National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs Balbir Singh on 2 April, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 628 OF 2007 (Against the order dated 02.08.2007 in Complaint No. 27/1999 (RBT No.79/07) of the State Consumer Disputes Redressal Commission, UT Chandigarh) New India Assurance Co. Ltd. Having its head office at 87, M.G. Road, Fort Mumbai-400001 Appellant Versus Balbir Singh S/o Shri Umed Singh R/o Shakti Nagar Near Nahar Colony Jhajjar Road, Bahadurgarh Respondent BEFORE: HON'BLE MR. JUSTICE ASHOK BHAN, PRESIDENT HON'BLE MRS. VINEETA RAI, MEMBER HONBLE DR. S.M. KANTIKAR, MEMBER For Appellant : Mr. Bhaskar Tiwari, Advocate For Respondent : Mr. S.M. Tripathi, Advocate Pronounced on 2nd April, 2013 ORDER
PER VINEETA RAI, MEMBER
1. This first appeal has been filed by New India Assurance Co. Ltd. being aggrieved by the order of the State Consumer Disputes Redressal Commission, U.T. Chandigarh (hereinafter referred to as the State Commission) which had allowed the complaint of deficiency in service filed by Balbir Singh, Complainant before the State Commission and Respondent herein.
2. FACTS :
Respondent-Complainant, who is engaged in the business of selling tyres and tubes and is also the Authorized Dealer of Modi Continental Tyres, had got his shop Jai Bharat Tyre Co. situated at Bahadurgarh, District Jhajjar insured with the Appellant-Insurance Company against a wide range of risks, including fire, theft, burglary etc., for the period from 29.05.1996 to 28.05.1997 for which the premium was also paid. On the night intervening 27th 28th November, 1996 during the validity period of the policy, a theft occurred in the Respondent-Complainants shop, in which tyres amounting to Rs.7,45,400/- were stolen. Respondent-Complainant immediately informed the Police and an FIR was registered. He also reported the matter to the Branch Office of the Appellant-Insurance Company at Bahadurgarh and lodged a formal claim. A Surveyor was duly appointed by the Appellant-Insurance Company, who assessed the loss at Rs.7,10,000/- approximately. It was stated that Respondent-Complainant had supplied all the necessary documents to the Surveyor. Despite this, Appellant-Insurance Company did not pay the said amount and instead deputed one Mr. Chawla to investigate the loss/claim and thereafter appointed a second Surveyor who assessed the loss at Rs.4,94,500/-. Respondent-Complainant on account of his financial obligation accepted this lesser amount under protest but even then Appellant-Insurance Company failed to pay the amount assessed by the second Surveyor. Aggrieved by this, Respondent filed a complaint before the State Commission on grounds of deficiency in service because of non-settlement/payment of the claim and requested that Appellant-Insurance Company be directed to pay the Respondent-Complainant the following amounts:
(a) Rs.7,45,400/-
to the Complainant being the loss assessed by the first Surveyor.
(b) Interest @ 21% per annum on the above claimed amount with quarterly rests from 29.11.1996 to 31.03.1999 which comes to approximately Rs.3,82,000/-.
(c) Rs.5,00,000/-
on account of compensation for undue and unwarranted harassment, mental agony and loss of business etc.
(d) Future interest on the total awarded amount @ 24%.
(e) Rs.1,00,000/-
as cost of litigation.
3. Appellant-Insurance Company on being served filed a written rejoinder denying that there was any deficiency in service on their part. While no explanation was given in the written rejoinder for appointing a second Surveyor, Appellant-Insurance Company stated that the second Surveyor correctly assessed the loss at Rs.4,94,500/- after thoroughly scrutinizing all the documents. However, there was delay in settling this amount because the Respondent-Complainant himself failed to produce certain information sought from him. It was further stated that the complaint is not maintainable as Respondent-Complainant himself had given a letter of consent agreeing to accept Rs.4,94,500/- as full and final payment in respect of the burglary insurance claim.
4. The State Commission after hearing the parties and on the basis of evidence produced before it allowed the complaint by inter alia observing as follows:
16. From the evidence available on record, we find that the survey report given by the first surveyor i.e. M/s Lokendra Claims Care Corporation, New Delhi is a detailed report and the OPs have filed no evidence or given any reasons to disbelieve the same and have also put forward no cogent reasons for subsequently appointing the second surveyor and thereafter the third surveyor. This act of the OPs smacks of their ulterior motive and is not only illegal but is also a clear deficiency in service as well as unfair trade practice on their part.
17. In our considered view, therefore and in view of the law settled by the Honble National Commission in the case of M/s Hundi Lal Jain Cold Storage and Ice Factory Pvt. Ltd. vs. Oriental Insurance Company Ltd. (supra), it was the duty of the OPs to settle the claim of the Complainant on the basis of the report of the first surveyor, who had submitted the same on 25.5.1997 (Annexure P10). Non payment of the claim on the basis of this survey report of the surveyor clearly amounts to deficiency in service on the part of the OPs and the Complainant needs to be compensated for the same.
19. We do not find any merit in the contention of the OPs that the Complainant has no reason to file the complaint because he had agreed to the payment of Rs.4,94,500/-
as full and final payment, as the same amount stands already paid. This is because the Complainant has been able to fully satisfy us that due to delay in the settlement of the claim, he was put to severe financial loss and strain and therefore, by coercive bargaining of the OPs, he was compelled by the circumstances to sign this consent letter dated 29.4.1998. The contention of the OPs could have had some merit, had the OPs paid this consent amount to the Complainant immediately after the signing of the consent letter. However, it is clear from the records that the OPs had no intention of paying even this amount to the Complainant as subsequently vide their letter dated 13.10.1999 they offered to pay him only a sum of Rs.4,86,400/-. It is further deplorable that OPs paid the Complainant no amount till they were so directed by the order of the Haryana State Commission consequent to the order of Honble National Commission six years after the consent letter had been signed. (emphasis provided) The State Commission, therefore, directed the Appellant-Insurance Company to pay the Respondent-Complainant as under :
(a) Rs.7,10,307/-
towards the insurance claim less Rs.4,94,500/- already paid on 19.12.2004.
(b) Interest @ 12% per annum on the total amount of Rs.7,10,307/- w.e.f. 25.7.1997 i.e. two months after filing of the first surveyor report till 19.12.2004 when an amount of Rs.4,94,500/- was paid to the Complainant as part of the claim.
(c) Interest @ 12% per annum on the balance unpaid amount of claim amounting to Rs.2,15,807/- from 20.12.2004 till payment.
(d) Rs.5,000/-
as costs of litigation.
However, no separate compensation was granted as the rate of interest allowed was to cater for both the loss of interest as also compensation on account of mental agony etc.
5. Aggrieved by the order of the State Commission, the present first appeal has been filed.
6. Learned Counsels for both parties made oral submissions.
7. Counsel for the Appellant-Insurance Company stated that the State Commission erred in allowing Respondents complaint. From a perusal of the report of the second Surveyor, it is clear that the Respondent-Complainant could not have suffered a loss of Rs.7,45,400/- because in the commercial space available in the insured shop, which was 16 x 8.2 ft. and 9.10 ft. in height, not more than 64 tyres of big size could be stored upto a height of 10 tyres, after deducting 25% from this area as space required for storing tables, counters and chairs.
Therefore, Respondent-Complainants contention that he had stocks of 254 tyres which were stolen and that out of the said 258 tyres, 158 tyres were of big size, is obviously not correct and obviously these tyres were lying at some other place, which was not covered under the insurance policy. Counsel for the Appellant-Insurance Company while admitting that it took about six years to finally settle the claim as assessed by the second Surveyor, stated that the delay was attributable to the non-cooperative attitude of the Respondent-Complainant even after he had given his written consent to accept this amount. When specifically asked by us why a second Surveyor was appointed without giving any reasons for rejecting the report of the first Surveyor, Counsel for the Appellant-Insurance Company was not able to adequately explain the reasons for the same except to state that Appellant-Insurance Company was not satisfied with the correctness of the report of the first Surveyor. It was, therefore, justified in appointing a second Surveyor. Counsel for the Appellant-Insurance Company again contended that once the Respondent-Complainant had accepted the amount assessed by the second Surveyor in writing, he was not justified in filing the complaint before the State commission.
8. Counsel for the Respondent-Complainant on the other hand stated that the State Commission had rightly and through a well-reasoned order allowed his complaint. It was stated that the Respondent-Complainant had fully cooperated with the first Surveyor and given him all the required information on the basis of which the loss had been correctly assessed. However, the Appellant-Insurance Company without informing the Respondent-Complainant decided to appoint a second Surveyor. When Respondent-Complainant wrote to the Appellant-Insurance Company on 02.03.1998 as to why a second Surveyor had been appointed, there was no response to this letter. Counsel for the Respondent-Complainant further stated that apart from the second Surveyor, two other Surveyors had also been appointed by the Appellant-Insurance Company in the instant case and without any justification. This fact was also recorded by the State Commission in its detailed order. Learned Counsel for the Respondent-Complainant further stated that the National Commission as also Honble Supreme Court of India have come down heavily on the practice adopted by the Insurance Companies in appointing one Surveyor after another without recording reasons for doing so and in this connection he cited the judgment of this Commission in M/s Hundi Lal Jain Cold Storage and Ice Factory Pvt. Ltd. v. Oriental Insurance Company Ltd. [2004 (3) CPR 3 (NC)] and that of the Apex Court in Sikka Papers Limited v. National Insurance Co. Ltd. & Others [(2009) 7 SCC 777].
9. We have heard learned Counsels for both parties and have also carefully gone through the evidence on record. The fact that Respondent-Complainant had insured his shop with the Appellant-Insurance Company covering the risks of fire, theft, burglary etc. for the period from 29.05.1996 to 28.05.1997, for which the premium was also paid, is not in dispute.
It is further admitted that following a burglary in the insured premises, Respondent-Complainant filed a claim with the Appellant-Insurance Company, who appointed a Surveyor, who assessed the loss at Rs.7,10,000/-, which admittedly was not accepted by the Appellant-Insurance Company, who then appointed a second Surveyor without recording any reasons for rejecting the report of the first Surveyor. As pointed out by the Counsel for the Respondent-Complainant and as recorded by the State Commission in its detailed order, this Commission as also Honble Supreme Court of India have adversely commented on the practice of some Insurance Companies in appointing one Surveyor after another without giving reasons for not accepting the report of the first Surveyor. Specifically Honble Supreme Court in Sri Venkateswara Syndicate v. Oriental Insurance Co. Ltd. & Anr. [II (2010) CPJ 1 (SC)] has inter alia observed as follows :
We may also add, that, under this Section the insurance company cannot go on appointing Surveyors one after another so as to get a tailor made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reason for not accepting the report. Scheme of Section 64-UM particularly, of sub-sections (2), (3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course (emphasis supplied by us). If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest.
10. Counsel for the Appellant-Insurance Company during the course of his oral submissions stated that judgment of the Honble Supreme Court in Sikka Papers Limited (supra) would not be relevant in the instant case since it pertains to a date prior to the delivery of this judgment by the Honble Apex Court. We are unable to accept this contention in view of the fact that Honble Supreme Court of India in Sikka Papers Limited (supra) has only interpreted Section 64-UM of the Insurance Act, 1938 and has nowhere observed that this order would have prospective effect.
11. Apart from this serious deficiency on the part of the Appellant-Insurance Company in appointing a second Surveyor without giving any reasons for rejecting the report of its own first Surveyor, we note that the Appellant-Insurance Company is also guilty of deficiency in service in taking six long years to settle the Respondent-Complainants claim as per the report of the second Surveyor. Appellants contention that Respondent-Complainant had not been cooperating with it is not backed by any evidence on record. We, therefore, see no infirmity in the order of the State Commission, which had allowed the Respondent-Complainants complaint in toto and had directed the Appellant-Insurance Company to settle the Respondent-Complainants claim in terms of the findings of the first Surveyor i.e. for an amount of Rs.7,10,307/-.
11. Keeping in view the facts of this case and respectfully following the judgments of the Honble Supreme Court in Sikka Papers Limited (Supra) and Sri Venkateswara Syndicate (supra), we uphold the order of the State Commission and dismiss the present first appeal. We note that as per the order of this Commission, on 19.12.2004 Respondent-Complainant had already been paid a sum of Rs.4,94,500/- against bank guarantee. In that case, this amount be retained by the Respondent-Complainant and the bank guarantee accordingly stands discharged. Appellant-Insurance Company is directed to comply with the order of the State Commission and pay the Respondent-Complainant the remaining amount within a period of two months from the date of this order.
Sd/-
(ASHOK BHAN, J.) PRESIDENT Sd/-
(VINEETA RAI) MEMBER Sd/-
(DR. S.M. KANTIKAR) MEMBER Mukesh