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Judgment
This revision petition has been filed under section 21(b) of the Act 1986 in challenge to the Order dated 21.11.2011 of the State Commission in appeals no. 1051 and no. 1171 of 2009 arising out of the Order dated 03.06.2009 of the District Commission in complaint no. 566 of 2005.
We heard arguments from the learned counsel for the insurance co. (the petitioner herein) and for the complainant firm (the respondent herein), and also perused the record including inter alia the Order dated 03.06.2009 of the District Commission, the impugned Order dated 21.11.2011 of the State Commission and the petition.
The matter essentially relates to the (correct) assessment of loss in respect of the insurance claim in question.
Briefly, the complainant firm took an insurance policy from the insurance co. for sum insured of Rs. 20 lakh. The premium was paid. The policy was valid. During the subsistence of the policy an incident of fire took place in the insured premises.
The insurance co. settled the claim at Rs. 3,66,576/-, principally on the basis of its surveyor’s report.
The complainant firm was dissatisfied with the quantum allowed and filed a complaint.
The District Commission in its appraisal made its own assessment of the loss at Rs. 9,38,412/-. It ordered the insurance co. to pay the said amount of Rs. 9,38,412/- to the complainant with interest at the rate of 10% per annum from 12.07.2005 i.e. the date of filing of the complaint till realization along with compensation of Rs. 2000/- and cost of litigation of Rs. 2,000/-.
Both sides, i.e. the insurance co. and the complainant firm, appealed before the State Commission, the insurance co. for setting aside of the Order of the District Commission and the complainant firm for enhancement in compensation.
The State Commission vide its common Order dated 21.11.2011 dismissed the appeal of the insurance co. and partly allowed the appeal of the complainant. In its appraisal it made its own assessment of the loss at Rs. 14,72,952.15. It ordered the insurance co. to pay Rs. 14,72,952.15 (-) Rs. 3,66,576.00 = Rs.11,063,76.15/- i.e. the difference between its assessment of the loss and the amount at which the claim had been settled by the insurance co. to the complainant with interest at the rate of 10% per annum from the date of filing of the complaint till realisation along with compensation of Rs. 2,000/- and cost of litigation of Rs. 2,000/- .
The insurance co. preferred revision before this Commission.
Learned counsel for the insurance co. submits that the insurance co. settled the claim on the basis of its surveyor’s report and with the consent of the complainant firm. In its written version filed before the District Commission the insurance co. referred quite extensively to the contents of its surveyor’s report and inter alia also averred that the “settlement of the claim was done on the basis of” its surveyor’s report and after taking “full consent” of the complainant firm to accept an amount of Rs. 3,66,576/-.
Learned counsel argues that since the complainant firm had given its ‘consent’ to settle its claim at the said amount of Rs. 3,66,576/-, it could not have thereafter agitated before the District Commission.
We note that the aspect re ‘consent’ has been aptly dealt with by the State Commission vide its impugned Order. We do not deem it necessary to dwell much on this point, it is well settled that giving ‘consent’, under any kind of duress or in a situation where there is no other alternative but to give ‘consent’ (else the insurance co. would not pay any amount whatsoever) or in various other circumstances which have been well elaborated upon by the consumer protection fora from time to time, does not take away the right to agitate. The contention made on behalf of the insurance co. on this count lacks merit and is hence not acceptable.
Learned counsel however further argues that the claim was settled principally on the basis of its surveyor’s report.
We may first observe that survey and investigation are one of the fundamentals in settling a claim, and can not and should not be disregarded or dismissed without cogent reasons, though it certainly goes concomitantly that the survey or investigation should be convincing and credible and pass muster in scrutiny.
Learned counsel for the two sides inform that the surveyor’s report was not filed before the District Commission.
We see that the District Commission in its appraisal took note of the complainant firm’s objections on the surveyor’s report but did not examine the surveyor’s report by itself. We fail to understand that when objections of the complainant firm on the surveyor’s report were filed in evidence before the District Commission (which also indicates that the surveyor’s report was in the knowledge of the complainant firm), what prevented either or both sides to file the surveyor’s report too. We also fail to understand what prevented the District Commission from summoning the surveyor’s report when the same was one of the fundamentals in settling the claim and when objections thereto had been filed in evidence and were being taken note of. We discern a material dichotomy in the District Commission taking cognizance of the complainant firm’s objections on the surveyor’s report but maintaining imperviousness towards the surveyor’s report itself.
Both learned counsel confirm that the surveyor’s report was annexed by the insurance co. with its memorandum of appeal as part of its appeal before the State Commission.
Learned counsel for the complainant firm fairly submits that it had filed a reply to the memorandum of appeal.
Learned counsel for the insurance co. points out that in its reply the complainant firm inter alia also referred to the surveyor’s report. Learned counsel emphasizes that rather than making pointwise rebuttal on facts, the complainant firm made only bald averments like “the surveyor’s report is baseless without any evidence”.
We see that the State Commission in its appraisal has not examined the surveyor’s report at all, though admittedly the same was placed before it with the memorandum of appeal and reply of the complainant firm to the memorandum of appeal also made some averments in respect of the surveyor’s report.
A surveyor was appointed as provided for under The Insurance Act, 1938. It made its report. The insurance co. took the same as the principal basis for settling the claim. As such this was not a case where for any reason the insurance co. had not appointed a surveyor at all or for any reason the surveyor had not made its report at all. If the said report had to be overridden then the same should necessarily have been examined as an essential part of the appraisal. In the facts and circumstances of the present case at hand, completely ignoring the surveyor’s report while overriding it with its own assessment of the loss is a fatal error on the part of the State Commission.
A plain reading of the surveyor’s report shows cogent facts and reasons to demonstrate that the complainant firm tried to mislead and claimed an exaggerated loss. An air of malafide and malfeasance on the part of the complainant firm is clearly discernible.
In this regard we may reproduce here for ready reference some germane extracts from the surveyor’s report.
Later on we made enquires which revealed as under:
a. Insured had informed that he could not supply the books to Don Bosco School as the books were burnt. But when we enquired from the principal of the school he informed insured has supplied books and stationery to all the students.
b. We enquired from few of the suppliers of the insured over phone as per details given below:
i. Oxford University Press, New Delhi informed that as per their books there is debit balance of Rs. 32,231.30 in the name on the insured while insured has shown credit balance of Rs. 1,74,647.25.
ii. As per Statement of Account of M/s Ratna Sagar Pvt. Ltd., Lucknow there is Nil balance while insured has shown credit balance of Rs.67,010.00. Also party has informed that books worth Rs. 82,221.00 have been returned by the insured and a Credit Note dated 23.06.2004 for Rs. 82,221.00 has been issued to party while insured has not shown it in his books.
iii. We talked to M/s Goel Brothers Prakshan, New Delhi and M/s orient Longman P. Ltd. and both told that they can not send the balance, however they will send statement of account to insured.
It was observed in this case that insured has not taken into account bill no. 9853 Dt.24.03.2004 for Rs. 50,158.00 in their books.
iv. It is also observed from the statement of accounts submitted by the insured and enclosed as Annexure – “V” that:
· M/s Vikas Publisher Pvt. Ltd. has credited insured’s account with 19447.00 for return of books, but insured has not shown it anywhere.
- In the account of M/s Ratnasagar Pvt. Ltd., Lucknow, there is difference of Rs. 59,915.00 in the balances shown by the insured and the party.
- In the account of Selina Publisher there is difference of Rs.13,493.00 in the balances shown by the insured and the party
- In the account of Oxford Univeristy Press there is difference of Rs. 10,000.00 in the balances shown by the insured and the party.
The enquiry shows that the insured is not submitting the facts and submitting false details/submission to exaggerate his claim. Copy of the accounts of few parties, as per books of the insured is enclosed as ANNEXURE – “AFF”
Though Fire Brigade Report mention the value of loss for Rs. 10.28 lacs but they are not having any creditable valuation system and usually write the loss amount as intimated by the party.
It is apparent from the photographs that the fire was of low magnitude and only little water seems to have been used, as most of the goods were not affected by water.
In view of the earlier paras it is also very clear that insured is trying to mislead us and claiming the exaggerated amount. This view has been established due to no. of reason e.g.:
a. Insured has submitted three list relating to damaged goods lying for our physical verification as mentioned hereunder:
- First list showing goods worth Rs. 17,37,598.00 referred to para 10 (Anneuxre – “J”)
- Second list showing goods worth Rs. 12,34,565.00 referred at para 13 (Anneuxre – “K”)
- Third list showing goods worth Rs. 16,74,077.27 referred at para 23. Out of this list goods worth Rs. 7,43,524.02 were shown as lying after fire.
Insured could not give any proper reply as to why there was so much variation in each list, as referred at para 24 and insured’s reply at Annexure – AC.
b. Insured has returned letters sent by registered post.
c. Insured has been writing that there is salvage value of the goods damaged in fire while he has returned the goods to the parties and not shown in the books as referred at para 28. It proves his malafide intentions.
d. Insured has claimed loss of Rs. 1,00,000.00 (full amount of the sum insured) as loss of furniture etc. while its book value is only Rs. 6887.00, as per copy of ledger account enclosed as Anneuxre – “AJ” . Insured has not told the reason for the same despite our letter, as referred at para 29.
e. Insured has claimed loss of Rs. 16,74,061.35 as per Claim Form, without enclosing therewith the details of books but an audited statement which serves no purpose.
f. Insured has mentioned in the intimation letters to Police and Fire Brigade that some goods and furniture has been completely burnt while he has claimed more than 50% goods as completely burnt in the Third list submitted to us. Moreover, as mentioned in para 4 fire was of low magnituted.
Pertinently none of the facts contained in the above extracts were pointwise and specifically explained or rebutted by the complainant firm in its reply to the memorandum of appeal before the State Commission.
Nor is any argument forthcoming today on behalf of the complainant firm apropos these facts and related circumstances.
On the whole we note that in the present case the surveyor made a reasoned report and also made a fairly balanced assessment of the loss. We also note that the insurance co. on its part honored the claim by taking the surveyor’s report as the principal basis. We do not note any cogent reason to disregard or dismiss the surveyor’s report. Nor do we note any other materially significant evidence that supports the State Commission’s assessment of the loss to the abrogation of the assessment made by the surveyor.
The insurance co. honored the claim by taking its surveyor’s report as the principal basis. The State Commission erred in ignoring the surveyor’s report and yet overriding its assessment of loss and substituting it with its own assessment. We note no ‘deficiency’ on the part of the insurance co. Resultantly the revision petition succeeds. The impugned Order of the State Commission is set aside. The complaint stands dismissed.
The Registry is requested to send a copy each of this Order to the parties in the petition and to their learned counsel immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.