National Consumer Disputes Redressal
National Insurance Company Limited vs M/S. Ali Cloth House & Anr. on 3 December, 2021
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1713 OF 2016 (Against the Order dated 18/03/2016 in Appeal No. 2115/2007 of the State Commission Uttar Pradesh) 1. NATIONAL INSURANCE COMPANY LIMITED THROUGH BRANCH MANAGER, NEAR DIAMOND CINEMA, STATION ROAD, BAHRAICH UTTAR PARDESH ...........Petitioner(s) Versus 1. M/S. ALI CLOTH HOUSE & ANR. THROUGH PROPRIETOR, BHURE ALI BHUPGANJ BAZAR, PAYAG PUR, DISTRICT-BAHRAICH UTTAR PRADESH 2. BRANCH MANAGER, DISTRICT CO-OPERATIVE BANK LTD.,PAYAG PUR, DISTRICT-BAHRAICH UTTAR PARDESH ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE DR. S.M. KANTIKAR,MEMBER For the Petitioner : For the Petitioner : Mr. Paramod K. Singh, Advocate For the Respondent : For the Respondents : Mr. O.P. Srivastava, Advocate for R-1 NEMO for R-2 Dated : 03 Dec 2021 ORDER R.K. AGRAWAL, J., PRESIDENT Challenge in this Revision Petition is to the order dated 18.3.2016 passed by the State Consumer Disputes Redressal Commission, U.P. at Lucknow (hereinafter referred to as "the State Commission") in Appeal No.2115/2007. By the Impugned Order, the State Commission reversing the Order dated 18.05.2007 passed by the District Consumer Disputes Redressal Forum, Bahraich (hereinafter referred to as "the District Forum") dismissing the Complaint No.143/04 filed by the Complaint, has allowed the Appeal and directed the Petitioner Insurance Company (hereinafter referred to as "the Insurance Company") to pay the entire insured amount to the Complainant along with interest @ 9% p.a. from the date of filing of the Complaint till the date of actual payment.
02. Facts giving rise to the filing of the Complaint before the District Forum are that the Complainant had opened a clothing shop in Bupatganj Bazar, Bahraich for the livelihood of his family, for which he had taken Cash Credit limit of ₹2,00,000/- from Respondent No.2, District Co-Operative Bank Ltd. (hereinafter referred to as "the Bank"). The shop was insured for a sum of ₹2,00,000/- with the Petitioner for the period from 25.4.2003 to 24.4.2004. On 25.3.2004, the Complainant closed the shop at 7.00 PM. Thereafter at 9.00 PM, the fire occurred in the shop and a neighbour informed the Complainant about the occurrence of fire. Neighbours tried to put off the fire but could not control the fire. As a result, all cloth, furniture, bill counter etc. in the shop got burnt. Complainant reached the shop only after one and a half hour and informed the Police about the incident. Complainant also informed the Bank and the Insurance Company about occurrence of fire incident.
03. On intimation, the Insurance Company appointed a Surveyor to assess the loss. Complainant submitted the duly filled in Claim Form with the Bank, which denied to pay the claim by its letter dated 3.9.2004. The claim of the Respondent has been denied by the Insurance Company on the ground that the Complainant has admitted in the Claim Form as well as in the report lodged with the Police that he left burn aggarbatti in the Shop after Namaaz which was the violation of the condition No.3 of the Policy. Feeling aggrieved, Complainant filed the Complaint before the District Forum.
04. Upon notice, Petitioner Insurance Company entered appearance and filed its Written Statement. Bank did not respond to the notice and was proceeded against ex parte. In the Written Statement, the Insurance Company accepted the insurance of the Shop. It was stated that the Surveyor in his Survey Report dated 11.06.2004 had indicated that the fire occurred due to negligence of the Complainant as he left burnt Aggarbatties in the shop after worshipping Namaz and in terms of Condition No.3 of the Insurance Policy obtained by the Complainant, it was his liability to protect the insured articles and to keep it in the proper care. However, the Surveyor assessed the loss at ₹78,609.90 and as the Complainant did not maintain any Stock and Account Register, the actual loss was assessed ₹48,956.75p after deduction of 25% towards non-maintenance of Account Book and ₹10,000/- as per Excess Clause of the Policy. Since the survey report indicated that the fire occurred due to negligence of the Complainant, the claim was rejected as "NO CLAIM".
05. District Forum, after perusal of the pleadings and evidence and hearing the Complainant as well as the Insurance Company, dismissed the Complaint observing as under:-
" As per the Complainant's statement, the fire took place due to reason that he forgot to put off the burning agarbatti at the time of the closure of the shop through which the fire took place in night at about 9.30 p.m. The arguments of the counsel for the Complainant are that it seems impossible that the fire took place at 9.30 p.m. from burning abarbatti which was left at 7.00 p.m. This argument is not effective. There is no any evidence or expectation to the effect that in which order and kind the fire took place in the shop from the burning agarbatti, left at 7.00 P.M at the time of closure of the shop but it is clear and confirm statement of the Complainant to the effect that he forgot to put off the burning agarbatti at 7.00 P.M. at the time of closure of the shop due to which, in the night at 9.30 P.M. the fire took place in the shop. There is no any other such fact or evidence which may prove that the fire as stated in the FIR of the Complainant, not took place but it took place some other way.
XXXXXXXXXX From the aforesaid discussions, the Forum is of the conclusion that form the evidence available on the file, it is proved that the accident of fire in question was took place due to negligence and carelessness of the Complainant and in the circumstances, as per the conditions of the Insurance Policy, the decision of "No Claim" of the claim of the Complainant "
06. Dis-satisfied by the Order passed by the District Forum, the Complainant preferred Appeal before the State Commission.
07. The State Commission, after re-appreciation of the facts and material available before it, came to the conclusion that the Insurance Company was not justified in repudiating of the claim of the Complainant in absence of actual cause of occurring of fire and consequently allowed the Complaint in the above terms. The English translation of the relevant portion of the Order of the State Commission which is in vernacular language, is as under:-
` " On behalf of the Respondent No.1, mainly, it is argued that the Surveyor deputed by the Insurance Company after investigation and assessment of loss submitted their report and on the said basis the insurance claim of the complainant was accepted for the payment but the Complainant did not receive the payment and filed the complaint to which dismissed by the District Forum which is lawful and is appeal is liable to be dismissed. (emphasis supplied) After hearing both the learned Counsel at length and perusal of the file, we reach on the conclusion that the appellant for the self-employment after taking the C.C. limit of ₹2,00,000/- for the business of clothing shop, got insured his shop from the Insurance Company. During the period of insurance, the fire took place in the shop of the appellant, due to which the entire cloths and articles stored in the shop ruined by burning, due to which, the appellant sustained a huge loss. The shop of the appellant was covered from the fire under the Insurance Policy. The District Forum passed the judgement by ignoring these facts, which is not proper in judicial view, therefore, we find the present appeal acceptable."
08. Insurance Company, being aggrieved by the order passed by the State Commission has preferred this Revision Petition.
09. Heard the learned Counsel for the Petitioner and the Insurance Company at some length and have gone through the Complaint and material available on record.
10. It is a fact that the Complainant had taken a Shop Keepers Insurance Policy Cover Note No. 139627 from the Insurance Company for the period from 25.04.2003 to 24.04.2004 for a sum of ₹2,00,000/- covering the risk against fire on stock of all types of clothes. There was a fire accident in the shop on 25.03.2004. There is no denial of fire incident by the Insurance Company. In order to have a proper appreciation of the case, it is essential to go through the Surveyor's Report. The Surveyor in his Report dated 11.06.2004 with regard to cause of fire in the shop, under the heading of "Cause of Loss" has reported as under:-
The insured had reported to the police the cause of fire due to he left burnt Agarbatties in the shop after worshipping Namaz and the same filled in the claim form. In my opinion also, the same may be the cause of fire. First the stock might have started smouldering and later, due to polyester stock converted into a devastating fire. However, malicious act of some anti-social elements cannot be ruled out.(emphasis supplied)
11. A bare perusal of the afore-extracted Survey Report would reveal that the Surveyor was doubtful with regard to the exact cause of fire and he had not ruled out the possibility of the fire by some anti-social elements. It is pertinent to note here that the Surveyor has not been able to pin-point the alleged doubtful nature of the fire incident as alleged by him in his Report. He has simply mentioned it. He has just based his argument on the statement made by the Complainant in the FIR as well as Claim Form that the fire occurred perhaps due to he left burnt Aggarbatties in the shop after Namaaz. No conclusive evidence has been given to the fact that the fire was caused due to careless or negligence on the part of the Complainant. The Agarbatties were burnt at 7.00 P.M. by the Complainant while paying his Namaz and the fire had taken place in the Shop as reported by the Neighbours around 9.30 P.M. In our considered opinion, it is not possible that the Agarbatties burnt for near about two and half hours and caused the fire in the shop. Except the bare assertion of the Surveyor in his report, there is no cogent evidence available on the record to indicate the actual cause of fire. The fire was put off by the Neighbours of the shop. The Surveyor in his report has mentioned as under:-
" During our local enquiry, it was learnt that Shri Indal Pasad having his cycle shop in front of the insured's shop, while working in his shop, at bout 9.30 P.M was smoke emanating from the insured's shop. He got stunned. He started vociferate that a fire had set up in the insured's shop. Immediately a lot of market people thronged at the insured's shop. By that time, it converted to devastating flams. To save adjacent shops, they broke the locks of shutter of the insured' shop and started quenching the fire using water buckets. The fire was quenched after great effort but by the time almost the whole stock burnt in the fire. It was also learnt the insured could not be informed in the night due to telephones were not working and the insured resides at quite distant place, about 8-10 km. away in a village Shivdah. They could not inform the fire brigade also due to bad telephone lines. Moreover, due to nearest fire brigade was available at Bahraich which is about 30 km. away from Payagpur and by the time the fire brigade could arrive, the fire could spread to the nearby shops causing colossal damage, hence, the market people took their decision and quenched the fire themselves.
12. Hence, in the absence of any other cogent evidence with regard to actual cause of fire, it cannot be safely concluded that the fire occurred due to negligence or carelessness of the Complainant in leaving the burnt Agarbatties in the Shop. Since, the source of fire has not been identified by the Surveyor, in such a situation, the Insurance Company cannot take the ground of violation of condition No.3 of the Policy casting a duty upon the Complainant to take proper care of the insured articles. Moreover, it is not the case of the Insurance Company that with any malafide intention, the Insured has put the shop on fire. It is only the assumption of the Surveyor that the fire may have caught due to burning Agarnbatties. On the contrary, the Surveyor has not ruled out the possibility of fire by an anti-social element.
13. At this juncture, we would like to place reliance upon the decision of the Hon'ble Apex Court in the case of Canara Bank Vs. M/s United India Insurance Co.Ltd. & Ors. - Civil Appeal No.1042 of 2020 decided on 6.2.2020, in which, inter-alia, it has been held as under :
" In any event, neither in the report of M/s Truth Labs nor in the other reports by the Insurance Company is there anything to show that the insured had set the cold storage on fire. Whether the fire took place by a short circuit or any other reason, as long as insured is not the person who caused the fire, the Insurance Company cannot escape its liability in terms of the insurance policy. We reject the contention of the Insurance Company that the fire was ignited by the use of kerosene and hence, it is not liable."
14. Further, we place reliance upon the decision of the Apex Court in the case of the New India Assurance Co. Ltd. Vs. M/s. Protection Manufacturers Pvt. Ltd. - Civil Appeal No. 312 of 2006 decided on 08.07.2010 wherein the exact cause of fire was not known, it was held as under:-
"33. Without any material to support the theory of arson projected by M/s. J. Basheer & Associates and sufficient material to hold otherwise, it would be entirely unjust and inequitable to accept such a theory without any evidence whatsoever in support thereof. Reference can be made in this context to the submission made by the counsel for the Insurance Company before the National Commission and quoted in para 17 above. Accordingly, we endorse the views expressed by the National Commission that the cause of fire was accidental and that the attempt made by M/s. J. Basheer & Associates to show that the fire had been caused by an act of arson, was motivated and intended to benefit the Appellant Insurance Company."
15. In view of the above, we are of the considered view that the Complainant needs to be given benefit of doubt in the absence of any concrete proof of his negligence or carelessness. The repudiation of claim by the Insurance Company is without any basis. Therefore, the Complainant is justified in his demand for claim towards the loss suffered by him. Even otherwise, it has been recorded by the State Commission in its order that the main contention of the Learned Counsel for the Insurance Company is that they have accepted the claim of the Complainant based on the report of the Surveyor but the Complainant has not accepted the offered amount. As such, it is clear that in the absence of any cogent evidence with regard to exact cause of fire, the Insurance Company was ready to settle the claim with the Complainant.
16. Now, coming to the question of the loss suffered by the Complainant, the Surveyor in his report has assessed the loss as under:-
In my opinion, the insured's total stock in his shop just before the loss from our rough physical verification should have been worth ₹90,000/- only. Thus our loss assessment is as follows:-
Sl.
NO.
Particulars Amount (In Rs.)
1.
Cost of total stock present in the insured's shop just before the loss from our rough physical verification 90,000.00
2. Less Cost of total unscathed stock which was saleable
-3,3911.00 Total 86,609.00
3. Less Salvage of the burnt remnants assessed on the notional Basis
-3,000.00 Total 83,609.00
4. Less a notional value of obsolete stock generated in the shop during the operation of the business
-5,000.00 Total 78,609.00
5. Less an adjustment for erroneousness if any as the insured does not maintain stock register and other books of account, @ 25% 19,652.25 Net Loss Assessed 58,956.75 Note: As per policy condition, a sum of ₹10,000/- is to be deducted as deductible excess from the above assessed loss to arrive at the net payable loss at Rs.48,956.75
17. From the reading of the above chart, it is manifest that the Surveyor had taken the total stocks of clothes available in the Shop at the time of fire incident at ₹90,000/- in the absence of any Stock or Account Register being maintained by the Complainant. It had been admitted by the Complainant that since he was not preparing any Trading Account or paying any tax, he did not maintain the Stock or Account Register. He had further stated that all the Purchase Vouchers had been burnt in the fire. However, he had produced some kaccha vouchers to the Surveyor. On behest of the Surveyor, he submitted some copy of the Pucca purchase Vouchers according to which his purchases on pucca vouchers was ₹1,17,895/- which has also been considered reasonable by the Surveyor in his report. No material including the claim form is available on record to show how much amount had been claimed by the Insured Complainant from the Insurance Company towards the loss suffered by him in the fire accident. However, it has been mentioned by the Surveyor in his report that the insured had reported to the Insurance Company his loss worth ₹1,45,000/- which cannot be disapproved taking into consideration the stock statements prepared by the Complainant for the months of November 2003 to February 2004 which was ₹2,76,258/-, ₹2,50,140/- ₹2,07,665 and ₹1,84,526/- respectively. Hence, it is clear that the Surveyor has wrongly assessed the value of stocks available in the shop at the time of fire accident as according to him the fire was devastating and all the stocks available in the shop has badly damaged or burnt. In Catena of judgments, the Hon'ble Supreme Court has held that though the Surveyor Report is an important documents to indemnify the loss suffered by the Insured but the Insurance Company is not binding with the said report. In the case of New India Assurance Co. Ltd. Vs. Pradeep Kumar - Civil Appeal No.3253 of 2002 decided on 9.4.2009, the Hon'ble Apex Court has held as under:-
" In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but Surveyor's report is not the last and final work. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured."
18. For the aforesaid reasons, we are of the considered opinion that the Insurance Company was not justified in repudiating the claim of the Insured Complainant and hence, the Insurance Company is liable to compensate the insured for the loss suffered by him due to fire in Shop to the tune of ₹1,45,000/- as claimed by him. However, since the Stock and Account Registers were not being maintained by the Insured, we hold the deduction of 25% made by the Insurance Company on that account.
19. Consequently, we partly allow the Revision Petition by modifying the order of the State Commission to the extent that the Insurance Company shall be liable to pay a sum of ₹1,45,000/- to the Complainant after deduction of 25% towards non-maintenance of Stock and Account Registers, along with interest @ 9% p.a. from the date of filing of complaint till the date of payment, within a period of six weeks from the date of receiving a copy of this order. However, it is made clear that if any amount had already been paid to the Insured in terms of the Orders of this Commission, the same shall be adjusted against the amount payable in terms of this Order. No orders as to costs.
......................J R.K. AGRAWAL PRESIDENT ...................... DR. S.M. KANTIKAR MEMBER