M/S. Chandan Associates vs New India Assurance Co. Ltd

This appeal has been filed by the appellant M/s. Chandan Associates against the order dated 26.11.2015 of the State Consumer Disputes Redressal Commission, Punjab, (in short 'the State Commission') passed in CC No.39 of 2013.

Brief facts of the case are that on 20.02.2012 appellant/complainant firm had purchased standard fire and special perils policy from respondents/opposite party Nos.1 and 2 through State Bank of India, Main Branch Sirhind, vide Insurance policy bearing no.36120111110100000634 which was valid from 20.2.2012 to 19.02.2013 and through the above said policy the above said Vishal Mega Mart shop run by M/s. Chandan Associates through its proprietor Sh. Chandan Wadhwa was fully insured in all respects to the tune of Rs.1,15,00,000/- i.e. Rs.100,00,000/- for stocks and stocks in progress and Rs.15,00,000/- for furniture, fitting, fixtures and other contents. On 16.04.2012 Mr. Chandan Wadhwa along with his brother Sh. Munish Wadhwa came to the shop early in the morning and opened the locks, shutter and glass doors of the shop. They found a lot of smoke and heat inside the shop. Thereafter Fire Brigade was called immediately and they acted swiftly and controlled the fire. It has been claimed that the Fire incident occurred due to electric short circuit, as such the cause of fire was accidental. The Insurance Company was informed and DDR no.23 dated 16.04.2012 regarding the fire incident was also lodged. On the same day respondents/opposite party Nos.1 & 2 deputed Shri Vinay Mittal Surveyor and loss assessor to assess the loss. On 18.04.2012, office of Fire Brigade Sirhind issued fire occurrence report vide ref. no.349 dated 18.04.2012. On 10.07.2012, Shri Vinay Mittal Surveyor submitted his preliminary report to the respondents/op No.1 and 2. On 17.09.2012 & 27.09.2012, respondents/opposite party Nos.1 and 2 deputed Consolidated Surveyor Pvt. Ltd. to assess the loss. They submitted the final report dated 17.09.2012 and 27.09.2012. On 27.10.2012, as per the report of final surveyor, a sum of Rs.30,23,106/- was credited in the cash credit account of the appellant/complainant firm with the respondent No.3. The complainant firm also sent registered letter dated 27.10.2012 to the respondents/opposite party No.1 and 2 to give the balance amount of claim as the appellant/complainant firm was not satisfied with the amount of fire claim credited in the C.C. account as consent was withdrawn before the assessment of the fire claim. On 29.11.2012, appellant/complainant firm has also sent registered letter dated 29.11.2012 and dated 31.01.2013 to the respondents/opposite party No.1 and 2 for the payment of remaining fire claim but the opposite party no.1 and 2 has not given any reply to these letters neither denied nor paid the balance amount of fire claim to the appellant/complainant firm. On 02.04.2013, complainant filed complaint before the State Commission. On 26.11.2015, State Commission dismissed the complaint.

Hence the present appeal.

The learned counsel for the appellant as well as learned counsel for the respondent Nos.1 & 2 were heard. Respondent No.3, State Bank of India has been proceeded ex-parte vide order dated 03.01.2019 .

Learned counsel for the appellant/complainant stated that they have taken the policy from the opposite party for their shop of Vishal Mega Mart since 2009. The policy for 2012-2013 was valid from 20.02.2012 till 19.2.2013. After the fire, DDR was registered by the police on 16.04.2012 itself. In this DDR, it is written that fire incident occurred due to electric short circuit. Due to this fire, the article inside the shop including readymade clothes, computer, karyana items, curtains, house hold articles, sports item, briefcase, blanket, lays, juice, cold drinks etc. were damaged. In this DDR, loss has been stated to be for Rs.70,00,000/- by the complainant. In the report of the fire brigade department it is clearly mentioned that the cause of fire was short circuit and the category of the fire was major. In this report also, the damage has been mentioned to be of Rs.70,00,000/-. In the claim form submitted to the Insurance Company estimated loss of Rs.80,00,000/- were mentioned. Preliminary surveyor in his report dated 10.7.2012 has clearly stated that "the final liability of the insurers will be around Rs.34.00 to 35.00 Lacs and that exceeds the financial limits allotted to me. As such, I submit my report of preliminary survey for the consideration of insurer and final surveyor and that exceeds the financial limits allotted to the surveyor". It is not clear as to why this surveyor was appointed as preliminary surveyor when estimated loss was already mentioned as Rs.80,00,000/- in the claim form. Clearly the estimate of loss given by the preliminary surveyor, which is around Rs.34.00 lacs cannot be relied upon. It was further argued by the learned counsel for the appellant that Insurance Company then appointed surveyor M/s. Consolidated Surveyors Pvt. Ltd. and they submitted their final report on 27.09.2012. This surveyor also assessed the net final loss to be of Rs.30,29,429.78. On one hand, the surveyor mentions that the possibility of fire due to malafide intentions of the insured is ruled out as the insured is financially sound and the business was running very smoothly, but on the other hand, the same loss has been estimated by this final surveyor also, as was assessed by the preliminary surveyor, who even did not have the proper authority to survey and estimate the loss as the loss was more than his financial limit.

Learned counsel for the appellant further stated that the appellant wrote a letter dated 18.08.2012 seeking settlement of claim as early as possible and also to consider that the second surveyor was wrongly appointed and also that the loss assessed in respect of karyana items and other stocks has not been as per the claim submitted and certain items were left out. Learned counsel stated that due to non-settlement of claim, the land lord also pressurised for vacating the shop. This information was also given to the Insurance Company on 03.07.2012. The provisional trading account for the period 01.04.2012 to 15.04.2012 was also supplied which supports the claim of the complainant. The complainant also filed IT returns giving the annual income of the complainant, which also supports the claim of the complainant. The surveyor has accepted that as per provisional trading account from 01.04.2012 till the date of loss, the total closing stock was Rs.73,72,180/-, whereas on the basis of the inventory prepared by the preliminary surveyor, the stocks were only for Rs.42,28,152/-. There is no reason why the surveyor should not have taken the closing stock as per the trading account. On the basis of these reasons, the learned counsel for the complainant stated that remaining amount of claim may be allowed and the Insurance Company be directed to pay the same to the complainant. It was further argued by the learned counsel for the appellant/complainant that the Insurance Company settled the claim of the complainant on the blank discharge voucher and the amount of Rs.30,23,106/- was transferred to the loan account of the complainant. Signing of this voucher and transfer of the amount to the cash credit account of the complainant does not debar the insured to file complaint for additional payment when there are cogent reasons to dispute certain findings of the surveyor. In support of his argument, the learned counsel referred to the following authorities:-

(i). Amirali A. Mukadam Vs. United India Insurance Co. Ltd., IV (2007) CPJ 234 (NC). It has been held that:-

"11. The important word is "or the like". In this case admittedly, the mishap had occurred on 16.7.1994. The report of the Surveyor had been received on 11.4.1995 yet the payment of Rs. 28,99,357 was made only on 8.11.1996, it was Friday and admitted position is that protest was made in the form of asking for enhanced amount by the complainant to the Insurance Company on the next working day, i.e., Monday, i.e., 11.11.1996. It is necessary to appreciate that in what circumstances, the complainant accepted the awarded amount. Para 5(iii) of the complaint reads as under:

(iii) The complainant also suffered heavy business loss due to non-availability of the aforesaid claim amount. However, the complainant does not wish to claim the same in the present complaint as per advice received that such amount is not payable under the provision of the C.P. Act. However, complainant is advised that he is entitled to claim compensation for mental torture and harassment, the details given herein above which cannot be explained in words."

(ii) New India Assurance Co. Ltd. Vs. Pradeep Kumar, IV (2009) CPJ 46 (SC). It has been held that

The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is Rs.20,000/- or more, the loss must first be assessed by an approved surveyor ( or loss assessor) before it is admitted for payment or settlement by the insurer. Proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor). In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured."

Learned counsel for the appellant has further stated that the State Commission has observed that the DDR report, fire brigade report and newspaper clippings cannot be considered as expert report. Learned counsel stated that the complainant had also filed the report of the Chartered Accountant Mohan Singh partner of S. Mohan Singh & Associates, who confirmed the claim of the complainant.

It was further stated by the learned counsel that the State Commission has further failed to consider the fact that in the year 2009-10 the turnover of the appellant firm was 90 lakhs and the turnover of the appellant in the year 2010-11 increased to 1,80,00,000 and in the year 2011-2012 the turnover of the company was Rs.6,70,00,000/-. These figures also justify the loss as claimed by the complainant.

Learned counsel also mentioned that the State Commission has not taken into consideration that the appellant had withdrawn the consent vide letter dated 18/8/2012 sent to the respondent No.1 and 2 and also to the Director of Consolidated Surveyor Private Limited, much prior to the settlement of claim, wherein it has been specifically stated by the appellant that being a lay man he did not have the knowledge and he was made to sign the estimate of stock of Rs.37,11,241/- which was damaged, whereas the actual figure at the time of fire was entirely different and also thereafter sent the stock statement filed by the appellant with his banker on 31/03/2012 for Rs.73,17,5000/-.

Learned counsel for the appellant stated that the deduction of Rs.1,59,443/- is not justified as the policy clause is not applicable. The State Commission has further observed that "we are strictly governed by the contract of insurance in this case. In the policy document ExOP1/1, it is set out that the insurance under the policy is subject to clauses like clause 3 designation property clause, clause 4 reinstatement value policy clause, clause 5 local authorities clause. Since there is a express contract regarding the insurance under the policy, which is subject to clauses, hence the contention of the complainant that amount of Rs.1,59,443 has been wrongly deducted is not accepted". Learned counsel further stated that the State Commission has considered the deduction of Rs.1,59,443/- as correct. It was argued that policy excess clause was not applicable in the present case and to support his arguments learned counsel referred to a decision of State Commission of Himachal Pradesh in Chuni Lal Vs. Oriental Insurance Co. Ltd., III (2007) CPJ 286, wherein it has been observed that:-

"2. ......... Moreover in case of fire no deduction is to be made especially when the insured assets as in the present case had been reduced to ashes.

This matter had been otherwise set at rest by the National Commission in the case of Oriental Insurance Co. Ltd. & Anr. Vs. M/s. Girdhari Lal Tulshiramji Joshi, I (1997) CPJ 50 (NC). Nothing to the contrary was brought to our notice so as not to accept this view."

On the other hand, learned counsel for the respondent/insurance company stated that the complainant had accepted the discharge voucher on 26.10.2012. Once the discharge voucher has been signed by the complainant, he can dispute the discharge voucher only on grounds of fraud, forgery, coercion or misrepresentation on the part of the Insurance Company. The complainant has not alleged any of these things. Clearly the first surveyor was only the preliminary surveyor and he has also estimated the loss of roughly Rs.34.00 - 35 lacs. Clearly, the final surveyor has actually assessed the loss based on the inventory prepared by the preliminary surveyor and has assessed the net loss of Rs.30,23,106/- which the Insurance Company has already paid to the complainant and the complainant has signed the discharge voucher. The surveyor has mentioned the estimated loss to be of Rs.43,03,786/- only and therefore, the actual loss cannot be more than this amount. Hence the claim of the complainant for Rs.80,00,000/- or even for Rs.70,00,000/- cannot be accepted. The final surveyor has assessed the loss on the basis of the inventory and not on the basis of the trading account which was only on paper whereas the inventory was actual which was given by the complainant to the preliminary surveyor and preliminary surveyor recorded the same. Therefore, there can be nothing more authentic than the inventory itself. Thus, there is no force in the arguments of the complainant that the loss should have been assessed on the basis of the trading account.

Learned counsel for the respondent Insurance company argued that State Commission in its order in para no.12 has clearly observed that the claim was fully and finally settled between the parties. The State Commission has rightly observed that no apparent fraud, undue influence or misrepresentation has been proved by the complainant. The State Commission has also rejected the reliance on letter dated 27.10.2012 as it is the subsequent invention of the mind of the complainant to move the letter and e-mails after receiving the settlement amount and then to press for more amount from the respondent insurance company.

Learned counsel for the respondent Insurance Company stated that this Commission has also held in M/s. L.M.Spinners Pvt. Ltd. Vs. UIIC, RP No.2668 of 2013 & 2669 of 2013 decided on 16.12.2013 that once petitioner has received the amount unconditionally and has also got the cheque encashed, under these circumstances, petitioner ceases to be a consumer as per Consumer Protection Act, 1986 . The privity of contract or relationship of consumer and service provider between the parties came to an end the moment petitioner accepted the refund unconditionally and also got the cheque encashed. The present case is squarely covered by the said judgment of this Commission. Therefore, the contentions made by the appellant in the present appeal are against the law laid down by this Commission as well as by the Hon'ble Supreme Court.

Based on these reasons, the learned counsel for the Insurance Company stated that there is no merit in the appeal filed by the appellant/complaint and the same should be dismissed.

I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the record. Clearly the insured has accepted the discharge voucher and has signed the same. It is an allegation of the complainant that he signed the blank voucher. This allegation is not supported by any evidence and therefore, this cannot be accepted at its face value. Moreover, if a person has signed a document, it will be presumed that whatever is mentioned in that document is correct unless there are cuttings or overwriting on the document. Nothing of this sort has been alleged by the complainant. Moreover it is further seen that the complainant has not alleged any misrepresentation, coercion or fraud by the opposite parties which led to signing of the discharge voucher. Hon'ble Supreme Court in United India Insurance Vs. Ajmer Singh Cotton & General Mills & Ors., AIR 1999 SC 3027 has held the following:-

"7. In the instant cases the discharge vouchers were admittedly executed voluntarily and the complainants had not alleged their execution under fraud, undue influence, mis-representation or the like. In the absence of pleadings and evidence the State Commission was justified in dismissing their complaints. The National Commission however granted relief solely on the ground of delay in the settlement of claim under the policies. The mere delay of a couple of months would not have authorised the National Commission to grant relief particularly when the insurer had not complained of such a delay at the time of acceptance of the insurance amount under the policy. We are not satisfied with the reasoning of the National Commission and are of the view that the State Commission was justified in dismissing the complaints though on different reasonings. The observations of the State Commission in Jiyajeerao Cotton Mills Ltd. Vs. New India Assurance Co. Ltd. (Original Petition No. 52 of 1991 decided on November 28, 1991) shall always be construed in the light of our findings in this judgment and the mere receipt of the amount without any protest would not always debar the claimant from filing the complaint."

Thus, it is clear that the signing of the discharge voucher cannot be challenged on the ground that the complainant signed on blank voucher without knowing the actual amount of settlement. As already examined above, no evidence has been filed to prove this allegation against the opposite parties. Hence, the discharge of the voucher was in respect of full and final settlement by the Insurance Company.

So far as the claim of the complainant with respect to additional amount is concerned, it is seen that even the preliminary surveyor has indicated a loss of approximately Rs.34,00,000/- and the final surveyor has also assessed the loss to the tune of Rs.30,23,106/-. Clearly, it seems that both the surveyors have assessed the loss for roughly the same amount and hence no basis is made out for any additional amount to be paid by the Insurance Company. The surveyors are appointed under the Insurance Act, 1938 and they are independent loss assessors, whose report is to be given importance and has to be considered while deciding the settlement of the Insurance claims. Their report cannot be set aside without any cogent reasons as held by the Hon'ble Supreme Court in ["Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited & Anr", (2009) 8 SCC 507], has observed that:

"31. The assessment of loss, claim settlement and relevance of survey report depends on various factors. Whenever a loss is reported by insured, a loss adjuster, popularly known as loss surveyor, is deputed who assesses the loss and issues report known as surveyor report which forms the basis for consideration or otherwise of the claim. Surveyors are appointed under the statutory provisions and they are the link between the insurer and the insured when the question of settlement of loss or damage arises. The report of the surveyor could become the basis for settlement of a claim by the insurer in respect of the loss suffered by the insured.

There is no disputing the fact that the surveyor/surveyors are appointed by the insurance company under the provisions of the Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them. We also add, that, under this Section the insurance company cannot go on appointing surveyors one after another so as to get a tailor-made report to the satisfaction of the officer concerned of the insurance company; if for any reason, the report of the surveyors is not acceptable, the insurer has to give valid reason for not accepting the report."

Learned counsel for the appellant has relied upon New India Assurance Co. Ltd. Vs. Pradeep Kumar, (supra), which states that the Insurance Company has to obtain a surveyor report if the claim is more than Rs.20,000/-. It has also been observed in the judgment that though the report of the surveyor is an important document, which needs to be considered for settlement of the insurance claim, however, the report of the surveyor is not the last and final word. If this judgment is seen together with the judgment of the Hon'ble Supreme Court in Sri. Venkateshwara Syndicate Vs. Oriental Insurance Company Ltd and Anr., (2009)8SCC507 (supra), one can easily infer that until the report of the surveyor is challenged, it needs to be accepted to settle the insurance claim. In the present case, no such effective and convincing challenge has been put up. Therefore, I do not seen any irregularity if the claim has been settled on the basis of the surveyor's report. So far as the judgment of this Commission in Amirabli A. Mukadam Vs. United India Insurance Co. Ltd. (supra) is concerned, it is seen that this Commission has allowed the appeal filed by the complainant only in respect of the interest and no additional amount has been granted to the complainant. As no question of interest is involved in the present case, I do not see any applicability of this judgment in the context of the present case. It has been argued by the learned counsel for the complainant that the consent was withdrawn vide letter dated 18.8.2012 and therefore, the amount given to the complainant is not with the consent of the complainant. The complainant has signed the discharge voucher without any protest at that time, therefore, whether the consent was withdrawn or not, the consent of the complainant would be deemed to have been there as he accepted the payment.

Another objection has been raised by the learned counsel for the appellant /complainant that the State Commission has not considered the increasing turnover over three years from 2009 to 2012 when the turnover reached to Rs.6,70,00,000/-. In this regard it is to be seen that the Insurance Act, 1938 provides for appointment of surveyor when the claim is more than Rs.20,000/-. The surveyor has to examine all the documents and then to submit his report. The complainant has not pointed out any specific mistake or oversight on the part of the surveyor in the present case. The surveyor has clearly stated that though the complainant has submitted the loss of stock to the tune of Rs.73,17,500/-, however, the actual inventory prepared by the preliminary surveyor was to the tune of Rs.42,28,152/-. The preliminary surveyor has accounted for all the material that was damaged in the fire and has prepared an inventory, which was agreed by the complainant. It is admitted fact that the complainant has agreed and signed that loss of stock was to the tune of Rs.33,00,000/- only. Now as an afterthought, the complainant cannot increase the value of the stock that was damaged. The report of the first preliminary surveyor and the report of the final surveyor as well as the agreed loss as signed by the complainant, all range from Rs.30,00,000/- to Rs.35,00,000/-. Clearly, the surveyor has allowed the deduction of policy excess to the tune of Rs.1,59,443/- as per the policy condition and then reached to the conclusion that the net loss was of Rs.30,23,106/-. I agree with the observation made by the State Commission that policy excess is a part of contract of insurance and there is no specific clause that in case of fire, policy excess is not applicable. The decision of Himachal Pradesh State Commission in Chuni Lal Vs. Oriental Insurance Co. Ltd. (supra) relied by the appellant is not in respect of policy excess exclusively and therefore, it cannot be applied to deal with the deduction of policy excess. Therefore, in these conditions, I do not find any force in the argument of the learned counsel for the complainant that the policy excess should not have been deducted from the settlement amount.

On the basis of the above discussion, I do not find any merit in the appeal. Accordingly, the First Appeal No.159 of 2016 is dismissed. Parties to bear their own costs.