Kerala

StateCommission

CC/12/4

The Manager,M/s Manappuram Group of Companies - Complainant(s)

Versus

The Divisional Manager,The Oriental Insurance Co Ltd - Opp.Party(s)

J S Asok Kumar

22 May 2015

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

CC.NO.04/2012

JUDGMENT DATED :22.05.2015

PRESENT

SRI.K.CHANDRADAS NADAR     : JUDICIAL MEMBER

SMT.SANTHAMMA THOMAS      : MEMBER

 

COMPLAINANT

          M/s.Manappuram Group of Companies,

          Manappuram House,

          Valappad.P.O Thrissur

          Rep.by Sri.Jayaraj, Manager - Legal,

          South Kerala Region,

          Thiruvananthapuram

 

          (By Adv.Sri.Asok Kumar.J.S)

 

                                                                                                Vs

OPPOSITE PARTY

          The Oriental Insurance Company Ltd,

          Rep.by the Divisional Manager,

          Divisional Office, Maheswari  Building,

          IIIrd Floor, M.G.Road,

          Thrissur

 

          (By Adv.Sri.V.Manikantan Nair)

 

JUDGMENT

SRI.K.CHANDRADAS NADAR     : JUDICIAL MEMBER

          This is a complaint filed under section 17 of the Consumer Protection Act. The complainant is a company registered under the Companies Act having licence to conduct financial business from the Reserve Bank of India. The complainant company accepts deposits and lends money against gold through its branches all over India. The complainant has a branch at Shalimarbagh, Delhi. The complainant took policy for Rs.75 crores from the opposite party. A memorandum of understanding was executed between the complainant and the opposite party. The policy between the parties covered risks among other things from burglary and house breaking covering the gold and gold ornaments pledged and stored in the premises or branches of the insured inside safes or strong room vaults and locked. As per the terms of the memorandum of understanding in case of burglary of gold and gold ornaments the weight of gold for calculating compensation will be the gross weight of gold. It is alleged in the complaint that burglary took place at the shalimarbagh branch of the complainant company on 29.01,2009. Gold ornaments weighing 11432.30 gms and cash for Rs.2.30 lakhs were stolen from the branch. Immediately, complaint was lodged before North West Police Station Delhi on 29.01.2009 and FIR was registered. The police conducted investigation and apprehended the accused. The investigation is going on. The complainant submitted claim for Rs.1,40, 91,933/- on 05.02.2009 with the opposite party. As per the terms of the memorandum of understanding the opposite party appointed M/s.Soni & company, New Delhi as surveyor for conducting survey. Details and all documents regarding the theft were handed over to the surveyor who filed report to the opposite party. As the customers who have deposited gold and availed loan demanded return of their valuables, under immense pressure frantic communications were sent to the opposite party, but the opposite party took a relaxed attitude. Thereby the complainant was forced to surrender to every demand made by the opposite party. After several demands, the opposite party informed the complainant that Rs.1,01,68,270/- only had been approved by the competent authority and that Rs.60,00,000./- from the said amount would be disbursed immediately. Since the complainant was under immense pressure from the customers, they had no option but to receive the amount disbursed. Subsequently, Rs.41, 68,210/- was received by the complainant. The complainant issued letter to the opposite party stating that Rs.39,23,723/- more is due from the opposite party as per the terms of the memorandum of understanding and the same may be disbursed at the earliest. There was no response from the opposite party. The opposite party disbursed amount taking the lesser rate (net weight) as against the gross weight of gold ornaments and against the terms of the memorandum of understanding. The opposite party has taken undue advantage of the situation and they have misrepresented the facts. Thus, they have committed deficiency in service .Hence the complainant seeks to recover an amount of Rs.39,23,723/- with interest from the opposite party.

          2.      The opposite party filed version raising the following contentions. The complainant is not a consumer as defined under the provisions of the Consumer Protection Act. The complainant has availed the services of the opposite party for commercial purpose. Hence he is not a consumer. This commission has no jurisdiction to entertain the complaint. The opposite party has admitted that policy was issued to the complainant as alleged for the period from 07.02.2008 to 06.02.2009. But the copy of the memorandum of understanding submitted by the complainant is undated and the stamp paper is seen purchased on 11.03.2010 which would show that the produced memorandum of understanding is not applicable to the policy that expired on 06.02.20009. The allegation that in case of burglary of gold and gold ornaments the weight for calculation of compensation will be the gross weight of gold is not correct. The allegation that the complainant reported loss of Rs.1,40,91,933/- in cash and jewellery to the opposite party is admitted . On receipt of the claim the opposite party deputed S.Sony and Company independent licensed surveyors and loss assessors to inspect the premises and to asses the loss due to the burlguy on 29.01.2009. After conducting survey and verifications the surveyor submitted his report dated 31.03.2009. The surveyor assessed net loss of Rs.1,24,48,355.20/- by calculating the total gold lost as 9608.09 gms and rate of gold per gram as Rs.1280/-. Rs.1,50,000/- was the cash lost from safe. But the total loss of 9608 .09 gms of gold included an infidelity loss of 71.1 gms of gold . It was detected prior to the robbery on 29.01.2009. A revised report dated 17.08.2010 is submitted by the surveyor reassessing the loss at Rs.1,01,68,209.58. The allegations that there was immense pressure from the customers of the complainant and the opposite party took very relaxed attitude to the claim etc are incorrect and are denied by the opposite party. Even before the final report of police and without any letter of subrogation, The opposite party paid Rs.60,00000/. After submission of final report by police and after execution of letters of subrogation and undertaking and power of attorney on 20.12.2010, the opposite party disbursed the balance amount of Rs.41,68,210/- on 11.01.2010. It is incorrect to say that due to immense pressure from customers and due to increase in the value of gold the complainant had no other option but to receive the amount is incorrect.

          3.      Claim was settled after the insured agreed to the quantum of Rs.1,01,68,210/- as full and final settlement. There was no undue influence, duress or pressure from the side of the opposite party to accept the assessment of the surveyor. The insured is not a layman to accept the claim if it was unreasonable. The insured has submitted a statement showing the gross and net weight of gold received. The net rate is the actual weight of gold in the ornaments. Coloured stones or zircons in the ornaments add to the weight but have no resale or monetary value. In many cases gold produced will not be of 22 ct purity. In North India, specific types of jewellery are manufactured in 18 ct or lesser purity gold as embedding stones in 22 ct gold is difficult. The insured has confirmed to the surveyor that net weight was calculated after converting the purity to that of 22 ct. In deed when ornaments are sold it is the net weight  which is taken for calculating the value. The allegation that the insured had to pay its customers amounts based on gross weight is denied by the opposite party. The opposite party is justified in paying the correct value of the asset covered by the policy since this is an asset policy. There is no unfair trade practice or deficiency in service on the part of the opposite party. After accepting the amount as full and final settlement the complainant has no locus standi to raise further claim. The complaint is devoid of merit.

          4.      On the pleadings in the complaint and the contentions raised by the opposite party the following points arise for determination.

1. Whether the complainant is a consumer as defined under the consumer protection act?

2. Whether deficiency in service on the part of the opposite party is established by evidence?

If so, whether the complainant is entitled to realize the amounts claimed of in the complaint?

          5.      The evidence consists of the deposition of PW1 and Exts.A1 to A7 marked on the side of the complainant.  On the side of the opposite party one witness is examined as DW1 and Exts.B1 to B5 were marked.

          Arguments were heard.

Point No.1

          6.      The complainant is M/s.Manappuram Group of Companies represented by its legal manager. The complaint relates to insurance claim made on account of gold ornaments and cash lost in a burglary at the shalimarbagh branch of the complainant company. The contention that the complainant is not a consumer is raised in the above background. No doubt service of a insurance company comes under the definition of service availed under consumer protection act. But the contention is that since the service is availed for commercial purpose, the complainant goes outside the purview of the provisions of the Consumer Protection Act. On the allegations in the complaint itself this argument is not without force.

Point No.2

          7.      Admittedly, the complainant had availed policy from the opposite party valid from 07.02.2008 to 06.02.2009 interalia insuring against loss by burglary and house making covering the gold and gold ornaments pledged and stored in the premises or branches of the insured inside safes or strong room vaults and locked. It is further admitted that burglary took place at the Shalimarbagh branch of the complainant in Delhi on 29.01.2009. Immediately, complaint was lodged with northwest police station, Delhi and claim for Rs.1,40,91,933/- was lodged with the opposite party. There upon the opposite party deputed S.Sony and company independent licensed surveyors and loss assessors to assess the loss due to the burglary on 29.01.2009. They filed a report and revised report. The surveyors assessed net loss of 1,24,48,355.20/-  finding that 9608.09 gms of gold of 22 ct purity was lost and the rate of gold was Rs.1280/-  per gram. They also found that cash of Rs.1,50,000/- was  lost. Subsequently, the surveyor found that the total loss of 9068.09 gms of gold included an infidelity loss of 71.1 gms of gold detected prior to the robbery. This necessitated the filing of revised report reassessing the loss at Rs.1,01,68,209.58/-. Admittedly, the opposite party disbursed Rs.60,00,000/- on 06.01.2010 even before the police filed final report in the crime registered by them. Subsequently, on execution of letters of subrogation and undertaking and special power of attorney (Exts. B2 to B4) they released the balance amount of Rs.41,68,210/- on 11.01.2010. The grievance of the complainant is that the surveyor as well as the opposite party in allowing the insurance claim have considered only the lesser rate namely the net weight as against the gross weight of the gold ornaments and against the terms of the memorandum of understanding. This is the main allegation in the complaint.

          8.      So the immediate question is whether the complainant is entitled to claim insurance amount on the basis of gross weight of lost gold.  As already indicated the claim is based on Ext.A3 memorandum of under standing. The question is whether the claim of the complainant can be justified on the basis of Ext.A3. It was pointed out that the non judicial stamp paper for drafting is Ext.A3 is seen purchased on 11.03.2010 from a vendor under the Thrissur Sub Registrar's office and was obviously after the expiry of the policy period on 06.02.2009. So Ext.A3 produced by the complainant can not be urged in support of the contention that the gross weight of lost gold ornaments is to be taken into consideration in assessing the loss. We feel that even the terms of Ext.A3 itself would not support the allegation in the complaint. What is provided in Clause 6 is that the weight of gold for calculating compensation will be the gross weight of the gold less the weight of stones where applicable. This is the net weight shown in the survey report. It is further mentioned that gross weight in the context of Ext.A3 would represent the weight of gold taken as of 22 ct purity. It is clarified  that the insured’s internal process by which deductions if any made on certain gold pledges are made only as a matter of prudent lending and shall not affect the computation of the claim amount.

          9.      The survey report is produced and marked as Ext.B1. The report gives the names of the customer the actual weight of gold pledged by them, the net weight and the amount for which the gold was pledged. It is quite obvious that the net weight represents the actual weight of 22 ct purity gold pledged with the complainant. The evidence of PW1, the legal manager of the complainant is relevant in this context. To the pointed question whether in the case of a gold chain weighing 100 gms and having stones weighing 30 gms embedded in it how much would be the weight the complainant would consider for granting loan, PW1 answered that the weight would be considered as 70 gms. He admitted that the account of gold returned to the customers is with the complainant. He further admitted that there is nothing to indicate that the claim was settled on gross weight basis. PW1 further admitted that out of 9608.09 gms calculated by the surveyor as lost, 71.1 gms of gold was detected as lost prior to the date of robbery. He also admitted that Rs.60,00,000/-  was received from the insurance company even  before police filed the final report. In re-examination PW1 categorically admitted that when a customer approaches them to pledge gold gross weight and net weight would be calculated and amount would be disbursed based on the net weight. The claim is only that when customer approaches them with the claim, they are bound to return gold ornaments having the original weight. But this gross weight is inclusive of the stones embedded in the ornaments which are not of much value. That apart even  Ext.A3 does not justify an inference that gross weight is to be taken into account. The only understanding in Ext.A3 is that the net weight (weight of gold ornament less weight of stones ) would be taken as gold of 22 ct purity. It is further relevant to notice that an insurance claim can be settled only on no loss no gain basis and a customer and for that matter the insured is not entitled to gain profit out of the unfortunate burglary. Here, the insurance company settled the claim based on a surveyor and loss assessor's report which suffers from no apparent infirmity and the evidence of PW1 itself justifies the settlement of the claim on the basis of net weight of the lost gold. Hence deficiency in service on the part of the opposite party can not be found based on the available evidence and circumstances. Since a decision on the main contentious issue can be arrived at on the basis of the available evidence the several decisions cited by the learned counsels on either side loses relevance.

10.    The opposite party has a contention that the complainant received the amount disbursed by them in full and final settlement of all their claims. The argument is raised on the basis of Ext.B5 discharge voucher executed by the complainant. The complaint is sought to be sustained on the allegation that soon after the burglary the complainant was under immense pressure from customers to return their valuables and as such they were forced to receive the amount offered by the opposite party and settle the claim. So it appears that the allegation is that Ext.B5 was executed under coercion from the circumstances arising from the burglary. But it is difficult to say that there was any delay in settling the claim. That apart it is also difficult to presume that a company like the complainant would be put to immense pressure because in one of its branches burglary happened and settle the claim under coercion. We have discussed in detail the merit of the claim itself and the claim is found to be devoid of merit. At any rate, we are not sitting in appeal over every claim settled by an insurance company. The question is whether deficiency in service on the part of the opposite party is established, if not the complainant is not entitled to sustain the claim. We have categorically found that the complainant has not succeeded in establishing any deficiency in service on the part of the opposite party

Point No.3

It follows that the complainant is not entitled to succeed and is not entitled to realize the amount claimed in the complaint.

          In the result, the complaint is dismissed but without costs.

K.CHANDRADAS NADAR   : JUDICIAL MEMBER

 

SANTHAMMA THOMAS      : MEMBER

Be/

APPENDIX

List of witness for the complainant

 

PW1                    - Jayarajan

Exihibits for the complainant

 

Ext.A1                 - Authorisation letter dated 03.01.2012

Ext.A2                 - Copy of the policy bearing No.441100/48/2008/2513

Ext.A3                 - Copy of memorandum of understanding between the

                              complainant and the opposite party

Ext.A4                 - Copy of FIR dated 29.01.2009

Ext.A5                 - Copy of burglary claim Form dated 05.02.2009

Ext.A6                 - Copy of the letter dated 23.03.2011

Ext.A7                 - Postal Receipt

 

List of witness for the opposite party

 

DW1                     - Miss.Rema Devi.V

 

Exihibits for the opposite party

Ext.B1                  - Survey Report with photos

Ext.B2                  -Subrogation dated 20.12.2010

Ext.B3                  -Letter of undertaking dated 20.12.2010

Ext.B4                  - Special power of attorney dated 20.12.2010

Ext.B5                  - Discharge voucher

 

K.CHANDRADAS NADAR   : JUDICIAL MEMBER

 

SANTHAMMA THOMAS      : MEMBER

be/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KERALA STATE

CONSUMER DISPUTES

 REDRESSAL COMMISSION

 SISUVIHARLANE

VAZHUTHACADU

THIRUVANANTHAPURAM

 

 

CC.NO.04/2012

JUDGMENT

 DATED :22.05.2015

 

                                                                                      be/