National Consumer Disputes Redressal
H.P. Horticulture Produce Marketing & ... vs United India Insurance Co. Ltd. on 7 August, 2007
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL No. 156 OF 2003 (Against the order dated 03/08/1999 in A.N./OC No.13/97 of the State Commission DELHI ) H.P. HORTICULTURE PRODUCE MARKETING & PROCESSING CORPN. LTD. ........ Petitioner(s) Vs. UNITED INDIA INSURANCE CO. LTD. ........ Respondent(s) BEFORE: HON'BLE MR. JUSTICE M.B. SHAH, PRESIDENT MRS. RAJYALAKSHMI RAO, MEMBER For the Petitioner : MR. P.R. BAHL, Advocate For the Respondent : MR. S.M. TRIPATHI, Advocate Dated the 7th day of August,2007 ORDER
M.B.SHAH, J. PRESIDENT Heard the learned counsel for the parties.
Being aggrieved and dissatisfied by the judgement and order dated 3.8.1999 passed by the HP State Consumer Disputes Redressal Commission in Original Complaint No.13/1997, the HP Horticulture Produce Marketing and Processing Corporation Ltd. (HP Undertaking) has filed this appeal.
Facts:-
Undisputedly, the complainant has taken an insurance policy for a sum of Rs.2,41,51,000/- from the respondent M/s. United India Insurance Company. On 2.9.1990, a devastating fire broke out in the factory premises and the stock along with building, material and furniture was destroyed in the said fire. On the basis of the information given by the complainant to the Insurance Company, the Insurance Company appointed a surveyor who submitted its report on 24.3.1992.
As per the report, fire had badly burnt and/or extensively damaged the 1st and the 2nd floor of the building and the material which was kept therein. The surveyor has arrived at the conclusion that the cause of fire is not known. He assessed the loss at Rs.47,48,100/- payable by the Insurance Company which included a sum of Rs.9,07,750/- received by the complainant from the State Government as subsidy. In the said report it has been stated that the assured has agreed to receive the above figure of loss either on market value or at the subsidized rates and submitted the duly completed and signed claim form along with letter of consent.
The letter of consent is also produced on record wherein it has been stated by the complainant that they agreed to receive the amount of Rs.47,48,100/- being full and final compensation to the loss caused to the building, machinery, furniture, fixture and fittings and stocks on the market rates. It is also mentioned that if subsidy is deducted, the amount would come to Rs.38,40,350/-. The complainant has given consent for both methods adopted by the surveyor. It is specifically stated that if the State Government would ask for refund of the subsidy amount i.e. Rs.9,07,750/-, and if refunded, the same will be paid by the insurer.
Despite the survey report and the aforesaid consent letter, the Insurance Company failed to pay the amount for years together on the ground that Magisterial Enquiry and the Police Enquiry with regard to the cause of fire and suspected arsenal, were pending. Finally the amount of Rs.37,74,064/- was paid on 16.8.1996 after taking an indemnity bond from the insured that in the event of any adverse finding of the Police is received, the amount would be refunded by the complainant.
It is to be stated that on 16.8.1996, the date when the cheque was given to the complainant, the complainant wrote a letter to the Divisional Manager of the Insurance Company stating that there was no justifiable ground for deducting Rs.9,74,036/- and Rs.66,286/-, hence, details thereof be supplied to the complainant. To that letter, a reply was given by the Insurance Company on 30.8.1996. Relevant part of that letter is as under:-
1.
Towards difference in premium under the Policies on which claim has occurred as pointed out by surveyor at the time of assessment of loss Rs.18,546.00
2. Premium for Respondent-instatement Of sum insured under both the policies In which claim has occurred as per Policy terms and condition Rs.12,162.00
3. Recovery under Policy No.111300 11/13/771/90 as pointed out by our internal auditors for the period ending 31.3.1991 Rs.24,280.00
4. Recovery under Policy No.03/01/ 006/89 as pointed out by our internal auditors for the period ending 31.3.91 Rs.10,688.00
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Total amount Rs.66,286.00
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As the dispute was not settled, the complainant was required to approach the State Commission by filing Complaint No.13 of 1997 in the year 1997. That was dismissed by the State Commission. Feeling aggrieved, the complainant is in appeal before us.
Submissions:-
At the time of hearing of the appeal, learned counsel for the complainant submitted that there was no justifiable reason in not paying the interest on the sum which was assessed by the surveyor in the year 1992 and which was paid only in August, 1996. It is his contention that the survey report was submitted on 21.3.1992.
Therefore, the Insurance Company should be directed to pay interest from 21.3.1992 till 30.8.1996 on the sum which was payable to the complainant as per the surveyor report. He further submitted that there was no justifiable ground for deducting the amount of Rs.9,07,750/- which was paid by the Government to the complainant by way of subsidy, which is a Government Undertaking. In any case, it is his contention that the loss suffered was to the tune of Rs.47,48,100/- as assessed by the surveyor, and, therefore, under the terms of the insurance policy, the Insurance Company is bound to pay the said amount.
As against this, Learned counsel Mr. Tripathi appearing on behalf of the Insurance Company, submitted that the insured has given a consent letter and on the basis of the consent letter the Insurance Company has paid the amount. Therefore, the insured cannot raise any objection with regard to the deduction made by the Insurance Company. He further submitted that payment of the amount was delayed because there were allegations of arsenal and the matter was being investigated by the Police as well as by holding Magisterial Enquiry.
It has been pointed out that the Magisterial Enquiry was over and report was submitted on 24.11.1994 and a copy of the report is produced on record. As per the report, the cause of fire could not be concluded or found out.
Findings:
I. Interest for delayed payment.
In our view, once the surveyor has arrived at the conclusion that the cause of fire could not be ascertained and when the loss was also assessed by the surveyor, it was the duty of the Insurance Company to reimburse the complainant for the loss suffered by it. The Insurance Company has withheld the said amount for more than 4 years. In those set of circumstances, the Insurance Company should pay the loss of interest suffered by the complainant. It is contended by the learned counsel for the complainant that because of the loss caused due to fire, the company suffered severe financial crunch and might have been wound up but for the assistance given by the Government. Hence, for this, the Insurance Company must reimburse the Complainant by way of compensation and that measure of compensation would be rate of interest.
II. Subsidy amount.
Secondly, with regard to the amount of subsidy given by the State Government, it is to be stated that the subsidy is given for the protection of the Government Undertaking so that it can sell the goods at a lesser price in public interest, as a welfare measure. It is for the benefit of the consumers/purchasers and not for the benefit of the Insurance Company. The Insurance Company is not expected to take undue advantage of the welfare measures adopted by the Government for the benefits of the consumers/Corporation. It is not open to the Insurance Company to contend that subsidy should be withdrawn at the first instance by the Government and thereafter, it would pay the amount.
Moreover, the Government is entitled to withdraw such subsidy or can recover the same. But for that the Insurance Company has nothing to do and the Insurance Company cannot withheld it. In this connection, it is to be stated that the Deputy Secretary to the Government of H.P. has specifically written a letter to the Managing Director, HPMC, Shimla-2. Relevant portion of that letter is reproduced below:-
In regard to the balance amount of Rs.9.74 lacs, it is immaterial whether the Government pays any subsidy to HPMC or not. In so far as the Insurance Company is concerned, it must pay full amount for which the goods were insured. You are therefore requested to claim the amount of Rs.9.74 lakhs from Insurance Company immediately along with full interest for delayed payment.
As stated above, the subsidy given by the Government is not for the benefit of the Insurance Company but to enable the complainant-Corporation to provide goods/services at lesser rates for the benefit of the public at large. The Insured has suffered the loss as assessed by the surveyor.
However, learned counsel for the Insurance Company submitted that insured is to be indemnified for the loss that he has suffered and not the loss which the Government may suffer, and, in the consent letter also the complainant has accepted that it is open to the Insurance Company to accept either of the mode and pay the amount.
In our view, this submission is totally erroneous because the policy specifically provides that the Insurance Company has agreed that after payment of the premium if the property insured described in the said schedule or any part of such property, is destroyed or damaged the Insurance Company will pay the insured value of the property at the time of happening of its destruction or the amount of such damage or at its option reinstate or replace such property or any part thereof. The value of the destroyed property as assessed by the surveyor at Rs.47,48,100/- and the same is required to be reimbursed.
Further, by grant of subsidy the market value of the goods is not diminished. In the present case, the market value of the goods was Rs. 47,48,100 as assessed by the Surveyor.
Secondly, in the present case because of financial difficulties even the Government Company was compelled to accept the amount offered by the Insurance Co. under protest, and after receipt of the amount, immediately, a letter was written by the Government Company to the Insurance Co. that there was no justifiable ground for deducting the amount.
In this view of the matter, the Appeal is allowed. The Insurance Company is directed to pay interest @ 10% on the amount of Rs.37,74,064/- from 1.4.1992 till 16.8.1996 and also pay the sum of Rs.9,07,750/- along with interest @ 10% from 1.4.1992 till the date of its payment. There shall be no order as to costs.
Sd/-
J. (M.B. SHAH) PRESIDENT Sd/-
(RAJYALAKSHMI RAO) MEMBER SG.