AI Structured Summary
Not yet generated for this judgment
Judgment
Dr. Inder Jit Singh, Presiding Member
The present Consumer Complaint (CC) has been filed by the Complainant against the opposite party as detailed above, inter aila praying for directing the Opposite Party (OP) to:-
(i) grant Rs.17,41,94,520/- alongwith interest @18% p.a. towards the loss of goods due to the accident (Rs.7,75,00,000/- towards principal, and interest Rs.9,66,94,520/-, calculated @18% from 14.09.2010 to 15.07.2017);
(ii) grant pendentelite and future interest @ 18% per annum till realization;
(iii) grant an amount of Rs.50,00,000/- towards damages;
(iv) grant cost of litigation of Rs.10,00,000/-.
Notice was issued to the opposite party on 20.09.2017 giving them 30 days’ time to file their written statement.
It is averred/stated in the complaint that:-
i) That the complainant is a company incorporated under the Companies Act, 1956 and is engaged in transportation of consignments across India for various customers. The complainant is a logistic company which is globally respected as one of the industry leaders in offering point to point services for transportation of goods and storage facilities and has over 350 locations, fleet of vehicles and a nation-wide network. The complainant, so as to secure the goods, which would be stored in its various warehouses across India, has always been taking insurance policies with the OP. As per regular practice, OP had issued many policies including the relevant Standard Fire and Special Perils Policies for the year 2009-2010.
ii) The complainant obtained the policies from the OP (a) Standard Fire & Special Perils Policy No. 311700/11/2010/201, Policy period from 04.09.2009 to 03.09.2010, sum insured Rs.27,66,00,000/- covering 32 premises. The goods covered were “Stock (GNL Merchandise Non Hazardous Goods on A/c of various clients, Goods held on trust, Cloths, Yarns, Mach”, (b) Standard Fire & Special Perils Policy No. 311700/11/2010/202, Policy period 04.09.2009 to 03.09.2010, sum insured was Rs.59,19,00,000/- covering 110 premises. The goods covered were “Stock (GNL Merchandise Hazardous and Non-Hazardous Goods on A/c of various clients, Goods held on Trust”.
iii) During the pendency of the Insurance Policies, unfortunately a fire broke out on the intervening night of 13.02.2010 and 14.02.2010 in a few of the premises covered under the above two policies. The affected premises were covered under Sr.No. 8, 9 and 10 under Policy No. 201 and Sr.No.24, 29 and 31 under Policy No.202. The complainant informed the OP about the fire accident immediately on 15.02.2010 by way of letter informing that Sr.Nos. 8,9 and 10 covered under Policy No. 201 and vide another letter of the same date had informed that Sr.Nos. 24 and 31 covered under Policy No. 202 have been badly affected due to fire. The complainant vide another letter dated 16.02.2010 informed the OP about the loss at premises mentioned in Sr.No. 29 also under policy No.202.
iv) The OP vide its letter dated 18.02.2010 replied that the Surveyors and Loss Assessors have been deputed and requested the Complainant to fill up the claim form attached with the letter. The OP had appointed Absolute Surveyors Pvt. Ltd. as the Surveyor for the present claim. The complainant vide letter dated 19.02.2010 specifically described the affected locations by providing the list and details of those godowns and buildings in which the damage occurred. Vide letter dated 20.02.2010, the complainant also informed the OP that all the records, books, documents and papers got burnt and there is no access to any paper. However, the complainant explained that they are trying to organise the records through the help of various branch offices and provided a provisional stock sheet as on 13.02.2010. The complainant vide letter dated 24.02.2010 informed the OP that there was no casualty in godown No.4,6,7,9 ground floor and mezzanine floor and platform at Strand warehouse. The complainant vide its mail dated 12.03.2010 had forwarded a comprehensive list of goods stored at Strand warehouse wherein fire took place to the Surveyors. The complainant has been corresponding with the OP from time to time by providing necessary information and documents. The OP vide letter dated 05.04.2010 requested the complainant for furnishing the documents as per the list of documents sent by the OP alongwith the letter, within seven days. Vide mail dated 06.04.2010, the complainant requested the Surveyor to collect the papers as desired by the OP.
v) Vide letter dated 08.04.2010, the complainant forwarded the claims of 194 customers amounting to Rs.8,88,39,357/- alongwith the original consignee copies/gate passes, invoices, claim letters and affidavits to the Surveyors. Vide same letter the complainant also requested the surveyor to recommend to OP for release of part payment.
vi) The OP vide its letter dated 26.04.2010 cancelled four fire policies in terms of policy condition No.5 and suggested to refund the premium on pro-rata basis. The complainant has been taking insurance policies from the OP since 1990 continuously for all over India. Vide letter dated 10.05.2010, the OP requested the complainant to withdraw a claim of Rs.1.50 crores under Sr.No.9 of the list of properties as the same has not been damaged. In reply to the same, the complainant vide its letter dated 12.05.2010 clarified that the rest of the premises mentioned in Sr.No.9 were damaged except C-4 and C-5 which were also covered by mistake in S.No.10 of list of properties and the same was immediately withdrawn by the complainant. Due to lackadaisical approach of the Surveyor in not forwarding any documents submitted by the complainant and not providing any information to the OP, the OP sent a mail dated 11.05.2010 to the Surveyor pointing out the mistakes of the Surveyor.
vii) Vide letter dated 15.05.2010 the complainant forwarded claims of another 277 customers amounting to Rs.7,57,39,738/- alongwith necessary documents to the Surveyor. Vide letter dated 17.05.2010, the OP requested the complainant to withdraw its claim in godown No. C-3 mentioned in Sr.No.24 of the list of properties under Policy No. 201 as the same was not affected which was replied vide letter dated 21.05.2010 reiterating that the said claim had already been withdrawn.
viii) In response to letter dated 05.04.2010 of the OP, the complainant vide its letter dated 27.05.2010 given all details stating that 471 claims have been lodged for an amount of Rs.16,45,79,095/- and had forwarded various documents such as claim letter of the claimants, copy of invoice, claim bill, affidavits of claimants and assessment of loss as regards five years claim data. The complainant expressed its inability to provide certain other information demanded by the OP due to the reason that all the records got burnt. The complainant also forwarded a copy of FIR alongwith the letter dated 27.05.2010. Vide letters dated 12.08.2010 and 21.09.2010 claim of 188 claimants and 9 claimants amounting to Rs.3,50,78,183/- and Rs.66,76,684/- respectively forwarded by the complainant to the Surveyor. The complainant repeatedly requested the Surveyor to recommend the OP to release part payment immediately during the pendency of the final assessment by the Surveyor. Ultimately vide letter dated 26.10.2010, the complainant compiled the entire data and informed the Surveyor that all the claim papers (total claimed amount Rs.20,63,33,962/-) have been duly submitted alongwith the required documents and requested the Surveyor to make the assessment and submit its Survey Report. The Surveyor vide its mail dated 20.12.2010 demanded layout plan of the warehouse and also on the same day, sent another mail, the OP without exactly knowing the fact that the only document pending for submission was the lay out plan of the warehouse, got agitated for alleged non-submission of complete documents by the complainant. However, the said document was not an essential document for assessment of loss or for processing of the claim as the OP had never sought for any layout plan while issuing policies since 1990. In view of this, the demand for the layout plan was nothing but eyewash to buy some more time by the Surveyor.
ix) The complainant vide its letter dated 26.12.2010 expressed their agony and stated that the Surveyor had on several times visited their office and checked all affected stock and godowns and held several rounds of discussion acknowledging several claims lodged by the customers directly and through Courts, despite the same the Surveyor had not even submitted its report. Vide the same letter, it was also informed that an adhoc payment of Rs.1,70,00,000/- to about 225 customers amounting to approx..10% has already been disbursed by the complainant to show their bonafide to their customers and to maintain goodwill in the market. Again the Surveyor demanded more documents. The complainant completed all the formalities and submitted all the required documents after sending the layout plan of the warehouse. The said plan could not submitted earlier since the complainant was not in possession of the same and could not arrange it earlier from the Port Trust despite continuous follow up.
x) The complainant received a mail dated 25.03.2011 from one B.B. Associates & Surveyors stating that they have been appointed by the Mumbai office of OP to investigate and obtain necessary documents pertaining to a claim by Pioneer Dyeing Pvt. Ltd. and the said Surveyor also sent a list of documents. The OP sent a mail dated 02.06.2011 to the Surveyor by marking a copy to the complainant stating that the survey report has not yet been submitted and there was no complaint of non-cooperation from the side of the complainant by the surveyor and also categorically stating that any pecuniary loss arising out of delay would be accounted to the sole responsibility of the surveyors. The complainant on 11.06.2012 wrote a letter to Surveyor by marking a copy to OP about non-submission of Survey Report and expressed their desperate situation since they were facing acute complaints from their customers due to non-settlement of their claims and they are losing their customers, even though they have paid about Rs.2 crores to their customers for which the complainant has taken loan from bank by paying interest to the bank. The surveyor submitted its report on 31.07.2012, but the OP had neither supplied copy of it to the complainant nor had they settled the claim within a month of submission of the report. Again on 02.04.2013, the OP sought certain clarifications. The complainant vide its letter dated 17.04.2013 provided a complete clarification to all the queries raised by the OP. The complainant was expecting an early settlement of the claim since all the requisite documents were submitted by the complainant, but did not receive any intimation from the OP for a long time. The Complainant contacted to the Head Office of the OP and sent other reminders to various officials of the OP. The complainant also received letters from the head office of the OP stating that the head office of the OP has raised certain queries and requested for clarification. The OP, suddenly issued a show cause letter dated 06.02.2015 seeking information under three heads, to be provided within two weeks from the date of receipt of the said letter or else the claim shall stand repudiated without further advise from them. The complainant vide letter dated 27.02.2015, explaining the relevant facts and also pointed out that after a lapse of five years of the fire, the OP is raising irrelevant queries regarding the tenancy despite knowing the fact that the complainant is very much in possession of the warehouse as tenant under Kolkata Port Trust since a very long time and there is also a litigation pending between the complainant and the Port Trust regarding the same. The complainant also reiterated that the earlier claim which occurred in 2003 was also entertained and paid by the OP.
xi) The complainant requested for a copy of the relevant extract of the survey report showing different components related to assessment of loss. Since the complainant did not receive any response, the complainant moved an application dated 11.06.2015 under section 6 of the Right to Information Act, 2005 asking for the relevant extracts of survey report as requested earlier. Vide letter dated 29.06.2015, the OP responded demanding a demand draft of Rs.46/- for providing a copy of the survey report and ultimately provided the copy of survey report but without the annexures, along with a covering letter dated 03.07.2015 to the complainant. However, subsequently, the complainant with great difficulty obtained complete Survey report along with all the annexures only after repudiation its claim in Sept. 2015. Even after giving all the clarifications to the queries sought by the OP, the OP vide letter dated 22.09.2015 repudiated the claim of the complainant on the following grounds:-
“1. The cause of loss was not being established by the fire report, FSL report and insured.
Insured had no tenancy right.
The Government of West Bengal had lodged an FIR against the owner/occupier of the building for violation of section 12 and 11C of the Fire Service Act, 1950.”
The complainant had explained the above three grounds to the OP. The complainant had received a total claim of Rs.20,63,33,962/- from various customers whose goods were stored in the said warehouse on the date of loss. The complainant has paid approx.. Rs.1,97,00,000/- and the balance amount has to be disbursed to the customers. Therefore, complainant prays and is entitled for an amount of Rs.7,75,00,000/- along with interest. The Survey report is dated 31.07.2012. The date of repudiation by the OP is 22.09.2015. There is negligence and deficiency of service on the part of the OP in sitting idle in processing the claim for around five years in contravention to the IRDA (Protection of Policy Holders’ Interests) Regulation, 2002. The said Regulation stipulates that the Surveyor has to communicate his findings within a period of 30 days to the Insurer and provides a maximum period of 6 months to furnish his report. The said Regulation also casts a duty upon the Insurance Companies to take a decision within a period of 30 days from the date of receipt of Survey Report. Contrary to the Regulations, the Surveyor and OP deliberately did not act or take a decision till the year 2015 which has caused immense loss of reputation and financial loss to the complainant. Hence, the complainant is before this Commission.
OP contested the case. In its written statement/reply stated that :-
i)The complaint is not maintainable under General Condition No. 6 (ii) of the Insurance Policy which provides that if a claim is made and rejected and no action or suit is commenced within 12 months, the benefits flowing from the policy shall stand forfeited and consequently any subsequent action would not be maintainable.
ii) It is also contended by the OP that the complaint is filed after 12 months after payment of the claim which implied that the claim, if any, for the balance amount as claimed by the complainant was not payable and was thus rejected. Hence the benefits flowing from the policy shall stand extinguished and any subsequent action would not be maintainable. It is trite that the complainant is not entitled to any benefit under the Consumer Protection Act in such a situation. The complaint is liable to be rejected in limine.
iii) The OP denied all the contentions and averments in the complaint. It is contended by the OP that the complaint is on the face of it false, frivolous and replete with baseless assumptions. The complainant is commercial entity. It had taken the insurance policy to protect its properties etc. meant for business and profit-making purpose. Therefore, the services of the OP were availed of by the complainant purely for ‘commercial purpose’. The complainant is thus not a consumer qua the Consumer Protection Act, 1986. The proceedings before this Hon’ble Commission are essentially summary in nature and disputes with such like complex questions are thus beyond the purview of this Commission. It is also contended by the OP that the complainant has filed this complaint to lay claim on a non-admissible liability in terms of the insurance policy as well as the prevailing law from the OP which is neither due to the complainant nor is the complainant legally entitled thereto. The OP denied any unfair practice and deficiency of service as alleged stating that the complainant has exaggerated the claim amount so as to bring the complaint within the pecuniary jurisdiction of the Commission.
Rejoinder and Evidence by way of affidavit was filed by the complainant on 11.04.2018 and affidavit of evidence was filed by the OP on 17.09.2018 broadly on the lines of averments made in the complaint.
Heard counsels of both sides.
In this case, the claim has been repudiated by OP on three grounds, which are stated as follows:
i. The cause of the fire has not been established by fire report, FSL report and insured.
ii. The insured has no tenancy right.
iii. The Government of West Bengal has lodged a FIR against the owner/occupier of the building for violation of section 12 and 11 (c) of the Fire Service Act, 1950.
It was argued by the complainant that OP has paid the earlier claim to the complainant in 2003 for a similar incident occurred in the same premises without raising any dispute regarding the tenancy rights. Further, OP has cleared the claims of other insured/companies at the same place, namely, M/s Jai Durga Traders, occupier of godown No. Do-V and Shri M/s Balaji Textile, occupier of godown No. Do-II whose goods were also affected by the same fire incident and whose status with respect to premises is exactly similar to that of the complainant. On the directions of this Commission, the OP filed an affidavit dated 04.08.2019 clearly admitting by way of the documents filed along with the affidavit that the claim of M/s Jay Durga Traders and M/s Shri. Balaji Textile Pvt. Ltd. were paid by the O.P. The OP had not raised the ground of right of tenancy of those companies while settling the claim even though their status is also the same as that of the complainant as regards to cause of fire.
The complainant argued that the Divisional Officer, West Bengal Fire & Emergency Services vide its report dated 31.08.2010 has specifically noted that the cause of fire could not be ascertained but has clearly stated that various commodities stored and found at the site were completely destroyed by fire and northern side warehouse had totally collapsed. The cause of loss was found to be fire only which could not be found out or ascertained even by the experts, the fire accident is not disputed and different governmental authorities have given their reports stating the cause of fire could not be ascertained. Therefore, the onus of explaining the cause of fire cannot be shifted to the complainant. The complainant further argued that the report of West Bengal Fire & Emergency Services dated 31.08.2010 shows the tenant of the premises as "Inland Road Transport (P) Ltd.", which shows that the premises were in the custody and possession of the complainant at the time of fire. The premises is being occupied since 1987 by Inland Road Service whose proprietor is Mr. Radha Krishan Somani, who is also the Director of the complainant company. Hence, the complainant has been in possession of the warehouse since very long and there is no dispute with regard to possession.
With regard to the FIR, the complainant argued that Final Report no. 03 of 2012 dated 31.01.2012 submitted in the court of Ld. Chief Metropolitan Magistrate, Kolkata on 02.02.2012 specifically states that the allegations made by Fire Brigade in FIR were not established and investigation of the case was closed by DCPO declaring the fact as true. The said report was accepted by the Ld. Chief Metropolitan Magistrate, Kolkata, vide its order dated 06.04.2016 and proceedings under the said FIR was dropped.
With respect to the contention taken by the OP that right of the Complainant to file the complaint got extinguished after a period of 12 months from the date of repudiation, the complainant submitted that period of limitation for filing a complaint is 2 years in the Statute and that period cannot be curtailed/superseded by entering into an agreement and same would be hit by the Contract Act and would be void.
Regarding objection of the OP that the complainant is not a consumer, it was argued by the complainant that the policy taken by the complainant can never be for profit making as payment of claim amount is towards indemnification of the loss occurred during the period of insurance. The purpose of taking the policy against consideration was only to make good the loss or indemnify the insured. Relying on the judgment of this Commission passed in M/s. Harsolia Motors Vs. NIC Ltd. [I(2005) CPJ 27 (NC)], the complainant argued that a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose.
The complainant stated that he had received a total claim of Rs.20,63,33,962/- from various customers whose goods were stored in the said warehouse on the date of loss. The complainant has paid Rs.1,97,00,000/- and the balance amount has to be disbursed to the customers. The surveyor had assessed the loss by three different logics/methods and had recommended Logic 3 so that interest of both the complainant and the OP would be satisfied and has assessed the total loss to be Rs.7,03,69,335/- which along with interest has been calculated and the compensation of Rs.17,41,94,520.55/- has been claimed.
As regard, the first reason for repudiation viz; cause of fire not established, OP could not show any clause in the policy which would permit the OP to repudiate the claim if the cause of fire is not established. In this case, even the expert/competent authority like FSL report, fire Deptt. etc. have not been able to come to a definite finding after detailed investigation about the cause of fire. Loss due to fire is not in dispute. There is no allegation that the fire was caused deliberately. Hon’ble Supreme Court in Canara Bank V. United India Insurance Co. Ltd. [(2020)3 SCC 455] observed that “………..Whether the fire took place by a short circuit or any other reason, as long as insured is not the person who caused the fire, the Insurance Company cannot escape its liability in terms of the insurance policy.” Further, it is admitted that the same fire incident also engulfed a few other establishments adjoining to the complainant and the same OP has admitted and paid the claim of two other establishments who suffered loss in the same fire incident. Hence, the reasoning to repudiate the claim on this ground is not valid. Counsel for OP could not give a satisfactory response to this.
As regard, second ground, notwithstanding the fact that there is a dispute between the complainant and the West Bengal Port Authority with respect to tenancy, the complainant are in possession of the said premises and are having a valid insurance policy for the premises occupied by them. Even earlier, in another case of fire, the same OP has admitted their claim where the loss happened in the same premises.
Regarding 3rd reason for repudiation, in the said FIR, final report has already been filed by the police and there is no charge sheet against anyone as the cause of fire could not be established. It is also noted that the surveyor has not given any of these reasons for repudiating such claim and in his report has given the assessment of loss.
After hearing both the sides and going through the various record, I find that reasons given by the OP in their repudiation letter dated 22.9.2015 are not valid and hence the said repudiation letter is set aside. OPs are directed to consider and pay the claim of the complainant on merits as per the report and assessment dated 31.07.2012 of the surveyor appointed by them; subject to standard deductions as per policy conditions.
I also tend to agree with the contentions of complainant regarding delay on the part of Surveyor in submitting his report and on the part of the OP in taking decision within the timelines stipulated in the 2002 Regulations cited. The OP should have taken a final decision within a maximum of 8½ months from the date of appointment of the Surveyor by the OP (6 months maximum for Surveyor to submit his report, 15 days for OP to seek additional report, 3 weeks to Surveyor for submitting additional report and 30 days for OP to take final decision on receipt of Survey Report/Additional Survey Report). In that case, as the Surveyor was appointed by OP on 18.02.2010, 8½ months’ lapsed on 31.10.2010. Hence, OP will be liable to pay interest to the complainant on any amount which is payable as per this order w.e.f. 01.11.2010.
For the reasons stated hereinabove, and after giving a thoughtful consideration to the entire facts and circumstances of the case, various pleas raised by the learned Counsel for the Parties, the Consumer Complaint is allowed/disposed off with the following directions/reliefs: -
(i) The OP shall reprocess the claim and pay the eligible claim to the complainant in accordance with the report and recommendation dated 31.07.2012 of the surveyor which is already on record, alongwith simple interest at a rate of 9% w.e.f. 01.11.2010 till the date of actual payment, within 45 days from the date of this order.
(ii) OP shall also pay litigation cost of Rupees one lakh to the complainant.
The pending IAs, if any, also stand disposed off.