been placed on record alongwith complaint.
7. It is alleged that the OP kept the lawful claim of the complainant pending and slept over the matter and after a gap of more than 2 years sent a letter dated 5.12.2002 seeking certain clarifications as per their alleged letter dated 04.2.2002. The clarifications sought by the OP vide their letter dated 5.12.2002 were nothing but harassment and delay tactics on their part with ulterior motives to defeat the lawful claim of the complainant. As a matter of fact, all desired documents/information which could be obtained were already intimated to the OP and Surveyor as and when required and finally on 18.2.2000. After this date, there was nothing left for the complainant to provide the unnecessarily and unwarranted requirements of the OP. True copy of letter dated 5.12.2002 was annexed with the complaint as Annexure C8. Fed up with the never ending demand for documents, explanation etc, the complainant was left with no option but to approach the Grievance Cell of the OP at Mumbai vide letter dated 23.5.2003 for taking necessary action and to expedite the settlement of the claim. In response thereof the complainant received a letter dated 19.6.2003 from the Grievance Cell for prompt action. The complainant reminded the OP through its letter dated 30.7.2003 for taken necessary action. True copy of letter dated 23.5.2003, 19.6.2003 and 30.7.2003 were annexed in complaint as Annexure C-9 (Colly). Despite providing all relevant documents/information, Surveyor failed to assess the loss suffered by the complainant within a stipulated period. On 30.7.2003, complainant wrote a letter to the Surveyor to provide them a copy of surveyor report which the surveyor had submitted to the OP for which complainant is entitled. Vide letter dated 31.7.2003, the surveyor declined to provide the survey report claiming the same as privileged document in violation of the provisions of the Insurance Act 1938. Further vide letter dated 25.10.2004 and 9.3.2005, complainant again demanded copy of survey report and also pressed for settlement of the claim by the OP. True copies of the letter filed and marked as Annex C-10 (Colly). Again through letter dated 9.3.2005 and 5.5.2005, complainant reminded Controller, Delhi Regional Office-2 of the OP for expediting the settlement of the claim but of no avail. Aggrieved by the misconduct of the OP, complainant through letter dated 15.6.2005 approached the Dte of Public Grievances, Sansad Marg, New Delhi for taking action against the OP, which was acknowledged by the Dte through letter dated 1.7.2005. Further the OP vide letter dated 9.3.05 informed the complainant for considering the claim as the claim file was being called for. The complainant again reminding Controller, Delhi Regional Office of the OP through letters dated 8.7.2005, 15.7.2005 and 22.7.2005 for the settlement of the claim, which was acknowledged by them through letter dated 2.8.2005 confirming the fact that they have called for the concerned claim file and scrutinized the same and informed their Divisional Office-2 Meerut to review the claim file. True copies of letters dated 9.3.2005, 5.5.2005, 15.6.2005, 17.6.2005, 7.7.2005, 22.7.2005 and 2.8.2005 annexed and marked as Annex C-11 (Colly). In response to letter dated 15.6.2005 of the complainant to the Dte of Public Grievances, the Divisional Office-2, Meerut of the OP vide letter dated 22.9.2005 confirmed that in view of fresh representation, the claim file was being reviewed. Complainant was once again requested to provide clarifications/comments on the queries raised therein. Through letter dated 12.11.2005, the complainant clarified the points raised. Inspite of these efforts, the claim of the complainant was not settled by the OP and kept the claim pending without taking any decision.
Copies of letter dated 22.9.2005, 12.11.2005 and 29.11.2005 were annexed and marked as Annexure C-12 (Colly).
8. Unfortunately, the Managing Director of the Complainants Company namely S.C. Jain could not bear the loss, pain and agony and passed away in the month of December 2005. His son Sh. Ashish Jain took over as Managing Director and persued the matter further but with no result. The lawful claim of the complainant withheld without any rhyme or reason by the OP.
9. This amounts to gross negligence and the deficiency of the service on the part of the OP. The complainant was therefore compelled to send a legal notice dated 29.4.2009 asking the OP to make payment of Rs. 80 Lacs towards loss suffered by the complainant along with interest @ 18%.
In reply to the legal notice, OP through its letter dated 2.6.2009 intimated the counsel for the complainant that the complainants claim has been made No Claim. This was allegedly done due to noncooperation and failure on the part of the complainant to furnish required information and provide required documents. True copies of the legal notice dated 29.4.2009 of the complainant and reply to the notice dated 2.6.2009 sent by the OP were annexed and marked as Annx. C-14 & 15 respectively. Failure to settle insurance claim and making inordinate delay despite receipt of the survey report in itself amounts to deficiency of service. OP thus failed to fulfill its legal obligations under the contract of indemnification and loss suffered by the insured. Complainant was entitled to be indemnified to the tune of Rs. 80 Lacs as loss suffered by the insured complainant under the policy of insurance along with interest.
10. OP filed its written statement. It was admitted that the factory of the complainant was insured with the OP for a total sum of Rs. 80 Lacs and that cover note bearing Nos. 0330484 and 0330485 for the period 22.4.1998 to 21.4.1999 and 23.4.1998 to 22.4.1999 respectively were issued. However, rest all the allegations contained in the complaint were denied. A preliminary objection was raised to the effect that present complaint was not maintainable for want of territorial jurisdiction. The factory and the office of the complainant were situated in Meerut and insurance policy was taken from the Meerut office of the OP. The State Commission of the UP, therefore, had proper jurisdiction to entertain the complaint.
11. That there was no negligence or any kind of deficiency on the part of the OP. The OP was fully justified in closing the file of the complainant and making it No claim for want of submission of relevant documents/formalities despite numerous letters/reminders sent by the OP. The surveyor/investigator also reminded the complainant to submit vital documents like books of accounts, sales tax details, inventory etc. Exasperated by non-submission of reply by the complainant, the OP was forced to close the file as No claim as the file could not be kept open for an indefinite period. Under the terms and conditions of the insurance policy, insured was bound to submit relevant details of documents and to cooperate in finalization of the insurance claim. The report of Investigator Sh. R.K. Sharma sent numerous letters seeking documents and clarifications but the complainant failed to furnish required information and documents which by itself are sufficient grounds for repudiating/closing the claim. According to the report of Investigator, the spot surveyor and facts & circumstances, the alleged fire in the intervening night of 2/3.06.1998 was manipulated one just to tied over the loss that took place during the night of 31.5.1998 and 01.06.1998 on account of dacoity in the complainants factory. The Investigator collected enough evidence to show that about 15-16 persons entered in the factory premises on the night of 31.5.1998/1.6.1998. They tied all the 5 employees and locked them in a room.
They carried away all the goods in a heavy goods carrier. No insurance policy had been taken for the theft/burglary/dacoity. In addition to this, employees in the factory were smoking/cooking in the factory premises. Kerosene was also kept there. All this was done in the violation of the policy condition (1) & (3) (a). The final surveyor submitted his report based on the part documents for a loss to the tune of Rs. 29,60,437/-.
12. It was denied that the complainant supplied all relevant documents to the surveyor/investigator and the OP. All the three wrote numerous letters for various accounting requirements, sale tax returns, balance sheets, statement of stocks etc., but the same were not supplied. Therefore, the claim was closed as No claim through letter dated 30.9.2003 by the OP. It was further alleged that no specific answer to specific observations and clarifications sought in letter dated 20.9.2005 of the OP was given by the complainant and not for the letter dated 12.11.2005. The complainant has sought to Obfuscate the relevant issues. Accordingly, the competent authority of the OP reiterated its earlier decision of treating the claim as No claim and conveyed it through reply of the legal notice of the complainant. It was further maintained that the complainant was not entitled for any amount of claim as he had miserably failed to supply relevant documents/clarifications as stated earlier. Without admitting any liability, it was stated that only loss to the tune of Rs. 29,60,437/- was assessed by the final surveyor who was a technical person. The Surveyors/Investigators are appointed under a statutory authority and their reports cannot be brushed aside. The report of the surveyor is to be given due importance and there should be sufficient ground for not agreeing with the assessment made by them.
13. Thus, there was no question of any deficiency of service on the part of the OP. The complaint was without force and was liable to be dismissed.
14. Parties led evidence in support of their cases.
15. Complainant filed rejoinder and evidence by way of affidavit and the documents were annexed.
16. OP also filed evidence by way of affidavit appended large number of documents as exhibits, final surveyor report dated 26.9.2000 of Sh. A.K. Govil and Associates. Insurance surveys and law assessors was also filed.
17. We have heard Sh. A.K. Soni, Advocate for the complainant and Sh. V.K. Anand, Advocate for the OP. We have also perused the record at length.
18. Complainant filed written arguments, which were taken on record.
19. It has been argued on behalf of the complainant that a claim of Rs. 89,78,921.67 was submitted by M/s JSD Classic International Ltd., to the Insurance Company for the loss due to fire. The surveyor appointed by the OP visited the factory premises for assessment of the damage/loss. The required information and documents were provided by the complainant to the surveyor on various dates during the period 6.6.1998 to 18.02.2000. The surveyor submitted report dated 29.9.2000 to the OP and assessed a loss to the tune of Rs. 29,60,437/- on the basis of documents submitted by the complainant. However, he wrongly deducted an amount of Rs. 20,05,618/- without any justification whatsoever. The deduction of handsome amount by the surveyor was unjust besides being arbitrary and improper. It was emphasized that the OP instead of paying the assessed loss by the surveyor kept the lawful claim of the complainant pending for a very long time without any cogent reason.
Thereafter, they woke up and through letter dated 5.12.2002 sought certain clarifications as per their alleged letter dated 04.02.2002 while the complainant never received the alleged letter dated 04.02.2002, copy of which was also not attached with the letter dated 05.12.2002. The letter dated 05.12.2002 was an attempt on the part of the OP to harass the complainant and was just a cover to delaying tactics adopted by the insurance company to defeat the lawful claim of the complainant. The counsel further emphasized that the desired documents/information were already supplied to the OP and final surveyor as and when required and finally on 18.2.2000, the complainant had made it abundantly clear to the insurance company and the surveyors that there was nothing left which was to be filed or provided and further demand of information and documents was totally unwarranted. Due to harassing attitude applied by the OP, the complainant was compelled to approach the Grievance Cell of the OP at Mumbai through letter dated 23.5.2003.
In response to the said letter, the complainant received letter dated 19.06.2003 from the Grievances Cell at Mumbai for prompt action. Despite submission of all the relevant information/documents, the surveyor also failed to assess the loss suffered by the complainant within the stipulated period under Section 64 UM of the Insurance Act 1938 and IRDA Regulations.
Through letter dated 30.7.2003, complainant requested the surveyor to provide a copy of its survey report submitted to the OP but the same was declined through letter dated 31.7.2007 framing the same as privileged document in fragrant violation of provision of Insurance Companies Act 1938. Further, through letter dated 25.10.2004 and 09.3.2005, the complainant wrote to the OP to provide the surveyor report and to settle the claim. Again the complainant vide letter dated 9.3.2005 and 5.5.2005 reminded the Controller, Delhi Regional Office-2 of the OP to expedite the settlement of the claim but to no result. The complainant approached the Dte of Public Grievance, Sansad Marg, New Delhi through letter dated 15.6.2005. OP vide letter dated 17.6.2005 acknowledged the letter dated 9.3.2005 of the complainant for considering the claim file. The complainant again reminded the Controller, Delhi Regional Office through its letters dated 08.7.2005, 15.7.2005 and 22.7.2005 for settlement of the claim which were acknowledged by them through letter dated 2.8.2005 confirming that they called for concerned claim file and scrutinized the same and in turn informed the Divisional Office-2, Meerut to review the file and sent them their observations on the points raised. In response to letter dated 15.6.2005 of the complainant to the Dte of Public Grievances, the Divisional Office-2, Meerut through letter dated 22.9.2005 confirmed that in view of fresh representation, the claim file was being reviewed. The complainant was once again requested to provide the clarifications/documents on the points raised. The complainant through letter dated 12.11.2005 clarified the points raised and also requested the Head Office of the OP to settle the claim. Despite all this, the claim was not settled and the matter was kept pending without taking any decision, This clearly amounted to deficiency of services on the part of the OP and gross negligence. The complainant, therefore, served legal notice dated 29.4.2009. In reply to the legal notice, the OP through their counsel vide its letter dated 2.6.09 took the final decision and intimated the counsel for the complainant that the claim of the complainant was not maintainable and the Competent authority of the OP reiterated its earlier decision of treating the claim as No claim. Thus the OP kept the bonafide claim of the complainant pending till 2.6.2009 and finally declined the claim of the complainant. It was argued that OP after receiving the surveyor report assessing the loss to the tune of Rs. 29,60,437/- closed its eyes, did not raise any fault in the surveyor report. They failed to admit the report of the surveyor regarding the net loss caused by fire in the factory of the complainant though it was their bounden duty to settle the claim in the light of the survey report of the final surveyor who has assessed the loss on the basis of the documents provided by the complainant. The insurance company was duty bound to settle the claim within 2-3 months of receiving the surveyor report assessed loss of Rs. 29,60,437/-. The report of the surveyor who is a technical person to assess the loss could not have been ignored by the insurance company. They were duty bound to settle the claim but they failed to do so and illegally made the claim as No claim, which tantamount to gross negligence and deficiency of services of a very high order. He relied upon the following rulings in support of his arguments:
(a) Sri Vankateswara Syndicate Vs. Oriental Insurance Company Ltd. And Ors (2009) 8 SCC 507
(b) Vee Kay Cotsyn Ltd. Vs. United India Insurance Company Ltd. III (2013) CPJ 66 (NC).
20. As regards payment of interest, the counsel relied upon the following two ruling:
(i) National Insurance Company Ltd Vs. M/s Prabhat Rubber Industries III (1996) CPJ 85 (NC).
(ii) United India Insurance Company & Anr Vs. Jahangir Spinners Pvt. Ltd I (1999) CPJ 5 (NC)
21. On the other hand, it has been argued on behalf of the OP that this complaint was not maintainable as this Commission has no territorial jurisdiction to entertain this complaint. The factory and the office of the complainant were situated in Meerut and insurance policy was obtained from the Meerut Branch office of the OP. Proper jurisdiction to entertain this complaint would have been of State Commission UP not Delhi. Ld. Counsel for the OP relied upon two rulings:
1. New India Assurance Co. Ltd. Vs Lasa Footwear IV(2012) CPJ 821 NC
2. Sonic Surgical Vs National Insurance Co. Ltd IV (2009) CPJ 40 (SC).
22. It was further argued that there was no deficiency of services on the part of the OP in closing the file of the complainant for want of submission of relevant documents/formalities inspite of numerous letters and reminders by the OP and the surveyors/investigators. Exasperated by non-submission of the reply by the complainant, the OP was forced to close the file of the complainant as No claim. The file could not have been kept pending for an indefinite period.
The report of investigator, Sh. R.K. Sharma clearly mentioned that numerous letters written by him for certain clarification. As per report of the investigator and spot surveyor and the attending circumstances, the alleged fire in the intervening night of 2/3.06.1998 was manipulated one just to tie over the loss that took place in the intervening night of 31.5.1998/1.6.1998 on account of dacoity in the factory. Lot of finished goods, unfinished goods including machinery was stolen and was taken away by goods carrier by the thieves. No insurance cover had been taken for the theft/burglary/dacoity. In addition, the employees in the factory were smoking/cooking in the factory premises. Kerosene was also kept there. It was also argued that final surveyor submitted its report based on the part documents to the tune of Rs. 29,60,437/-. Therefore, the complainant was not entitled for any amount as claimed. He miserably failed to supply relevant documents/clarifications as and when called by the OP as stated earlier. However, it was maintained that without admitting any liability it was note worthy that final surveyor who was a technical person assessed the loss to the tune of Rs. 29,60,437/-. As per judgment of the Supreme Court in Sri Vankateswara Vs Oriental Insurance Co. Ltd (2009) 8 SCC 507, Surveyors are appointed under a statutory authority and their reports cannot be brushed aside. The report of the surveyor is given due importance and one should have sufficient ground in not to agree with the assessment made by them. It was also argued that Delhi Regional Office is only a Controller authority of Divisional Office and Branch office of the OP at Meerut.
23. As regards the territorial jurisdiction of this Commission is concerned, the two rulings relied upon by the OP are not much helpful to the OP as the facts of the two cases were different from the facts of the present case. It is an admitted case of the OP that Meerut Divisional office, 339, Bombay Bazar, Meerut and Meerut branch Office, 201-205, Metro Plaza, Delhi Road, Meerut are functioning under the direct control of Delhi Regional office-2, Scope Tower-II, Laxmi Nagar, Delhi.
24. Sh.
A.K. Govil and Associates, Surveyor and loss assessors, 114, Jor Bagh, New Delhi 110003, in their report dated 29.9.2000 clearly noted that instructions were received from the Delhi Regional Office-2 on 4th June, 1998 to survey and assess the loss caused to insured property of the complainant due to fire. Accordingly, surveyors visited the insured affected premises on 5.6.1998 and preliminary survey report was submitted on 6.6.1998. Moreover, complainant through letter dated 9.3.2005 and 5.5.2005 requested Delhi Regional office-2 of the OP for expeditious settlement of the claim.
Delhi Regional office of the OP through letter dated 8.7.2005 of the complainant reminded them for settlement of the claim, which were acknowledged by them through letter dated 2.8.2005 and confirmed the fact that they have called for the concerned claim file and scrutinized the same. They instructed the Divisional Office-2, Meerut to review the claim file and sent their observations.
We are, therefore, of the considered view that this Commission has territorial jurisdiction to entertain and decide the complaint in view of the provision of Section 17(2)(b) read with clause (c) of the Consumer protection Act 1986, besides the existence of Controller, Regional office of OP at Delhi. Part of the cause of action also arose at Delhi.
25. The next question that needs our consideration is settlement of the claim. Sh. A.K. Govil and Associates, the final Surveyor assessed the loss caused due to fire submitted their report dated 29.9.2000 in which net loss assessed was to the tune on Rs. 29,60,437/-. This report regarding loss due to fire was based on the documents and information which were provided by the complainant to the surveyor. Despite clear report of loss to the tune of Rs. 29,60,437/-, the insurance Company in its wisdom kept the matter pending without any decision. They were only awoken after the complainant sent a legal notice dated 29.4.2009 to the OP. The OP thereafter sent a reply on 2.6.2009 informing the complainant that as per direction of the Regional Office of the OP, the competent authority reviewed the matter and in the absence of non-submission of required information/documents, construed that the insured had nothing to reply. The Competent authority of the OP, therefore, reiterated its earlier decision of treating the claim as No claim. For this reason, the claim was not found maintainable. It is interesting to note that both the complainant and the OP have relied upon the ruling of the Honble SC in Sri Venkateswara Syndicate Vs. Oriental Insurance Co. Ltd. - (2009) 8 SCC 507. In this leading case, the Honble Supreme Court held:
(a) However, if report is prepared in good faith, with due application of mind and in the absence of any error or ill-motive, insurance company cannot reject the report of the surveyors.
(b) The Surveyor/Surveyors are appointed by the insurance company under the provisions of Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them.
(c ) Report of the Surveyor forms basis for settlement of a claim by insurer in respect of the loss suffered by insured.
26. Complainant also relied upon the ruling of the Honble National Commission in Vee Kay Cotsyn Ltd. Vs. United India Insurance Company Ltd. III (2013) CPJ 66 (NC), wherein it was held that surveyor report has significant evidentiary value.
27. The conduct of the OP Insurance Company was strange and incomprehensible. They neither rejected the report nor relied upon it. It should have formed basis for settlement of the claim but Insurance Company chose to brush the report aside by keeping quite. When legal notice was given, they simply said that the insurance claim was not maintainable, therefore, the claim was made as No claim.
Certain flimsy reasons were given but nothing was said about surveyor report which was totally based on submission of the documents and clarifications. The report dated 29.9.2000 of the Surveyor Sh. A.K. Govil and Associates is very candid and detailed covering of all aspects of the matter. It has been mentioned in the report that it is based on the documents/information submitted by the complainant. Assessment of loss was discussed and explained and the complainant was requested to accord its consent. It was also mentioned in the report that on visiting the fire affected portion of the factory, they were of the opinion that the fire may have been caused due to electric short circuit from where the finished goods were stored.
Insured also furnished a copy of fire brigade report dated 20.6.1998 in vernacular and its English Translation which also supports the chances of fire being caused by electric short circuit.
Ignoring hard facts, evidence and circumstances, the Insurance Company came to the conclusion that the incident of fire was manipulated to cover the loss caused in theft occurring in the factory two days before the incident of fire. They further rejected the electric short circuit as most probable cause of fire instead of relying the report of final surveyor Sh. A.K. Govil and Associates, Insurance company appears to have given more reliance on the report of Sh. R.K. Sharma, Investigator who was non-technical person and whose report does not carry much meaning.
28. In view of these facts and circumstances and legal position, we are of the clear view that the OP committed gross negligence and deficiency of service in not finalizing the settlement of the insurance claim after the submission of report of Sh. A.K. Govil and Associates who were deputed to assess the loss caused due to fire. The Insurance Company instead relied upon the report of Sh. R.K. Sharma, Investigator, which appears to be tailor made and complaint.
29. Thus the Insurance Company was clearly guilty of deficiency of service. They were legally bound to settle the long pending claim of the complainant in the light of the surveyor report.
30. It was argued by Ld. counsel for the complainant that complainant was not only entitled to get at least Rs. 29,60,437/- as assessed loss by the surveyor due to fire but this amount was illegally withheld by the OP Insurance Company for a very long time and therefore, the complainant was entitled to get fair amount of interest as well. The Insurance Company is given a reasonable time of 2-3 months for settlement of the claim after the submission of the surveyor report.
In the present case, surveyor submitted its report on 29.9.2000. In our considered view, complainant is entitled to get interest @ 9% from 1.1.2001 till the realization.
31. It was also argued that the complainant ran from pillar to post to get its lawful claim settled within reasonable time but it was made to suffer lot of harassment, mental agony and pain besides suffering huge financial loss. On this count, a sum of Rs. 10 Lacs has been claimed. Considering the entire facts and circumstances, we are of the view that a sum of Rs. 1,50,000/- towards compensation for harassment, mental agony and pain will suffice the end of justice. Besides a sum of Rs. 10,000/- will also have to be paid by the OP towards cost of litigation.
32. Before concluding, it would not be out of place to mention that over all attitude of the Insurance Company has been callous towards settling a lawful claim within the framework of Laws and within a reasonable time.
33. The Final Surveyor Sh. A.K. Govil and Associates also deducted a sum of Rs. 20 Lacs while calculating the loss caused by fire but we do not find very reliable and cogent basis for the same. However, it is our considered view that at least payment of net loss calculated by the Surveyor will have to be paid as the report of Surveyor has significant evidentiary value.
ORDER Accordingly, complaint partly succeeds and is allowed.
OP New India Insurance Company Ltd is directed to pay a sum of Rs. 29,60,437/- towards insurance claim within a period of 30 days from the date of knowledge of the judgement and order along with interest @ 9% p.a. from 1.1.2001 till the date of realisation. OP is further directed to pay compensation of Rs. 1,50,000/- towards harassment, mental pain and agony besides a sum of Rs. 10,000/- towards litigation expenses.
34. A copy of this judgement and order as per the statutory requirement be provided to the parties free of charge, thereafter the file be consigned to Record Room.
(S.A. SIDDIQUI) MEMBER (JUDICIAL) (S.C. JAIN) MEMBER rn