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Judgment
The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.
The Complainant is running a business of sales and service of two wheelers motor vehicles along with sale of spares, accessories and allied articles at Nandurbar District under the name and style ‘M/s Ashwin Auto Services’ since 1996. Opposite Party No.1 is Insurance Company and Opposite Party No.2 is the Surveyor. On 14.07.2015, the Complainant purchased “Motor Dealer Package Insurance Policy”, from Opposite Party No.1, vide Policy No.OG-16-2003-4095-00000005, for a sum of Rs.4.44 crores, valid from 14.07.2016 to 13.07.2016.
The case of the Complainant is that on 15.03.2016 at around 02:30 am, fire broke out in the premises of the Complainant, causing damage of new vehicles, spare parts, furniture etc. The Complainant informed the Police, Fire Department, and Opposite Party No.1. Opposite Party No.1 deputed Opposite Party No.3/Mr. Parvinder Kumar Bhatia as Surveyor and Loss Assessor, who visited the place of the incident on 18.03.2016. The Surveyor instructed the Complainant not to remove the debris until the process is complete. Debris remained scattered for 292 days, as a result the Complainant suffered loss of business of Rs.1,91,096/- per month as per last income tax return. The total loss of business incurred by the Complainant was Rs.19,10,957/-. The Surveyor sought several documents from the Complainant, vide letter dated 18.03.2016. The Complainant informed the Surveyor that all the records including accounts books, purchase order, bills, etc. were lost and burnt in the fire. This fact was also mentioned in the Panchnama dated 15.03.2016 prepared by Mr. Yadhav Bhadane, Investigating Officer, Nandurbar City Police Station. The Complainant, however, provided all the documents which were available with him. The Surveyor submitted his report dated 18.08.2016. The Opposite Party, however, did not provide the Survey Report to the Complainant. The Complainant received an email from the Surveyor stating that the loss caused to the Complainant was of Rs.71.48 Lakhs against spares only. The assessment of building, damaged vehicles, workshop equipment, furniture and fixtures, interiors, cash in showroom were not considered, though these items were insured under the Policy purchased by the Complainant. The Complainant did not accept the amount as they suffered loss to the tune of Rs.2,75,00,000/-. The Surveyor did not consider accessories and spare parts in List C amounting to Rs.40,57,486/-. The Insurance Company offered compensation of Rs.37,53,635.67/- to the Complainant, which was accepted by the Complainant under coercion as they were in financial constraint. Alleging deficiency in service on the part of the Opposite Parties, the Complainant filed the instant Complaint with the following prayer:
“a) Damages of worth Rs.2,75,00,000/- (Rs.Two Crores Seventy Five Lakhs) may be allowed and recovered from Opponents jointly & severally.
b) Fine of Rs.50,00,000/- (Rs.Fifty Lakhs) for harrassments (physical, mental & financial) to applicant from Opponents jointly & severally may be granted.
c) Expenses for communication to Opponents by applicants worth Rs.1,00,000/- (Rs.One Lakh) may be allowed from Opponents jointly & severally.
d) Loss of Business- The Complainant had suffered loss for his 292 days (approx. 10 months) income. The Complainant earning income from business was worth of Rs.1,91,096 (Rs.One Lakh Ninety One Thousand and Ninety Six only) per month as per his last Income Tax Return filed. So the total lost incurred for these ten months is Rs.19,10,957/- (Rs.Nineteen Lakhs Ten Thousand Nine Hundred Fifty Seven). This much amount kindly be awarded to Complaint from the Opponents jointly & severally.
e) Cost of the case Rs.3,00,000/- (Rs.Three Lakhs) may be allowed from Opponents jointly & severally.
f) Cost of loss of livelihood & Goodwill of Rs.3,00,00,000/- (Rs.Three Crores) may be allowed from Opponents jointly & severally.
g) Interest @ 18% on all above amount dues from the date of incidence to till date of recovery of all the amounts may be allowed.
h) Honorable Court think fit to allow other compensations & benefits, kindly it may be granted to the applicants against the Opponents.”
The Complaint was resisted by the Opposite Parties by filing joint written statement on the ground that the contract of Insurance between the Parties was of commercial in nature. The Complainant was, therefore, not a “Consumer” within the meaning of Consumer Protection Act, 1986. It was also stated that clause 9 of the Policy provided for “Dispute Resolution” by Arbitration. It was also stated that the issue involved complicated question of facts and law which cannot be adjudicated in a summary jurisdiction. The Consumer Complaint before this Commission was, therefore, not maintainable.
On merits, it was stated as the Complainant accepted the amount in full and final settlement and signed the discharge voucher in favour of the Insurance Company, no cause of action survived. It was further stated that the Complaint was filed after expiry of more than 10 months from the signing of discharge voucher, which is an afterthought. The Complainant also concealed numerous correspondences between the Complainant and the Opposite Parties requesting for additional documents time and again. There were also major discrepancies between the amounts claimed by the Complainant against the stocks and the market value from authorized dealers. The claim of Rs.2,75,00,000/- was highly inflated and without any basis. It was further stated that in the email dated 04.12.2016, the Complainant indicated that they wanted to arrive at a settlement as they were unable to substantiate the claim. The Survey Report was prepared on the basis of available documents and a copy thereof was provided to the Complainant. In terms of the arrangement between the Parties, the Complainant accepted the settlement amount in January, 2016 and duly signed a discharge voucher in lieu of the same. The Complaint is, therefore, liable to be dismissed.
Heard the Learned Counsel for the Parties and carefully perused the record. Learned Counsel for the Complainant submitted that the sum insured and the premium was calculated after duly verifying the goods/items sought to be insured. It was stated that each and every material in the premises of the Complainant was completely burnt and lost in fire resulting in total loss and this was never disputed by the Opposite Parties. Clause 4.2 of the terms & conditions of the Policy also provided that in case of total loss, the Insurance Company shall indemnify the Insured in respect of restoration or replacement costs. The Surveyor/Opposite Party No.2 illegally made depreciation in violation of clause 4.2 of the terms & conditions of the Policy. The Insurance Company approved an amount of Rs.37.53 lakhs, whereby it is beyond imagination to reinstate or replace building, burnt furniture, fixtures, fittings, cabins, chairs, etc. Learned Counsel also submitted that as per Section 13(2) of Insurance Regulatory and Development Authority of India (Insurance Surveyor and Loss Assessors) Regulations, 2015, it is mandatory for the Surveyor to submit the report to the Insurer and Insured within 30 days of his appointment, subject to extension of 6 months from the Insurer, which the Surveyor failed to do. Learned Counsel further submitted that the Opposite Parties falsely stated in the written statement that the price list was obtained for various items from the dealer, as no such price list was attached with the Survey Report. He further submitted that the Complainant was coerced to accept the amount of Rs.37,53,665.67/- in full and final settlement of the claim.
Learned Counsel for the Opposite Parties submitted that the contract of Insurance between the Parties was commercial in nature. The Complainant was, therefore, not a “Consumer” within the meaning Section 2 (1) (d) of the Consumer Protection Act, 1986. Clause 9 of the Policy provided that the dispute between the Parties would be redressed through Arbitration. The Consumer Complaint before this Commission is not maintainable.
On merits, Learned Counsel for the Opposite Parties submitted that after receiving the amount in full and final settlement of the claim and signing the discharge voucher, the cause of action did not survive against the Opposite Parties. Moreover, the Complainant accepted the settlement amount without any protest. He further submitted that after receiving the amount in full and final settlement, the Complainant filed the instant Consumer Complaint after expiry of 10 months, which was an afterthought. It was also submitted that there were major discrepancies between the amount claimed by the Complainant against the stock and the market value from the authorized dealer. The Complainant had highly inflated the claim without any supporting evidence. The Complainant, vide email dated 04.12.2016, informed the Insurance Company that the Complainant wanted to settle the claim as they were unable to substantiate the claim. The Survey Report was prepared by the Surveyor on the basis of documents provided by the Complainant and a copy thereof was provided to the Complainant. There was no deficiency in service on the part of the Opposite Parties and the Complaint is liable to be dismissed.
It is admitted that on 14.07.2015, the Complainant purchased Motor Dealer Package Policy No.OG-16-2003-095-00000005 from the Opposite Party No. 1 and 2, valid from 14.07.2015 to 13.07.2016. The incident of fire is also admitted by the Parties. The dispute is regarding quantum of claim and the assessment made by the Surveyor. It is also disputed by the Opposite Parties that after receiving the amount in full and final settlement without any protest, the claim of the Complainant is not maintainable.
On Maintainability, the contention of Opposite Parties is that the Complaint involved complicated question of facts which cannot be adjudicated in a summary proceeding under Consumer Protection Act, 1986. Hon’ble Supreme Court in CCI Chambers Coop. HSG. Society Ltd. v. Development Credit Bank Ltd., Appeal (Civil) 7228 of 2001 observed as follows:
“It cannot be denied that Fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of the Fora established under the Act. These Fora have been established and conferred with the jurisdiction in addition to the conventional Courts. The principal object sought to be achieved by establishing such Fora is to relieve the conventional Courts of their burden which is ever-increasing with the mounting arrears and whereat the disposal is delayed because of the technicalities. Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved.”
From the above, it is clear that this Commission is competent to adjudicate the Complaint filed for deficiency in service.
This Commission in Harsolia Motors v. National Insurance Co. Ltd. I, (2005) CPJ 27 (NC) decided on 03.12.2004 held that since an Insurance Policy is taken for reimbursement or for indemnity of the loss which may be suffered on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose. This Commission does possess the requisite jurisdiction to entertain a Consumer Complaint wherein there is allegation of deficiency in the services by the service provider. In view of the above, the Complaint is maintainable.
Another objection taken by the Opposite Parties was that the Complaint is barred due to Arbitration Clause in the Insurance Policy. The Consumer Protection Act was enacted, inter alia, “to provide for better protection of the interest of the consumer”; to promote and protect the rights of consumers such as “the rights to seek redressal against unfair trade practices or unscrupulous exploitation of consumers”. It is settled law that the remedy under the Consumer Protection Act is an additional remedy and is not curtailed due to any specific law. It was also held in the case of Emaar MGF Land Ltd. v. Aftab Singh, I (2015) CPJ 5 (SC) that an Arbitration clause on the agreement does not bar the jurisdiction of the Consumer to entertain the Complaint. This objection of the Opposite Parties is rejected.
The main dispute relates to the quantum of loss. In this regard, the observation of the Surveyor regarding assessment of loss is relevant, which reads as follows:
“1. In our opinion above is fair and Reasonable Assessment of Loss and we submit the same to the underwriters subject to the Terms & Conditions of Policy & acceptance of liability by Insured.
As per Insured the Salvage value of the damaged Spare parts and other material as per the quotation received is Rs.1,30,000/-. However in our opinion the fair value of Salvage for Accessories / spare parts should be at least 5% to 10% of the claim amount.
Stocks: Insured had submitted a valuated list of stocks damaged in the mishap as enclosed.
We had requested Insured time to time again to provide supporting documents for the claim of stocks as below:
Purchase Bills / Invoices.
Vat Returns / Statements.
List of Suppliers.
List of Debtors / Creditors.
Storing pattern of the Showroom and Workshop.
Insured had submitted and Audited ITR Return Copy and Balance for the Year 2013-2014, 2014-2015 and 2015-2016 and Trading A/c as on date of loss.
The Supporting Annexure of the Balance Sheet/ Returns has not been provided. The Correspondence with the Insured has been shared with the insurers. In the light of non-submission of above documents, the loss to stock cannot be assessed accurately. We have however tried to obtain process of the parts as quoted by Insured and our market enquires. It may be noted that Insured may be carrying some dead stock of the spare parts over the years due to some models being obsolete as also slow running of some parts are likely to have be sourced from the local market. Items under the ash list are normality items which appears to be purchased from the local market items. Major visible items have not been considered. We have only considered minor items like nuts, bolts, wasgers, springs, rubber and plastic items which could have been damaged in the mishap and are present in the ash.
Debris Removal / Loss minimization efforts / segregation vouchers as claimed by the Insured are Rs.25,200/- the same have been considered as per policy terms and conditions.
We have not considered the List of Ash as provided by the Insured as we have not physically inspected the list. However we are giving a working of the list as below for the information to the insurers.
Working on List of Salvage items /Parts /Accessories from the Ash
Loss Assessed = Rs.12,41,3460.57
Less Dead Stock @10% = Rs. 1,24,136.06
TOTAL = Rs.11,17,224.52
Less URD Purchases @20% = Rs. 2,23,444.90
TOTAL = Rs. 8,93,779.62
Less Profit Margin @15% = Rs. 1,34,066.94
TOTAL = Rs. 7,59,712.67
Less Salvage @7% = Rs. 53,179.89
TOTAL = Rs. 7,06,532.79
Excess @5% = Rs. 35,326.64
TOTAL = Rs. 6,71,206.15
All other documents are submitted by the Insured are enclosed.
Our Survey Fee Bill along with photographs is enclosed.”
From the above, it is clear that the Complainant could not substantiate the claim through documents/evidence while assessment of loss or even thereafter. In absence of documents/evidence, the Surveyor assessed the loss on the basis of market value of the goods/items. The Complainant had not produced any evidence to show that the assessment made by the Surveyor on the basis of market value, was arbitrary or illegal. Complainant admitted that they wrote an email dated 04.12.2016 to the Insurance Company stating that they wanted to arrive at a settlement as they were unable to substantiate the claim. Hon’ble Supreme Court in Khatema Fibres Ltd. vs. New India Assurance Company Ltd., Civil Appeal No. 9050 OF 2018 decided on 28 September 2021 observed as follows:
“Once it is found that there was no inadequacy in the quality, nature and manner of performance of the duties and responsibilities of the surveyor in the manner prescribed by the Regulation as to their code of conduct and once it is found that the report is not based on adhocism or vitiated by arbitrariness, then the jurisdiction of the Consumer Forum to go further would stop.”
Moreover, the Complainant had also signed the discharge voucher in full and final settlement of the claim without any protest. On merits, it is noted that the Complainant had accepted the amount in full and final settlement of the claim. Admittedly, the Complainant also signed the discharge voucher. In M/s Bhagwati Prasad Pawan Kumar v. Union of India [2006-03 PLD 76 (SC)] Hon’ble Supreme Court held that the protest of non-acceptance must be conveyed before the cheque is encashed. After signing the discharge voucher and accepting the amount in full and final settlement, the Complainant is not permitted to raise the plea that the amount was accepted under protest. In the instant case the discharge voucher was executed and the Complainant had not alleged any fraud, undue influence, misrepresentation or the like, though, the Complainant alleged that the discharge voucher was signed under coercion. The Complainant had not produced any evidence oral or documentary to prove that there was any coercion on the part of the Opposite Party.
In view of the above, the Complaint is dismissed. There shall be no order as to costs. All the pending Applications stands disposed herewith.