State Consumer Disputes Redressal Commission
M/S.Choudhary Bardana vs Cholamandalam Ms General Insurance ... on 12 June, 2017
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G.)
Complaint Case No.CC/2017/04
Instituted on : 28.02.2017
M/s. Choudhary Bardana,
Through : Proprietor Shri Shubham Chaudhary,
S/o Shri Rambabu Choudhary,
First Floor, Mittal Complex, Ganj Para,
Raipur (C.G.) ... Complainant.
Vs.
Chola M.S. General Insurance Company,
Simran Tower, Near Railway Crossing, Pandri,
Through : Legal Manager,
Raipur (C.G.) ... Opposite Party
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES:
Shri Deepak Diwan, Advocate for the complainant.
Shri Deepesh Kumar Thawait, Advocate, for the opposite party.
ORDER
Dated : 12/06/2017 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. The complainant has filed this consumer complaint under Section 17 of the Consumer Protection Act, 1986 against O.P. seeking following reliefs :-
(a) To direct the O.P. to pay a sum of Rs.36,20,018/- (Rupees Thirty Six Lakhs Twenty Thousand and Eighteen) towards compensation in respect of the bags burnt in the fire incident.
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(b) To direct the O.P. to pay a sum of Rs.7,34,964/- (Rupees Seven Lakh Thrity Four Thousand Nine Hundred Sixty Four) to the complainant in respect of damages to the building.
(c) To direct the O.P. to pay interest @ 12% p.a. on the above amount.
(d) To direct the O.P. to pay cost of litigation to the complainant.
(e) To direct the O.P. to pay a sum of Rs.1,00,000/- (Rupees One Lakh) towards compensation for mental agony to the complainant.
(f) To grant any other relief, which the Hon'ble Commission deems fit and proper.
2. Briefly stated the facts of the complaint of the complainant are that the complainant is a proprietorship firm which is doing work of purchase of old bardana and after repairing, sell the bardana. The complainant obtained a Standard Fire and Special Perils Policy No.2130/00375468/000/01 from the O.P., which was valid for the period from 30.05.2015 to 29.05.2016. Under the above policy, the plant, machinery and stock were got insured by the complainant and the insured value was Rs.1,20,00,000/- for which the complainant paid premium. The complainant got himself registered as registered contractor with private traders as well as C.G. Rajya Beej Evam Krishi // 3 // Vikas Nigam Ltd., C.G. Rajya Sahkari Vipnan Sangh Maryadit and was purchasing damaged bags and was repairing the same and thereafter same is sold in the market. For the above work the complainant got registered himself with both the departments and was purchasing the bags from both the department from time to time through tender. The annual turnover of the complainant for the year 2012-13 was Rs.1,54,82,354/-, for the year 2013-14 Rs.1,70,22,267/, for the year 2014-15 Rs.1,54,56,840/-. In the intervening night of 12- 13/01/2016, unfortunately, incident of fire occurred in the godown of the complainant situated at Kurra Patewa, Tahsil Nawapara Rajim due to which near about 3,25,000 bags burnt value of which was Rs.34,55,818/-. After getting knowledge regarding the incident, the complainant immediately gave intimation regarding the incident to the O.P. on 13.01.2016. The O.P. appointed Ram Mohan Gupta as Surveyor and entrusted him responsibility to assess the loss suffered by the complainant. The complainant completed all formalities for settlement of his claim. The complainant received letters dated 15.01.2016 and 22.02.2016 from the Surveyor in which the Surveyor expressed doubt regarding the quantity of stock available at the time of incident, whereas prior to 22.02.2016, the complainant submitted all documents regarding his stock to the Surveyor, even then the Surveyor written letters to the complainant and was telling the matter of the complainant doubtful, the complainant was having a doubt that // 4 // the O.P. will try to repudiate his claim on technical ground whereas since beginning the O.P. did not want to pay claim amount to the complainant, even then the complainant sent reply to the letters sent by the Surveyor and cleared his doubts and also provided all relevant documents to the Surveyor along with reply. In response to letter dated 15.01.2016 and 22.01.2016, the complainant obtaining Estimate of R.K. Choudhary, Chartered Engineer and Architect in respect of damages caused to the godown for Rs.7,34,964/-. The Surveyor also raised objection there is no similarity in the amount deposited from September 2014 to December, 2015 in respect of C.C. Limit and he also written that the complainant deposited nominal amount and saved his account to be become N.P.A in reply the complainant mentioned that the main basis of the C.C. Limit is the profit and loss of his business and the amount received from sale. When he recovers the amount from other traders then he adjust amount in other expenses and deposit the amount and irregularity in payment of instalment in respect of loan account is not basis of the acceptance / rejection of the claim. The O.P. calculated the number of bags kept in the godown on the basis of imagination or hypothetical, with an intention to repudiate the claim of the complainant. The O.P. committed deficiency in service. The O.P. also disputed regarding the quantity of electricity and tried to establish that the complainant is mentioning his loss exaggeratedly, whereas to prove his loss, the complainant provided // 5 // stock, purchase bills, sale bills, audit report and C.C.T.V. Footage to the O.P. The Surveyor assessed the loss holding the actual cost of the damaged bags, whereas the damaged bag is repaired and is made usable and the expenses incurred for the same is equivalent to the cost of the bag. Vide letter dated 06.05.2016, the O.P. tried to misguide the complainant informing that the bags of other traders were kept in the godown of the complainant whereas the complainant specifically informed that the complainant is doing business of urchase of old bardana and after repairing the same is sold. The complainant has already mentioned that he is purchasing the damaged bags and after repairing the same, the same is again made for selling condition/work and such entire stock is kept in the godown of the complainant situated at Kurra Patewa which were in above number on the date of incident. The complainant provided stock of the bags available in his godown, details of purchase, sale, and documents sought from the time to time, even then the O.P. repudiated the claim of the complainant vide letter dated 22.07.2016 on the basis of surmise. The O.P. committed deficiency in service. Hence, the instant complaint.
3. The O.P. filed its written statement and averred that the complainant purchased a Standard Fire & Special Perils Policy No.2130/00375468/000/01 from the O.P. which was effective for the period from 30.05.2015 to 29.05.2016 and according to sum insured mentioned in the policy, the plant, machinery and stock were insured.
// 6 // The cost of the burnt bags was not Rs.34,55,,818/-. On being intimation received from the complainant regarding the incident, the O.P. appointed Ram Mohan Gupta as Surveyor and entrusted him the responsibility of assessment of the loss. The Surveyor found that there was no similarity in the amount deposited in the C.C. Limit of Central Bank of India from September 2014 to December, 2015 and there was irregularity in payment of the instalment and the electricity bill was not of higher level it was average electricity bill. The Surveyor visited the place of occurrence on 15.01.2016 and 16.01.2016 and on other dates and conducted survey and came to the conclusion that expert investigator should be appointed. Thereafter Forensic Expert Company Vibrant Advisory Services was appointed for submitting forensic report. The Forensic Expert Company Vibrant Advisory Services & Surveyor and Forensic Expert on the basis of their study, residue of the fire incident, documents provided by the complainant, came to the conclusion that the complainant has not claimed any actual loss. The Forensic Investigation elaborately studied the samples collected and outside C.T.V. Footage and after evaluation of physical proof it came to know that the above fire incident was not occurred due to short circuit but deliberately the human set fire. The complainant provided the documents in pieces and from the perusal of the document it appears that for some time the business was nil, therefore, there was no possibility of storage. The complainant // 7 // deposited the VAT Returns of two years from 01.04.2014 to 31.03.2015 and 01.04.2015 to 31.12.2015 on 04.02.2016 after occurrence of the incident for collecting evidence. After August, 2014, the bank account has not been regularly operation and in the month of September, 2014 the balance was Rs.90,83,425/- and in the month of December, 2015 the balance was 91,00,081/-. It means during the above period the balance was increased for Rs.20,000/-. According to the bank account there was no turnover and there was no trade. There was no stock storage. In Central Bank of India, no stock statement was submitted. From the stock statement it came to know that the unit rate of the stock was exaggeratedly shown. In the audit report also, there is no basis for closing stock of Rs.67,39,700/-. There is lack of document to prove the purchase, inspite of request made by the Surveyor and there was no stock register. According to the Survey of the Surveyor total stock cannot be more than Rs.2,83,967/-. The fire was deliberately set. According to condition no. 8 of the Fire Insurance Policy the claim is not payable, therefore, the same has been repudiated. The O.P. did not commit any deficiency in service or unfair trade practice. According to the title sheet of the complaint the complainant is a business establishment in the name and style as M/s Choudhary Bardana whereas in para 2 of the complaint it is mentioned that the complainant is a proprietorship firm, therefore, this Commission has no jurisdiction to hear the complaint of the complainant. The O.P. has // 8 // not commit any deficiency in service or unfair trade practice. The complainant is not entitled to get any compensation from the O.P. and the complaint is liable to be dismissed.
4. The complainant has filed documents. Annexure 1 is Schedule forming part of Policy No.2130/00375468/000/01 along with terms and conditions of the insurance policy, Annexure 2 is letter dated 21.03.2016 sent by Deputy General Manager (Seed), C.G. Rajya Beej Evam Krishi Vikas Nigam Limited, Raipur to the complainant, Annexure 3 is letter dated 25.10.2011 sent by District Marketing Officer, C.G. Rajya Sahkari Vipnan Sangh Maryadit, District North Baster, Kanker to the complainant, Annexure 4 is Audit Report U/s 44AB of Income Tax Act and Statement of Account of Choudhary Bardana, Kurra Patewa, Nawapara Rajim, District Raipur for the year 2013-14, Annexure 5 is Audit Report U/s 44AB of Income Tax Act and Statement of Account of Choudhary Bardana, Kurra Patewa, Nawapara Rajim, District Raipur for the year 2014-15, Annexure 6 is Estimate for shed construction of Size (14'6" X 36' & 30'9" X 40) for M/s. Chaudhary Bardana, Prop. Subham Chaudhary, to be constructed Village Patewa, P.O. Nawapara, The. Abhanpur, District Raipur (C.G.), courier receipt, Annexure 7 is letter dated 22.07.2016 sent by the O.P. to the complainant, A-1 is letter dated 03.03.2016 sent by the complainant to Ram Mohan Gupta, Surveyor and Loss Assessor, A-2 is courier receipt, A-3 is letter dated 22.02.2016 sent by // 9 // Ram Mohan Gupta, Surveyor & Loss Assessor to the complainant, A- 4 is letter dated 16.05.2016 sent by the complainant to Ram Mohan Gupta, Surveyor & Loss Assessor, A-5 is courier receipt, A-6 is letter dated 06.05.2016 sent by Ram Mohan Gupta, Surveyor & Loss Assessor to the complainant. The complainant has also filed Provisional Trading and Profit & Loss Account for the period 01.04.2015 to 11.01.2016, Provisional Balance Sheet as on 11th January, 2016.
5. The O.P. has also filed documents. The documents are letter dated 22.07.2016 sent by the O.P. to the complainant, Standard Fire and Special Perils Policy Schedule, Terms and conditions of Standard Fire and Special Perils Policy, Final Survey Report dated 30.05.2016 of Ram Mohan Gupta, Surveyor and Loss Assessor submitted to The Manager (Claims), Chola Mandalam General Insurance Co. Ltd., Indore, Forensic and Field Investigation Report on the incident of Fire in M/s Choudhary Bardana, Kurra, Pateva, Raipur District (C.G.).
6. Shri Deepak Diwan, learned counsel appearing for the complainant has argued that he is registered as contractor and he is doing business of purchasing damaged bags and after repairing the same, he is selling it. The bags are purchased through tender from G.C. Rajya Beej Evam Krishi Vikas Nigam Limited and C.G. Rajya Vipnan Sangh Maryadit and other departments. The turnover of the complainant in the year 2012-13 was Rs.1,54,82,354/-, in the year 2013- 14 was Rs.1,70,22,287/- and in the year 2014-15 was Rs.1,54,56,840/-.
// 10 // The complainant annexed the audit report for the year 2013-14 and 2014-15 as Annexure 4 & Annexure 5. The complainant obtained Standard Fire and Special Perils Policy from the O.P., which was effective for the period from 30.05.2015 to 29.05.2016. The plant, machinery and building were insured and the insured value was Rs.1,20,00,000/-. In the intervening night of 12-13/01/2016, the incident of fire occurred in the godown of the complainant situated at at Kurra Patewa in which near about 3,25,000 bags were burn. When the complainant received intimation regarding the fire incident, he sent intimation to the O.P. on 13.01.2016. Ram Mohan Gupta, was appointed as Surveyor, who assessed the loss suffered by the complainant. The complainant completed all the formalities and submitted relevant documents which were asked by the Surveyor, even then the Surveyor had written letters to the complainant and was telling that the matter of the complainant is doubtful. The complainant was having a doubt that the O.P. will try to repudiate the claim of the complainant on technical ground. In response to letter dated 15.01.2016 and 22.01.2016, the complainant obtained estimate of R.K. Choudhary, Chartered Engineer and Architect in respect of damages caused to the godown, for Rs.7,34,964/-. The Surveyor also raised objection that there is similarity in the amount deposited from September, 2014 to December, 2015 in respect of C.C. Limit. In Surveyor Ram Mohan Gupta, in his report assessed the loss to the tune // 11 // of Rs.17,62,504/- but in conclusion clause he assessed loss to the tune of Rs.5,89,469/- without giving sufficient reason and deliberately gave report to deprive legitimate right of the complainant. Even Vibrant Advisory Services has also given report in favour of the O.P. without any sufficient reason and ground. The Investigator based its report on the basis of C.C.T.V. Footage. It is not possible for the investigator to observe expression of face , waking & talking in mobile phone, therefore, ground taken by the Investigator is baseless and is without cogent reasons. The complainant has produced sufficient evidence to prove that he suffered loss to the tune of Rs.36,20,118/- regarding damage of bags due to fire. The complainant also suffered loss of Rs.7,34,964/-, therefore, the complainant is entitled for the above amount along with interest @ 12% p.a. The claim of the complainant was repudiated by the O.P. without sufficient ground, therefore, the complainant is also entitled for a sum of Rs.1,00,000/- towards compensation for mental agony. The complaint may be allowed and the reliefs as prayed by the complainant be granted to him. He placed reliance on Lavlesh Singh Vs. United India Insurance Co. Ltd. IV (2013) CPJ 398 (NC); New India Assurance Company Limited Vs. Harinder Paul Singh (Since Deceased) Through his legal heirs & another, III (2012) CPJ 103 (NC); National Insurance Company Limited Vs. Shilpa Cloth House; IV (2015) CPJ 349; Royal Sundaram Insurance Co. Ltd. Dr. Mobile & Anr. IV (2015) CPJ 150 (NC); Oriental Insurance Co. Ltd. & Anr. Vs. Student Boot House & Anr. II // 12 // (2011) CPJ 136 (NC); Kum Kum Silk and Sarees Vs. United India Insurance Company Ltd. II (2013) CPJ 100 (NC); New India Assurance Co. Ltd. Vs. Dr. M.M. Krishan, 2011 NCJ 445 (NC); Ramdev Industries Vs. New India Assurance Co. Ltd. & Ors. IV (2014) 224 (NC); National Insurance Company Limited Vs. Hari Om Marketing IV (2011) CPJ 519 (NC); New India Assurance Co. Ltd. & Ors. Vs. S.S. Textiles, IV (2011) CPJ 276 (NC); New India Assurance Co. Ltd. Vs. Somesh Readymade Garments, IV (2011) CPJ 273 (NC); Padia Exports Private Limited VS. Bajaj Allianz General Insurance Co. Ltd. Through Its Authorised Signatory, I (2014) CPJ 421 (NC); National Insurance Co. Ltd. Vs. Ruchira Papers Limited I (2014) CPJ 237 (NC); Diamond Ply Pvt. Ltd. Vs. United India Insurance Co. Ltd. III (2015) CPJ 528 (NC) and S.M. Jute Pvt. Ltd. Vs. Oriental Insurance Co. Ltd. & Anr. IV (2015) CPJ 264 (NC).
7. Shri Dipesh Kumar Thawait, learned counsel appearing for the O.P. has argued that the complainant is a proprietorship firm and is purchasing the damaged bags and after repairing resale the bags for business purpose, therefore, the transaction is commercial transaction. The complainant is a commercial firm. The insurance policy was obtained by the complainant for commercial purpose, therefore, the complainant is not a consumer and dispute between the parties is not a consumer dispute. The complainant obtained Standard Fire and Special Perils Policy from the O.P. which was effective for the period // 13 // from 30.05.2015 to 29.05.2016. According to sum insured mentioned in the policy, the plant, machinery and stock were insured. The cost of the burnt bags is not Rs.34,55,818/-. On being intimation received from the complainant regarding incident, the O.P. appointed Ram Mohan Gupta as Surveyor and Loss Assessor. The Surveyor found that there is no similarity in the amount deposited in the C.C. Limit of Central Bank of India from September, 2014 to December, 2015 and there was irregularity in payment of the instalments. The electricity department gave average bills to the complainant continuously. Surveyor Ram Mohan Gupta visited place of occurrence, conducted survey and gave conclusion. Vibrant Advisory Services was appointed for conducting investigation and to give forensic report. Vibrant Advisory Services also visited the place of occurrence and gave its detailed report. According to the Surveyor and Investigator, the fire was occurred due to electrical short circuiting and not due to spontaneous combustion and the fire was deliberately set, therefore, the O.P. has rightly repudiated the claim of the complainant. The complaint is liable to be dismissed.
8. We have heard learned counsel appearing for both the parties and have perused the documents filed by them in the complaint case.
9. Firstly we shall consider whether the complainant is consumer ?
// 14 // 10 The complainant pleaded that the complainant is proprietorship firm and it is carrying business of purchase of damaged bags and after repairing, the bags are resold. The Special Fire and Perils Policy was obtained by the complainant from the O.P. for the period from 30.05.2015 to 29.05.2016. It is admitted fact the sum assured is Rs.1,20,00,000/-.
11. In Ashish Vishwakarma Vs. National Insurance Company Limited & Others, II (2012) CPJ 169 (NC), Hon'ble National Commission has observed that "Contract of insurance is a contract of indemnity and therefore, there is no question of commercial purpose in obtaining insurance coverage. It has also been held that the insured could not trade or carry out any commercial activity with regard to the insurance policy, being barred to do so under Section 3 of the Insurance Act, 1938."
12. In The Divisional Manager, L.I.C. vs. Shri Bhavanam Srinivas Reddy, 1991 (2) CPR 144 (NC), Hon'ble National Commission, observed thus :-
"3. The first point of objection raised by the Insurance Company before the State Commission and reiterated before us namely is that no dispute arising out of a contract of insurance can be made subject matter of adjudication under the Consumer Protection Act. This contention cannot be sustained in view of decision of this Commission dated July 28, 1989 in Shri Umedilal Aggarwal v. United India Assurance Company Ltd., F.A. Nos.3 and 4 of 1989 (Reported in I (1991) CPJ-3, 1991 (1) CPR 217 (NC), wherein we have held as follows :-
// 15 // "We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the insurer to settle the claim of the insured within a reasonable time and the prayer for the grant of compensation in respect of such delay will not fall within the jurisdiction of the Redressal Forums constituted under the Consumer Protection Act. The provision of facilities in connection with insurance has been specifically included within the scope of the express 'service' by the definition of the said word contained in Section 2(i)(o) of the Act. Our attention was invited by Mr. Malhotra, learned counsel for the Insurance Company to the decision of the Queen's Bench in National Transit Insurance Company Ltd. vs. Customs and Central Excise Commissioner, (1975) (1) all England Reports Page 303) The observations contained in the said judgment relating to the scope of the expression 'insurance' occurring the schedule of the enactment referred to therein are of no assistance at all to us in this case because the context in which the expression is used in the English enactment considered in the case is entirely different. Having regard to the philosophy of the Consumer Protection Act and its avowed object of providing cheap and speedy redressal to consumers affected by the failure on the part of persons providing "service" for a consideration, we do not find it possible to hold that the settlement of insurance claims will not be covered by the expression "insurance" occurring in Section 2(1)(d). Whenever there is a default or negligence in regard to such settlement of an insurance claim that will constitute a 'deficiency' in the service on the part of the Insurance company and it will be perfectly open to the concerned aggrieved consumer to approach the Redressal Forums under the Act seeking appropriate relief. We, accordingly over the objection // 16 // raised by the Insurance Company regarding the jurisdiction of the State Commission to adjudicate upon the complaint.
13. In The Divisional Manager, L.I.C. vs. Uma Devi, 1991 (1) CPR 662 (NC), Hon'ble National Commission, observed thus :-
"8. The very fact that the Insurance Act provides for a machinery for remedy for grievances arising out of repudiation of a claim under section 45 leads to show that the Corporation has to satisfy a Court that the repudiation was justified. Accordingly, it is for the consumer to choose a forum convenient to him to seek remedy for the loss suffered because of deficiency in service. As the provisions of this Act are in addition to and not in derogation of any other law for the time being in force, the State Commission has the jurisdiction to entertain the complaint and to investigate whether the repudiation was justified or not and to grant such relief as deems fit if it is satisfied that there was deficiency in service. We therefore, cannot uphold this contention in view of the decision of this Commission in Revision Petition No.12 of 1990 (New India Assurance Co. Ltd. v. Vipro Electronics Pvt. Ltd., 1991 (1) C.P.R. (NC) 531, where the identical point has been elaborately discussed".
14. In The New India Assurance Co. Ltd. vs. M/s Vipro Electronics Pvt. Ltd., 1991 (1) C.P.R. (N.C.) 531, the Hon'ble National Commission, observed thus :
"We are not impressed with the contention raised by Shri S.K. Paul, learned counsel appearing on behalf of the Petitioner that merely because of Insurer had totally repudiated his liability in respect of the claim, no proceedings could be validly initiated under the Consumer Protection Act by the insurer. This contention squarely falls within the ruling given by this Commission in Ummedilal Agrawal v. United // 17 // India Assurance Co. Ltd. (O.P.No.3 & 4 of 1989, decided on 28.7.1989". In that decision this Commission has observed that it is not possible to hold that settlement of a disputed insurance claim will not be covered by the expression "service" occurring in Section 2(d) of the Act. It was laid down that whenever there is default or negligence in regard to service that will constitute "deficiency in service" on the part of the insurer and it is perfectly open to the aggrieved party for seeking appropriate relief under the Act.
In the result, the Revision Petition has no merits and it is accordingly dismissed".
15. In M/s. Harsolia Motors vs. M/s. National Insurance Co. Ltd. & Ors. 2005 (1) CPR 1 (NC), Hon'ble National Commission, has observed thus :-
"13. In Halabury's Laws of England Vol. 25, 4th Edition, the origin and common principles of insurance is discussed and in paragraph 3 it has been discussed and in paragraph 3 it has been mentioned that it is based on principle of indemnity. Thereafter, relevant discussion is to the effect that most of contract of insurance belong to general category of contracts of indemnity. In the sense that insurers' liability is limited to the actual loss which is , in fact, proved. The contract is one of indemnity and, therefore, insured can recover the actual amount of loss and no more.
14. In this view of the matter, taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose.
16. We would refer to few relevant judgments :
// 18 // In Regional Provident Fund Commissioner vs. Shiv Kumar Joshi, (2000) 1 SCC 98, the Court elaborately considered the provisions of Sections 2(1)(d) and 2(1)(o) as well as earlier decisions and held that :-
"The combined reading of the definitions of 'consumer' and 'service' under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words "consumer" and "service" as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall 'be deemed to be a consumer notwithstanding that the services were in connection with any goods or their user. Such services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act."
The aforesaid ratio makes it abundantly clear that the services may be for any connected commercial activity, yet it would be within the purview of the Act."
16. The insurance policy has been taken by the complainant for protection of the property and not for making any profit, therefore, the complainant is a "consumer" and dispute between the parties comes within purview of "consumer dispute".
17. So far as merits of the case is concerned, the complainant pleaded that in the intervening night of 12-13/01/2016, the incident of fire took place in godown of the complainant and 3,25,000 bags were burnt. The complainant suffered loss of Rs.34,55,818/-. The complainant himself pleaded that the O.P. appointed Ram Mohan // 19 // Gupta as Surveyor. On being letter written by the Surveyor to the complainant, the complainant submitted estimate of Rs.7,34,964/- prepared by R.K. Choudhary, Chartered Engineer and Architect, to the Surveyor. All details and relevant documents were also submitted by the complainant to the Surveyor.
18. The O.P. has filed Final Survey Report No.CHM/109/CB/FR/2016 dated 30.05.2016 of Ram Mohan Gupta, Surveyor , in which the date of incident is mentioned intervening night of 12-13/01/2016 and claim preferred under Standard Fire and Special Perils Policy No.2130/00375468/000/01 operative from 30.05.2015 to 29.05.2016. In page no.2 of the Survey Report, Surveyor Ram Mohan Gupta assessed loss to the tune of Rs.17,62,502/-. In page No.2, it is also mentioned that he visited Patewa Village, Raipur on 15 & 16.01.2016 and inspected the affected premises. During his inspection, the insured has not produced any records to him by saying that his accountant is out of station and provided only certain Purchase and Sales bills from 01.04.2015 to 12.01.2016. In para 2 the Surveyor mentioned that he also examined the coy of Bank Account and noted that there is no much turnover in the Bank after September, 2014. He observed that there is no much transactions after September, 2014 and the Insured is depositing / transferring the fund which is sufficient for the serving of interest in CC limited to avoid the declaration of account as NPA by the Bank and its freezing.
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19. In the Survey Report at Page No.8, it is mentioned thus :-
"From the above table, it is noted that the gross profit of all (03) years i.e. 25.12% for 2012-13, 33.20% for 2013-14 and 46.15% for 2014-15. This huge variation in the gross profit indicates that the gross profit are fluctuating very much and has no consistency and fixed percentage, therefore, applying of trading a/c method for determination of stock by this method is not in accordance with the accounting principle. The trading a/c. method is applied where the gross profit is consistently constant year to year and not fluctuating. Moreover, in old bardana business, the profit reflected in the above audited statements for the year 2014-15 is very high i.e. 46%.
Normally in trading business of old bardana, a businessman earns gross profit of maximum 15% on sales and also earns approx. same percentage of profit in job work i.e. 15% as repairing charges/income to maintain parity in both activities. In view of this fact, the high gross profit was shown & considered only to make higher valuation of closing stock purposely on 31.03.15 by determining the balancing figure of matching the debit & credit side of Trading a/c. The Insured is not maintaining any stock register and further, when Insured has made purchases of old bardana during last (03) years i.e. 2012-13, 13-14 & 14-15 of Rs.1,02,02,694/- and the corresponding sale during these (03) years is Rs.1,97,92,492/- then how a big stock of Rs.67,39,700/- could be accumulated as on 31.03.15."
At page No.10, it is mentioned thus :-
"In our opinion, the Insured in order to show the higher stock in the trading a/c., had indicated very high & abnormal profit and has credited the repair income in Trading a/c. purposely so // 21 // that the direct expenses which otherwise would have incurred for job work could increase the valuation of the closing stock in multifold manner whereas per accounting principle, the same is incorrect, illogical and has no rational. The insured has also submitted us the trading a/c. from 01.04.15 to 11.01.16 which is also attested by a Charted Accountant firm M/s. LNUA & Associates by making a remark that "as per book of accounts & other records produced before us."
At Page No.11, it is mentioned thus :-
"Hence in view of the above circumstances, we are of the firm opinion that the closing stock of own bardana as on the date of fire on 12.01.16 should have been Rs.2,83,967/- as determined by us after removing the abnormality of high gross profit shown purposely to make the high valuation of closing stock and crediting the job income in the trading a/c. in contravention of accounting principle with a motive to increase / enhance the closing stock value as on 31.03.15 and taking the advantage of carrying forward this huge opening stock in the beginning of the year as on 01.04.2015 deliberately, so that the insured could justify the presence of huge stock on the date of occurrence of fire as on 12.01.16.
The insured is not maintaining quantitative record which in fact in this trade could have been maintained easily, because the Insured is dealing only in old bardana which is a single salable product /unit. The Insured's claim that on 31.03.15, there was a stock of Rs.67,39,700/- is wrong and imaginative figure. The insured's determination that there was a stock of old bardana bags 7,09,757 in numbers on 01.04.15 is also wrong because Insured had purchased the bardana 4,62,300 // 22 // nos. for Rs.9,33,270 during the year 2014-15, as evident from the purchase bills produced by the insured."
At page No.18, it is mentioned thus :-
c. As discussed in earlier part of the report, the insured has deliberately determined higher value of the stock of old bardana by trading a/c. method showing super profits and not following the proper method & principle of accounting and making zig-zag calculation in his trading a/c. and has not kept the proper quantitative records of jute bags stock and the non accumulation of heavy stock on account of very low purchases and sales. The insured is also in highly financial stress condition, as his CC A/c. was not operating well and he has constant debit balance of Rs.90.00 lakhs from Sep. 14 and has not deposits in the a/c. since last one & half years except interest serving credits.
d. In our opinion, as per our examination & scrutiny & analysis of the purchase bills, sales bills and bifurcating the direct expenses which Insured is claiming to have incurred only in old bardana meant for his sale & not attributing the same with the repair income which he has earned on job work and resulted into the overvaluation of the stock in trading a/c.
In fact the actual stock as derived by us on the date of occurrence belonging to Insured is Rs.2,83,967/- [own stock] and not Rs.71,50,400/- as determined by trading a/c. submitted to us from 01.04.15 to 11.01.16. ...........
// 23 // In conclusion the Surveyor observed that "Thus Insured had suffered a loss of Rs.5,89,469/- in respect of stock & building but same is not payable because as per our findings and looking to the circumstances and forensic expert opinion, the fire seems to be deliberately set and therefore, the claim is not tenable."
20. The O.P. has filed Forensic and Field Investigation Report on the incident of fire in M/s Choudhary Bardana, Kurra Pateva, Raipur, District Chhattisgarh, dated 23rd March, 2016 of The Vibrant Advisory Services in which it is mentioned thus :-
"10. CFL bulbs present in GI & GII were burnt due to external fire.
11. Four CCTV cameras were installed in CB, one located on the top of watchman's room, one located about the door of the office, one located at the edge of the verandah opposite to GIII facing north and other located at the edge of verandah opposite to GIII facing south. All the four CCTV Cameras and their footages were not affected by fire.""
PHYSICAL & DOCUMENTARY EVIDENCE COLLECTED :-
".........
The pendrive contained the CCTV footage from 18:00 hrs to 23:59 on 12.01.2016. The footage showed that at 18:15 Hrs. the works in the verandah of CB were closing down their routine work and leaving the premises at 18:16 hrs. After that the video footage did not contain any other event."
RESULTS OF PHYSICAL EVIDENCE ANALYSIS :
"The GC-MS analysis of burnt debris samples collected from different locations from CB did not indicate the presence of any inflammable hydrocarbons in the burnt samples."
// 24 // "INFERENCES :
1. It was observed that the effects of fire were maximum on the south eastern side of GI adjoining the door in the alley which leads to incomplete common wall. The fire patterns observed on the wall also indicate that the fire could have stated in the south eastern corner of the GI.
2. Gunny bags being flammable in nature, the fire initiated must have spread rapidly in GI and spread to GII through the window.
3. The decreasing intensity of fire from south to north in GII also indicates that the origin of the fire was in GI.
4. CB is not having any high power drawing machinery or equipment.
All the godowns are provided with CFL bulbs whose wattage is much less than the ordinary tube lights. On examination, the electric meter was found to be intact, devoid of any short-circuit symptoms such as blackening, beading, etc. indicating that electrical related short circuit was not the cause of fire. The CFL bulbs must have been burned due to external heat.
5. The weather in Kurra Pateva village on 12th of Jan. 2016 being winter was below 26o C. Futher, there were no thunder storms, lightening etc., on that day. Hence fire due to natural causes was ruled out.
6. As no chemical substances were stored in the godowns spontaneous fire is ruled out.
7. The watchman during the interaction with expert team and also in his statement stated that he woke up at 00:20 Hrs. only due to stoppage of the tab fan due to power failure and he did not notice any smoke or smell of smoke. However, through the CCTV footages it was found that copious quantities of smoke emanated from GI.
// 25 //
8. Further from the footage of Cam 4 it was observed that he was walking and talking in a mobile phone in a relaxed manner observing the fire in GI without any anxiety, worry, tension or any other emotions.
9. The wooden door in GI leading to the alley behind GII & GII is bounded by an incomplete brick wall of height 4 feet through which any miscreant or any person motivated for his own selfish benefits can easily enter and ignite flammable gunny bags."
OPINION :
"Based upon a thorough and in-depth examination, inspection of site of fire, scrutiny of CCTV footages, oral evidence, scientific & technical evaluation of the forensic evidence, I am of the opinion that the fire occurred in M/s Choudhary Bardana, Kurra, Pateva, District Raipur on the intervening night of 12/13 January, 2016 was :-
a. Non due to electrical short circuit, b. Not due to any spontaneous combustion, c. And was on account of deliberate ignition, initiation, propagation and burning of ignitable gunny bags which were present in the godown I through human interventions.
d. Taking into account the peculiar behaviour of supervisor cum watchman, means opportunity, circumstances and the motive to initiate such fire, the possible of the management to have been directly or indirectly responsible in this nefarious activity for pecuniary benefits cannot be ruled out."
21. In Devendra Malhotra Vs. United India Insurance Co. Ltd. & Anr. 2016 (3) CLT 525 (NC), Hon'ble National Commission, has observed thus :-
// 26 // "Consumer Protection Act, 1986, Sections 2 (1) (g), 19 & 21 (a) (ii)- Insurance claim Surveyor report Held It is a established legal proposition that the report made by the surveyor, who is a professional in his field, cannot disbelieved, unless there are cogent and convincing reasons to do so."
22. In Oriental Insurance Co. Ltd. Vs. Pavan Enterprises & Anr. I (2016) CPJ 503 (NC), Hon'ble National Commission has observed thus :-
"12. I see no reason to discard the report of the Surveyor. He appears to be a guideless witness. No motive was ever attributed to him. There must be some reasonable ground or doubt to reject his report. The report of the Surveyor carries infinite significance as was held in Roshan Lal Oil Mills Ltd. & Ors., 2014 (SLT Soft) 1 = 2014 (CPJ Soft) 1 = (2000) 10 Supreme Court Cases 19 and in D.N. Badoni v. Oriental Insurance Co. Ltd., I (2012) C.P.J. 272 (NC)."
23. In New India Assurance Co. Ltd., vs. Pave Infrastructures Pvt. Ltd., 2015 (3) CPR 577 (NC), Hon'ble National Commission has observed that "Loss of assessment by approved Surveyor can be discarded only on cogent reasons".
24. In Garg Acrylics Ltd., Through Sh. Anish Bansal G.M. (G.M.) Authorised Representative vs. United India Insurance Co. Ltd., 2015 (1) CPR 273 (NC), Hon'ble National Commission has observed thus :-
"11.................. This is settled Law that the report of the surveyor is to be given much more weightage than any other piece of evidence. See // 27 // the Law laid down in United India Insurance Co. Ltd. & Others Versus Roshan Lal Oil Mills Ltd. & Ors. (2000) 10 Supreme Court Cases 19 & in D.N. Badoni Vs. Oriental Insurance Co. Ltd. I (2012) C.P.J. 272 (NC)".
25. In The Oriental Insurance Co. Ltd., Through its Regional Manager vs. Ishwar Singh, 2015 (1) CPR 157 (NC), Hon'ble National Commission has observed thus :-
"17. Counsel for the petitioner has also drawn our attention to the Apex Court Judgment in the case Sri Venkateswara Syndicate vs. Oriental Insurance Company Ltd., and Another, (2009) 8 Supreme Court Cases 507 wherein the Apex Court has held as under :-
"There is no disputing the fact that the surveyor/surveyors are appointed by the insurance company under the provisions of the Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them".
26. The O.P. also appointed The Vibrant Advisory Services for conducting investigation. The investigator investigated the matter minutely and reached to the conclusion that "the incident of fire was not due to electrical short circuit and not due to any spontaneous combustion and was on account of deliberate ignition, initiation, propagation and burning of ignitable gunny bags which were present in the godown I through human intervention." The Surveyor Ram Mohan Gupta also opined that "Thus, Insured had suffered a loss of Rs.5,89,469/- in respect of stock and building, but same is not payable because as per our findings and looking to the circumstances and // 28 // forensic expert opinion, the fire seems to be deliberately set and therefore, the claim is not tenable under the policy."
27. The reports of the Surveyor and Investigator are reliable documents, therefore, the reports of the Surveyors and Investigators are reliable and can be made a basis for adjudication of the case of the complainant. The Report of the Surveyor can be given due weightage and it cannot be discarded lightly. The complainant has not filed any document to rebut the reports of the Surveyor & Investigator. In the instant case, the Surveyor and Investigator both have mentioned in their reports that the fire was caused deliberately.
28. The complainant obtained Standard Fire and Special Perils Policy from the O.P. The O.P. has filed Policy Schedule along with terms and conditions. From perusal of the terms and conditions of the insurance policy, the incident of fire, comes within condition No.8, which runs thus :-
"8. If the claim be in any respect fraudulent, of if any false declaration be made or used in support thereof or if any fraudulent means or 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 occasions by the wilful act, or with the connivance of the Insured, all benefits under this policy shall be forfeited."
29. It appears that the incident of fire was caused deliberately and set with human intervention, therefore, the loss suffered by the // 29 // complainant is not covered under the Standard Fire and Special Perils Policy and complainant is not entitled to get any compensation from the O.P. The facts of the judgments cited by the complainants are quite distinguishable from the facts of the instant case, therefore, they are not helpful to the complainant.
30. Therefore, the complaint filed by the complainant against the O.P., is liable to be dismissed, hence the same is dismissed. Parties shall bear their own costs.
(Justice R.S. Sharma) (D.K. Poddar) (Narendra Gupta)
President Member Member
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