State Consumer Disputes Redressal Commission
M/S. Karpagam Finance vs National Insurance Co. Ltd., on 29 September, 2008
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice N. KANNADASAN, PRESIDENT THIRU Pon. GUNASEKARAN B.A.,B.L., MEMBER - I A.P.NO.531/2005 (Against O.P.No.7/2004 on the file of the DCDRF, Thanjavur) DATED THIS THE 29th DAY OF SEPTEMBER 2008 M/s. Karpagam Finance V.S.M. Subramanian Chettiar and Co-represented by M/s. V. Subramani Its Managing Partner Counsel for V.S.M. Subramanian Chettiar Appellant / Complainant Vs. 1. National Insurance Co. Ltd., Rep. by its Divisional Manager Thanjavur 2. Regional Manager Regional Office Mr. N. Vijayaraghavan National Insurance Co. Ltd., Counsel for Coimbatore Respondent /Opposite parties ORDER
N. KANNADASAN J.
The appellant is the complainant and the respondents are the opposite parties before the District Forum. The appeal is filed as against the order of the District Forum in dismissing the complaint.
1. The brief facts of the case are stated as under:
The appellant is a Licensed Pawn Broking Firm and has insured Gold and Silver Jewels pledged with it along with other valuables, by taking Insurance Policy from the respondents since 1993 regularly. On 23.11.1999 the appellants business premises was ransacked by unknown persons, burglary was committed and the appellant was deprived of Jewels, valuables and cash worth about 20 lakhs. A case was registered Under Cr. No. 173/99 for offences U/Sec. 457, 380. The appellant has also informed the first respondent about the said occurrence of burglary on the same day itself. The surveyor appointed by the respondents inspected the premises on 25.11.1999 and issued the claim form to the appellant. The appellants forwarded the claim on 13.12.1999. In the meanwhile one another surveyor appointed by the respondent company had undertaken an investigation and after nearly 18 months i.e in the year 2001 only he had chosen to submit a report.
2. In the interregnum, the Police have filed final report and had issued non traceable certificate dated 15.12.2000. Based on this, the Judicial Magistrate, Kumbakonam on 16.01.2001 has passed orders dropping all further actions by the police in this matter. Thereafter on 05.12.2001 the appellant has approached the Insurance Ombudsman against the respondents for settlement of claim.
The respondent had repudiated the claim and hence the appellant filed the complaint in the District Forum seeking a sum of Rs.15,50,000/- together with interest @ 12% p.a. along with damages for a sum of Rs.50,000/- and costs.
The District Forum though has accepted that the Consumer Forums Jurisdiction to deal with the matter has chosen to dismiss the complaint on the ground that the issues involved cannot be decided in a summary manner and hence directed the appellant to approach the Civil Court. Aggrieved against this the appellant filed the present appeal The respondents herein have contended that their surveyor has given an elaborate surveyor report dated 26.05.2001 to the effect that it is not possible for such an occurrence of burglary to take place, since the Jewels were protected in safes and there were no signs to suggest the occurrence of burglary. That apart, the respondent also relied on the report of the Assistant Superintendent of Police, Kumbakkonam, dated 16.11.2001, wherein he had informed the respondents that the claim of burglary was not a genuine one.
4. The appellant/complainant has filed 27 exhibits in the District Forum whereas the respondent/Opposite Parties have filed 3 Exhibits. The District Forum solely considering the report of the surveyor of the respondent company had arrived at present conclusion that the issues could be settled only by way of an elaborate trial and not by summary procedure.
5. The respondents have marked Exhibit B-1, the surveyor report of the Companys surveyor dated 26.05.2001, letter dated 27.07.2001 address to Superintendent of Police, Thanjavur as Exhibit B-2, and the reply dated 11.10.2001 sent by the Superintendent of Police, Thanjavur enclosing the report of the Assistant Superintendent of Police, Kumbakonam dated 07.10.2001.
6. The Counsel for the respondents would contend that the report of the surveyor in Exhibit B-1 and the report of the Additional Superintendent of Police in Exhibit B-3, clearly throw great doubts upon the interested version of the complainant in the FIR and relies upon the decision reported in 2005(1)CPJ 107 (NC). He also further contended that the complaint is not maintainable. He contents that the National Commission has repeatedly dismissed doubtful theft claims and as such present claim is also liable to be dismissed and relies on the decisions reported in 2008(1) CPJ 111, 2008 (1) CPJ 276 (NC) and 2007 (2) CPJ 151 (NC) . He also further contends that there is no deficiency in service and the service availed is only for commercial purpose and as such the Jurisdiction of the Consumer Forums could not to be invoked.
7. The counsel for the appellant per contra, contends that the District Forum has failed to consider any one out of the 27 Exhibits marked on the side of the appellant/ complainant before arriving at the decision which is now appealed against. He would contend that the Surveyor report sought to be relied on by the respondents/opposite parties is only an ingenious ploy created by the respondents/ opposite parties for the purpose of frustrating the claim of the appellant/ complainant. That apart he would also ridicule the alleged report received from the Additional Superintendent of Police as non-est report in the eye of law.
8. The issue as to whether the present complaint could be maintained under Consumer Protection Act had already been answered and settled by the District Forum itself in as much as rendering of service even for commercial purpose would fall within the ambit provided under the Consumer Protection Act. Now, we are left only with the question as to whether the issues involved herein could be decided by the Consumer Forums themselves or the appellant/ complainant is to be directed to approach the Civil Court.
9. Considering the rival submissions, it is clear that the District Forum while upholding the Jurisdiction of the consumer Forum to deal with the present complaint, has taken a contrary view that the summary procedure adopted by the Consumer Forums is not sufficient to decide the issues involved and only an elaborate trial procedure adopted by the Civil Courts only will sort out the issues involved.
10. The order of the District Forum has been passed solely on the basis that the Consumer Protection Act provides only for the summary procedure and issues involved herein have to be decided by elaborate trial.
While deciding so, the District Forum has heavily relied on exhibits B-1 and B-3. The District Forum has failed to appreciate the fact that the Consumer Protection Act under Section 13(4) has provided the same powers as are vested in a Civil Court under the Code of Civil Procedure 1908, while trying a suit. Therefore the conclusion drawn by the District Forum in the present case to the effect that the Consumer Forums does not have the power to deal elaborately with the issues involved is contrary to law and cannot be sustained. It is pertinent to point out that the District Court at the same length has held that the Jurisdiction of the Consumer Forums to deal with the present issue is not ousted and in such a scenario the conclusion drawn by the District Forum is self contradictory which cannot be allowed to be sustained.
11. The Honble Supreme Court in the decision reported in III (2003) CPJ 9 (SC) has held that merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved. In one another decision reported in III (2002) CPJ 8 (SC) the Honble Supreme Court has held that the Consumer Forums are competent to decide all complicated questions of Law or facts and further held that merely because Commission required to have Summary Trial, would hardly be a ground for directing the Consumer to approach Civil Court. In the decisions reported in II (2007) CPJ 63 (NC), III (2006) CPJ 444 (NJ),III (2006) CPJ 102 (NC), III (2006) CPJ 103 (NC), the National Commission has clearly held that the Consumer Forums have the competency to decide complicated questions even if the allegations are centered around the questions of fraud etc.,. So also by the decisions reported in I (2006) CPJ 350, II (2006) CPJ 484 KARNATAKA and the U.P STATE Forums respectively have held similar views. Therefore it is clear that the present complaint can be dealt by the Consumer Forum even if were to involve complicated questions.
12. Now as far the merits of the case is concerned, the fact that the appellant/complainant has been availing burglary and house breaking policy along with fire policy since 1993 as can be found from exhibits A-2 to A-8 remains unchallenged. The appellant has obtained license in the year 1990 and has been carrying on business in Pawn broking since then. On 23.11.1999, the burglary has taken place and proper complaint has been lodged based on which the case has been registered by the police on 24.11.1999 itself. The copy of the FIR has been produced and marked as Exhibit A-9. The appellant has also immediately informed the respondents which is evident from Exhibit A-10.
13. Exhibits A-11 and A-12 which is the communication from the first respondent and the claim form submitted by the appellant herein clearly shows that the respondents herein initially did not have any hesitation to settle the claim of the appellant/complainant. The same is further fortified by the fact that respondents have not chosen to deny that at the first instance a person was appointed as a Surveyor and only based on his report the respondent Insurance company had issued the claim form and had accepted the same on being presented. Even exhibits A-12, A-14, A-15, A-20 to A-23 clearly suggest that for a long period the claim was never rejected nor was any doubt raised on the issue of occurrence of burglary by the respondent Insurance Company. Only by exhibit A-26 dated 25.01.2002, the respondents for the first time have chosen to repudiate the claim that too after the appellant/complainant had approached the Insurance Ombudsman. This repudiation infact was after the receipt of exhibit A-16, Police final report & Non traceable certificate, exhibit A-18 and A-19, action drop proceedings. This clearly gives rise to the feeling that repudiation of the claim by the respondent Insurance Company is only an after thought, probably injected to frustrate the claim of the appellant/complainant.
14. The main premise of the respondents contentions is that the claim of the appellant/complainant cannot be accepted in view of the surveyors report in Exhibit B-1 and the report of the Additional Superintendent of Police in Exhibit B3. The surveyors report in Exhibit B-1 not only denounces the occurrence of burglary but also makes scathing attack on the character, conduct, intention etc., of the insured. The surveyor gives his own theory or version to decry and nullify the theory of burglary laced with syrupy stories about the intentions possessed by the insured like proposed investments, likelihood of purchasing buses etc.,. One cannot deny the fact that the appellant has been availing Insurance Policies since 1993 and the Burglary is reported only in 1999. Hence the alleged presumptions of the Surveyor that the said Burglary was stage managed is nothing but new theory injected apparently to deny the claim. In the decision reported in II (2007) CPJ 312, the Delhi State Forum has held that the Surveyors function is limited to the extent of assessing the loss . Here the said report in exhibit B-1 is a report by the Insurance Company appointed surveyor for which much significance cannot be attached so as to make the same as the base on which the entire claim put forth by the insured is to be rejected. The surveyor appointed by the Insurance Company cannot be construed an expert opinion in all aspects including forensic science. This Forum cannot be guided by his opinion and understanding of the occurrence, when exhibit A-9, A-16, A18 & A-19 are totally contradictory to his theory.
The fact that the surveyor has taken more than 18 months to finalize this report also speaks volumes about the veracity and acceptability of the report which is against the spirit of the decision in II (2008) CPJ 198 (NC).
15. That apart, it is equally important to bear in mind that this surveyors report is only a second report at whereas already another surveyor has also examined the issues whose report is not brought to the fore and ultimately the same leads to an irresistible conclusion that the report in Exhibit B-1 cannot be accepted.
16. Per contra, the appellant had lodged a complaint immediately with the Police and the Police in turn have also registered a case speaks volumes in favour of the Appellant/ Complainant. So also the Appellant/ Complainant has chosen to immediately inform the respondents. The Police have filed a final report and have given a non traceable certificate, all these enables the Appellant/ Complainant to substantiate its case. The contention of the respondent that it is a doubtful case of theft is not supported with any solid evidence except with the Surveyors Report in Exhibit B-1, which is purely based on surmises and conjectures. In the decision reported in AIR 1961 PUNJAB 253, it is held that the burden of proof lies on insurer alleging fraud. Similarly the Delhi State Forum in II (2008) CPJ 483 has held that, Once the report is lodged with the police may be in any form, the Insurance Company is barred from appointing any Investigator to investigate into the fact whether the theft or accident has taken place or not. Under the Code of Criminal Procedure only the police have the authority to investigate into the offence registered under the IPC and nobody else. If the Insurance Companies are allowed to appoint Investigator forgoing into the truthfulness of the occurrence then there will be two parallel investigations, one by the statutory authority and another by an authority which is incompetent to investigate into a criminal offence. We have also held that Insurance Companies have no option than to accept the report of the police with regard to accident or theft of a vehicle or loss of vehicle by way of any other incident or event.
17. We are fully inconformity with the above said analogy drawn by the Delhi State Forum in the above decision. In the case on hand also, the respondents who ought to have accepted the Police report have tried to open up a new front on the investigating side through their Surveyor which cannot be accepted.
18. In so far as the report dated 07.10.2001 of the Additional Superintendent of Police, Kumbakkonam is concerned; the same does not give out any concrete opinion to rely upon. The Additional Superintendent of Police who had visited the scene of occurrence only after four months gave mutually contradictory statements and finally concludes that he has no definite opinion to offer. Such a report in Exhibit B-3 is of no use to deny the appellant/complainant claim. Both exhibits B-1 & B-3 by virtue of the foregoing discussion are only truncated tools in the hands of respondent Insurance company deny the lawful claim made by the insured.
19. The operative clause in Exhibit A-2 to A-8 clearly speaks about the fact that the respondent Insurance Company has given a commitment to indemnify the insured in case of Damage caused to the premises to be made good by the Insured resulting from Burglary and/or house-breaking or any attempt thereat any time during the period of insurance. This clearly casts a duty upon the insurance company to indemnify the insured and the stand of repudiation taken and reasons attributed for such repudiation are not only flimsy and after thought but appears to be a novel, ingenious method to frustrate the claim and as such the contentions of the respondents cannot be accepted. Exhibit A-9, A16, A-18 & A-19 clearly accounts for the occurrence of burglary and in the absence of any contradictory material the same has to be accepted. The contention of the respondents that there was no forcible entry and as such the theory of Burglary is false does not hold much water in view of the fact that the F.I.R in Exhibit A-9 speaks about forcible entry, ransacking of chest, drawers, etc,. In the absence of any contra material, the same has to be accepted and repudiation of the claim on this ground is nothing but deficiency in service. In the decision reported in II (2006) CPJ 219, it is held that repudiation of claim by insurer amounted to deficiency in service. The same also equally compels us to hold that there is deficiency in service committed by the respondents /Opposite Parties in the present case also.
20. As regards the claim of Rs.15,50,000/- is concerned, as per Ex.A4, the appellant has insured for the said amount and the appellant is constantly maintaining with regard to the loss sustained by him. In as much as the policy covers for the said amount and no other contra-material is produced by the respondents with regard to the value of the goods lost except a denial in a casual manner, when the appellant succeeds, he is entitled to receive the amount for which he has paid the premium to the policy.
21. In the result, appeal is allowed, the order passed by the District Forum which is under challenge is set aside and the respondents are directed to pay the appellant/ Complainant the said claim of Rs.15,50,000/- together with an interest @ 6 % from the date of filing of the Complaint before the District Forum and a sum of Rs.10,000/- towards compensation for mental agony and damages and Rs.2000/- towards costs.
PON GUNASEKARAN N. KANNADASAN MEMBER-I PRESIDENT INDEX : YES / NO Rsh/d/nkj/ Finance