B.N. Sinha, President:
1. The complainant No. 1 the proprietor of the Complainant No. 2 M/s. Laxmi Textiles, West Patel Nagar, Patna.
2. This case has been filed by them with averments hereinafter mentioned. Complainant No. 1 after obtaining financial assistance from Central Bank of India, Rukanpura Branch, Patna and the Bihar State Financial Corporation, Patna established M/s. Lakshmi Textiles â a small scale industrial unit for manufacturing fine hosiery cloths and got it registered in the Industries Department, Government of Bihar bearing Registration No. 03/10/06762 dated 29.8.83. The complainant got the buildings, machines raw materials, finished and unfinished goods of the firm insured with the New India Assurance Company, Exhibition Road, Patna the opposite party No.2, under the Fire Insurance Cover. Initially the company insured the buildings, plant and machinery of the firm for 2.5 lakhs under Fire Temporary Cover Note A/c No. 608541 dated 14.11.88 for the period from 14.11.88 to 13.11.89 (Vide Annexure-6). Sub sequently the stock of hosiery goods, finished and unfinished goods and raw materials kept in the premises of the firm were also insured by the Insurance Company for 6 lakhs for 12 months covering the period from 18.11.88 to 17.11.89 under Fire Temporary cover Note A/c No. 608546 (vide Annexure-5). Thus the complainant got total Insurance Policy of Rs. 8,50,000/- from the Insurance Company on payment of the due premium. After mid-night of 23rd November, 1988 there was a fire in the premises of M/s. Lakshmi Textiles (Complainant No. 2) as a result of which huge damage and loss were caused to the factory buildings, machines, finished and unfinished goods and raw-materials kept or stocked in the factory premises. The Fire Fighting Squad was informed and they reached at the spot and extinguished, the fire after great efforts. On the following morning i.e.; on 24.11.88 the complainant No. 1 lodged information in the Shastrinagar Police Station in writing about the aforesaid occurrence (vide Annexure-8) and on 25.11.88 he lodged claim with the Divisional Manager, New Indian Assurance Company, Branch Manager, New India Assurance Company, Patna (Vide Annexure-9); and he also informed the Central Bank of India, Rukanpura Branch (Vide Annexure-10) and the Managing Director, Bihar State Financial Corporation (Vide Annexure-11) about the incident. The complainant lodged claim of Rs. 10.35 lakhs (Vide Annexure13) with the New India Assurance Company for the loss caused due to the fire. The New India Assurance Company directed M/s. Survey and Investigation, Peermuhani Chowk, Patna to make survey and assess the damages caused to the complainants in the aforesaid fire incident and the Surveyor submitted his report on 17.12.90 assessing the loss caused to the complainant due to aforesaid fire incident of Rs. 7,03,901.00 only. But inspite of the report of the surveyor and several letters to that effect by the Central Bank of India (Annexure-15a), 15(b), 15(c) and 15(d) and also by Bihar State Financial Corporation (Annexure- 15/e and 15/f, the Insurance Company did not take any decision regarding the claim lodged by the complainant and ultimately on 7.10.91 the complainant received letter dated 1.10.91 from the Insurance Company which had been served on a different person repudiating the claim of the complainant. Consequently the complainant filed his complaint with Annexure before this Commission, alleging deficiency in service against the Insurance Company in respect of settlement of his claim  inspite of it being assessed as Rs. 7,03,901/- by the Surveyor and has claimed interest to be decided by this Commission on that account
3. Notices were issued to the opposite party. The Central Bank of India and its branch â opposite party Nos. 3 and 4 appeared and filed written statement supporting the case of the complainant and claiming Rs. 7,03,901/- with interest thereon as they have admittedly advanced loan to the complainant for financing his business, and the articles destroyed in the fire had been hypothicated to the Bank as security for the loan.
4. Written statement has been filed on behalf of the Insurance Company disputing the claim of the complainant inter-alia on the ground of it being exorbitant high and also alleging that taking into consideration the dates of taking insurance policy i.e.; 14.11.88 and 18.11.88 and the date of the alleged incident of fire i.e.; 23.11.88 there appears foul play by the claimant insured as the incident took place within ten days of taking the Insurance Policy. The Insurance Company has also stated in its written statement that the matter was enquired into by a private intelligence agency and they âare doubtful about the claimâ of the complainant.
5. The learned counsel appearing on behalf of the Insurance Company before this Commission challenged the jurisdiction of this Commission on the ground that as the claim has been repudiated by the company the claim can be adjudicated by Civil Court alone and this Commission has got no jurisdiction to proceed with the case under the Consumer Protection Act. But we find no merit in this submission on behalf of the Insurance Company because it is well settled by the decisions of the National Commission that simply because the claim of an insured had been repudiated by the Insurance Company, the consumers cannot be denied the benefit of this Act and it can be examined by consumer court under the Act if the Insurance Company was justified in repudiating the claim of the Insured. We are supported in our view by the observations made by the National Commission in the case of United India Insurance Company v. P.S. Mani (Vol. II) 1992 CPJ 354 (NC). Moreover, inordinate delay in repudiating the claim of a consumer is itself deficiency in service on the part of the Insurance Company.
6. In its written statement the Insurance Company has not disputed that M/s. Survey and Investigation, Pirmuhani Chowk, Patna was directed by the Insurance Company to assess the claim made by the complainant nor they have challenged the authenticity and correctness of the report (Annexure-16 to the complaint petition) of M/s. Survey and Investigation assessing the loss sustained by the complainant at Rs. 7,03,901/- only. They have not said even a word against the surveyor and his report. In this situation we fail to understand as to why the Insurance Company did not accept the assessment of the loss made by the Surveyor and kept the matter hanging for ten months thereafter till it repudiated the claim of the complainant. Of course, a petition has been filed just yesterday, that is, on 14.9.92 , stating that the surveyor became hostile to the Insurance Company and unduly favoured the insured and, therefore, the Insurance Company has resolved not to depute any work to that surveyer and some papers have been filed along with that petition in support of this assertion made in the petition. But we are not inclined to place reliance on this belated plea being taken on behalf of the Insurance Company and these papers as no such plea was taken in the written statement by the Insurance Company; and for the first time these papers could be produced four months after filing of the written statement by the Insurance Company and after the arguments on behalf of the parties had concluded and the case was fixed for orders.
7. Moreover, it appears from the copy of the report of the State Fire Brigade Officer, Bihar, Patna sent to the Director, Survey and Investigations that the Fire Brigade Squad had gone to the premises of the firm of the complainant on the alleged night of occurrence for extinguishing the fire and it took more than two hours to extinguish the fire and articles worth Rs. 9,25,000/- were burnt and damaged due to that fire. This report along with the forwarding letter has been annexed as Annexure-14 to the complaint petition. The Insurance Company has not said anything against that report of the officer of the Fire Brigade.
8. Suspecting foul play on the part of the complainant simply on the ground that the incident took place within ten days of the Insurance Policy can not be justified particularly when there was noj material before the Insurance Company for such suspicion. The Report of the Fire Brigade Officer (Annexure-14) and that of the Surveyer, which is quite detailed one fully support the claim of the complainant. Of course, it has been mentioned by the Insurance Company in its written statement that a Private Intelligence Agency enquired into 2 the matter and they are doubtful about the claim of the complainant. But that Private Agency is not named in that written statement nor its report was filed with the written statement and with the aforesaid petition. A report dated 14.9.92 of one S.K. Mukherjee, Retired D.S.P. (C.B.I) has been filed to indicate that he was asked by the Insurance Company to investigate into the matter. Moreover this report is neither supported by an affidavit nor by any oral evidence. Under these circumstances no reliance can be placed on this report. But this report even does not falsify the case of the complainant.
For these reasons we find and hold that the repudiation by the Insurance Company was arbitrary.
9. The Bihar State Financial Corporation by his letter dated 18.6.90 (Annexure-15/E to the complaint petition) has written to the Insurance Company for early settlement of the claim of the complainant mentioning that the firm of the complainant has been a well running unit which has fallen sick due to the fire incident and that the Bihar State Financial Corporation has taken up the unit under rehabilitation and that the settlement of the Insurance claim has vital role in effective rehabilitation of the unit. The Corporation has also made such request earlier by his letter dated 13.1.90 which is Annexure-15/F to the complaint petition. The Central Bank of India has also written by its different letters (Annexure-15/A, 15/B and 15/D) to the complaint petition and requested the Insurance Company for early settlement of the claim of the complainant. But still the Insurance Company remained negligent in settling the claim of the complainant even after submission of report by the Surveyor. This was clearly deficiency on the part of the Insurance Company. The complainant has admittedly taken loan from the Central Bank of India and from the Bihar State Financial Corporation for the purpose of setting his business. It appears that he had to pay an interest of 16.5 percent per annum on the loan given to him by the Central Bank of India. Due to delay in the settlement of his claim by the Insurance Company it has not been possible for the complainant to rehabilitate his business. Hence deficiency in service on the part of the Insurance Company has undoubtedly caused financial loss and consequent mental stress to the complainant.
10. For the reasons mentioned above we find and hold that the complainant is entitled to get Rs. 7,03,901/- from the Insurance Company and the company is being directed to pay an interest of 18% per annum on that amount from 7.1.91, that is, from the date one month after the date of the report of the Surveyor till payment thereof as compensation for the loss and mental strain sustained by the complainant due to deficiency on the part of the Insurance Company. The Insurance Company is also directed to pay Rs. 1,000/- (Rupees One Thousand only) as cost of the case to the complainant.
Complaint allowed with costs.