State Consumer Disputes Redressal Commission
M/S Saraswati Fertilizers vs United India Insurance Company Ltd. on 30 September, 2011
Daily Order
STATE CONSUMER DISPUTES REDRESSAL COMMISSION BIHAR, PATNA RAJY AAYOG (First. Floor), R. Block Rd. No.-2, Patna-800001 Complaint Case No. CC/3/2001 1. M/S SARASWATI FERTILISERS PATNA BEFORE: HONABLE MR. JUSTICE SUBASH CHANDRA JHA PRESIDENT HON'ABLE MRS. RENU SINHA MEMBER PRESENT: ORDER
Date of order: 30-09-2011
RENU SINHA, MEMBER
The present complaint case is filed by M/S Saraswati Fertilisers through its one of partners Birendra Singh against O.P.No.1 & 2 United India Insurance Company Ltd. and O.P.No.3-Punjab National Bank for deficiency in service for wrong and arbitrary repudiation of the insurance claim in respect to the damage of fertilizer kept in the godown due to rain and storm although the risk covered under the insurance policy and has claimed for total sum of Rs. 8,11,400/- with interest on different counts.
2. The facts of the complaint case is that the Sarsawati Fertilizer Firm is a partnership firm and the complainant is one of the partner among the three having business in fertilizer with different branches in the State of Bihar and it is financed by the Punjab National Bank. The firm had been under regular fire policy for last ten years with Oriental Insurance Company Ltd. but after the expiry of the previous policy, the O.P.No.3-Punjab National Bank persuaded the complainant to take policy from United India Insurance Company Ltd. Accordingly, on reques,the O.P.No.3 agreed to give business of United India Insurance Company and the firm was insured by the O.P.No.1 & 2-United India Insurance Company for all types of fertilizer kept in different godowns and covered under the risk of Fire Policy "C" for the total insured sum of Rs. 90 lacs bearing No. 210102/11/1/042/99-2000 after payment of premium of Rs. 27,830/- on 15-07-1999 for the for the period commencing from 24-07-1999 to 23-07-2000. On the request of the complainant, the Firm was also provided additional coverage against the risk of flood, which was attached to the Fire "C" Policy with STFI extension bearing No. 210102/11/1/002/99-2000 after the payment of extra premium of Rs. 6,734/- on 13-08-1999 fir insured sum of Rs. 90 lacs. One separate policy covering the risk of burglary and house breaking was also provided on 15-07-1999 bearing No. 210102/46/1/038/99-2000 for the sum insured for Rs. 90 lacs covering the same one year period for 24-07-1999 to 23-07-2000 to the complainant.
3. It is submitted by the complainant that on the night of 16/17-09-1999, the fertilizer kept in the godown at Singhi Khurd, Ara got damaged due to rain and storm. The incident was informed to the United India Insurance Company on the very next morning on 17-09-1999. Thereafter, on 25-09-1999, the O.P. deputed a surveyor, Sri Shyam Sundar Bhartiya to inspect the godown and to assess the loss. During his visit, he found that the roof sheet of the godown was flown up and the fertilizer kept in the godown were damaged due to rain water. The Insurance Company deputed another surveyor, Mr. Sristidhar Jha to investigate the matter and as per his request letter dated 30-10-1999, the complainant submitted all the relevant documents as per his demand. The surveyor, Sri Shayam Sundar Bhartiya along with Mr. Sristidhar Jha inspected the site of incident again and found 1420 bags of DAP badly affected and damaged due to rainwater and it was advised to the complainant to isolate them for further investigation. In course of investigation, he also recorded the statement of godown keeper, Bharat Roy, Sanjay Singh and Mangleshwar Singh about the occurrence of the incident. The surveyor also examined all the concerned documents of the complainant including renewal certificate, stock register, return submitted to the Director, Agriculture, Bihar for the period January,1999 to October,1999, audit report dated 31-08-1999, statement of accounts maintained by Punjab National Bank, Ara branch, audited balance sheet and profit and loss account of 1998-1999, purchase, sale and closing stock for 01-04-1999 to 16-09-1999.
4. It is further stated by the complainant that the surveyor, Sri Shyam Sundar Bhartiya also confirmed the incident of rain and storm after considering the report of the Circle Officer, Ara and from Japani Vigyan Kendra, Japani Farm, Ara and after thorough investigation, the surveyor, Sri Sristidhar Jha has also came to the final finding that the loss sustained due to rain on the night of 16/17-09-1999. The final survey report was prepared and submitted to the Insurance Company.
5. Despite the Insurance Company did not settle the claim of loss of th Fertilizer Company and sat over the matter inspite of receipt of final survey report in June, 2000 and investigator report in March,2000. The complainant made a request to the O.P. vide letter dated 16-10-2000 to settle the claim. Thereafter, vide letter dated 19-10-2000, the United India Insurance Company repudiated the claim of the complainant on the basis of certificate granted by Sone Command Area Development Authority (hereinafter to be referred to as SCADA only), Patna wherein it was stated that the "velocity of wind at Ara was normal and rainfall recorded nil". A representation was also made by the complainant to the O.P. for the consideration of the claim but it was denied the claim in view of the repudiation, hence the complaint.
6. The complainant has challenged the validity of the repudiation of the claim by the Insurance Company on the basis of the certificate of SCADA as illegal, arbitrary and against the authentic material of survey report of Sri S.S. Bhartiya and investigation report of Sri Sristidhar Jha and also against the report of Circle Officer, Ara and certificate of Metrological Centre, Japani Farm, Ara in view of the fact that it recorded the velocity of wind and rainfall at Ara and not at Singhi Khurd, which is situated at a distance of 10 K.M. from Ara.
7. It is also challenged by the complainant that the repudiation of the claim on the basis of report of SCADA, which has already been contradicted and falsified by the same Department under his certificate (Annexure-2). Therefore, the repudiation based on such frivolous report is illegal, arbitrary and amount to deficiency of service on the part of the O.P.-Insurance Company and are liable to indemnify the insured amount as per the policy.
8. The complainant has sought for the relief for allowing the claim amount of Rs. 6,36,420/- with compensation of Rs. 1,50,000/- towards harassment and mental agony with interest @ 12% per annum from the date of submission of surveyor report till the date of payment and litigation cost of Rs. 25,000/-.
9. In support of his case, the complainant has filed following documents on affidavit and the ruling of the Supreme Court as below:-
1. Xerox copy of policy No. 210102/46/1/038/1999-2000 burglary
2. Xerox copy of policy No. 210102/11/1/042/1999-2000 fire
3. Xerox copy of policy No. 210102/11/1/002/1999-2000 flood (Exbt. 1,2,2/1 & 2/2)
4. Xerox copy of letter to O.Ps. NO.1 dated 06-09-1999 (Exbt-3)
5. Xerox copy of letter dated 17-09-1999 to O.P.No.1 (Exbt.4)
6. Xerox copy of letter dated 26-09-1999 of surveyor (Exbt.5)
7. Xerox copy of letter dated 09-10-1999 and 25-10-1999 (Exbt.6 & 6/1)
8. Xerox copy of letter dated 30-10-1999 submitted to surveyor, Sri Jha (Exbit-7)
9. Xerox copy of stock statement, balance sheet, cash collection report required to be tested by other Court. (Exbt-8 & 8/1)
10. Xerox copy of letter dated 24-12-1999 of surveyor and reply by the Circle Officer, Ara dated 03-01-2000 (Exbit-9)
11. Xerox copy of certificate dated 09-05-2000 Sone Cammand Area Development Authority (SCADA), Ara (Exbit-11)
12. Xerox copy of letter dated 31-05-2000 of the C.O. informing the surveyor, Sri Bhartiya to accept the salvage at Rs. 80/- per bag on weight bags (Exbt.12).
13. Xerox copy of letter dated 16-10-2000 by complainant to O.P.(Exbit.13)
14. Xerox copy of repudiation letter dated 19-10-2000 (Exbit.14)
15. Decision relied on behalf of the complainant are 2003 7 SCC 233 CCI Chambers Coop. Housing Society Ltd. Vs. Dev. Credit and 2009 2 SCC 301 Punj Lyod Ltd. vs. Corp. Risks India Pvt. Ltd.
10. On being served notices, the O.P.- Insurance Company and the O.P.No.3- Punjab National Bank appeared and filed their respective written statements, which is on the record.
11. The written statement filed by the United India Insurance Company has raised objection on the point of maintainability of the complaint in view of the fact that the complainant having a partnership Firm having commercial purpose does not come under the purview of the Consumer Protection Act and second the certificate issued by SCADA, which was challenged by the complainant is a matter required to be appropriate adjudication in the court of law not by Consumer Forum as it needs to be full fledged enquiry. In support of the above averment, the O.P. have relied upon the judgement of 2006 IV CPJ 1 SC wherein it has been held that the complex factual position requires that the mater should be examined by an appropriate Court of Law (Annexure-A).
12. A plea has been taken by the O.P. that the certificate issued by the authorized agency -SCADA dated 22-12-1999 is based on metrological data recorded at Ara and is taken as most important and authentic evidence in view of the report of Sri Sristidhar Jha, investigator has also confirmed the same whereas the certificate about weather report issued by the Circle Officer, Ara and Japani Vigyan Kendra, Japani Farm, Ara is not authentic as they are not competent authority in the matter. So, those documents should not be considered. Therefore, in view of the above stated position, the O.Ps. has rightly repudiated the claim of the complainant vide letter dated 19-10-2000. The complainant was not entitled for any compensation for the less claim, which is baseless, frivolous and has to be dismissed with cost.
13. The O.P.No.3-Punjab National Bank has submitted in his written statement that the complaint petition is not maintainable against him on the ground of misjoinder. At Para-3 of the complaint petition mentioning of O.P.No.1 & 2 persuaded O.P.No.3 to take policy is false and baseless but the fact is that the complainant did not get stocks of his fertilizer insured before the expiry of the previous insurance policy. Therefore, the O.P.No.3-Punjab National Bank got the stocks insured by the United Insurance Company as it was not safe to keep the stock without insurance coverage. Therefore, it was prayed to exonerate Punjab National Bank from the allegation made in Para-3 of the complaint petition.
14. We have duly considered the submission so far put forward on behalf of the complainant and the O.Ps. and have gone through the materials on record. We have also examined the letter dated 26-09-1999, which relates to the inspection of the godown just after the incident by the surveyor, Sri Shyam Sundar Bhartiya. It is evident that it has been advised to the insured to keep the damaged DAP bag separately for further inspection. We have also gone through the letter dated 09-10-1999 and 25-10-1999 of Sri Sristidhar Jha, Investigating Officer appointed by the Insurance Company, who after verification of various documents confirmed the incident. We have also examined the final survey report dated 09-06-2000 of the Surveyor, Sri Shyam Sunder Bhartiya, which is an extensive based on after verification of various documents, reports and enquiry. We have also taken the note of the details of the insured and the assessment of the loss due to STFI in one of the godown of M/S Saraswati Fertilizer near Ara to the tune of Rs. 4,53,427-16 after assessing the value of balance stock at the time of loss Rs. 57 lacs, less the stock found in good condition Rs. 50,63,123/-, less the mount of policy excess as per terms and condition Rs. 63,536/- and the less the salvage value of Rs. 80/- per bag for Rs. 1,18,400/-. The surveyor has verified all other records and books of account and assessed the loss on the basis of books of accounts and audited statement for the period 01-04-1999 to 16-09-1999.
15. Heard the learned counsel appearing for both the parties and perused the materials at length. It is admitted fact that the complainant has taken a comprehensive insurance policy covering various risk of fire, burglary and house breaking including flood issued by the O.Ps.- Insurance Company to safeguard the business of fertilizer from such kind of eventualities. Now, the point of consideration is that whether the stocks kept in the godown at Singhi Khurd was damaged due to STFI flood, the risk covered under the policy or not and second the repudiation of the claim amount under such risk was valid or not.
16. In this context, we find that the certificate issued by the SCADA only goes to show the recorded data of weather condition of Ara town, not the place where the incident of storm and rain occurred in the night of 16/17-09-1999 at Singhi Khurd, which is ten KM away from Ara. In addition to that the said certificate does not bear seal and sign of its authorized signatory or an affidavit to ascertain the veracity and genuineness of that piece of paper. Therefore, that certificate produced by the Insurance Company cannot be considered or relied upon as a piece of evidence. In course of argument, it is submitted by the counsel for the complainant that there is every possibility of circle whist wind of high velocity with rain, which normally happens within 100 gag and night have diverted to any direction without touching the Ara town or knocking the door of the SCADA. Therefore, the occurrence of storm and rain at Singhi Khurd cannot be ruled out.
17. On the other hand, surveyor's report is an important piece of evidence in settling the claim in respect of loss and is to be considered unless there is some cogent reason assigned to the contrary. In the present case, we are of the opinion that the surveyor has given an extensive report after going through various document, investigation and examining the entire stocks confirmed the incident and evaluated the loss. Therefore, in our view, the Insurance Company having been accepted the premium amount on a particular risk cannot disown the claim under the risk covered on one pretext or other when it is called upon to make payment.
18. The complainant is entitled to the damages as per the assessment made by the surveyor in its final survey report dated 20-06-2002 and the O.P.-Insurance Company is liable to indemnify the loss for the risk covered under STFI in the said policy to the complainant. The Punjab National Bank is exonerated from this complaint case.
19. Therefore, it is directed to the O.P.-United India Insurance Company to pay the assessed payable loss amount of Rs. 4,53,000/- with interest @ 9% per annum to the complainant from the date the complaint was filed till the date of payment. It is also directed to pay Rs. 10,000/- as compensation for the mental agony and Rs. 5000/- as cost of litigation to the complainant within two months from passing of this order.
20. In the result, the complaint is allowed. [HONABLE MR. JUSTICE SUBASH CHANDRA JHA] PRESIDENT [HON'ABLE MRS. RENU SINHA] MEMBER