National Consumer Disputes Redressal
M/S. Aziz Wall Paper vs National Insurance Co. Ltd. & Anr. on 25 October, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 791 OF 2016 (Against the Order dated 27/01/2016 in Complaint No. 432/2013 of the State Commission Maharashtra) 1. M/S. AZIZ WALL PAPER MR. AZIZ AHMAD KHAN, AT SHOP 08, VEENA APARTMENTS, SEJAL PARK, NEAR OSHIWARA DEPOT, LINK ROAD, GOREGAON (WEST) MUMBAI-400014 MAHARASHTRA ...........Appellant(s) Versus 1. NATIONAL INSURANCE CO. LTD. & ANR. OFFICE AT UNIT NO. 26301. 6TH FLOOR, STERLING CINEMA BUILDING, 65, MURZBAN STREET, FORT, MUMBAI-400001 MAHARASHTRA 2. M/S G.D. BANGARD INSURANCE SURVEYORS,VALUERS & LOSS ASSESSORS,A-1/401, GANGOTRI SASANT CHS LTD.,MAIN LINK ROAD,BANGUR NAGAR, MUMBAI-400064 MAHARASHTRA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT HON'BLE DR. SADHNA SHANKER,MEMBER FOR THE APPELLANT : FOR THE APPELLANT : MS. DEEPIKA SHARMA, ADVOCATE FOR THE RESPONDENT : FOR THE RESPONDENTS : MS. HETU ARORA SETHI, ADVOCATE Dated : 25 October 2023 ORDER A.P. SAHI, J, PRESIDENT
1. The appellant is a proprietorship concern that insured its stocks stored in three godowns for which three separate policies were taken for the total sum insured as against each of the policies that was Rs.4,34,000/- for policy no.467, Rs.12,00,000/- for policy no. 468 and another sum of Rs.12,00,000/- for policy no. 469 dated 26.07.2006. The stocks had been stored at Shop No.8, Veena Apartment godown situate at Chawl No.196 in Motilal Nagar No.1, Goregaon (West), Mumbai and Chawl No.208 in the same vicinity. According to the appellant, due to heavy showers of rain, all the three locations where the stocks of the appellant firm were stored were heavily inundated as a result whereof the complainant/appellant suffered a heavy loss and the complainant/appellant estimated the damage at Rs.61,53,000/-.
2. At this juncture, it would be relevant to mention that the stocks were insured with the respondent no.1 (National Insurance Co. Ltd.) and also with the Oriental Insurance Co. Ltd. where also the complainant/appellant lodged his claim in respect of the loss suffered by him.
3. The respondent no.2 (M/s G.D. Bangard, Insurance Surveyors) were appointed as the surveyor by the respondent no.1 whereas the Oriental Insurance Co. Ltd. appointed M/s Padamsey Shah & Co. as their assessor for assessing the loss.
4. The case of the complainant/appellant is that as the stocks which were carpets were heavily soaked in water, they requested both the surveyors to visit for survey after the complainant/appellant is able to segregate the stocks for a proper assessment. The surveyor/respondent no.2 visited the premises on 04.07.2007 and 20.08.2007 along with the Branch Manager of the respondent no.1 insurance company and they only found stocks which had not been damaged and was safely kept wrapped in polythene. They however expressed their desire calling upon the complainant/appellant to get all the stocks verified in order to complete the survey. Instead of getting it done, they received a letter dated 22.08.2007 from the complainant/appellant that they would segregate the stocks, complete the record and then inform it for verification. The case of respondent no.1 insurance company is that since the surveyor was not allowed to inspect or carry out the survey in respect of the alleged damaged stocks in spite of repeated requests and reminder, the claim was closed.
5. On the other hand, the contention of the complainant/appellant is that the surveyor of Oriental Insurance Co. Ltd. namely M/s Padamsey Shah & Co. and the respondent no.2 had been requested to conduct a joint survey after the complainant/appellant had forwarded all the relevant documents for assessment on 11.10.2007. The respondents no. 1 and 2 did not cooperate nor did they come and therefore the survey was conducted by M/s Padamsey Shah & Co. who inspected the stocks on 10.11.2007 and the claim was settled with them after the surveyor had assessed the loss. The loss assessed by M/s Padamsey Shah & Co. was Rs.31,07,237/- and therefore the complaint before the Maharashtra State Consumer Disputes Redressal Commission at Mumbai (hereinafter referred to as the State Commission) was filed by the complainant/appellant for 50% of the said amount together with other ancillary claims.
6. So far as the claim against the Oriental Insurance Co. Ltd. is concerned, the same was settled through settlement vouchers dated 12.11.2008 and 21.04.2009 through which the complainant/appellant received a sum of Rs.9,83,754/- from the Oriental Insurance Co. Ltd
7. The complainant/appellant alleges that in spite of repeated requests, the respondent no.2 surveyor declined to visit the site which is evident from the letter of the surveyor sent in October, 2007, which is extracted hereunder:
"To M/s. Aziz Wall Paper Shop No.8, Veena Apartment, Sejal Park, Near Oshiwara Bus Depot, Link Road, Goregaon (West), Mumbai-400 104.
Kind Attn. Shri Azizbhai/Shri Liyas Dear Sir, Re: Floor claim of 30.06.2007 at Three Locations Policy Nos. 26001/11/06/3100000469 26001/11/06/3100000467 26001/11/06/3100000468 Further to our letter dated 30.07.2007, 20.08.2007, 26.09.2007 written to you and copies endorsed to Insurance Company, we regret to note that none of our letters have been replied till date.
One Mr. Sudhir Gudal had sent some file of your on 12.10.07, which we had not accepted as unless and until the damaged stock is verified, there is no point of accepting the papers. Which has already been conveyed to Mr. Gudal as well as to the Insurance Company. In fact Insurance Company is also agreeable with our point of view. They are also regretful and suspicious about your claim as no insured takes 5 months to get his damaged stocks verified.
Now after 5 months how to verify that the stock which you will be showing as damaged is really the same stock which was damaged in flood on 30.06.07. If at anytime the damaged stock can be shown, there is no need for any flood to happen. Since the flood damages has to be seen and quantified immediately after the flood and not after 5 months or so.
It is rather surprising that you are not interested in pursuing your claim at all even after our repeated reminders as listed above.
Now, we have sought the Insurance Company's considered opinion on the subject as to how we should go about your claim. On their instructions we shall move further in the said matter which please note.
Yours faithfully, G.D. Bangard Insurance Surveyors & Loss Assessors"
8. The claimant alleges they sent repeated reminders and requests to the respondents, including the respondent no.1 complaining about the conduct of the surveyor in not coming to assess the damaged goods, yet of no avail. It is also the case of the complainant/appellant that final survey report by the surveyor of the Oriental Insurance Co. Ltd. was submitted on 28.04.2008 with whom the claim was settled as mentioned above and since in spite of repeated efforts, the respondents did not get the survey conducted, a letter had to be issued on 26.05.2008 indicating that due to the stocks that had been damaged due to flood were deteriorated and had started stinking therefore they were compelled to forcefully dispose of the stocks in spite of holding it for more than twelve months. Through the said letter, it was also informed that photographs were being taken that would evidence the fact of the reason for disposal of the stocks under compulsion.
9. The claim of the complainant/appellant was being closed. This repudiation dated 03.03.2010 led to the filing of a complaint before the State Commission that was dismissed by the State Commission on 15.07.2011 on the ground of delay recording that the cause of action had arisen on 30.06.2007 when the stocks suffered damage due to rainfall. The complainant/appellant approached this Commission in First Appeal No. 318 of 2011 that was allowed on 10.10.2013 recording that the claim in fact stood repudiated on 03.03.2010 and in that view of the matter the complaint had been filed well within time. The matter was accordingly remanded back to the State Commission for hearing on merits.
10. It is in this background that after appraisal of facts and evidence the State Commission vide order dated 27.01.2016 rejected the complaint, holding that the complainant/appellant had failed to discharge the burden of proving the damage caused to the stocks primarily on two grounds, firstly that the complainant/appellant did not cooperate with the surveyor respondent no.2 and secondly disposed of the stocks without prior intimation to the insurance company. It also held that the survey report of the Oriental Insurance Company was not binding and consequently the complainant/appellant had failed to satisfactorily explain as to why the same stocks at three different locations had been insured with two different insurance companies.
11. Questioning the findings recorded by the State Commission, the present appeal has been filed contending that the State Commission has erroneously come to the conclusion that the complainant/appellant has failed to follow the terms and conditions of the policy and did not provide any opportunity to the surveyor to inspect and assess the loss, hence these findings being contrary to the weight of evidence on record the order of the State Commission deserves to be set aside.
12. We have considered the submissions raised and what we find from the record is that it is correct that the respondent no.2 surveyor had written letters on 30.07.2007 and 20.08.2007 for visiting the premises and surveying the segregated stocks separately. Letters were sent on 21.09.2007 and 30.11.2007 to prepare inventories which according to the respondents were not prepared.
13. In this regard one has to address the correspondence between the complainant/appellant and the insurance company. It is on record that when the respondent no.2 surveyor issued the letter dated 30.07.2007, a response was given on 22.08.2007 by the complainant/appellant indicating that the firm was in the process of arranging the stocks which would be time-consuming because the stocks being heavily soaked in water, each carpet needed to be separately dried and rerolled. The job was tedious as the carpets had started tearing at the time of lifting which was causing additional problem in the segregation of stocks and preparation of inventories. Consequently, it was requested that since the same would take some time, the complainant/appellant would be submitting the documents and intimating the surveyor to arrive for assessing the loss suffered.
14. The site was again visited by the surveyor on 20.08.2007 at about 8.00 p.m. at night and again the same position was explained by the complainant/appellant. The complainant/appellant completed the process of segregation, given all the documents and vide letter dated 11.10.2007 requested the respondent no.2 surveyor to visit and an answer was also given to the point-wise issued raised together with 19 documents that were filled up and sent. The said letter also intimated him about the surveyor appointed by the Oriental Insurance Company. This letter was received in the office of the surveyor respondent no.2 which has been acknowledged where-after the response was sent which is quoted hereinabove. It is thus clear that it is the surveyor respondent no.2 who created a suspicion and then assumed for himself that the complainant/appellant was not genuinely pursuing his claim and also expressed his doubt of any need of quantification after five months of the incident. Thus, the aforesaid letter of the surveyor respondent no.2 clearly indicates that he refused to arrive for the surveyor or conduct the same.
15. At this stage, it would be relevant to mention that the surveyor appointed by the Oriental Insurance Co. Ltd. inspected and surveyed the damaged goods on 10.11.2007 as the request for joint inspection was not accepted by the respondents and delay was caused by the surveyor respondent no.2. A reminder was sent on 03.12.2007 stating therein that M/s Padamsey Shah & Co., the surveyor of the Oriental Insurance Co. Ltd., has completed the physical verification of stocks and was in the process of finalizing the assessment report. No response was given by the surveyor respondent no.2 to this letter.
16. On the other hand, the surveyor respondent no.2 dispatched the communication dated 30.11.2007 reiterating its stand which was nothing else but an avoidance to visit the premises. The complainant/appellant on 10.12.2007 dispatched another communication to the surveyor respondent no.2 clearly stating therein that the surveyor respondent no.2 has not taken notice of any of the contentions of the complainant/appellant and that in spite of repeated requests for the past two months, no inspection was made by him. The contents of the letter dated 30.11.2007 were disputed and it was also informed that the Oriental Insurance Company surveyor has completed the survey and would be submitting the report in ten days.
17. This very letter intimates the respondents that there was tremendous pressure from the Municipal Corporation and the local Corporator as well as the neighbours to dispose of the goods which were emitting foul smell. This was sufficient intimation of the disposal of the damaged stocks. Having failed to receive any response, the complainant/appellant was compelled to directly address a letter to the respondent no.1 recording all the aforesaid facts and the said letter dated 07.01.2008 is on record. It was also informed that the surveyor respondent no.2 was insisting that he will proceed only after taking permission of the insurance company respondent no.1 in spite of the fact that full opportunity was given for inspection. Further request was that the surveyor respondent no.2 be directed to cooperate and do the needful.
18. The surveyor of the Oriental Insurance Co. Ltd. submitted the report dated 28.04.2008 and while assessing the loss and verifying the stocks indicated in clause 8.2 as follows:-
"8.2 The Insured conveyed that they had changed bankers. Since their current bankers had tie up with Oriental Insurance Co. Ltd., they had taken fresh policies as per their norms. Thus they had double insurance as policies with National Insurance Co. were not cancelled. We have been given to understand that National Insurance Co. Ltd. have appointed M/s Bangard & Co. Surveyors to assess the losses under their policies. The policies were identical, except with respect to additional flood excess. We have therefore allowed 50% of the claim under each policy and thereafter applied additional flood excess as applicable."
19. They further assessed the damage and in the remarks column at clause 11.1 indicated as follows:
"11.1 It may be noted that the said risk was also covered for flood risk under Policy No.260301/11/06/310000467, issued by National Insurance Co. Ltd. who have appointed M/s G.D. Bangard & Co. as surveyors."
20. Consequently, the recommendation was made to the effect that only 50% of the net claim is to be borne by the Oriental Insurance Co. Ltd. as the same stocks had been insured with the National Insurance Co. Ltd., respondent no.1 herein, as well. All this information was known to the respondents, yet no action was taken and it was then that finally on 26.05.2008 the respondent no.1 was informed by the complainant/appellant that they have been forced to dispose of the stocks as it cannot be held any longer keeping in view the pressure from the Municipal Corporation, the people of the surrounding region and other reasons.
21. It is therefore evident that it is after two years that the claim was closed vide letter dated 03.03.2010, which is extracted hereunder:
"To M/s Aziz Wall Paper, Shop No.8, Veena Apartment, Sejal Park, Near Oshiwara Bus Depot, Link Road, Goregaon (West), Mumbai-400104, Dear Sir, Re: Flood Claims of 30.06.2007 at Three Locatiaons Policy No. 260301/11/06/31000006 & 3100000488 and 3100000469 Claim No. 11/07/319000005, 319000006 & 319000007 With reference to the above referred flood loss of 30/06/2007, we would like to bring it to your notice that the survey was conducted on 04/07/2007, wherein even the undersigned was also present, and found that most of the stock consisting of wall papers, carpets, PVC flooring etc., were packed with PVC cover, then there was polythene sheets, and were kept in a haphazard manner, vertically and few of them were kept even horizontally on the floor. On opening of few of them it was noticed that they were perfectly OK as the water had not penetrated inside because of its packing in above manner.
Further it is observed from the reports and correspondence enclosed by the surveyor, that you had not prepared your inventory of the said stock, our surveyor M/s. G.D.Bangard had asked you to arranged them properly and prepared the list of damage and good stock separately for assessing your loss. Surveyor has written various letters to you to get the survey conducted vide his letter dated 30/07/2007, 20/08/2008 initially and repeated phone calls were made to you to show him the damage and good stock separately, but you have not deliberately delaying the same for some reason or the other. Ultimately you invited the surveyor to come and check the stock, but the surveyor, on checking found that all were sound stock and not damaged one which was purported by were only good stock and not damage ones.
Hence he wrote back to you to prepared the inventory of damaged stock vide his various letters dated 21/09/2007 and 31/11/2007, copies of which were sent to us also. However, you have been deliberately delaying the matter was which even mentioned in your letter dated 22/08/2007 wherein you have asked the surveyor to be patient as it was to take lot of time for your to prepare your inventory of good and damages stock separately till 03rd December 2007, which was almost after 5 months of the flood.
You have also informed us that you had disposed off the said damaged material also without even obtaining the prior approval of the insurance company which is in contravention of general condition no.6 and 7 of the policy as you are supposed to get your goods inspected, documents produced for assessment of loss, and you are not entitled to abandon any property without prior written approval from the insurers.
As your surveyor was not given an opportunity to verify the damaged stock of yours for assessment of loss which is the prime condition for any claim, we regret to inform you that we cannot consider your claim and accordingly closing your file as "no claim", which kindly note."
22. The State Commission has considered the material on record, came to the conclusion that the complainant was a 'consumer' and therefore the complaint was entertainable within the pecuniary jurisdiction of the State Commission. However, while proceeding to consider the allegations of deficiency in service on the part of respondent no.1, the State Commission has arrived at the conclusion that the surveyor report of the Oriental Insurance Co. Ltd. will not have any binding effect on the respondents. The State Commission has further recorded that the stocks were alleged to have been located at three places and when the respondent no.2 made an attempt to inspect the stocks on 20.08.2007, the stock which was shown had not been damaged, the stock was not arranged properly and the list of damaged goods and sound stocks was not prepared for assessing the loss. The State Commission further relied on the letters written on 21.09.2007 and 30.11.2007 to conclude that the repudiation was justified as the surveyor had not been given an opportunity to verify the damaged stocks.
23. This finding as contained in para-22 of the impugned order is contrary to the weight of evidence on record, inasmuch as after the surveyor's visit on 20.08.2007, the complainant/appellant had responded vide his letter dated 11.10.2007 categorically stating reasons for the gap in providing the opportunity as the stocks were being arranged which took time on account of the carpets being heavily soaked in water which had to be dried. It was further stated therein that all the documents which were required were being submitted. To this, the surveyor sent his reply which has been extracted hereinabove. We find that the surveyor himself showed his inability to visit the premises expressing doubts about the availability of the damaged stocks after five months. This reply of the surveyor is unsound and does not stand to logic, inasmuch as when a request for physical verification is being made together with a request for joint inspection with the surveyor of the Oriental Insurance Co. Ltd., the reluctance of the surveyor on the basis of presumption is against logic. The surveyor could have gone and made his own observations for which he was being repeatedly invited. Not only this, the surveyor of the Oriental Insurance Co. Ltd. did visit on 10.11.2007 and carried out the inspection where-after a survey report had been submitted. It does not stand to reason as to why the surveyor stuck to his stand on not visiting the premises on the basis of his own surmises that the damaged stock would not be available after five months. If the stock was available for inspection to the surveyor of Oriental Insurance Co. Ltd., there was no reason for the respondent no.2 surveyor to assume that the stock would not be available for him to inspect. This doubt appears to have been deliberately created for not visiting the premises for whatever reasons the surveyor had cited in his letter quoted hereinabove.
24. This was gross negligence and deficiency in service on the part of respondent no.1 insurance company and the surveyor appointed by them. This deficiency therefore has prejudiced the cause of the complainant/appellant when on the other hand the same damaged stocks have been assessed, valued and claim reimbursed by another responsible insurance company, namely, Oriental Insurance Co. Ltd. to the extent of 50% as indicated hereinabove. The deficiency on the part of the respondents is therefore writ large which aspect has been ignored and not assessed properly by the State Commission. The State Commission has noted that the complainant/appellant vide letter dated 11.10.2007 had offered the opportunity but the State Commission relied on the letter of the surveyor that he was unable to assess the alleged loss and that the complainant/appellant was pressurizing him to assess the loss only on the basis of papers without verification of the stocks. This finding of the State Commission is perverse in the light of what has been discussed above when the surveyor had been invited and who refused to visit for invalid and imaginary reasons when at the same time the stocks were existing which were inspected and verified by the surveyor of the Oriental Insurance Co. Ltd. The surveyor report of the Oriental Insurance Co. Ltd. may per se not be binding on the respondents but it is definitely an un-rebutted circumstance which evidences the existence of the stock and its verification followed by reimbursement of the claim. The State Commission having ignored this aspect has therefore arrived at an incorrect conclusion.
25. The fact that the inundation of the stocks did happen, the fact that the damage was assessed by another insurance company and claim reimbursed and the fact that the surveyor respondent no.2 failed to respond to the request of the complainant/appellant are established on record as per the discussion made hereinabove. The findings recorded by the State Commission therefore cannot be sustained and the claim petition deserves to be allowed. The repudiation by recording no claim is unsustainable.
26. Accordingly, the appeal is allowed. The order of the State Commission is set aside. However, coming to the amount of the claim, we find that even though there was a higher claim assessed by the surveyor, yet 50% of the claim was allowed by the surveyor which was paid to the tune of Rs.9,83,754/- by the Oriental Insurance Co. Ltd.
27. The 50% amount as assessed having been disbursed by the Oriental Insurance Co. Ltd. in respect of the same damaged goods/stocks, we allow the claim for the same amount of Rs.9,83,754/- to be paid by respondent no.1 together with 9% interest per annum which shall be disbursed to the complainant/appellant within a period of three months from today.
28. The appeal is disposed of in the above terms.
.........................J A. P. SAHI PRESIDENT ............................................. DR. SADHNA SHANKER MEMBER