Chandigarh

StateCommission

CC/170/2019

M/s Triveni Enterprises - Complainant(s)

Versus

The National Insurance Company Limited - Opp.Party(s)

Rahul Bhargava, Ruhani Chadha & K.S. Thakur Adv.

31 May 2021

ORDER

 STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Complaint case No.	:	170 of 2019
Date of Institution	:	26.07.2019
Date of Decision	:	31.05.2021

 

M/s Triveni Enterprises, SCO No.18, First Floor, Sector 20-D, Chandigarh through its Proprietor Sh.Ashwani Sharma.

……Complainant

V e r s u s

1. The National Insurance Company Limited having its Registered and Head Office at 3 Middleton Street, Prafulla Chandra Sen Sarani, Kolkata, West Bengal through its Chairman-cum-Managing Director.
2. The National Insurance Company Limited, Chandigarh, Branch III, SCO 305-306, Sector 35-B, Chandigarh through its Branch Manager.
3. The Consolidated Insurance Surveyors and Loss Assessors Pvt. Ltd. Office at H.No.171, Sector 36-A, Chandigarh through its Director CA. NS Sidhu.
4. The Bank of India, S.C.F. No.9, Sector 20-C, Chandigarh through its Branch Manager.

….Opposite Parties No.1 to 4

BEFORE:       JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                      MRS. PADMA PANDEY, MEMBER.

                      MR. RAJESH K. ARYA, MEMBER.

 

Present through Video Conferencing:     

                      Sh.Rahul Bhargava, Advocate for the complainant.

                      Sh.Deepak Jindal, Advocate for opposite parties no.1 and 2.

                      Opposite party no.3 exparte.

                      None for opposite party no.4.

PER RAJESH K. ARYA, MEMBER

                   It is the case of the complainant that he is engaged in the work of trading of computers, laptops, networking and other computer hardware items  (in short the stocks) since 1995. The said stocks were hypothecated with opposite party no.4, against which he had availed CC Limit. It has been stated that in order to secure the said stocks, he obtained the insurance policy in question from opposite parties no.1 and 2 since 2012, which was extended from time to time, on making payment of premium. For the year 2017-2018 also, the said policy was in existence for the period from 27.04.2017 to 26.04.2018 and the sum assured for the stocks thereunder was for Rs.82 lacs. It has been pleaded that on 03.02.2018 after 8 pm. fire broke into the insured premises, due to short circuit, as a result whereof almost the entire stocks got burnt. Intimation in this regard was given to the local police authorities on 03.02.2018 at 9.15 p.m. Fire station concerned was also informed which sent three fire brigade vehicles to extinguish the fire. Intimation regarding the above incident was also given to opposite parties no.1 and 2 on 05.02.2018 and rough estimate of loss to the tune of Rs.65 lacs was also provided to them. It has been stated that in the said fire incident, stocks worth Rs.17 lacs could be salvaged and the remaining were totally burnt/damaged. To prove that at the time of incident stocks worth Rs.80 lacs were kept in the premises, the complainant has placed on record stock statement commencing from 30.12.2016 to 20.01.2018, Annexure C-6 colly., provided by opposite party no.4, with which the same were hypothecated. It has been stated that thereafter, opposite parties no.1 and 2 appointed surveyor who took 4 days to visit the spot of incident i.e. on 08.02.2018. It has been averred that instead of settling the claim filed by the complainant, the same was repudiated by opposite parties no.1 and 2, vide letter dated 14.03.2019, Annexure C-13 on highly unsustainable and untenable grounds. Legal notice was also sent by the complainant to opposite parties no.1 and 2 but to no avail. Hence this complaint has been filed by the complainant seeking directions to opposite parties no.1 and 2 to make payment of claim amount of Rs.61,84,965/- alongwith interest; compensation for mental agony and harassment; litigation expenses etc.

2.           Opposite parties no.1 and 2, in their joint written reply while admitting factual matrix of the case with regard to obtaining of insurance policy in question, from time to time, by the complainant as mentioned in the complaint; payment of premiums by him; incident of fire in the said premises; lodging of police complaint in that regard; intimation to the  fire station; lodging of claim in question; rejection of the said claim etc. pleaded that on receipt of intimation with regard to the incident of fire in the said insured premises, they appointed surveyor to assess the loss; that despite repeated requests made by the said surveyor, the complainant failed to provide complete documents to him; that on detailed survey conducted by the said surveyor, it was found that the complainant had manipulated his books of accounts; concealed material facts and submitted false and misleading information and tried to avail maximum  benefit; that during survey it was found by the said surveyor that there was no proof wherefrom it could be opined that fire took place on account of short circuit in the said premises and as such, it was not accidental; that only one switch board exactly below the burnt rack was found in burnt condition which could not give rise to a major fire as claimed by the complainant; that fire of very low intensity took place and it is not possible that the stocks were completely burnt; that very less quantity of burnt material was found in the premises which did not substantiate the amount claimed by the complainant; that there was a huge difference between the inventory level as per trading accounts and stock statements; that a firm of insured’s brother was also operating from the insured premises dealing into lab equipments etc. and the insured forged and fabricated the purchase invoices of the items claimed from his brother’s firm;  that two sets of trading accounts for the period 01.04.2017 to 03.02.2018 were submitted by the complainant, which were found manipulated as he did not know as to which one was authentic; and that the complainant was submitting false stock statements to opposite party no.4 from which cash credit limit of Rs.75 lacs was availed; and that the complainant has submitted the fake purchases and tried to avail undue claim which was no relation with the actual loss.  Pleading that there is no deficiency in service on their part, a prayer for dismissal of the complaint has been made.
3.           Opposite party no.4 in its short reply stated that the stock statement issued by it to the complainant was only after verification done by it.
4.           In the rejoinder filed, the complainant reiterated all the averments contained in his complaint and controverted those contained in the written reply filed by opposite parties no.1 and 2. 
5.           This Commission has afforded adequate opportunities to the parties to adduce evidence in support of their respective contentions, by way of filing affidavit. In pursuance thereof, they have adduced evidence by way of affidavits and also produced numerous documents including written arguments by the parties.  
6.           Since none put in appearance on behalf of opposite party no.3, as such, it was proceeded against exparte vide order dated 14.10.2019.
7.           None put in appearance on behalf of opposite party no.4, on the day when this case was fixed for arguments, as such, we have heard Counsel for the complainant and opposite parties no.1 and 2, have also gone through the record of the case including the written arguments, very carefully.
8.           Since the facts with regard to purchase of the policy in question by the complainant; payment of premium in respect of the same; renewal thereof from time to time till 2018 are not in dispute, as such, the only question which needs to be decided in this complaint is, as to whether, the opposite parties no.1 and 2 were justified in repudiating the claim filed by the complainant or not. It may be stated here that the sole ground of repudiation of claim of the complainant by opposite parties no.1 and 2 is based on the report, prepared by surveyor appointed by them. We have perused the said surveyor report and find that the main grounds taken by the surveyor, which have been relied upon by opposite parties no.1 and 2 for rejection of the claim of the complainant are:-
   1. That no major fire took place at the premises of the complainant
   2. That there was no proof of short circuit except one switch board which was found in burnt condition;
   3. That since the premises were locked and the lights were off and only one fridge was lying in the first room, whereas the fire originated in the third room, as such, no spark would have generated from the switch board of fridge which travelled upto third room;
   4. That the insured failed to justify the storage of stocks claimed based on volumetric analysis;
   5. That there is a huge difference of inventory level as per trading accounts and stock statements submitted by the insured;
   6. That some purchase bills were found fake as there was firm of insured’s brother namely M/s Ujala Chemicals operating at the premises in question and the insured forged and fabricated the purchase invoices of the items claimed from his brother’s firm.
   7. That two sets of trading accounts for the period 01.04.2017 to 03.02.2018 were submitted by the insured which suffered difference between each other because he manipulated the records.
   8. That the insured was submitting false statements to opposite party no.4 from which cash limit of Rs.75 lacs against the said stocks were obtained by him.

 

9.           First we will deal with the question, as to whether, the surveyor was right in opining that there was no proof to say that fire took place on account of short circuit in the premises or not, it may be stated here that no doubt to justify his opinion, the surveyor has stated in his report that since only one switch board was found in burnt condition, as such, it cannot be said fire took place in the said premises. However, we are of the considered opinion that once it has been opined by the surveyor that a burnt switch board was found in the insured premises as such, this fact itself is sufficient to say that short circuit had taken place resulting into occurrence of the said fire. It is very significant to mention here that generally all fires start with a tiny spark and the said spark only sets a chain reaction for a fire. So, the largest fire has to have a source to start that fire and that fire started with a tiny spark which may occur from tiny electric short circuit even. Not only as above, even in the fire occurrence report dated 01.03.2018, Annexure C-5 issued by the Chief Fire Officer, Fire and Emergency Services, M.C. Chandigarh, it has been stated that the probable cause of fire, as per the spot assessment, seems to be electric short circuit. The Officer of Fire Department, who is specialist in assessment of the spot assessment has clearly opined in his report that the possible cause of fire seemed to be electric short circuit. It is therefore held that the fire in question took place from the sparks occurred from the electric short circuit out of the said switch board, mention whereof has been made by the surveyor in his report. Findings given by the surveyor in his report to the contrary, cannot be taken into consideration.
10.           The next question that falls for consideration is, as to whether, it was a small fire or a major one. It may be stated that if we took the observations made by the surveyor in his report that it was only a small fire and no major fire took place, then it has not been clarified by the said surveyor, as to why, admittedly, three fire brigades were required to extinguish fire in the premises in question. Our this view if fortified from the fire occurrence report dated 01.03.2018, Annexure C-5 issued by the Chief Fire Officer, Fire and Emergency Services, M.C. Chandigarh. It is therefore held that it was not a minor fire but a major fire which took place in the insured’s premises, and as such three fire brigades extinguished the same. Findings given by the surveyor in his report to the contrary saying that since the premises were locked and the lights were off and only one fridge was lying in the first room and fire originated in the third floor, as such, no spark would have generated from the switch board of fridge which travelled upto third room, cannot be taken into consideration.
11.           The next question which falls for consideration is, as to whether, the insured has been able to justify the storage of stocks claimed based on volumetric analysis or that there was a huge difference of inventory level as per trading accounts and stock statements submitted by the insured, as opined by the surveyor in his report, it may be stated here that, admittedly, the stocks in question were hypothecated with opposite party no.4 and the policy in question  had been obtained by the insured from opposite parties no.1 and 2 for safety of the  said stocks starting from 2012 onwards. It is very significant to mention here that the complainant has placed on record year wise stock statement verified by opposite party no.4, Annexure C-6 colly., which shows that as on 30.12.2016 to 30.01.2017, the stocks ranging between Rs.80,98,775/- to Rs.83,84,930/- were lying in the insured’s premises. Not only as above, it is further significant to add here that the fire in question took place on 03.02.2018 and there is a stock statement dated 30.01.2018 which shows that it was verified by opposite party no.4 that stocks worth Rs.83,84,930/- were found lying in the said premises. Furthermore, in the written reply filed by opposite party no.4 also, it has been very candidly stated by it that the said stock statement was derived from the verification conducted by the bank, in the premises of the complainant and all the stock statements have been issued by the said bank only. Thus, in the face of the said stock statements, the bald findings of the surveyor to the effect that insured has not been able to justify the storage of stocks claimed based on volumetric analysis or that there was a huge difference of inventory level as per trading accounts and stock statements submitted by the insured, have no significant value in the eyes of law.
12.           Even otherwise, it has not been clarified by opposite parties no.1 and 2 and also the surveyor in his report, that if there was no stocks lying in the said premises, then how the company has issued the insurance policy in question, wherein the stock worth Rs.82 lacs have been got insured on obtaining premium of Rs.14,660/- and the said stocks were covered under insurance for the period from 27.04.2017 to 26.04.2018. Thus, once the company itself has witnessed that the stock worth Rs.82 lacs were lying in the said premises and insured the same on obtaining premium from the complainant and also at the same time, opposite party no.4 has also stated that before issuing the stocks statement for the year 2017, the stocks were physically checked by it, then it leaves no doubt to say that the stock worth Rs.82 lacs were kept in the insured premises at the time of obtaining the insurance policy and as such, in this view of the matter also, the bald findings of the surveyor to the effect that insured has not been able to justify the storage of stocks claimed based on volumetric analysis and that the insured was submitting false statements to opposite party no.4 from which cash limit of Rs.75 lacs against the said stocks were obtained by him, have no significant value in the eyes of law.
13.           The next question that falls for consideration is, as to whether the complainant is entitled to get the claim amount and if yes, to what extent. No doubt, the surveyor, in his report has opined that some purchase bills were found fake and that two sets of trading accounts for the period 01.04.2017 to 03.02.2018 were submitted by the insured which suffered difference between each other because he manipulated the records, yet, in our considered opinion, these findings are also not based on justifiable evidence. It may be stated here that since lot of record with regard to the stocks in question was burnt in the said fire, it was not feasible for the complainant to procure and produce the entire record to the surveyor and under those circumstances, it was required of the surveyor to consider the case of the complainant accordingly and should have submitted his report, after deducting the amount to some extent of the claim amount on the ground that the entire record has not been able to be produced by the complainant. However, instead of doing that, he, from the very initial stage, started his investigation on imaginary grounds that there was no proof of short circuit in the said premises; that the complainant has not been able to prove that the stocks claimed were kept therein; that there was no major fire etc. etc. It has been observed from the surveyor report that the surveyor from the very beginning made up his mind to make assessment against the complainant only, for the reasons best known to him. Under above circumstances, it is held that the report submitted by the Surveyor suffers from illegality, to large extent. In New India Assurance Company Ltd Vs Pradeep Kumar (Civil Appeal No 3253 of 2002, dated April 9, 2009), the Supreme Court referred to Section 64 UM (2) of the Insurance Act and observed that even though the assessment of loss by an approved surveyor is a pre-requisite for settlement of claim, yet the surveyor’s report is not the last and the final word. Even though it is the basis for settlement of claim, it is not sacrosanct and it is not binding on the insurer or the insured.
14.           In view of the peculiar facts and circumstances of this case, we are of the considered opinion that to meet the ends of justice and fair play, if we allow the claim of the complainant to the extent of 75% of the claim amount and give benefit of 25% of the claim amount to opposite parties no.1 and 2 on the ground that the complainant has not been able to produce the entire record, irrespective of any reasons, that will meet the ends of justice.  
15.           For the reasons recorded above, this complaint is partly accepted with costs and  opposite parties no.1 and 2 are directed as under:-

1. To make payment of claim amount to the complainant already submitted by him, to the extent of 75% only, alongwith interest @9% p.a. starting from the date of filing of this complaint, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, thereafter, the said amount shall carry 3% penal interest i.e. 12% p.a. (9% p.a. plus (+) 3% p.a.), from the date of passing of this order, till realization.
2. To pay compensation for causing mental agony and harassment and also cost of litigation, in lumpsum, to the tune of Rs.50,000/-, to the complainant, within a period of 30 days, from the date of receipt of a certified copy of this order, failing which, the said amount of Rs.50,000/-, shall carry interest @9% p.a. from the date of passing of this order, till realization.

16.           Complaint against opposite parties no.3 and 4 is dismissed with no order as to costs.
17.           Certified Copies of this order be sent to the parties, free of charge.
18.           The file be consigned to Record Room, after completion.

 

Pronounced

31.05.2021

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

 (PADMA PANDEY)

          MEMBER

 

 

Sd/-

 (RAJESH K. ARYA)

MEMBER

 Rg.