State Consumer Disputes Redressal Commission
United India Insurance Co. Ltd. vs Siddheshwar Saree Centre Prop. Sou. ... on 8 May, 2008
CONSUMER DISPUTES REDRESSAL COMMISSION CONSUMER DISPUTES REDRESSAL COMMISSION MAHARASHTRA STATE, MUMBAI FIRST APPEAL NO. 987 OF 2005 Date of filing : 31/05/2005 @ MISC. APPL. NO. 1263 OF 2005 Date of order : 08/05/2008 IN CONSUMER COMPLAINT NO. 233 OF 2004 DISTRICT CONSUMER FORUM : SOLAPUR Mr.S.O. Mashalkar Divisional Manager United India Insurance Co. Ltd. Divisional Office Janata Shopping Centre, 1st floor, Navi Peth, Solapur. Appellant/org. O.P. V/s. Siddheshwar Saree Centre Prop. Sou. Gajra V. Kawchale R/at 2A/1A Rubut Nagar, Jule Solapur, Dist. Solapur. Respondent/org. complainant Corum : Justice Mr.B.B. Vagyani, Honble President Smt. S.P. Lale, Honble Member
Present: Mr.A.S. Vidyarthi, Advocate for the appellant.
Mr.U.B. Wavikar, Advocate for the respondent.
- : ORDER :-
Per Justice Mr. B.B. Vagyani, Honble President This appeal filed by United India Insurance Co. Ltd. is directed against the award dated 07/04/2005 passed by the District Consumer Forum Solapur. The Forum below allowed the complaint filed by the complainant and directed the Insurance Company to pay Rs.15 Lakhs to the complainant with interest @ 9% p.a. We heard Mr.A.S. Vidyarthi, Advocate for the appellant/Insurance Company and Mr.U.B. Wavikar, Advocate for the respondent/org. complainant.
For sake of brevity and understanding, we propose to refer the parties by their original status.
The complainant owns a Saree Shop at Solapur. The complainant had taken Shopkeepers Insurance Policy from the Insurance Company in order to cover the entire stock in trade with furniture and fixtures for a sum of Rs.32,50,000/-. The policy was in force from 12/09/2003 to 11/09/2004. There was fire in the shop on 22/09/2003 at about 2.30 hrs. early in the morning. The entire stock in trade, furniture, fixtures and fittings were gutted in fire. The complainant therefore lodged a claim of Rs.19 Lakhs for the loss suffered. The Insurance Company repudiated the claim. Therefore, the complainant approached the District Consumer Forum and filed consumer complaint. The said consumer complaint was resisted by the Insurance Company mainly on the ground that the purchases made from different traders were doubtful. Some of the shops are not in existence. Because of presence of fraud, the Insurance Company has taken a stand that the contract of insurance stands vitiated.
The Forum below mainly relied upon the Valuation Report prepared by Laxmikant Birajdar, Surveyor & Loss Assessor and allowed the complaint and directed the Insurance Company to pay Rs.15 Lakhs with interest @ 9% p.a. The Learned Advocate Mr.Vidyarthi took us through the various documents placed on record and submitted that the claim made out by the complainant is false. He further submits that the complainant has brought on record purchase and sale bills, which are proved to be fabricated. He mainly relied upon the relevant clause of the contract of insurance, which runs as under :-
If the claim be in any respect of fraudulently or if any false declaration be made or used in support thereof or if any fraudulent means and devices are used by the insured or any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the willful act or with the connivance of insured, all benefits under the policy shall be forfeited.
He also submitted that the Forum below failed to apply its judicious mind and overlooked the findings of the Surveyor & Investigator.
The Learned Advocate Mr.Wavikar argued that the Valuation Report of Laxmikant Birajdar is very valuable piece of evidence, which supports the claim of the complainant. According to him the bills are not fabricated. He also invited our attention to the affidavit of Laxmikant Birajdar and submitted that the award passed by the Forum below is perfectly legal and correct. In support of his oral submissions, he relied upon a decision of the National Commission in the case of Purar Textiles Pvt. Ltd. V/s. New India Assurance Co. Ltd., 2003 NCJ 614 (NC).
We gave anxious consideration to the rival submissions advanced at the Bar. We subjected the entire material placed on record to close scrutiny. The Insurance Company had appointed Bhatawadekar & Co. (Fire, Marine & Engineering, Surveyors, Loss Assessors & Valuers) from Pune to carry out the survey. The Surveyor visited the spot and conducted the investigation in presence of the representative of the complainant and Divisional Manager of the Insurance Company. He called upon the complainant to produce the documents. The complainant was also asked to produce Books of Accounts including purchase and sale bills. The complainant informed the Surveyor that the bills kept in the shop were gutted in fire. However, after few months, bills were placed before the Surveyor with explanation that the bills were found kept on the loft in the house. The Surveyor after scrutiny of papers came to a conclusion that all the transaction of purchases were in cash and not through the Bank. He also noticed sudden rise in purchase and sale upto the date of loss. Therefore, the Surveyor minutely examined and checked the sale & purchaser transactions. The Profit & Loss Accounts, Balance-sheet was submitted by the complainant were not audited by the Chartered Accountant, but found to have been prepared on the information given by the complainant. Therefore, the Insurance Company appointed an Investigator & Chartered Accountant to work out closing stocks as on the date of loss.
The Insurance Company appointed M/s.Shambhu Alagundgi as an Investigator and M/s.P.V. Karve & Co. (C.A.) to work out closing stocks as on the date of loss. The complainant produced bills of Arvind Fabrics at Surat, M/s.Jaikrishna Fashion, Surat, M/s.Gopal Textiles, Sainthia, Dist. Birbham (West Bengal), M/s.Manoj Enterprises, Solapur and M/s.Bhajandas & Co., Solapur. The Investigator had correspondence with the above parties. From them it is revealed that the sale bills produced by the complainant were fabricated. The Investigator had personally visited on the addresses of above parties and confirmed about the genuineness of the said bills produced by the complainant. M/s.Arvind Fabrics, M/s.Jaikrishna Fashion and M/s.Gopal Textiles have clearly stated that the so called sale bills produced by the complainant were not issued by them. They have denied any transaction with the complainant. The Investigator scrutinized all the bills produced by the complainant and verified the bill books produced by the complainant. The Investigator has given elaborate explanation in his report about non-acceptance of these bills. The Investigator has come to a conclusion that the complainant inflated his claim by fabricating purchase and sale bills. The Investigator has also come to the conclusion that the complainant has no documentary evidence to substantiate her source of income. He also noticed that there is no Agent from Surat by name Dhirajlal Hasmukhlal Gupta. The bills furnished by the Gopal Textiles are found fabricated. It is also found that Shri Kanchan Saha is not the representative of Shri Gopal Saha of Sainthia. It is also found that the bills of M/s.Mayur Dresses and M/s.Bhavani Garments of Mumbai are fabricated. The Investigator thus submitted his detail report on 09/04/2004 along with several documents.
The Insurance Company after getting the Investigation Report and Survey Report, thoroughly made scrutiny of all the relevant papers and came to the conclusion that the claim lodged by the complainant is not a genuine and honest claim. There is element of fraud and consequently repudiated the claim.
Mr.Nitin Sudhakar Phadnis has filed affidavit and support the action of repudiation. He has made reference to all the relevant documents including reports of Investigator and Surveyor. The Investigator Shri Shambhu Alagundagi has also filed his affidavit to support the action of repudiation. He has made a statement on oath that he thoroughly investigated the claim lodged by the complainant. He states in his affidavit that he verified all the record produced by the complainant. It is seen from his affidavit that he had personally gone to Surat, Sainthia and Mumbai in order to verify the purchase bills produced by the complainant. After detailed investigation and scrutiny of the record, he has drawn following conclusions. These conclusions are in the form of affidavit :-
a) The insured has inflated his claim amount to an unimaginably higher amount by fabricating purchase & sale bills.
b) The insureds books of A/cs are fabricated after the loss based on fabricated purchase & sale bills only for the purpose of this claim.
c) Insured has no documentary evidence to substantiate his source of income.
d) There is no agent from Surat by name Dheerajlal Hasmukhlal Gupta & purchase bills furnished by insured from Arvind Fabrics & Jaikrushna Fashions are fabricated bills.
e) Gopal Textiles at Sainthia is non-existent firm. Bills furnished by insured from Gopal Textiles, Sainthia are fabricated.
f) Shri Kanchan Saha is not a representative of Shri Gopal Saha of Sainthia.
g) Insured has also fabricated purchase bills of M/s.Mayur dresses & M/s.Bhavani Garments of Mumbai.
It is material to note that the complainant had also hired the services of National Insurance Co. Ltd. and had taken cover for the stock in trade, furniture, fixtures and fittings. The complainant had also lodged claim to the National Insurance Co. Ltd. The National Insurance Co. appointed Surveyor Mr.S.V. Kolatkar in order to assess the loss. The Surveyor inspected the documents and verified the record. The Surveyor appointed by the National Insurance Co. Ltd. observed as under :-
1. Documents forwarded by the insured showed variation in quantity and value of stocks claimed.
2. Insured initially informed us that sales bills kept in their shop were burnt. After about 6 months the insured presented bill books of sales saying that the same kept on the loft in their residence.
3. Profit and loss account, Balance Sheet submitted by the insured were not audited by their C.A.
4. There was sudden rise observed in purchase and sales for the F.Y.2001-02 and further period upto dated of loss i.e. 21.9.2003.
5. Insured have not submitted monthly stock to any of his Financial Institutions. In fact all transactions i.e. purchases and sales were done by the insured in cash only.
6. Exact cause of fire cannot be pinpointed.
7. Variation in indicating closing stock as on 21.09.2003. As per Police Panchanama covering amount of loss Rs.5 Lacs based on information given to them on 22.09.2003.
8. The insured was neither able to produce purchase bills nor was able to prove ownership of such items.
9. In a single shop of 12 x 22 where many items such as utensils, bangles, cutlery items, cold drinks etc. were kept and traded the same and atmosphere required for selling items such as sarees, clothes, readymade garments, etc. cannot be maintained.
10. In the debris quantity of large no. of clothes and allied items was not seen.
The National Insurance Co. also repudiated the claim lodged by the complainant on the ground that the claim submitted by the complainant is based on fabricated documents.
The complainant has produced Income Tax Returns for the Assessment Year 2000-2001 and 2001-2002. The complainant has not placed on record further Income Tax Returns. The Valuation Report of Laxmikant Birajdar is the trump card of the complainant. Laxmikant Birajdar has placed on record his affidavit in support of his Valuation Report dated 27/08/2003. According to him he made physical verification of the stock and submitted a Valuation Report for the purpose of bank. The complainant wanted to avail loan facility and for that purpose Laxmikant Birajdar was engaged to submit a Valuation Report. In fact no loan facility was obtained on the basis of Valuation Report. From the record placed on record, it is clearly seen that the complainant already incurred loan from the Bank of India, Chaundeshwari Togatveer Co-op. Credit Society and Sahastrarjun Nagari Sahakari Sanstha. The purpose for hiring services of Laxmikant Birajdar appears to be a dubious. The report of Laxmikant Birajdar is also dubious because purchase bills produced by the complainant are found fabricated. The Valuation Report appears to have been prepared later on in order to support the claim lodged by the complainant. It is interesting to note that the Profit & Loss Account Statements are found to have been prepared by Anand A. Gangji & Co. There is specific endorsement made by Anand A. Gangji that the final statements are prepared as per the information furnished by the Proprietor. The bills were not placed before him.
The ratio in the case of Purar Textiles Pvt. Ltd. cannot be pressed into service. In this particular case, no successive Surveyors are appointed. The Insurance Company after having found fabricated bills thought it fit to appoint an Investigator. In the case of fraudulent claim, the Insurance Company can appoint an Investigator to find out the truth in the claim. The Law does not prohibit for appointment of Investigator in the case of submission of fraudulent claim.
After having scanned the entire material placed on record and after having considered the rival submissions advanced at the Bar, we are of the opinion that the action of repudiation is justified. The purchase bills are found fabricated. Some of the shops are not in existence. Because of presence of element of fraud, the Insurance Company rejected the claim lodged by the complainant. It is well known principle of law that justice and fraud cannot dwell together. The Forum below failed to apply its judicious mind and ignored the valuable piece of documentary evidence placed on record by the Insurance Company. In the result, we pass the following order :-
-: ORDER :-
1. Appeal is allowed. The impugned order under challenge is quashed and set aside.
2.
No order as to costs.
3. Misc. Appl. No.1263/2005, which is for stay stands disposed of.
4. Copies of the order be furnished to the parties.
(S. P. Lale) (B.B. Vagyani) Member President dd.