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Judgment
The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.
The Complainant is a Company incorporated under the Companies Act, 1956 and is carrying out the business of trading of paper, duplex board, etc.. The Complainant holds a Standard Fire and Special Perils-Floater Policy bearing No. 271701/11/2010/108 issued by the Opposite Party insuring the Stocks in Trade of the Complainant. The sum insured under the said Policy was Rs.1,75,00,000/- and the Gross Premium paid by the Complainant for the said insurance was Rs.65,820/- including Service Tax and Stamp Duty.
The case of the Complainant is that a fire broke out in the godown of the Complainant, situated at Khasra No. 562/563, village Sirsapur, Libaspur, Delhi-110034 on 06.12.2010, at around 07:30 AM. According to the Complainant, the godown of the Complainant had stock in trade worth Rs.1,43,27,095.60/- at the time of fire and as a result of fire, the entire stock was destroyed. The Complainant immediately intimated the Opposite Party about the said fire in writing and requested the Opposite Party to depute a Surveyor. The Opposite Party, accordingly, deputed M/s Aditi Consultants Pvt. Ltd. as Surveyors to assess the loss suffered by the Complainant as a result of the fire incident. The Surveyors visited the site of the incident on 06.12.2012 and duly examined the site as well as all the documents that were furnished to them. The Surveyors also requested the Complainant to provide additional documents. The Complainant, vide letter dated 31.01.2011, enclosed all the documents requested by the Surveyors, vide letter dated 06.12.2010. The Complainant further cleared queries of the Surveyors and provided the requisite documents through various letters dated 26.02.2011, 28.07.2011 and 23.01.2012. Despite all documents and clarifications provided by the Complainant, the Opposite Party failed to settle the claim of the Complainant. There was no response from the Opposite Party after letter dated 23.01.2012 was issued by the Complainant. Due to inaction on the part of the Opposite Party, the Complainant issued letters dated 18.06.2012 and 08.08.2012 to the Opposite Party requesting them to approve and release the claim amount of the Complainant. Aggrieved by the Opposite Party not settling the claim, the Complainant issued a legal notice dated 21.08.2012 to the Opposite Party, calling upon them to settle the claim within 7 days from the receipt of the said notice. However, the Opposite Party failed to reply and settle the claim of the Complainant. The Complainant, thus, filed this Consumer Complaint alleging deficiency in service by the Opposite Party with the following prayer:-
“(i) Pass an order thereby directing the Opposite Party to settle and release the claim of the Complainant amounting to Rs.1,43,27,095.60 along with interest @ 18% per annum;
(ii) Direct the Opposite Party to pay a sum of Rs.30,00,000/- to the Complainant as a result of the business loss suffered by the Complainant as a result of the delay in the settlement of the claim caused by the inactions of the Opposite Party;
(iii) Direct the Opposite party to pay a sum of Rs.20,00,000/- to the Complainant towards the mental torture and agony suffered by the Complainant due to the omissions and commissions of the Opposite Party;
(iv) Direct the Opposite Party to pay a sum of Rs.10,00,000/- to the Complainant towards the cost of litigation;
(v) Pass any other or such further orders as this Hon’ble Commission may deem fit and proper to pass having regard to the facts and circumstances of the present complaint.”
The Opposite Party resisted the Complaint by filing Reply whereby it contended that the Complainant had concealed material facts from the Opposite Party/ Insurance Company, as well as from this Commission. The Surveyor inspected the premises and noted that the godown did not have electric connection and the same was surrendered on 13.03.2009, as per the surrender request sent to the NDPL. It was, therefore, clear that the fire did not take place due to any ‘Electric Short Circuit’. The Surveyor further ruled out the possibility of fire originating from throwing of inflammable articles such as bidi, cigarette etc. It was noted by the Surveyor that all the stock was burnt into ashes with no salvage left. The Forensic Examination of ashes conducted by Truth Labs, confirmed the presence of Hydro Carbons suggesting that the fire originated due to extraneous fire accelerants such as Kerosene and stated that the possibility of arson cannot be ruled out. It was submitted that the Complainant did not provide any reasoning which could substantiate the cause of fire. The cause of fire, therefore, remained unestablished. Accordingly, the involvement of the insured or its representatives cannot be ruled out, though there is no direct evidence to sustain that the insured had caused fire. The Opposite Party submitted that the Complainant failed to substantiate its claim and cause of fire and satisfactorily explain the anomalies raised by the Surveyor. The Opposite Party provided ample opportunity, through the Surveyor, to the Complainant to clarify discrepancies during assessment, with respect to details in stock register, goods receipt, goods sold after the incident and undisclosed movement of goods and cause of fire due to extraneous fire accelerants, but the insurer could not substantiate its stand in the reply. Accordingly, the claim was repudiated by the Opposite Party.
Heard the Learned Counsel for the Parties and carefully perused the record. Learned Counsel for Complainant denied that the Complainant had played any fraud as alleged by the Opposite Party. It was wrong on the part of the Opposite Party to attribute the cause of fire to the malicious involvement of the Complainant to extort money from the Opposite Party. It was submitted that the onus of establishing the cause of fire was on the Surveyor and experts conducting the investigation. The reports produced by the Opposite Party could not establish the actual cause of fire and only indicated probable cause of fire indicating involvement of extraneous article. It was submitted that M/s Truth Labs, appointed by the Opposite Party, being a private lab, surreptitiously examined the cause of fire, without involvement of the Complainant. The findings of the report, therefore, were highly suspicious and lacked authenticity. According to the Complainant, the godown was locked at the time when the fire broke out. There was no labour present in the vicinity at that time. There would, therefore, not be any malicious involvement of the Complainant. Further, in the assessment of loss, the Survey Report did not consider goods in transit for the purpose of calculating the loss and consequentially wrongly arrived at the figure of Rs. 75,28,967/-.
Learned Counsel for the Opposite Party submitted that the insured failed to justify its claim and cause of fire etc. and had not satisfactorily explained issues to the Surveyor. The claim was repudiated as the insured was not able to substantiate its stand.
Admitted facts of the case are that the Complainant purchased a Standard Fire and Special Perils Floater Policy bearing no. 271701/11/2010/108 to insure the stock in trade, with effect from 31.12.2009 to 30.12.2010 for Rs.1,75,00,000/- and further endorsement from 07.05.2010 to 30.05.2010 for Rs.1,75,00,000/- with respect to the godown at Khasra no. 562/563/565/566/567 and Khasra no. 1037 at Libaspur, Delhi. On 06.12.2010, at about 07:30 AM, fire broke out in the godown of the Complainant at Khasra No.562-563. The Complainant immediately informed about the incident to the Opposite Party/Insurance Company, Police Control room and the Fire Department. The Opposite Party deputed M/s Aditi Consultant Pvt. Ltd. as Surveyors to inspect the premises and assess the loss due to the said fire. The Insured Complainant had submitted claim for losses as follows:
Particulars
Quantity
Value
Duplex
64,833.80
2,322,221
ECP
51,053.00
1,705,515
Paper
288,365.36
9,990,233
Freight
475,186
Total
404,252.16
14,493,155
Regarding the cause of fire, the Surveyor observed as follows: -
“-- The insured has stressed that cause of fire is unknown.
· There is no electric connection at the affected godown of paper, as such fire being originated from short circuiting is ruled out.
· As per the report of M/s Truth Labs, the fire could have been originated due to extraneous fire accelerants such as kerosene.
Although forensic examination has reported that possibility of arson cannot be ruled out, still no evidence of insured (namely M/s Jitender Impex Pvt. Ltd.) or its directors having any role in the fire was found.”
The Surveyor had pointed the following anomalies as regards material facts for assessment of loss:-
“(a) T hat he insured has been reporting quantity & value of papers only (No stock of Duplex & ECP) in the stock statement from April 2010 to Nov 2010.
(b) Rate of Rs. 28 per kg is reported till Oct-2010 and Rs. 35 per kg has been reported in the month of Nov 2010.
(c) That during confirmation from the parties from whom purchases are made it was noticed that purchases of Rs. 194.01 Lacs was not recorded in the books.
(d) On enquiry the insured replied that due to change of overloading concept in Haryana Govt., all the trucks, which happened to be overloaded were confiscated by Govt. of Haryana thus in order to avoid that the transporter M/s Shore to Shore had sent few stock through railway wagon and the same were delivered in early Dec-2010.
(e) Further, to check the same we have asked from the insured the copy of relevant GR & invoice and it is observed that:
· Container No. not mentioned in G.R.
· Date of receipt of consignment is not mentioned in G.R.
· Certain G.R's have the endorsement on reverse for onward delivery; however, delivery to recipients on account of goods sold in transit is not clear in G.R.
It is not possible hat such huge purchases were in transit for a period ranging from fortnight to cne month and all were received and sold within next two day of fire when all the business operation are dislocated.”
In view of the above observation and anomalies, the Surveyor, in its Final Report dated 30.04.2012, assessed the loss as:
Particulars
Quantity
Claim
Considered
Duplex
64,833.80
23,22,221
23,22,221
ECP
51,053.00
17,05,515
17,05,515
Paper
2,88,365.36
1,07,26,147
92,85,303
4,04,252.16
1,47,53,883
1,33,13,039
Less: Error & Omission @ 5%
6,65,652
Less: Dead Stock @ 2.5%
3,32,826
Net Assessed Loss
1,23,14,561
Less: Salvage -
-
Net Adjusted Loss
1,23,14,561
Less: Under Insurance
47,75,594
Gross Adjusted Loss
75,38,967
Less: Excess
10,000
Net Adjusted Loss
75,28,967
Regarding the preliminary issue of maintainability of the Complaint, we find that this Commission is very well within its jurisdiction to decide the present Consumer Complaint. This Commission in Harsolia Motors v National Insurance Company Ltd. [I (2005) CPJ 26 (NC)] held that a contract of Insurance is a contract of indemnity and, therefore, there is no question of commercial purpose in obtaining insurance coverage. In view of law laid down, the Complainant is a “Consumer” and the Complaint is maintainable.
On merits, once it is established that there was fire, it is settled law that it is upon the Insurer to prove that the fire was intentionally caused by the Insured. In the present case, it is seen that the fire had occurred at around 7:30 AM on 06.12.2012 when the shutter of the Godown was closed. The Opposite Party Insurance Company, after deputing the Surveyor, failed to communicate to the Complainant the status of the claim. After filing this Complaint, the Survey Report came to the light of the Complainant for the first time. The Opposite Party alleged that the Complainant failed to establish the cause of fire. We do not find any inadequacy in the quality, nature and manner of performance of the duty of the Surveyor appoint by the Opposite Party. The Surveyor observed that the cause of fire remained unestablished. It is relevant to mention that when the Opposite Party doubted the cause of fire, the burden of proof lay on them. The Opposite Party cannot shift the burden of proof on the Complainant. Forensic report stated that “ the possibility of arson cannot be ruled out.” Even the forensic report did not specify the cause of fire. The Opposite Party, therefore, cannot be permitted to deny the genuine claim of the Complainant.
Regarding quantum of loss, Surveyor has given detail reasons for assessment of loss. Neither Complainant nor the Opposite Party challenged the assessment of loss made by the Surveyor. Moreover, report submitted by a Surveyor is an important piece of evidence and it has to be given due weight, though it is not sacrosanct and can be ignored, provided there is cogent evidence otherwise. In the present case, the Opposite Party did not lead any evidence disproving the report submitted by the Surveyor. In the absence of any evidence to the contrary, the report submitted by the Surveyor of the Insurance Company is to be accepted.
In view of the above discussion, we partly allow the Complainant and direct the Opposite Party/Insurance Company to pay Rs.75,28,967/- as assessed by the Surveyor with interest at the rate of 9% p.a. from the date of repudiation of the claim till realization. The order be complied within eight weeks, failing which the Complainant shall be entitled to an interest of 12% p.a. from the date of default till realization. All pending applications stands disposed herewith.