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Himanshu Trading Co., Noida v/s New India Assurance Co. Ltd., Ghaziabad & Another

    Appeal No. 738 of 2007

    Decided On, 28 January 2022

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. JUSTICE RAM SURAT RAM MAURYA
    By, PRESIDING MEMBER

    For the Appellant: Mohit Singh, Vikas Bhadana, Advocates. For the Respondents: R1, J.P.N. Shahi, Saddam Hussain, Advocates, R2, Nemo.



Judgment Text

1. Heard Mr. Mohit Singh, Advocate, for the appellant and Mr. J.P.N. Shahi, Advocate, for respondent-1.

2. Himanshu Trading Company (the complainant) has filed the present appeal from the order of State Consumer Disputes Redressal Commission, Uttar Pradesh, dated 07.11.2007, dismissing Consumer Complaint No.4 of 2007, filed by the complainant.

3. Himanshu Trading Company filed Consumer Complaint No.4 of 2007, for directing The New India Assurance Company Ltd. (the Insurer) to pay (i) insurance claim of Rs.6962000/- with interest @18% per annum, from the date of the loss till its actual payment, (ii) all the dues of Canara Bank on the complainant, (iii) Rs.5/- lacs as the compensation for mental agony and physical harassment, (iv) Rs.50000/- as the cost of litigation and (v) any other relief which may be deemed fit and proper, in the facts and circumstances of the case.

4. The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-

(a) Himanshu Trading Company (the Insured) was a sole proprietorship concern and trading in distribution of soft drinks of Coca Cola brand, soda water and mineral water. Its Head Office was at Main Road, Defence Colony, Bhopura, Sahibabad and godown in a rented premises at village Bishanpura, Sector-58, Noida, district Gautam Budh Nagar. The Insured had cash credit facility up to Rs.40/- lacs from Canara Bank, branch Maliwara Chowk, Ghaziabad.

(b) The New India Assurance Company Ltd. (for short the Insurer) is a public insurance company, engaged in the business of providing insurance services of different nature. Himanshu Trading Company (the Insured) obtained Standard Fire & Special Perils Policy i.e. Policy No.321600/46/05/00085, for a sum of Rs.70/- lacs, for the period of 22.05.2005 to 21.05.2006, on the Stock of all kind of soft drinks, Soda water bottles, Mineral water and/or related goods, stored/lying in the godown at village Bishanpura, Sector-58, Noida, from the Insurer. The stock in godown was hypothecated with Canara Bank, as such, the Insured used to submit monthly statement of stock to the bank.

(c) On the intervening night of 01/02.10.2005, fire was broke out in the godown, due to electric short circuit. One Balraj, who had his dairy in the neighbourhood of the godown, noticed the fire at about 5:00 AM. He informed Brijesh Kumar, an employee of the Insured, who was sleeping, in adjoining room. Brijesh Kumar informed Yash Pal Singh, the husband of the proprietor, on telephone. Yash Pal Singh informed Fire Service Station, Sector-2, Noida, on 02.10.2005 at 9:01 AM, from where, two fire tenders were deputed on the spot, one of which controlled the fire. Yash Pal Singh informed Police Station, Sector-58, Noida about the fire incident, where it was registered vide Rapat No.37 at 15:55 hours on 02.10.2005.

(d) The Insured informed Canara Bank on 02.10.2005, regarding the incident of the fire in the godown in writing and requested to inform the Insurer and set up insurance claim of the loss. Canara Bank informed the Insurer on 03.10.2005 about the fire incident in the godown of the Insured. The Insurer appointed Kejriwal & Company, Ghaziabad, on 03.10.2005, for preliminary survey. Kejriwal & Company, the Surveyor, inspected the godown of the Insured on 03.10.2005 at 3:00 PM and submitted his preliminary report dated 10.10.2005, mentioning that there was electric short circuit in the employee’s room, due to which, wire got burnt up to godown switch, which fell down on the record. The fire was picked up by the paper record and took devastating nature and damaged the entire stock.

(e) The Insurer appointed KAYPSENS, Surveyor & Loss Assessor, Delhi, on 04.10.2005, for survey and assessment of the loss. The Surveyor inspected the godown on 04.10.2005, took photographs, measurements of the godown and prepared inventories. The Surveyor vide letter dated 04.10.2005 demanded various papers (total 15 papers) from the Insured. The Insured supplied some of the documents on 22.02.2006. The Surveyor then vide letter dated 09.08.2006 demanded certified copies of Balance Sheets for last three years and Profit & Loss Account from their Charted Accountant for the period of 01.04.2005 to 01.10.2005. The Insured supplied these documents on 21.08.2006. The Surveyor submitted his Final Report on 06.10.2006, doubting cause of fire and quantum of loss and recommended for repudiation of the claim under General Condition No.-6(i) and 8 of Standard Fire and Special Perils Policy.

(f) The Insurer, vide letter dated 29.12.2006, repudiated the claim on the grounds that as per statement of Balraj, fire was noticed by him at 5:00 AM, while according to Yash Pal Singh, he received information around 6:00-7:00 AM. He informed U.P. Fire Service Noida at 9:00 AM as such undue delay was caused in giving information to Fire Service station, which shows lack of due diligence in minimising the loss. Initially, the Insured informed that entire records were burnt. Later on, he submitted sales and purchase bills, which shows that he attempted to supress the actual facts and presented misleading picture. Probably the Insured was storing stock at some other location, which has not been informed. It is found that the claim was exaggerated. In the records of the Insured, soft drinks of Coca Cola brand were mentioned but on the spot soft drinks of Pepsi brand were found in considerable quantity. The Insured has not shown sale after 05.09.2005, in his papers. The Insured misrepresented the claim, as such, entire claim was forfeited under Policy Condition Nos.-6 (1) and 8.

(g) The complaint was filed on 14.11.2006, on the allegations that the Insurer illegally delaying settlement of the claim, although the loss was fully proved from various documentary evidence.

5. The insurer filed its written reply, in which, the facts relating to the policy and fire incident have not been denied. It has been stated that after receipt of the information of the loss, the Insurer appointed Kejriwal & Company, Ghaziabad, on 03.10.2005, for preliminary survey, who submitted his preliminary report dated 10.10.2005. The Insurer appointed KAYPSENS, Surveyor & Loss Assessor, Delhi, on 04.10.2005, for survey and assessment of the loss. The Insured supplied some of the documents on 22.02.2006 and some of the documents on 21.08.2006 to the Surveyor. The Surveyor submitted his Final Survey Report dated 06.10.2006. Then the Insurer examined the records and found various discrepancies, showing that the claim was exaggerated and based upon fabricated records, as such, it was repudiated vide letter dated 29.12.2006.

6. State Commission, by the impugned order, found that the Surveyor in his report dated 06.10.2006, noted various discrepancies in the papers of the Insured. The complainant has failed to contradict the findings of the Surveyor. In view of the findings of the Surveyor, Condition Nos.-6 (1) and 8 of General Terms and Condition of the Policy was fully attracted. The repudiation letter dated 29.12.2006, was not suffering from any illegality. On these findings, the complainant was dismissed. Hence this appeal has been filed.

7. The counsel for the Insured relied upon the judgments of Supreme Court in New India Assurance Company Ltd. Vs. Pradeep Kumar, (2009) 7 SCC 787, Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507, New India Assurance Company Ltd. Versus Protection Manufacturers Pvt. Ltd., (2010) 7 SCC 386 and this Commission in OP/73/2002 M/s. Jagannath Poultries Vs. New India Assurance Company Ltd. (decided on 19.01.2012), New India Assurance Company Ltd. Vs. R.P. Oil Industries, IV (2016) CPJ 627 (NC), First Appeal No. 444 of 2015, Branch Manager, New India Assurance Company Ltd. Vs. M/s. A.M. Traders (decided on 07.08.2019) and in First Appeal No. 109 of 2014, Bajaj Allianz General Insurance Company Ltd. Vs. Sonam Uden Bhutia (decided on 26.11.2021) and submitted that the surveyor report is not a sacrosanct and final word and appointment of second surveyor was illegal. The complainant availed cash credit facility up to Rs.40/- lacs from Canara Bank. The stock in the godown of the Insured was hypothecated with Canara Bank, as such, the Insured used to submit the statement of stock to Canara Bank in every month, who used to verify it. Loss/claim of the Insured was fully proved from the statements of stock as supplied to Canara Bank. The complainant filed statements of stock of last 12 months i.e. from October, 2004 to September, 2005 and other documentary evidence. Sh. P.C. Sinddu, Senior Divisional Manager and Sh. Sony, Assistant Divisional Manager of New India Assurance Company Ltd. inspected the godown of the complainant on 03.10.2005 along with Mr. G.R. Kejriwal, the first Surveyor and noticed the extensive damage/loss of the stock. The report of first Surveyor dated 10.10.2005 has been illegally ignored. Second Surveyor was appointed on 04.10.2005 and submitted his report on 06.10.2006. He did not give any reason for disagreeing with the report dated 10.10.2005. In the written reply, the insurer took plea that as the loss exceeded to Rs.50/- lacs, inspection had to be done by Loss Prevention Society of India under Circular dated 30.12.2005, which shows malafide on the part of the Insurer. Yash Pal Singh was informed about 7:00 AM about the fire incident, then he went on the spot and informed Fire Service Station at 9:00 AM. This delay occurred as Yash Pal Singh was residing at a long distance from the godown. Fire Service Officer also found extensive damage of about Rs.40/-lacs and the fire had been caused due to electric short circuit. The claim has been illegally repudiated. State Commission has illegally based its findings upon report of the Surveyor and ignored the documentary evidence of the complainant.

8. I have considered the arguments of the counsel for the parties and examined the record. It is mandatory for the Insurer to appoint a surveyor for assessment of loss, exceeding Rs.25000/- under Section 68 UM of Insurance Act, 1938. Supreme Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507 and New India Assurance Company Ltd. Vs. Sri Buchiyyamma Rice Mill (2020) 12 SCC 105, held that Section 68 UM of Insurance Act, 1938 does not impose any restriction for appointment of second surveyor. In Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., (2009) 8 SCC 507 and Khatema Fibres Ltd. Vs. New India Insurance Company Ltd., 2021 SCC OnLine SC 818 held that the report of surveyor has to be given due importance. There should be sufficient ground to disagree with the report of the surveyor. Once it is found that there was no inadequacy in quality, nature and manner of performance of the duties and responsibilities and once it is found that the report is not based on adhocism or arbitrariness then the consumer forum will have no jurisdiction to ignore it.

9. The surveyor is an expert and its report stands on the footing of expert evidence and has to be corroborated from other evidence on record, in order to examine bonafide/malafide of the Surveyor and correctness of the report. In the present case, the Insurer appointed Kejriwal & Company, Ghaziabad, on 03.10.2005, for preliminary survey and KAYPSENS, Surveyor & Loss Assessor, Delhi, on 04.10.2005, for final survey and assessment of the loss. As such, it cannot be said that there was appointment of second surveyor. Job of preliminary surveyor was only to ascertain the incident, on visual examination at the earliest. Preliminary Survey Report cannot be taken to contradict the Final Report of the surveyor.

10. The Insured gave the details of loss to the Surveyor on 07.10.2005, showing total loss of Rs.6962000/-. The Surveyor in the report dated 06.10.2006, found that the Insured submitted two lists of the damages to the local police, which were contrary to each other. She submitted a totally different list of the damages to the Surveyor, in which, 4480 crates of 200 ml soft drinks, 4534 crates of 300 ml soft drink, 3839.5 corrugated boxes of 500 ml soft drinks and 5142.3 corrugated boxes of 2000 ml soft drinks were mentioned. On volumetric analysis, it was found that in the godown of the Insured only 2421 crates and corrugated boxes could be stores, while the Insured has given list of 9014 crates and 8981.8 corrugated boxes (total 17995.8). The Insured could not challenge this finding.

11. The Surveyor further found that in Statement of Stock as submitted to the bank from April, 2005 to September, 2009, total purchase of Rs.47245940/- and total sale of Rs.45994734/- was shown, while in the Provisional Trading Account from April, 2005 to September, 2009, total purchase of Rs.16610398/- and total sale of Rs.17051663/- was shown. This was a major contradiction. The Insured could not give any explanation of this discrepancy. The Insured has not filed certificate of the bank to prove that the stock was actually verified by the bank. In view of the aforesaid discrepancy and in the absence of certificate of the bank relating to verification of the stock, the loss of the Insured is not proved.

12. The Insured relied upon the report of Fire Service Station. In this report, total

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stock was of Rs.one crore was shown out of which stock of Rs.60/- lacs was saved in the incident. The Insured is totally silent about the stock, which was not damaged in the incident. Although this was only visible estimate but from this report, it is proved that large quantity of the soft drink was saved in the incident. From this report also exaggeration of the claim has been proved. Finding in the repudiation letter that the Insured misrepresented the claim, as such, entire claim was forfeited under Policy Condition Nos.-6 (1) and 8, does not suffer from any illegality. 13. Fire in the godown of the Insured was notice at about 5:00 AM, while information to Fire Service Station was given at 9:01 AM. Admittedly an employee of the Insured was present at the godown. This was not a normal delay. The Insurer has rightly came to the conclusion that the Insured had not taken due diligence in preventing the loss, although under the Terms and Condition of the policy, the Insured is bound to take reasonable care. 14. State Commission has considered the various findings of the Surveyor in his report dated 06.10.2006. No illegality has been pointed out by the Insured in the judgment of State Commission. In view of aforesaid discussions, the claim as set up by the Insured is not proved from the evidence produced by him. Judgement of State Commission does not suffer from any illegality. ORDER The appeal has no merit and is dismissed.
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