H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA.

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Consumer Complaint No. 03/2007.

Reserved On. 26.6.2009

Date of Decision: 10.7.2009.



Smt. Naina Kotvi W/o Sh. Krishan Kotvi,

R/o Village Thana, PO Mandal, Tehsil Jubbal, District Shimla, HP.



… … Complainant.



Versus



1. M/s IFFCO-TOKIO General Insurance Co. Ltd.,

Corporate Office: 4th & 5th Floors, IFFCO Tower Plot No. 3,

Sector-29, Gurgaon 122 001, Haryana through its

Chief Executive Officer.,



2. The Branch Office, M/s IFFCO-TOKIO General Insurance

Co. Ltd., Khalini, Shimla, HP through its Branch Manager.



… … Opposite Parties.

Hon’ble Mr. Justice Arun Kumar Goel (Retd.), President.

Hon’ble Mrs. Saroj Sharma, Member.

Hon’ble Mr. Chander Shekher Sharma, Member.



Whether approved for reporting? No.



For the Complainant: Mr. Peeyush Verma, Advocate.



For the Opposite parties: Mr. Vinnu Bhasin, Advocate.





O R D E R





Justice Arun Kumar Goel (Retd.), President.





Admitted facts giving rise to this complaint are, that vide Annexure R-1 house of the complainant at village Dashanli, Tehsil Rohru, District Shimla was insured in the sum of Rs. 30 lacs with the opposite parties (OPs). Cover note and proposal form have been placed on record by the insurance company. This was a double storeyed house.

2. This house was gutted in the fire incident on 3.11.2006 when complainant was at Shimla, and her husband was also at Shimla though he runs a jewellery shop at Rohru. After having come to know of the fire on 8.1.2007, OPs were intimated in that behalf. They deputed one Mr. Vijay Kumar Berry to assess the loss. His preliminary survey report dated 22.1.2007 is Annexure R-2, and the final survey report is Annexure R-3. Vide letter Annexure A-6, dated 15.2.2007, OPs informed the complainant, that as the claim was not under the purview of policy condition, it was closing the file as “No Claim”. On receipt of this communication, present complaint has been filed by the complainant alleging deficiency in service on the part of the OPs, when it closed the file wrongly according to her.

3. When put to notice, OPs filed reply to the complaint which was later on allowed to be amended, as per order dated 3.6.2008. Sum and substance of this reply is that the insurance obtained by the complainant was a result of fraud having been committed by her. She did not disclose regarding Punjab National Bank having financial interest, to whom the building stood charged. The report of one Mr. Aukta, Assistant Engineer, HPPWD, that was submitted to the bank had in fact not been issued by him who otherwise could not have undertaken the said job being in government service. Fire had earlier also taken place on 6.9.2006, but no intimation was given by the complainant to the OPs. Insured house was purchased from one Mr. Bhagwan Dass through his attorney. Per attorney, he had never given possession of the house to the complainant as the full amount had not been paid. And at the same time cheque issued by the complainant had been dishonoured. Complainant had no insurable interest in the house. Terms and conditions of the insurance company were read over and explained in vernacular to the complainant. Further according to OPs, house had remained unoccupied for over a continuous period of one month, therefore it was not liable to indemnify the complainant as per policy conditions. Complaint was lodged after about 2 months of the incident with a view to extract money. There was no trace of household effects having been destroyed in the house. Insured building was a very old structure. Some of the frames of doors and windows were there. This is what was pleaded by the OPs based on the surveyor’s reports, as well as the report of Mr. Kamal Narian, (Retd) Dy.S.P. who was deputed to investigate into the matter.

4. In order to support stand of the OPs at the time of hearing, Mr. Bhasin learned counsel referred to the evidence produced by his clients in the shape of affidavits of S/Sh. Sanjay Seth, Govind Singh attorney of Bhagwan Dass, Vijay Kumar Berry surveyor, Kamal Narian Retd. Dy.S.P. and Ghanshayam Aukta. Further case of the OPs as made out from their reply is, that causing of fire was also doubtful. Complainant did not produce any report from Fire Fighting Department and Daily Diary Report was belated one. Intimation of fire was given after two months and on this ground also the fire was doubtful.

5. Stand of the OPs based on evidence (supra), was resisted by Mr. Verma learned counsel for the complainant. According to Mr. Verma, his client was given only cover note and policy conditions were never delivered to her, what to talk of those having been read over and explained in vernacular as pleaded by the OPs in their reply while contesting the complaint. There is no question of fraud per Mr. Verma and by raising this plea OPs cannot be allowed to shun their liability to indemnify his client. House was in occupation of his client and in this behalf he referred to, as well as relied upon the affidavits of Mr. Vipan Lal and Mr. Sain Ram who are the next door neighbours of the complainant. They had supported her claim regarding ownership, as well as occupancy of the house. According to Mr. Verma though his client is employed at Shimla, her husband was running a jewellery shop at Rohru and was in occupation of the house in question. He however submitted that the complainant had been coming and going to Rohru and was thus also occupying the house in question. Delay in lodging the claim was not contested by Mr. Verma. However he stated that by no stretch of imagination from this fact, it can be inferred that his client was continuously out of possession of the house in question for over a month. Regarding the plea that the seller, Mr. Bhagwan Dass having not delivered the possession of the house in question to his client, he urged that it is contrary to proved facts on record. He also submitted that the report of Mr. Berry surveyor is meaningless as he was not eligible to have undertaken the assessment in the face of his qualification. In this behalf he drew our attention to the order passed on 2.5.2008 in this complaint.

6. Regarding report of Mr. Kamal Narian, Annexure R-4, Mr. Verma pointed out that it is also meaningless. Primarily it is based on what was told to him by son and attorney of Bhagwan Dass, who has an axe to grind in this case as per his own version. Thus he prayed for allowing this complaint.

7. We shall first of all deal with the report of Mr. Berry the surveyor and loss assessor. He was summoned by us and he appeared on 2.5.2008. He admitted that he is a mechanical engineer by qualification, but while in service he had undergone two months Condensed Course in Civil Engineering at Sunder Nagar. Further according to him he is a duly registered surveyor by the competent authority since 1982. His licence was being renewed from time to time and he was authorised to carry out surveys of general insurance, fire, automobile etc. etc. He further stated that Annexure R-2 and R-3 respectively have been submitted by him.

8. Admittedly the fire had broken out in the house and thus assessment that was to be made was in respect of civil works. We are of the view, that the proper, eligible as well as qualified person who could have assessed the loss in such like cases was a qualified civil engineer. Two months Condensed Course would not make the surveyor, Mr. Berry a civil engineer. OPs ought to have deputed a duly qualified person to assess the loss caused due to the fire of the house of the complainant. Why this was not done, Mr. Bhasin had no answer.

9. Faced with this situation Mr. Bhasin submitted that Mr. Berry is a duly licensed surveyor appointed by the competent authority in accordance with law. As such it would not make any difference if he was a mechanical engineer because, firstly he had undergone for two months Condensed Course in Civil Engineering, and secondly since 1982 he was carrying out surveys and assessing losses caused due to damage to all type of works entrusted to him, including civil works. Therefore according to Mr. Bhasin, Annexures R-2 and 3 cannot be brushed aside on this ground alone, he prayed for accepting, as well as upholding both these survey reports.

10. What is the effect of mechanical engineer being appointed to assess the loss in respect of civil works came up for consideration before us in Original Complaint No. 4/2007 in case titled as M/s Hotel Woodrina Vs. United India Insurance Co. Ltd. decided on 25.6.2008. Report of the surveyor was rejected in this case.

11. Insurance company filed Revision petition No.3591/2009 before the National Commission. While upholding the basis for rejecting the report of the surveyor who was a mechanical engineer, it was observed as under by the National Commission.

“Good reasons have been assigned by the State Commission for discrediting the report of Sh. Umesh Kumar Sood, surveyor appointed by the insurance company. The State Commission preferred to put credence on the survey report of Mr. Saini who was a Civil Engineer than the report of Mr. Sood who was obviously Mechanical Engineer.

One can take notice of the fact that regard being had to be nature of the job which the surveyor was required to accomplish, the surveyor should have possessed expertise in the Civil Engineering.”



12. That being the position, we see no reason to uphold the plea of Mr. Bhasin to accept and uphold Annexures R-2 and R-3, the assessment reports given by Mr. Berry.

13. Now comes the question as to what was given to the complainant when insurance was undertaken by the OPs of the house in question. Cover note was issued by Mr. Surinder Pal agent of the OPs. Its No. is 41094017. Proposal form is also filed by the OPs with their reply. Admittedly Mr. Sanjay Seth had not undertaken the insurance. By whom the terms and conditions, including exclusions and exceptions etc. of the insurance policy were explained, there is not a murmur in the reply, nor anything is there in the affidavit of Mr. Sanjay Seth. As per documents filed by the OPs, it was Rakesh Verma authorized signatory who had issued the cover note under his signatures, and agent was Mr. Surinder Pal. Both of them were the best persons to have said something regarding terms and conditions having been explained to the complainant in vernacular as alleged in their reply by OPs. Their affidavits are not filed. Why, Mr. Bhasin could not explain.

14. In this connection Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests), Regulations 2002 assume significance. As per Regulation 3, it was the duty of the person who had undertaken the insurance to have explained all the pros and cons including exclusions etc. to the person who was seeking insurance, so that the insured could opt for the best that was in his/her favour. As such Mr. Surinder Pal and or Rakesh Verma were the best persons to have said something regarding compliance of Regulations 2002, (supra). OPs being governed by these Regulations framed by Insurance Regulatory and Development Authority under the Insurance Act, 1938 and Insurance Regulatory Development Authority Act, 1999 was not disputed on behalf of the OPs. That being the position, pleading by the OPs that the terms and conditions of the insurance policy were read over and explained in vernacular to the complainant is of no consequence being based on no evidence is hereby rejected.

15. Another reason to negate the stand of the OPs regarding having explained the terms and conditions of the policy of insurance is, that how, when, in what manner and by whom the insurance policy was supplied to the complainant by the OPs, there is no evidence. If it was delivered on man to man basis, then the person who had actually delivered/handed over the same to the complainant should have filed the affidavit. In case it was sent by post, then it was incumbent upon the OPs to have placed on record something from its contemporaneous official record to prove that needful was done. There is no such evidence.

16. Now coming to the report of Mr. Kamal Narian, Retd. Dy.S.P. the investigator, Annexure R-4. As per this report Mr. Bhagwan Dass had admittedly sold the house to the complainant. The same was pledged to the bank and the loan was raised from the PNB. For this purpose assessment report of Mr. Ghanshyam Aukta is stated to be filed by the complainant. Mr. Ghanshyam Aukta has filed affidavit that he never prepared any estimate/valuation report. Therefore according to the investigator, Mr. Kamal Narian finance was obtained from the bank on a forged document. He has also mentioned in his report, that after sale of the house, its possession was never delivered to the complainant by the attorney of the seller Mr. Govind Singh. Further as per attorney his father was in possession on the date of his filing of the affidavit. His affidavit is dated 20.8.2008. That means that on the date of fire it was Bhagwan Dass who was in possession of the house in question. This person has not disputed the sale in favour of the complainant by his father. Moreover the sale of the house as per law is not disputed by the attorney.

17. If this was factually correct, we fail to understand as to how and under what circumstances the agent, as well as authorised signatory undertook the insurance vide cover note No. 41094017 after having accepted the premium on behalf of the OPs from the complainant. This negatives the stand of the OPs, that the complainant did not have any insurable interest in the effected property or that she has set up a highly exaggerated claim based on false, fake document/statements and also having obtained insurance by concealing of material facts and committed breach of several policy conditions.

18. It is necessary to examine this aspect of the case here. When the agent as well as authorised signatory of the OPs understood the insurance on the basis of proposal form filled in by them on 4.1.2006 and thereafter having issued cover note, it is presumed that they had satisfied themselves about the insurable interest of the complainant in the house, as well as of her in being in its possession. As such in our opinion pleas to the contrary appear to be purely afterthought. It is not the case of the OPs, that either the agent or the authorised signatory had in any manner jeopardized its interest while undertaking insurance and or had connived with the complainant. We are alive to the situation that the insurance is based on utmost good faith and on the doctrine of uberrima fides. However that does not mean that the insurance agent like Mr. Surinder Pal and authorized signatory Mr. Rakesh Verma of the OPs in this case have to be completely oblivious of their duty towards both i.e. the complainant and OPs. As such because of the acts of these persons, the OPs cannot be exonerated.

19. OPs have placed on record copies of the photographs Annexure R-13. A perusal of these photographs clearly suggests that the house in question is no more there, except for some walls, window and door frames being there. Annexure R-14 is the letter relied upon by the OPs. This goes to show that no doubt house of the complainant was mortgaged with PNB, Anaj Mandi, Shimla branch for Rs. 40 lacs. Since the loanee had repaid the amount due to the bank, as such the bank had asked for the release of the property from its charge. No doubt complainant should have stated this fact while obtaining the insurance from the OPs. However in what manner OPs were prejudiced due to this omission could not be explained on their behalf and in our opinion, the lapse is not such which will either vitiate and or negative the contract of insurance between the parties. In our opinion only difference it would have made was, that claim would have been payable to the financier bank in case of mishap. As per Annexure R-14 the liability of the bank was admittedly liquidated before the fire.

20. So far violation of the terms of policy and or claim being exaggerated by the complainant is concerned, suffice it to say in this behalf that there is no evidence, showing compliance with the Regulations of 2002, (supra), or the policy conditions having been read over and explained in vernacular as alleged in the reply, as well as in the affidavit of Mr. R.K. Seth referred to hereinabove. Affidavit of Mr. Kamal Narain as well as his report does not in any manner improve the case of the OPs, because it is based on the information gathered by him from the residents of the village in addition to what was informed to him by Mr. Govind Singh son of Sh. Bhagwan Dass. Mr. Govind Singh had got a case registered against the complainant on account of dishonour of cheque, but the FIR was cancelled by the court as per Annexure R-4. So far obtaining loan from bank based on the report of Sh. Ghansyham Aukta who has denied having issued any estimate is concerned, it also does not improve the case of the OPs, because we are not required to adjudicate that question and in any event the loan stands liquidated. Above all if anyone is defrauded it is the Bank and not the OPs.

21. There is acceptable evidence regarding occupation of house by the complainant and her husband in the shape of affidavits of S/Sh. Vipan Lal and Sain Ram, the next door neighbours of the complainant. They have categorically stated that the house was in possession of the complainant who was occupying the same whenever she visited the village and her husband used to live there and he was carrying on jewellery shop at Rohru.

22. In the light of the above discussion we are of the view that the OPs are liable to indemnify the complainant. As such now the question arises as to what compensation the complainant is entitled to. In this behalf Mr. Verma referred to the assessment made by Mr. Kushal Gangta, Annexure Y as well as his affidavit and submitted that his client is entitled to the sum insured, i.e. Rs. 30 lacs Mr. Gangta had visited the house of the complainant on 14.1.2007 as per his affidavit. In these circumstances, this report cannot be accepted on its face value. Reason being that as per terms of insurance policy complainant has to be indemnified for the loss sustained. Except her own affidavit, averments made in the complaint and affidavit as well as detailed estimates given to Mr. Kushal Gangta, there is no other material on record. What was extent of loss suffered there is no evidence.

23. Then the question arises how to assess the compensation. In this behalf some guess work has to be there. Reason being that from Annexure R-13 it is evident that some building material including walls along with wooden frames etc. of doors, windows, ventilators etc. are there at the spot is evident from Annexure R-13. House was gutted in fire, therefore we are of the view that complainant is entitled to the compensation in the sum of Rs. 15 lacs. This amount we have worked out looking to the type of construction as well as what is left out after the fire at the spot. It will also sub-serve the interest of justice.

24. No other point was urged.

In view of the aforesaid discussion this complaint is allowed and as a result, it is held that the complainant is entitled to Rs. 15 lacs as compensation payable by the OPs alongwith interest @ 6% per annum from the date of complaint, i.e. 13.4.2007 till the date of payment/deposit whichever is earlier, as well as cost assessed at Rs. 10,000/-.

Learned counsel for the parties have undertaken to collected authenticated copy of this order from the Court Secretary free of cost as per rules.

Shimla,

July 10, 2009.



( Justice Arun Kumar Goel ) (Retd.)

President.





(Saroj Sharma)

Member.





( Chander Shekhar Sharma )

/Krn/ Member