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Judgment
Dinesh Singh, Member
This Revision Petition has been filed under Section 21(b) of The Consumer Protection Act, 1986, hereinafter referred to as the 'Act', challenging the Order dated 30.05.2012 passed by The Punjab State Consumer Disputes Redressal Commission, hereinafter referred to as the 'State Commission', in F.A. No. 1387 of 2007 arising out of the Order dated 30.08.2007 in C.C. No. 42 of 2007 passed by The District Consumer Disputes Redressal Forum, Moga, hereinafter referred to as the 'District Forum'.
The Complainant before the District Forum, Gopal Agencies, Dutt Road, Moga, through its Partner, Mr. Manmohan Krishan Mittal, is the Respondent herein, and is hereinafter being referred to as the 'Complainant Firm'.
The Opposite Party before the District Forum, The United India Insurance Company, is the Petitioner herein, and is hereinafter being referred to as the 'Insurance Co.'.
We heard the learned Counsel for both sides, and perused the material on record including inter alia the Order dated 30.08.2007 of the District Forum and the impugned Order dated 30.05.2012 of the State Commission.
The salient facts, as fundamental and relevant for the adjudication of the case, are listed below:
[i] The Complainant Firm is in the business of electrical goods, mobile phones, confectionary, toilet goods, etc.
[ii] Its main premises are situated at Dutt Road, Moga, where its shop, hereinafter being referred to as the 'Shop', and adjoining godown, hereinafter being referred to as the 'first Godown', are located. It has another godown, located at Focal Point, Moga, hereinafter being referred to as the 'second Godown'.
[iii] It had insured its Shop, first Godown and second Godown with the Insurance Co.
[iv] As recorded by the first Surveyor appointed by the Insurance Co., one Mr. Charanjit Garg, the particulars and scope of the relevant insurance policies were as below:
INSURANCE POLICY PARTICULARS
:
Covernote number
:
948363
Date of Issue
:
21.04.2005
Date of Expiry
:
20.04.2006
Total sum Insured
:
Rs.5,00,000/-
SCOPE OF POLICY
:
A sum of Rs.5,00,000/- has been provided on all kinds of stocks of Electrical Goods, including mobile phones, confectionary, general goods, lying and/or stored in the shop situated at Dutt Road, Moga under shopkeeper insurance policy.
INSURANCE POLICY PARTICULARS
:
Covernote number
:
317297
Date of Issue
:
25.04.2005
Date of Expiry
:
24.04.2006
Total sum Insured
:
Rs.55,00,000/-
SCOPE OF POLICY
:
A sum of Rs.30,00,000/- has been provided on all kinds of stocks of Electrical Goods, including mobile phones, confectionary, general goods, lying and/or stored in the godown situated at Focal Point, Moga and Rs.25,00,000/- has been provided on above mentioned goods in the godown situated at Dutt Road, Moga behind the insured shop covered under standard fire policy.
[v] On 09.09.2005, due to heavy rains, rainwater flooded / inundated the Shop and the first Godown at Dutt Road, Moga.
[vi] The Complainant Firm intimated the Insurance Co. on the same day i.e. on 09.09.2005 itself.
[vii] It made a claim for Rs. 1,88,881.41p. with the Insurance Co.
[viii] The First Surveyor, the one Mr. Charanjit Garg, made his report dated 03.10.2005.
[ix] The Insurance Co. appointed a second Surveyor, one Mr. Ashok Kumar Bansal, who made his report dated 25.03.2006.
[x] The second Surveyor computed the Net Loss Assessed as below:
Damaged items: Rs. 97981.00
Less the value of dead stock @2%: - 1959.00
Less Clause: - -10000.00
Net Loss Assessed: Rs. 86022.00
[xi] The Insurance Co. repudiated the claim vide its letter dated 03.07.2006 stating that:
With reference to the above we would like to inform you that as per our policy, risk covered against stock lying in the godown behind the shop whereas as per survey report stock was lying in the adjoining building of the shop, where the loss occurred and that was not insured.
In the light of the above fact we are not in position to settle your claim.
Hence claim is repudiated.
(emphasis supplied)
The short point in dispute is whether or not the damaged stock was lying in the insured premises.
The District Forum vide its Order dated 30.08.2007 dismissed the Complaint.
The State Commission vide its Order dated 30.05.2012 allowed the Complaint.
For ready appreciation, the differing appraisal made by the two Fora below is reproduced below:
District Forum
The only point for determination in this case is whether the loss to the goods of the complainant had occurred in the insured premises or not. Admittedly, the insured premises consist of i) godown situated at Focal Point, Moga and ii) godown situated on the backside of the shop of the complainant firm. The aforesaid godowns were insured for losses to the extent of Rs.30 lacs and Rs. 25 lacs respectively vide cover note no. 319297 Ex.A5. The evidence on the file show that the adjoin shop shown as green in colour and marked as Sr. no. 3 in the site plan prepared by Ashok Kumar Bansal surveyor (Ex.R9) was not insured premises but only the godown shown as red in colour and marked as Sr. no. 2 was got insured by the complainant. The report of Charanjit Garg Surveyor (Ex. R10) who visited the spot on the same day show that the goods were damaged not in the insured premises but the same were lying in the adjoining shop shown as red in colour and marked as Sr.no. 2 in site plan Ex.R9. In the column of occurrence he has observed as under:-
"As told there was a heavy rain before noon on 09.09.2005 resultingly the water clogged in and around the insured shop and finally the water made entry to the godown adjoining the insured shop thus causing damages to the stocks lying there. It may be noted that the adjoining shop has not been mentioned in the policy thus any endorsement to this effect if made by the insurer may be looked into while finalizing the claim."
To corroborate his opinion, he also took snaps of the uninsured premises Ex. R13 to Ex.R15 and Ex.R17 to Ex.R24. Ex.R16 is the photograph of the insured premises situated on the backside of the shop of the complainant firm and it show that the same was under construction at the time of incident. To rebut the aforesaid evidence, the complainant has not produced the photographs of the premises where the loss, if any, had occurred. On the other hand, there is no reason to discard the photographs Ex.R13 to Ex.R24 of the place of incident produced by the OPs-Insurance Company.
The OP-Insurance Company also referred the matter to Ashok Kumar Bansal surveyor Ex.R8 who has finally observed as under:-
"The risk to insured's stock lying in the adjoining Bldg. to the insured's shop is not covered under the policy terms & conditions. So in my opinion the claim is not payable."
Thus, relying upon the report Ex.R8 and site plan Ex.R9 of Sh. Ashok Kumar Bansal Surveyor and report Ex.R10 of Sh. Charanjit Garg surveyor, the OP-Insurance Company has rightly repudiated the claim of the complainant holding that the loss of the goods had not been occurred in the insured premises.
Moreover, it is admitted case of the complainant that about one month prior to the present incident, they suffered loss to their goods lying in the insured premises i.e. shown as red in colour in the site plan Ex.R9. The OP-Insurance Company had accepted their claim and granted compensation of Rs.178000/- vide claim disbursement voucher Ex.R11. Thus, it shows that if the OP-Insurance Company can grant the compensation to the extent of Rs.178000/- to the complainant one month prior to the present incident then they would have no hesitation in accepting their claim if the same had occurred in the insured premises. This fact also shows that the complainant firm in order to defraud the OP-Insurance Company had lodged the false claim alleging that their goods had been damaged in the insured premises. Hence, the OP-Insurance Company had legally and validly repudiated the claim of the complainant firm.
(paras 8 to 11 of the District Forum's Order)
State Commission
The complaint was dismissed by the learned District Forum on the ground that the goods were lying damaged in a godown which was not insured with the OP-respondents and, therefore, the OP-respondents were not liable to indemnify the complainant for the loss. Now the basic question would be as to which are the godowns, the goods lying in which were insured and whether the goods which were damaged were lying in any of the said godown or not. In fact, the learned District Forum did not analyse this fact and accepted the version as given by the Surveyor without ascertaining the location of the godowns which were insured by the OP-respondents.
There is no dispute about it that the complainant had obtained 3 insurance policies which are Ex. A3, Ex. A4 and Ex. A5. Ashok Kumar Bansal who was appointed as a surveyor had prepared the site plan Ex.R9 with respect to one shop and two godowns one shown in the blue colour and the other in green colour. Ex.A3 pertains to the electrical goods, mobile phones etc. and general goods which were lying in the shop shown as Gopal Agencies, Dutt Road, Moga. In Ex R9, Ashok Kumar Bansal has shown the said shop by blue colour. It, therefore, shows that Ex.A3 pertains to the goods lying in the shop shown with blue colour. Ex.A4 is the cover note relating to the stocks, electrical goods/mobile appliances etc. lying in one godown, Focal Point, Moga and the other godown backside Dutt Road, Moga. In Ex.R9, this godown is shown by green colour because on the backside of this godown, there is Dutt Road. The third insurance policy is Ex.A5, through which also, the stocks of all kinds of electrical goods and mobile phones were insured lying in one godown, Focal Point, Moga and the other godown backside shop, Dutt Road, Moga. The learned counsel for the appellants has argued that in this manner, both the godowns shown in red and green colour were mentioned in Ex.A4 and Ex.A5 and all the goods lying therein were insured. Ex.R9 shows that both the godowns and the shop are inter connected located at one place having joint walls with each other. It, therefore, cannot be said if these godowns and the shop are at different places and were not covered under the policies Ex.A4 and Ex.A5. The learned counsel for the respondents was unable to clarify as to which is the other godown referred to in Ex.A4 and Ex.A5 if the same do not pertain to the godowns shown by red and green colour in Ex.R9. The contention of the OP-respondents that the godown shown in green colour in Ex.R9 was not insured, therefore, does not appear to be correct.
It is also argued by the learned counsel for the respondents that the insured articles were shifted by the complainant from one godown to the other which was under construction and therefore, the goods/articles which had been shifted could not be covered under the insurance policy. We do not find any merit in this argument also. The main question is whether the goods were lying in the insured godown when the occurrence took place and the goods were damaged or not. It would become immaterial if subsequently the same were shifted by the complainant to the adjoining place so as to minimize the loss of damage to his goods. In such a situation, the insurance company is always benefited because by shifting the damaged goods or the goods going to be damaged to a safer place, their liability is likely to decrease. The claim made by the complainant, therefore, could not be repudiated on any such ground.
Ex. R12 is the survey report submitted by Sumant Sud. The total loss was assessed by him at Rs.1,88,250/- and after applying the excess clause, Rs.10,000/- was decreased therefrom to reach the amount of Rs.1,78,250/- to which the complainant appellant was held entitled. We are, therefore, of the opinion that the complainant was entitled to this amount and has wrongly been deprived by the OP-respondents.
In view of the above discussion, we are of the opinion that the complaint was liable to be allowed but has been wrongly dismissed by the learned District Forum. We, therefore, allow this appeal, set aside the impugned order dated 30.08.2007 passed by the learned District Forum, Moga and allow the complaint. The OP-respondents are directed to pay to the complainant a sum of Rs.1,78,250/- as compensation within 30 days from the date of receipt of a copy of this order along with interest @ 9% per annum with effect from 5.12.2005 (two months after the report Ex. R12 of Surveyor Sumant Sud) till the amount is paid to the complainant. The OP-respondents shall also pay Rs.10,000/- as cost of litigation.
(paras 7 to 11 of the State Commission's Order)
The District Forum, in concluding its appraisal and dismissing the Complaint, has (inter alia) reasoned that about a month prior to the present incident, the Complainant Firm suffered loss to its goods lying in the insured premises; the Insurance Co. accepted its claim and granted compensation of Rs.1,78,000/-; this shows that if the Insurance Co. can grant compensation to the extent of Rs.1,78,000/- one month prior to the present incident, then it would have no hesitation in accepting the claim if the same had occurred in the same insured premises; this also shows that the Complainant Firm in order to defraud the Insurance Co. has lodged a false claim alleging that its goods had been damaged in the insured premises (refer para 11 of the District Forum's Order).
We find this argument to be untenable.
The incident of the earlier loss occurred on 06/07.08.2005. No dispute apropos the said incident was brought before the District Forum. The incident of the present loss occurred on 09.09.2005.
In respect of the instant incident of 09.09.2005, the report of the first Surveyor, the one Mr. Charanjit Garg, inter alia mentions:
PARTICULARS OF LOSS CAUSED BY INUNDATION
:
Date of flood
:
Before noon 09.09.2005
Date of intimation
:
09.09.2005 about 3.00p.m
Date of survey
:
09.09.2005 & subsequent days
INSPECTION
It is apprised your goodself that when the undersigned came out from your office the water found clogged on the G.T. Road, near our office and adjoining the street in between the office and State Bank of Patiala. When the undersigned further moved near Dutt Road the water found clogged everywhere. When the undersigned steered to Dutt Road the level of water found rose to above knee level that even the undersigned decided not to go by car and after parking it on the G.T. Road, hired a rickshaw to reach insured shop. Before the undersigned reached the entire road and side lanes found filled with water. The undersigned arranged few snaps, which are enclosed herewith.
When the undersigned reached near to insured shop the water found clogged in and around the shop. After reaching there the insured firm partner Sh. Manmohan Krishan was contacted. When the undersigned entered the shop the insured had laid few bricks in order to avoid entry of water the level was touching to the shop entrance. By the time the rains had stopped, otherwise the water might have entered in the shop, the level that was above the road level. The insured shown a one box of Sun Silk Shampoo box, which was kept outside the shop, had been affected by water.
Afterwards the insured and the undersigned after stripping of shoes went adjoining the residence converted godown of insured. The water had reached to knee level and after entering the gate the cycle of employees and motorcycle found lying in water. Further when the undersigned entered into the godown, the insured employees were busy in removing the water-affected boxes of confectionary and general goods to safer place, such on the rickshaws and two other vehicles parked inside the godown. The undersigned inspected the godown rooms and found submerged in rainwater and the stocks lying on the floor found damaged. Snaps were arranged, enclosed herewith.
Later the undersigned alongwith the insured went behind the shop godown. The road on the Rhs of the shop also found clogged with water. Though the water made its entry to the godown, but this time the entry of water into godown rooms could have been averted due to construction of new floor levels, the insured had started after first inundation on 08.08.2005. It is recalled that earlier the water had entered the said godown, thus loss caused to the stocks of confectionary and general goods.
Later the undersigned prepared a list of inventory after counting it at the shop, in the godown behind the shop and in the godown situated at focal point.
And the report of the second Surveyor, the one Mr. Ashok Kumar Bansal, inter alia mentions:
CAUSE OF LOSS:
As per insured's statement duly confirmed by the preliminary surveyor Sh. Charanjit Garg, the loss to the insured's stock had occurred, when the flooded water entered into the bldg. where the insured have stored there stocks on temporary basis, because the previous godown (which is covered under the policy) was under constn. The insured has taken the above policy covering the risk for Rs.25 Lac for the stock lying in the godown behind the shop & not in the bldg. adjoining to their shop, where the loss has occurred. The stocks lying in the godown situated in Focal Point, Moga (covered for Rs.30 Lac) & the stocks in the shop (covered for Rs. 5 Lac) is quite safe.
BRIEF HISTORY:
As per insured's statement duly confirmed by the preliminary surveyor that it was all well on 09.09.2005 upto 8 A.M. Suddenly a heavy rain started, which remain continue for 3-4 hour & due to this heavy rain, the water clogged in the city as well in the street, where the insured bldg. is situated & ultimately it entered into the bldg. adjoining to the insured's shop, where the insured had temp. stored his stock. Because the godown behind the stock (which is insured as per policy) was under constn. & due to this clogged rain water the insured's stock of confectionary goods & other material damaged heavily. (The Site plan of the bldg.'s is enclosed for your ready reference.) Hence this loss.
NEWSPAPER CUTTING:
The flooding in the Moga town due to heavy rain dated 09.09.05 is reported in the Daily newspapers. However the copy of Moga Faridkot Kesri dated 10.09.05 is enclosed for your ready reference.
A plain reading of the above excerpts, from the reports of the two Surveyors, shows that the incident of heavy rains / flooding / inundation had actually taken place and that the Shop and first Godown of the Complainant Firm had actually been affected.
It is also evident that subsequent to the earlier incident of 06/07.08.2005, the Complainant Firm was undertaking construction to protect its Shop and first Godown from future flooding / inundation.
The occurrence of the present incident of flooding / inundation has been documented by both the Surveyors and has been admitted to by the Insurance Co.
In such situation, arriving at a non sequitur conclusion that "This fact also shows that the complainant firm in order to defraud the OP-Insurance Company had lodged the false claim alleging that their goods had been damaged in the insured premises." is erroneous.
We note that the State Commission has re-visited and re-examined the evidence in respect of the specific question in dispute, whether or not the loss occurred in the insured premises. On appraising the evidence, the State Commission arrived at a reasoned conclusion that the contention of the Insurance Co. that the stock was not lying in the insured premises did not appear to be correct (refer paras 8 and 9 of the State Commission's Order).
In the facts of the case, and having regard to the evidence adduced by the two sides, we find that the State Commission has made a reasonably sound appraisal, wherein the reasons for differing with the District Forum have also been sufficiently brought out.
However, we note that, in making its Award, in para 10 of its Order, the State Commission has taken a net adjusted loss of Rs.1,78,250/-, which was the net loss assessed by an earlier Surveyor, one Mr. Sumant Sud, relating to the earlier incident of 06/07.08.2005, and not to the present incident of 09.09.2005. This appears to be a mechanical error by the State Commission, which, but, does not affect its reasoned appraisal of the facts and evidence of the present incident of 09.09.2005. This error however requires to be rectified.
We also note that the State Commission has awarded interest at the rate of 9% per annum with effect from 05.12.2005 i.e. two months after the report of the said Surveyor, the one Mr. Sumant Sud, who had assessed the loss related to the earlier incident of 06/07.08.2005. This error also requires to be rectified.
We note that it is admitted that the Complainant Firm's Shop and first Godown were duly insured. The incident of flooding / inundation is admitted. It is nobody's case that the loss did not actually occur. The only question is whether the stock that was damaged was lying in the insured premises.
The first Surveyor, the one Mr. Charanjit Garg, has mentioned the following in his report dated 03.10.2005:
OCCURRENCE
:
As told there was a heavy rains before noon on 09.09.2005 resultingly the water clogged in and around the insured shop and finally the water made entry to the godown adjoining the insured shop thus causing damages to the stocks lying there. It may be noted that the adjoining shop has not been mentioned in the policy thus any endorsement to this effect if made by the insurer may be looked into while finalizing the claim.
The second Surveyor, the one Mr. Ashok Kumar Bansal, has made the following REMARKS in concluding his report dated 25.03.2006:
The risk to insured's stock lying in the adjoining Bldg. to the insured's shop is not covered under the policy terms & conditions. So in my opinion the claim is not payable. However the insurer is requested to look into the matter before settlement of loss, however the insured is fully agreed with the assessment made by the undersigned & has also signed the final acceptance letter. The copy of which is enclosed.
The Surveyors have also submitted related site-plans to show that the stock was not lying in the insured premises.
In repudiating the claim, the Insurance Co. has principally relied on the remarks given in their reports by its two Surveyors read with the site-plans prepared at the time of loss assessment.
To our mind, it is fair and reasonable to accept that an insured would immediately take the necessary steps as deemed appropriate by it to protect / salvage its stock in case of flooding / inundation. In such endeavour, it will place its stock in an anyhow hurried manner at whichever nearby spot it finds available, where the flooding / inundation would not cause damage / cause minimum damage.
Also, as the State Commission has (rightly) observed in para 9 of its Order, if the insured stock was shifted, it was not to the detriment of the Insurance Co., but to its benefit, since its liability for damaged stock got reduced accordingly.
It is well evident that the Complainant Firm's Shop and first Godown were situated in a congested densely built-up locality, prone to flooding / inundation.
We find the remarks read with the site-plans to be unclear and ambiguous, they lack the requisite clarity and precision as is required to categorically and unambiguously convey the exact position, especially in a congested densely built-up locality.
In its insurance policies, the Insurance Co. had written the scope of the policies as below:
A sum of Rs.5,00,000/- has been provided on all kinds of stocks of Electrical Goods, including mobile phones, confectionary, general goods, lying and/or stored in the shop situated at Dutt Road, Moga under shopkeeper insurance policy.
A sum of Rs.30,00,000/- has been provided on all kinds of stocks of Electrical Goods, including mobile phones, confectionary, general goods, lying and/or stored in the godown situated at Focal Point, Moga and Rs.25,00,000/- has been provided on above mentioned goods in the godown situated at Dutt Road, Moga behind the insured shop covered under standard fire policy.
(emphasis supplied)
While insuring the Shop and the first Godown, i.e. the premises at Dutt Road, Moga, which, well evidently, were situated in a congested densely built-up locality, prone to flooding / inundation, the Insurance Co. did not annex any professional site-plan or in any manner clearly articulate and convey the exact demarcations of the insured premises.
The remarks were recorded by the Surveyors subsequently, after the incident occurred, and after the claim was lodged. Similarly, the related site-plans were subsequently prepared, after the incident occurred, and after the claim was lodged.
The remarks read with the site-plans lack the requisite clarity and unambiguity.
A mere perusal of the site-plans shows that they have been perfunctorily prepared, they are not to scale, they have not been prepared by a professional (a draftsman or architect etc.), they lack the requisite clarity and precision.
As such, the remarks recorded by the Surveyors, read in conjunction with the said site-plans, come forth as ambiguous and imprecise, they do not convey the exact position.
Both, for not making any professional site-plan or in any manner clearly articulating and conveying the exact demarcations of the insured premises in a congested densely built-up locality, at the due time, i.e. at the time of issuing the insurance policies, and for subsequently relying, after the incident, and after the claim was lodged, on casual and imprecise remarks and related site-plans, the benefit, in the present facts, has to go to the insured i.e. the Complainant Firm.
Clarity should have been ensured ab initio by the Insurance Co. at the time of issuing the insurance policies, and doubly ensured post facto at the time of assessing the claim. The Insurance Co. is found lacking on both the counts. The benefit of lack clarity and precision has to go to the insured.
The Insurance Co. should not and can not take recourse to post facto ambiguous remarks conjoined with rough site-plans, without the adequate and requisite clarity and precision, to contend that the stock was not lying in the insured premises.
The onus of proving its defence was on the Insurance Co., which onus the Insurance Co. has failed to discharge. It is not for the other side, in arguing its case, to anyhow endeavour to make reason or sense from nebulous imprecise documentary evidence adduced in defence. The benefit in such situation goes to the other side.
The Act is for "better protection of the interests of consumers". Its Statement of Objects and Reasons says of "speedy and simple redressal to consumer disputes". The incident occurred in 2005. The Complaint was filed in the District Forum in 2007. We are now in 2020.
In the situation as obtaining on date, and on the basis of the above discussion, and to settle the matter, we find it just and equitable to go with the Net Loss Assessed by the second Surveyor, the one Mr. Ashok Kumar Bansal, who made the final loss assessment report dated 25.03.2006 for the Insurance Co.
We also find it fair and reasonable to award interest from 25.09.2006 i.e. six months from the date of the final loss assessment report dated 25.03.2006. An insurance company cannot sit indefinitely on deciding a claim, it has to make its decision within a reasonable time-period. A period of six months, in the facts of this case, was more than adequate for the Insurance Co. to decide the claim.
We further find the rate of interest of 9% per annum, as awarded by the State Commission, to be just and equitable.
We furthermore find it fair and reasonable to award cost of litigation of Rs. 50,000/-.
We thus firm-up our Award as follows:
The Insurance Co. through its Chief Executive shall pay a sum of Rs. 86,022/- to the Complainant Firm with interest at the rate of 9% per annum from 25.09.2006 till its realisation, and a sum of Rs. 50,000/- as cost of litigation, within four weeks of the pronouncement of this Order.
In compliance of this Commission's Order dated 27.09.2012, the Insurance Co. was directed to deposit half of the awarded amount with the District Forum as condition attached to the grant of stay on the operation of the impugned Order. The District Forum shall utilize the said amount, if it has been so deposited, along with interest if any accrued thereon, towards the satisfaction of the Award made herein in para 25 above, as per the due procedure.
Needless to say that the Award requires to be complied with in its entirety. In case of failure or omission, the District Forum shall undertake execution, both for 'Enforcement' under Section 25(3) and for 'Penalties' under Section 27 of the Act, as per the law.
So disposed.