State Consumer Disputes Redressal Commission
Mohammad Akbar vs The Oriental Insurance Company Ltd. on 1 May, 2023
Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND, DEHRADUN
Date of Institution: 12.08.2016
Date of final hearing: 13.04.2023
Date of Pronouncement: 01.05.2023
Consumer Complaint No. 08 / 2016
Mohd. Akbar S/o Habib Ahmad
R/o Village Shahpur, Bhagwanpur, Post Khas
Thana Bhagwanpur, Tehsil Bhagwanpur, Haridwar
(Through: Sh. Naved Siddiqui, Advocate)
.....Complainant
VERSUS
1. The Oriental Insurance Co. Ltd.
Divisional Office, Railway Road, Jwalapur, Haridwar
Through Branch Manager
(Through: Smt. Savita Sethi, Advocate)
.....Opposite Party No. 1
2. Punjab National Bank
Branch Bhagwanpur, Tehsil Bhagwanpur, Haridwar
Through Branch Manager
(Through: Sh. R.S. Bajwa, Advocate)
.....Opposite Party No. 2
Coram:
Ms. Kumkum Rani, Judicial Member II
Mr. B.S. Manral, Member
ORDER
(Per: Ms. Kumkum Rani, Judicial Member II):
This complaint has been filed on behalf of the complainant Mohd. Akbar alleging that a factory was being run in the name of a firm styled as 1 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another M/s Mohd. Akbar Industries, Village - Sikanderpur, Bhaiswal Roorkee, District Haridwar by the complainant and he is sole proprietor of the above firm / unit. The unit is a metalizing unit; the main raw material is scrap and used aluminum sheets etc. for melting of the material for using coal furnace. The complainant borrowed a Cash Credit Limited to the tune of Rs. 20 Lacs from Punjab National Bank - opposite party No. 2 for the above purpose. The above mentioned firm was insured with the insurance company - opposite party No. 1 vide policy No. 252990/11/2016/15 with full risk cover for the period from 12.04.2015 to 11.04.2016. According to the complaint, on dated 30.04.2015 at about 11pm, heavy rain with heavy storm started and the raw material and certain materials lying in the premise in the shed got damaged. The main power material were damaged; due to storm, the shed of the unit was collapsed which caused huge loss to the complainant. The complainant has immediately, i.e. on 01.05.2015 informed about the loss in the said incident to the opposite party No. 2 who has further intimated to opposite party No. 1. The complainant has submitted his claim of Rs. 27,84,263/- to the opposite party No. 2; the opposite party No. 1 - insurance company appointed Sh. Rajeev Gupta as preliminary surveyor and Sh. Rajkumar Singhal as final surveyor who did not assess the loss of the stock kept in open within the premises of the above mentioned unit and discretionally assessed the loss to the tune of Rs. 1,74,000/-. The surveyor has also inquired about the stock from the opposite party No. 2 - Bank, but neither the copy of the report of survey was furnished to the complainant, nor gave any opportunity of his hearing nor took any consent of the complainant before appointing the surveyor by the company, hence the surveyor is not an independent person and his report is neither independently given nor is final. The opposite party No. 2
- Bank did not answer to his legal notice dated 05.04.2016. Thus, the insurance company appointed surveyor has not properly evaluated the loss to have occurred to the complainant, hence the complainant has filed the 2 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another complaint praying before this Commission to direct the opposite party No. 1 - insurance company to pay the claim amount Rs. 27,84,263/- with interest, cost of litigation and compensation for mental and physical agony alongwith financial loss.
2. The opposite party No. 1 - insurance company has alleged in its written statement that the complaint is not maintainable and is liable to be dismissed. According to the written statement of the answering opposite party, the complainant has no insurable interest and has no locus standi. It is averred in the written statement that the information of the incident of loss which allegedly took place on 30.04.2015 at about 11pm, was received on 02.05.2015 and the insurance company deputed spot surveyor on 01.05.2015 on telephonic information from the bank - opposite party No. 2 and it was found by spot surveyor that semi-furnished and furnished material was kept in Pacca Construction and all types of raw material scrap was kept in open area and under shed also. No building, shed structure etc. was insured and the policy. It is pleaded that in one day's rain all the stocks (of Rs. 30 Lacs) were destroyed, whereas all the finished goods were kept in Pacca Construction, it means it is a case of under insurance. The insured was liable to take reasonable care of the goods / stocks insured and due to keeping the stocks in open, their nature has changed due to their getting drenched in water and moisture for which non-else but complainant himself is responsible. The insured has submitted photocopies of bills of raw material purchased (scrap and used aluminum sheets) to the final surveyor, but none of the raw material was damaged, hence those bills were not considered while assessing the loss. The preliminary surveyor made spot inspection and detailed report of loss was prepared by Sh. Raj Singhal surveyor, who considered only those goods which were kept under tin shed covered area and goods kept in open in the industry were not considered while assessing the loss in the report. The final surveyor has demanded 3 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another papers which were not supplied that was the cause of delayed submission of report by him. There is no provision of taking written permission or consent before the appointment of the surveyor nor any objection can be initiated before the finalization of the report. In garb of the loss, there was plan to mint money out of misfortune due to dead stock. Hence there was no deficiency in service of the answering opposite party, therefore, the complaint should be dismissed.
3. Opposite party No. 2 - the Bank has submitted its pleading in written statement that the bank through branch Manager is not a juristic person, hence the complaint is liable to be dismissed. It is true that the complainant availed Cash Credit Limited of Rs. 20 Lacs from the answering opposite party, hence the complaint is not legally maintainable. The Bank is not a consumer, hence no cause of action has arisen against the answering opposite party, therefore, it is liable to be dismissed.
4. In the replication, the same versions are alleged as mentioned in the complaint stating that the complainant took Cash Credit Limit for his business for self and earning of his family member.
5. The complainant has filed 13 documents / papers vide suchi saboot Paper No. 11 and documents vide suchi saboot paper No. 139 and affidavit namely Mohd. Akbar, Mohd. Inam, Mohd. Ajmad and Hemant during the evidence of the complainant.
6. Opposite party No. 1 - insurance company has submitted evidence by way of affidavit, such as affidavit of Sh. P. Palden, Senior Divisional Manager, Oriental Insurance Co. Ltd., affidavit of spot surveyor Sh. Rajeev Kumar Gupta and affidavit of final surveyor Sh. Rohit Singhal of Ravi K Singhal Associate and Sh. Rohit Singhal with survey report.
4 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
7. Opposite party No. 2 - Bank has submitted its evidence by way of affidavit of Sh. Moti Lal Arya, Branch Manager, Punjab National Bank. The complainant has filed his affidavit alongwith income tax record in rebuttal evidence before the Commission.
8. We have heard both the learned counsel and perused the record and material available before us.
9. It is an admitted fact that the complainant was running one firm in the name of M/s Mohd. Akbar as sole owner at Village Sikanderpur, Bhaiswal, Roorkee, District Haridwar. It is also undisputed fact that the above mentioned firm was insured for the sum of Rs. 30 Lacs under the insurance scheme type 'Standard Fire and Special Perils' vide policy No. 252990/11/2016/15 for the period commencing from 12.04.2015 to midnight 11.04.2016. There is no dispute regarding this fact that on dated 30.04.2015, at about 11am, heavy rain started with heavy storm and the certain material, i.e., stocks and raw material were damaged due to storm, the shed of the unit was collapsed. It is also proved that the complainant informed opposite party No. 2 - Bank immediately about the incident and thereafter this fact was brought immediately by the opposite party No. 2 - Bank to the knowledge of the opposite party No. 1 - insurance company. It is admitted by both the parties to the complaint that the opposite party No. 1 - insurance company deputed Sh. Rajeev Kumar Gupta, as a surveyor for spot inspection who inspected the spot on 05.05.2015. As per the report of the surveyor Sh. Rajeev Kumar Gupta, the complainant's unit is a metalizing unit and the main raw material used by the unit is scrap of the aluminum. The unit is making Bar and Bricks after melting the aluminum scrap.
5 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
10 The opposite party No. 1 - insurance company has also deputed Ravi
K Singhal Associate for final survey. In the said survey report dated 03.12.2015 of Sh. Rohit Singhal of the M/s Ravi K Singhal Associate the net loss was assessed to the tune of Rs. 3,09,581/-. The above surveyor Ravi K. Singhal Associate on dated 02.03.2016 has submitted Addendum Survey Report wherein the surveyor has assessed Rs. 1,74,500/- as the net amount payable for the loss caused to the complainant factory.
11. The complainant has proved his complaint by submitting his affidavit in evidence. The version of the complainant is supported by the other witnesses namely Mohd. Inam, Mohd. Amjad and Hemant who had submitted their affidavits in evidence.
12. The insurance company - opposite party No. 1 never denied in its pleadings about the occurrence of the said incident on the relevant date, i.e. 30.04.2015. It is also conceded in the pleadings of the insurance company
- opposite party No. 1 that the answering opposite party has deputed a surveyor Sh. Rajeev Kumar Gupta for spot inspection and another surveyor Sh. Raj Kumar Singhal (as per pleading of para No. 29 of the written statement of opposite party No. 1) for detailed and final survey of the spot, who have assessed the loss, but the affidavit of final surveyor is filed on record (paper Nos. 330 and 331) whose name is mentioned as Sh. Rohit Singhal, hence affidavit of Sh. Raj Kumar Singhal final surveyor as per pleading of the written statement of the opposite party No. 1 is not available on record.
13. In the written statement of the Punjab National Bank - opposite party No. 2, one legal plea has been raised stating that the complainant is not a consumer of the Bank - opposite party No. 2, hence the complaint is not maintainable. It is to note that the complaint is not only filed against the 6 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another Bank rather it is also filed against the insurance company, alleging deficiency in service on the part of the insurance company - opposite party No. 1. Apart from it the factory was being run by the complainant exclusively for the purpose of earning his livelihood by means of self- employment, hence the complainant was not running his factory for commercial purpose, but it was being run by the complainant for earning his livelihood by means of self-employment, hence the complainant comes within the purview of the consumer as defined under Section 2(d) of the Consumer Protection Act, 1986.
14. In such circumstances, the arguments of the opposite party No. 1 is not tenable and sustainable that the complainant is not the consumer of the insurance company.
15. The second plea in written statement of the opposite party No. 2 is raised that the Bank through manager is not a juristic person and the case cannot be sued in its name.
16. We have perused the complaint wherein Punjab National Bank through its manager was impleaded as necessary party as opposite party No. 2. During course of the arguments, learned counsel for the opposite party No. 2 - Bank has pressed such legal issue, but we are of the opinion that opposite party No. 2 - Bank can sue or be sued through his manager.
17. It is alleged by the parties to the complaint case that the insurance company - opposite party No. 1 has assessed the loss occurred due to the incident on dated 30.04.2015 to the tune of Rs. 1,74,500/-. Learned counsel for the complainant has averred that the insurance company - opposite party No. 1 has admitted all the facts, but its surveyor has wrongly assessed and calculated the loss accrued to the complainant's factory.
7 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
18. We have also perused the record. As per the pleadings of the written statement and the evidence of both the parties, it is proved that the occurrence of incident is nowhere denied by the opposite parties. It is also not disputed that the stock of the factory was damaged due to rain and heavy storm on the date of incident. The currency of the insurance policy during the date of occurrence is also not disputed.
19. First surveyor Sh. Rajeev Kumar Gupta has submitted spot inspection report before the opposite party No. 1 - insurance company on 05.05.2015, wherein it is specifically mentioned that the stock/stock, used in trade, stock of raw materials, finished/semi-finished goods used in manufacturing of utensils etc. were insured vide policy cover note No. 252990/11/2016/15 for the sum to the extent of Rs. 30 Lacs under the type of insurance "Standard Fire & Special Perils".
20. The above surveyor Sh. Rajeev Kumar Gupta has also observed in his report that the factory of the complainant was running since last three years and the unit is making bar and bricks after melting of the aluminum scrap. The unit is a metalizing unit wherein the finished and semi-finished goods are kept in the Pacca construction building and all type of raw material are lying in the open are and under shed.
21. As per the above report, the surveyor has described the construction of the unit stating that the boundary walls are made of bricks with cement mortar with RBC roof and the raw material / scrap are laying in the shed and also furnace is running in the asbestos shed. Thus, as per the surveyor report, the raw material / scrap are laying in the shed of the insured factory.
8 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
22. In the column of damages, the above surveyor has found the damages to the tune of Rs. 27,84,263/- and under the column of observation, the surveyor has observed as under:-
1. That the Unit M/s Mohd. Akbar Industries, is engaged in the manufacturing of Aluminum bar since last three years in the Village Sikanderpur Bhaiswal.
2. The manufacturing process is melting of the aluminum scrap.
3. The loss was occurred on Dated 30.04.2015 in the night at 11 PM, Due to Heavily out poring of rain with heavy storm the goods / stock got damaged kept in the factory.
4. That during the course of my survey, undersigned could not verify the goods / stock due to structure of shed was lying over the stock and there was no labour / worker available.
5. That quantity of the loss may be vary during the assessment.
6. The loss is beyond man control.
23. From the spot survey report, it is proved that the structure of shed was lying over the stock. Sh. Rohit Singhal, the final surveyor of M/s Ravi K. Singhal Associates has submitted Fire Survey Report dated 03.12.2015 before the opposite party No. 1 - insurance company wherein it is also again admitted that the stock/stock, used in trade, stock of raw materials, finished/semi-finished goods used in manufacturing of utensils etc. were insured in the insurance policy which was taken by the complainant from the opposite party No. 1 - insurance company.
9 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
24. After a perusal of the Audited Balance Sheet, Trading and Profit & Loss Account and other records submitted by the complainant before the final surveyor for the period from 31.03.2013, 31.03.2014 and 31.03.2015, the surveyor has verified the records. The complainant has submitted audited balance sheet, trading and profit & loss account for the period from 01.04.2015 to 30.04.2016 showing the value of the closing stock on 30.04.2015 as Rs. 28,33,583/- (Rs. 24,59,320/ - Rs. 3,74,263/).
25. Here it is to be mentioned that the complainant has submitted his claim (paper No. 22) mention therein in the balance sheet dated 30.04.2015 wherein the damaged stock is shown as Rs. 24,59,320/-. The final surveyor has also mentioned in his report that the insured has submitted photocopy of Vat returns / Acknowledgment of Form 3 for the period from 01.04.2012 to 31.03.2015 and we found that the figures of sales are tallied with the respective trading account. The surveyor has further observed that the insured is having a CC Limit of Rs. 20 Lacs from Punjab National Bank, Bhagwanpur and they are regularly submitting the stock statements on an estimation basis to the bank on quarterly basis to fulfill the statutory requirement of the Bank. Thus, the final surveyor has obtained all details regarding Vat returns as well as the records of the stock statement given by the complainant to the bank.
26. We are very surprised after perusing the surveyor report that the surveyor has not considered VAT returns, bank records in order to assess the loss in his own way, only to assess the loss to the minimum side.
27. The final surveyor has further mentioned in his report that initially the insured has submitted the loss details to the preliminary surveyor for Rs. 27,84,263/- later on after thorough verification insured has submitted 10 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another the loss details for Rs. 24,59,320/- on comparing both the loss details, we found that only two items are similar in both the loss details, which are verified by the preliminary surveyor at the time of initial inspection, thus we are considering only these two items for the purpose of assessment as under:-
S.N. Particulars Unit Qty. Rate Rs. Amount Rs.
1. Drauss Kg. 13300.000 60.00 7,98,000.00
2. Powder Kg. 47000.000 20.00 9,40,000.00 Gross Loss 17,38,000.00
28. With the paper Nos. 208 to 327, the Fire Survey Report dated 03.12.2015 and its photocopy (paper No. 97 to 102) are filed by the insurance company with the evidence of the opposite party No. 1 wherein all the stocks / stock, used in trade, stock of raw materials, finished / semi- finished goods used in manufacturing of utensils etc. are shown to be kept within the premises of the factory area. The opposite party No. 1 - insurance company has not mentioned what stock was kept outside of the premises of the insured factory of the complainant. In this survey report nothing is noted down that above mentioned Drauss and Powder were not covered with the policy.
29. We have also perused the insurance policy cover note (paper No. 12) wherein nothing is written that the stocks / stock should be kept in the room or in the covered area. As per the policy cover note, all the stocks were kept in the Pacca Construction or within open and shed area. As per the pleadings and evidence all the stocks were covered under the insurance policy issued to the complainant for the period from 02.04.2015 to 11.04.2016. In the policy nothing is written down that the stocks / stock 11 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another kept in open area / shed area of the insured factory premises are not covered within the policy.
30. The final surveyor has further observed that the insured has submitted the detail of costing towards the damaged stocks (Drauss and Powder) but has not submitted any proof towards the same, hence the cost considered by them in the detail of loss could not be verified and thus we are deducting 50% on account of non-submission of proper cost records.
31. We are very surprised if the surveyors have obtained the Bank records alongwith purchased bills and the stock statements which was regularly submitted by the complainant on quarterly basis and if the VAT return has been obtained by the complainant with the balance sheet of the relevant years, then it cannot be said that such deduction to the extent of 50% on account of non-submission of the proper cost records is appropriate.
32. The final surveyor has not given in his report the specific clause of the terms and conditions wherein it is provided that a deduction to the extent of 50% should be made from the insured before settling the claim on account of non-submission of the proper cost record. Thus, under the claim assessment, the surveyor has further deducted 50% in regard to the dead stock, but such calculation is only done on imaginary basis. The surveyor vide his report dated 03.12.2015 (paper No. 101) has specifically written that as per the trading account on dated 30.04.2015 the value of closing stock is Rs. 28,33,583/-, whereas it is insured for Rs. 30 Lacs, hence under insurance is not applicable.
33. The final surveyor has submitted Addendum Survey Report (paper No. 103) on dated 02.03.2016 wherein it is said that we received a letter 12 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another from the insured in which he has bifurcated the stock lying in open area and in shaded area and as per his information the loss details calculated are as under:-
S.N. Particulars Unit Qty. Rate Rs. Amount Rs.
1. Drauss Kg. 9600.000 60.00 5,76,000.00
2. Powder Kg. 4000.000 20.00 80,000.00 Gross Loss 6,56,000.00
34. But we have perused the loss of stock prepared by the complainant (paper No. 314), which was given to the surveyor wherein the complainant has clearly noted down Drauss powder 47000 and Drauss 15150. Thus, as per the above detail, nothing is written down in the above paper that the Drauss powder 9600kg and powder 4000kg has been mentioned in the loss details of the stock.
35. Thus, we are of the view that the Drauss 13300 Kg and the powder 47000 Kg, total value Rs. 17,38,000/- should considered as per the surveyor report dated 03.12.2015. In the report dated 02.03.2016, the surveyor has deducted 25% amount on account of non-submission of the proper cost records, whereas the same surveyor vide his report dated 03.12.2015 has deducted 50% amount on account of non-submission of proper cost record. Thus, these variation has clearly shown that the surveyor has discretionally deducted the amount percentagewise and in contravention of the terms and conditions of the insurance policy in order to avoid the valid and legal claim to the complainant.
36. Here it is to submit that no terms and conditions and provision has been mentioned in the reports of the final surveyor that under which clause of the terms and conditions 50% deduction in regard to dead stock has been 13 Consumer Mohd. Akbar 01.05.2023 Complaint Vs. No. 08 of 2016 The Oriental Insurance Company Limited and Another made. In the surveyor report dated 02.03.2016, the same surveyor has not mentioned under which clause he has deducted 25% amount for salvage.
37. According to the insured, damaged stock do not possess any salvage value because it is scrap and the insured has also submitted the quotation of some salvage buyers and none of them is ready to buy the damaged stocks at any cost. It is to be noted down that in spot survey report the items aluminum (I & II) was found damaged in the incident but in the final survey report the surveyor has not stated that the aluminum items shown damaged in spot inspection report were not actually damaged and the report of the spot inspection of the preliminary surveyor is wrong and incorrect.
38. Thus, we find that there is no relevancy to deduct 25% amount on account of salvage because the scrap has no market value. We are also of the view that the total 10% deduction in regard to the dead stock, salvage and non-submission of the proper cost should be made. As per the surveyor report, the Drauss and powder (paper No. 101) gross value is Rs. 17,38,000/- and after deducting 10% amount from the total gross value of Rs. 17,38,000/- the rest amount comes to the tune of Rs. 15,64,200/- which the complainant is entitled to get from the opposite party No. 1 - insurance company. Accordingly, we are of the view that the complaint is liable to be allowed.
39. Consumer complaint is hereby allowed. It is hereby ordered that the opposite party No. 1 - insurance company shall pay Rs. 15,64,200/- (Rs. Fifteen Lacs Sixty Four Thousand Two Hundred only) with interest @ 6% per annum from the date of filing the complaint till its actual realization. It is further ordered that the complainant is hereby ordered firstly to make the payment in Cash Credit Limit maintained by the opposite party No. 2 -
14 Consumer Mohd. Akbar 01.05.2023
Complaint
Vs.
No. 08 of 2016
The Oriental Insurance Company
Limited and Another
Punjab National Bank. It is further ordered that the complainant is entitled to get Rs. 20,000/- as costs of litigation.
40. A copy of this Order be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986 /2019. The Order be uploaded forthwith on the website of the Commission for the perusal of the parties.
41. File be consigned to the record room along with a copy of this Order.
(Ms. Kumkum Rani) Judicial Member II (Mr. B.S. Manral) Member This judgment is dated, signed and pronounced today.
(Ms. Kumkum Rani) Judicial Member II (Mr. B.S. Manral) Member Pronounced on: 01.05.2023 15