Delhi

East Delhi

CC/29/2018

SHARMA electrical - Complainant(s)

Versus

united india ins. - Opp.Party(s)

10 Feb 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110092

 

C.C. NO. 29/2018

 

1.	M/s SHARMA ELECTRICALS & ELECTRONICS THROUGH IT’S PROP. SH. SUNIL SHARMA R/O:- 92/2, MAIN BAZAAR, PATPARGANJ VILLAGE, DELHI-110091	….Complainant
Versus
1.       2.	UNITED INDIA INSURANCE COMPANY LTD. AT- D-8 C.S.A. MARG, LAXMI NAGAR, NEW DELHI-110092.   CANARA BANK AT-MAYUR VIHAR PH-I, DELHI-91.   Both Through its General Manager, Executive or Chairman, Company Secretary or Managing Director or any other authorized representative.	…OP1                                                               …OP2

 

Date of Institution: 23.01.2018

Order Reserved on: 08.02.2023

 Order Passed on: 10.02.2023

               

QUORUM:

Sh. S.S. Malhotra (President)

Sh. Ravi Kumar (Member)

Ms.Rashmi Bansal(Member)

 

 

Order by : Sh. S.S. Malhotra (President)

 

 

JUDGMENT

 

1. By this order the Commission shall dispose off the complaint of the Complainant with respect to deficiency in service by the OP1 in repudiating the claim of the complainant on account of the theft in the shop of the complainant.
2. Brief facts stated by the complainant in the complaint are that the complainant took Insurance Policy No. 2215001216P118498696 from OP1 on account of the stock of the complainant and since the complainant has taken credit facility of Rs. 80 Lakh from the Canara Bank OP2, the premium was directly paid by the Canara Bank on behalf of the complainant. It is further stated that unfortunately the theft had taken place in the shop of the complainant on 10/04/2017 against which he lodged an E-FIR, at Police Station, Pandav Nagar stating loss of Rs. 10,59,712/-. The complainant intimated the OP as well as Canara Bank and thereafter OP appointed a surveyor Sh. Vinod Sharma who visited the shop of complainant and he was provided all the relevant documents by the complainant i.e. FIR, Final Report, Ledger, Stock Register, Audited Financial, DVAT Returns along with untraced report. Thereafter complainant approached many a times to the OP1 but OP1 has never given any satisfactory reply and as such complainant has filed the present complaint praying interalia that OP be directed to pay Rs. 10,59,712/-  to the complainant along with interest @ 18% p.a., Rs. 28,000/- as compensation for mental agony and Rs. 5,000/- towards legal expenses.
3. The OPs were served and OP1 filed its written statement taking preliminary objections that complaint is false, un-sustainable, raise a complicated question law & therefore the same is beyond the jurisdiction of this Commission, the claim of the complaint for burglary has not been supported with any documents or with accounts and records of the complainant and there are major variations and discrepancies, especially in the value of the stocks as per the report of the surveyor dated 04.09.2017.
4. It is further submitted that complainant has tried to enhance the value of loss and also had under insured his stock at the time of purported loss which was discovered by the surveyor &, this is in violation of terms & conditions of the Insurance Policy by the complainant, rendering the contract voidable at the option of OP1 which option has been exercised by the OP1 and it has repudiated the claim and communicated the same to the complainant on 12/01/2018 along with copy of surveyor report. It is further submitted that complaint is running a commercial shop and as such is not a consumer within the definition of ‘Consumer’ under CPA Act 2019.
5. It is further submitted that after the receipt of intimation of the alleged loss on account of the theft, the OP1 immediately appointed the surveyor Sh. Vinod Sharma to conduct the detailed survey who conducted the same/survey and submitted his report after physical verification of the insured premises and also observed that there is no record of theft incidence on the CCTV Camera installed in the premises, though the display was regular, the missing stock purchased rates were checked from the purchase bill submitted for the purported stolen item, stock ledger in tally for each stolen item was verified and surveyor noted various discrepancies in the accounts of record.
6. It is further submitted in case of Intex LED, stock summary showed 3 LEDs and physical verification of the inventory also showed the same figure however, complainant had 01 Intex LED in stock. On verification of purchase bill, a Tax Invoice No. 6060000608 dated 29/03/2017 was available showing the purchase of AOC TV from TPV Technology, India Pvt. Ltd. for Rs. 13,82,929.85/- but there is no entry regarding the same in the purchase ledger in the month of March 2017. The surveyor has also observed that some sudden decrease of almost 74.19% in the closing stock and also noted that purchase to sale ratio during the current period was 80.57% as against the average, of last 02 years and after observing all these things the surveyor calculated that the Insurance amount 1,71,802/- however as improper books were being maintained and there were major variations and discrepancies in the value of stock, the surveyor recommended for the repudiation of claim of the said amount, which recommendations were accepted and claim was repudiated and accordingly was communicated to the complainant. On merit the contents of preliminary objections are reiterated and it is stated that complainant be put to strict proof of actual loss and it is prayed that complaint of the complainant be dismissed.
7. The Complainant thereafter filed Rejoinder in which he denied the contents of written statement and reiterated and re-affirmed the contents of complaint. It is submitted that complainant had provided a computer generated hardcopy of tally data to the OP1 and although it is correct that on verification of Purchase Bill a Tax-Invoice no. 6060000608 dated 29/03/2017 was available and there was entry regarding the same in purchase ledger but it is explained that out of some technical issues invoice of purchase goods does not match but the complainant had submitted the final statement for the period of 01/04/2016 to 31/03/2017 and from 01/04/2017 to 10/04/2017. It is also denied there were several discrepancies or in-consistencies in the statement of account so submitted.
8. It is further submitted that after implementation of GST w.e.f. 01/07/2017 certain big companies were trying to roll out their stocks to avoid GST liabilities and the complainant also to avoid such difficulties sold his stock through different segments and as such there was lesser stocks on the date of incidence but the stock was rightly calculated and there is no discrepancies in it. It is accordingly prayed that complaint of the complainant be allowed. The complainant has filed his evidence and has Exhibited following documents.

• FIR is Ex-CW-1/A.
• Final Report is Ex. CW-1/B.
• The legal notice is Ex. CW-1/C.
• Ledger, Stock Records, Audited Financial, DVAT returns etc. are Ex. CW-1/D (colly).   

OP has filed its evidence through Sh. Tek Chand Pahuja its legal Manager and as Exhibited following documents.

 

• A copy of the Survey Report, dated 04.09.2017, alongwith the annexures, is Ex. as O.P/1.
• A copy of the policy schedule is Ex. as O.P/2.
• A copy of the repudiation letter, dated 12.01.2018 Ex. as O.P/3.

 

9. The Commission has heard the arguments and perused the record. As far as the stock of the complainant was insured and theft took place, the information there of was given to OP1 and the OP1 had appointed a Surveyor and surveyor report is filed on record are admitted facts. The only disputed facts are that complainant alleges that on account of the such theft of stock, the material worth Rs. 10,89,712/- was stolen, which is the subject matter of the present complaint and the OP1 on the other hand in its written statement has alleged that as per the report of surveyor stock stolen was of cost price of Rs. 7,43,214/- and after deducting the depreciation of 10% on new stock, it comes to Rs. 6,68,893/-and as far as old stock is concerned it’s cost price was Rs. 1,82,586/- & after taking 50% depreciation of such old stock it comes of Rs. 91,293/- as shows in the tabular form:-

In view of the above parameters, the loss of the insured is assessed as under;-

•                                                                              

Cost of Stolen Stocks on Cost Price               [Annexure-A]	7,43,214/-
Less: Allowance for Display Stock-10%	74,321/-	6,68,893/-
Cost of Stolen Old Stocks on Cost Price               [Annexure-A]	1,82,586/-
Less: Allowance for Old Stock-50%	91,293/-	91,293/-
GROSS LOSS ASSESSED		7,60,186/-

10. Accordingly as per the surveyor the only loss which the complaint had suffered is Rs. 7,60,186/-, OP further has claimed that out of Rs. 7,60,186/- the amount of Rs. 5,88,384/-is not payable to the complainant on account of under insured policy clause and as such only amount Rs. 1,71,802/- is payable to the complainant. It is matter of record that even that amount has not been paid by the OP to the complainant taking the defence that since there was under insurance value of the stock, the contract of insurance was voidable at the option of the OP & OP has exercised this option & has cancelled the insurance policy.  
11. The whole controversy is as to how much loss has happened and how much loss has to be indemnified by the OP, if any and further as to whether the OP has rightfully exercised the option of voidable contract & was right in repudiating the claim.
12. The Counsel for the OP has argued there was a bill in the books of A/c of the complainant for amount Rs. 13,82,929/- and there was no entry regarding the same in the purchase ledger for the month of March 2017 and as such there appeared to be some mis-statement given by the complainant and further his statements are not matching with the stocks and since insurance claim is, a contract based on good faith, the policy amount cannot be given, if it is found that the complainant has concealed the material facts & therefore the policy of the complainant was rightfully cancelled.
13. The Commission has gone through the record. The allegation of the surveyor is that the a bill of Rs. 13,82,929.85/- is not entered in the purchase ledger. Certain dates are relevant. March happens to be the closing month for every financial year, the burglary has taken place on 10/04/2017. In common parlance and understanding, the books for preceding month has to go to its CA or the Accountant only next month, for the purpose of making entries of all such records, in the stock as per bill book which have taken place in the preceding month. Since accounting year is closed and the preceding month was March, so many adjustments are likely to take place which are required to be explained by the insured and then the CA or the Accountant had to adjust all such bills against the relevant heads and depreciation is calculated by the shopkeeper. Even Income Tax authorities give time to file return to every individual/firm/company for 30 days, 60 days and 90 days or as the case may be to different juristic entities.  Therefore contention of the surveyor that a particular bill was not entered in the purchase ledger is of not much consequence and is only a vague attempt to decline the claim on the such ground.
14. Further even if the surveyor’s report, after taking such adjustments is considered then also he admits that cost of stolen stocks 7,43,214/-  and cost of old stolen stock on cost price is Rs. 1,82,586/-. Then he has deducted 10% on the value of new stock and 50% on the validation of old stock as depreciation. How this has been done, has not been explained. The OP has not placed any record on court file, which he might have taken from the complainant to show, as to how much old a particular product was, which has been mentioning as ‘old’. No agreement or terms & conditions of the policy have been placed on record nor there is any bifurcation of such stocks as to how the surveyor has differentiated the old stock from current stock, & how a particular product has been leveled as ‘old’ or as ‘new’. There is no bifurcation of these categories in the entire surveyor report. The report of the surveyor’s on depreciation therefore is incomplete.
15. Further there is no particular clause mentioned under which these stocks have been taken on depreciation value and how much stock was an old stock and how old that was, i.e. whether such calculation is made on all such stock w.e.f. the date of purchase. These facts are missing from the surveyor report.
16. Further whether at the time of issuing the policy, copy of the stock was taken by the OP from the complainant year-wise or whether such terms & conditions were explained to the complainant, have not been explained at all in the entire written statement/pleading. It is common practice on the part of the Insurance Company/ies that at the time of giving the policy, their primary objective is to secure premium and at the time of giving the claim, they bring one or the other exclusion clause so that claim can be avoided for any reason. Law on this aspect is very clear, and OP can take benefit of only those terms and conditions which have been specifically explained by the Insurance Company to the insured & the signatures of insured, are taken of having understood the same. There is no such document on the court-file.
17. Admittedly the contract of insurance is contract based on good faith between two parties and it has to be remembered that good faith is on the part of both the parties which means that complainant is supposed to declare everything which is relevant w.r.t. policy being taken, and OP is supposed to inform all those fact which are prominent, and all the terms & conditions must be clarified to the insured so that the claim, if unfortunately is required to be taken then the insured can get the benefits emanating from that policy and such terms & conditions which goes to the root of the policy, and which goes to the root of allowing or declining the claim must be explained and must be printed in bold words on the policy so that if there is any shortcoming on the part of the insured or insurer, they should be mentally prepared to accept the facts based on such terms & conditions and if there is some objections on the part of insurance, they should be able to explain as to how that particular fact was duly explained and has been prominently placed on the policy bond and in this way bona-fide is required to be on part of both the contracting parties.
18. The Commission has perused the policy and no where it is written as to how the loss would be assessed, what would be the depreciation of new stock, what would be the rate of depreciation on old stock and how the ‘old’ & ‘new’ have been defined in the policy. Therefore deduction on these grounds does not appear to be falling within the definition of bona-fide on the part of the insurance as per surveyor report.
19. The total loss comes to Rs. 7,43,214/-+ 1,82,586/- which comes to Rs. 9,25,800/-. Until & unless OP shows that certain amount w.r.t. deduction were on account of the depreciation is necessary or on any such amount have been duly explained by the OP to the complainant, have been proved on record the OP would not be entitled to take any amount from the total amount assessed by the surveyor.
20. The complainant has claimed that loss of Rs. 10,85,000/- whereas this surveyor calculated Rs. 9,25,800/-. Prima-facie this is also not explained by the surveyor in its report parawise. However, this amount is stated to be taken on the face value of the stock, the OP is bound to honour the report of its surveyor. Deduction 10% on certain stock or 50% on another stock and then taking certain amount/account of one of the lesser valuation are the facts which amount to deficiency in service on the part of the OP. However as far as the OP2 is concerned, there is no deficiency of OP2 has been proved.
21. Accordingly the Commission of the opinion by not paying account so assessed by the surveyor which otherwise is lesser side, the deficiency of service on the part of the insurance stands proved. The Commission therefore order as follows: OP1 to pay Rs.9,25,800/- to the complainant along with interest @ 6% p.a. from the date of filing the complaint, along with litigation charge of compensation legal charges which is totally assessed as Rs.5,000/- to the complainant. The complaint of complainant is dismissed against OP2.

Copy of the order be supplied/sent to both the parties free of cost as per rules.

This Order is to be complied within 30 days from the receiving the same & in case the OP could not pay the amount within 30 days the rate of interest would be 9% from the date of filing the case upto the date of realization on the entire amount including of compensation amount.            

File be consigned to Record Room.

Announced on 10.02.2023.