Nehalkumar Hasmukharai Gandhi Propreitor of Shakti Chemicals Vs. the Divisional Manager New India Assurance Company Ltd. - Court Judgment

Dhanraj Khamatkar, Member

[1]  Mr. Nehalkumar Hasmukhrai Gandhi has filed this consumer complaint in the capacity of proprietor of Shakti Chemicals (hereinafter referred to as ‘the Complainant for the sake of brevity) under the Consumer Protection Act, 1986 against the Divisional Manager, New India Assurance Company Ltd., (hereinafter referred to as ‘the Opponent for the sake of brevity) alleging deficiency in service and unfair trade practice.

[2]  Facts leading to this complaint can be summarized as under:-

The Complainant had availed a standard fire and special perils insurance policy bearing No.111400/11/05/00000195 which was effective during the period 14/5/2005 to 13/5/2006. Insurance policy was in respect of goods stored in eight godowns, all situated at Bhivandi. On 6/2/2006, there was a fire in Godown No.5 and it spread to the adjacent godowns. Immediately, the Complainant informed the fire-brigade and the police authorities. It is contended that at the time of fire, goods around Rs.1,49,63,092/- were lying in all the godowns. The Complainant informed the incidence of fire on 6/2/2006 to the Opponent and requested the Opponent to appoint a surveyor to assess the loss. Accordingly, the Opponent appointed M/s. Professional Surveyors and Loss Adjusters Pvt. Ltd., to visit the site. Accordingly, the surveyor visited the site on 8/2/2006 and submitted the spot survey report on 10/2/2006 to the Opponent estimating loss to the extent of Rs.1,45,00,000/-.

[3]  The Opponent further appointed M/s. N. Velayutham and Company, Chennai who prepared the Loss Adjustment Report on 7/3/2007 on the basis of spot investigation report and documents produced by the Complainant. M/s. N. Velayutham and Company assessed the loss at Rs.1,33,75,163/- after adjustment of excess of Rs.10,000/- under the insurance policy. This Surveyor had further observed in his survey report that if the insurer decides to apply shortfall of 35.13% according to the Bhiwandi Claim Co-ordination Committees findings then claim would be revised to Rs.86,72,955/-. The Complainant further contended that the Opponent had made illegal deduction of 35.13% on the strength of recommendations of Bhivandi Claim Co-ordination Committee and reduced the claim of the Complainant. The Complainant further contended that there were various losses because of fire. Five surveyors operating in and around Bhivandi unilaterally formed a co-ordination committee to assess the losses in fire. The Complainant contended that purported committee had not statutory power to function without concurrence of various other insurance companies. The Complainant further contended that Committee had no legal sanctity and locus-standi as there is no provision under the Insurance Act to appoint such committee. Hence, the Complainant contended that the deduction recommended by the Bhivandi Claim Co-ordination Committee i.e. 35.13% of the assessed claim amount of Rs.47,02,208/- is highly objectionable and per-se illegal and amounts to deficiency in service.

[4]  The Complainant further contended that he has procured a copy of final survey report dated 7/3/2007 of M/s. N. Velayuthan and Company by filing an application under the Right to Information Act. The Complainant further contended that the Surveyor is not in agreement with the findings of the Bhivandi Claim Co-ordination Committee. The Complainant states that at the fag-end of the month of Feb-2008, the Opponent forwarded a statement and voucher alongwith a cheque dated 29/2/2008 for Rs.64,21,588/- thereby deducting further 25% of the amount recommended by the surveyor i.e. Rs.86,72,995/- on ‘non-standard basis. The Complainant states that this deduction was highly objectionable and contrary to the provisions of the Insurance Act, 1938. The Complainant further states that he was pressurized by the bank to accept the said amount. Alongwith the statement and voucher, it is seen that an amount of Rs.21,60,514/- was deducted for non-standard settlement of loss and even the shortfall in premium amounting to Rs.30,899/- for a period of two years was also deducted from the claim amount. The Complainant submits that the said deduction was contrary to the provisions of sub-clause (5) of Section-64UC of the Insurance Act which reads as under:-

“64-UC. Power of the Advisory Committee to regulate rates, advantages, etc.

(5) Where an insurer is guilty of breach of any rate, advantage, term or condition fixed by the Advisory Committee, he shall be deemed to have contravened the provisions of this Act;

Provided that instead of proceeding against the insurer for such contravention, the Authority may, if the insurer removes the contravention by recovering the deficiency in premium, or where it is not practicable to do so, modifies suitably or cancels the contract of insurance, compound the offence on payment to the Advisory Committee of such fine, not exceeding rupees one thousand, as he may decide in consultation with the Advisory Committee.”

[5]  The Complainant states that the Opponent could have deducted the penalty amount contemplated under the said Section or alternatively recovered the deficiency in premium and there was no justification of whatsoever nature to reduce the Complainants legitimate claim by 25%. The Complainant states that the cheque for Rs.64,21,558/- was handed over to the Complainant and the amount therein was realized in the Complainants account on 1/3/2008. The Complainant submitted an indemnity bond, duly attested before notary public, on 24/12/2007 alongwith a covering letter dated 24/12/2007.

[6]  The Complainant further submits that the Complainant consulted various consultants operating in the field and with their assistance he addressed a letter dated 18/6/2008 calling upon the Opponent to settle the legitimate claim of the Complainant. The Complainant sent letters dated 30/8/2008, 25/10/2008 and 14/11/2008 to the Opponent to settle his claim as per the provisions of the Insurance Act, 1938. On 4/12/2008, the Complainant addressed a letter to the Chairman and Managing Director of the Opponent placing correct facts on the record and calling upon him to settle the remaining claim of the Complainant. On 23/12/2008, the Opponent communicated its inability to reconsider the Complainants request with reference to his letter dated 9/12/2008. The Complainant states that the Opponent has refused to consider his claim by its letter dated 23/12/2008. Considering this as deficiency in service on the part of the Opponent the Complainant has filed his consumer complaint with following prayers:-

“(a)  that this Honble Commission be pleased to direct the Opposite Party to rectify the defects in its services as insurer and to pay the Complainants legitimate claim towards balance amount of Rs.69,53,605/- together with interest @ 12% per annum on the said amount from 6^th August 2006 (i.e. six months concession as per the IRDA Guidelines) till the date of filing of the present complaint i.e. 14^th May 2009 amounting to Rs.23,15,836/- as per the particulars of claim annexed hereto and marked Exhibit-‘H and further interest @ 12% on the said amount of Rs.69,53,605/- from the date of the complaint till realization.

(b)  that the Opposite Party be directed to pay to the Complainant a sum of Rs.1,00,000/- on the ground of deficiency in service and also on the ground of failure on the part of the Opposite Party to favourably consider the Complainants legitimate claim;

(c)  that the cost of Rs.50,000/- be provided for filing the present complaint;

(d)  for such other and further reliefs as the nature and circumstances of the case may require.”

[7]  Alongwith the complaint, the Complainant has filed following documents:-

(i)   Insurance Policy;

(ii)  Letter dated 06^th February, 2006;

(iii)  Report dated 10^th February, 2006;

(iv)  Report dated 07^th March, 2007;

(v)  Copy of Voucher;

(vi)  Indemnity Bond dated 24.12.2007;

(vii)  Letter dated 04^th December, 2008;

(viiii)  Letter dated 09^th December, 2008;

(ix)  Letter dated 15.02.2007.

[8]  The complaint was registered and admitted after hearing both the parties on 5/11/2009.

[9]  The Opponent had filed a written version denying the allegations made by the Complainant in the complaint. The Opponent admitted that the Complainant had taken a standard fire and special perils insurance policy and the insurance policy was in force during the period from 14/5/2005 to 13/5/2006. The Opponent admitted the fact that the incidence of fire occurred on 6/2/2006 and stated that the Opponent had appointed M/s. Professional Surveyors and Loss Adjusters Pvt. Ltd., to do the spot survey on fire claim and also appointed M/s. N. Velayutham and Company to do the final survey on fire claim of the Complainant. Opponent further submitted that the surveyor has assessed the loss due to fire at Rs.1,33,75,163/- (after deducting Rs.10,000/- for policy excess). The Opponent further stated that said fire claim of the Complainant was referred to Mr. B. P. Shah, Chairman of Bhivandi Claim Co-ordination Committee which is formed to bring all surveyors on one platform who are handling fire claims of various insurance companies so that they can do volumetric analysis of all the stocks as in fire claim generally stock of various insureds are stored at a godown and records of godown-keeper are burnt and the surveyors have no option but to rely on data submitted by the insured and cannot do cross-verifications. Bhivandi Claim Co-ordination Committee, consisting of surveyors from different insurance companies, in its report has suggested deduction of 35.13% under the fire claim. Relying on the report of Bhivandi Claim Co-ordination Committee the Opponent has deducted the claim by 35.13%. Opponent further contended that the Complainant had accepted an amount of Rs.64,21,558/- vide a cheque dated 29/2/2008 towards full and final settlement in respect of his fire claim after deducting 35.13% of the loss assessed by the surveyor on ‘non-standard basis. After accepting the claim amount towards full and final settlement the Complainant has filed this complaint.

[10] The Opponent further submitted that under the law of contract generally and also under insurance contracts estoppel is the legal bar raised by a persons own action against asserting a right that he once possessed, or making a choice that once was open to him. Estoppel has been defined as an impediment or bar arising out of ones own conduct whereby one is prohibited from averring or providing anything in contradiction to what one has either expressly averred or has by ones conduct led others to consider to be the case. The Opponent submits that the Complainant has accepted the compensation in full and final settlement and now, he is estopped from raising the claim afresh.

[11] On these grounds, the Opponent contended that there is no deficiency in service or unfair trade practice on its part and prayed that the complaint may pleased be dismissed.

[12] Both the parties were directed to file their respective evidence on affidavits and accordingly, both the parties have filed their evidence on affidavits. Further, parties have also filed pursis closing their respective evidence. Parties were also directed to file their respective briefs of written arguments as per Regulation-13(2) of the Consumer Protection Regulations, 2005 and accordingly, they have filed the same which is on the record.

[13]  We heard Adv. S. B. Prabhavalkar on behalf of the Complainant and Adv. Smt. Kalpana Trivedi on behalf of the Opponent.

[14] Admittedly, the Complainant had taken a standard fire and special perils insurance policy from the Opponent and said insurance police was in force during the period 14/5/2005 to 13/5/2006. Admittedly, during the subsistence of the insurance policy there was a fire on 6/2/2006 in the godown of the Complainant. It is on the record that the Complainant had informed the fire-brigade, police authorities and the Opponent. It is also not disputed that on 8/2/2006, the Opponent had appointed M/s. Professional Surveyors and Loss Adjusters Pvt. Ltd., to carry out spot survey and the said surveyor has estimated loss by fire to the extent of Rs.1,45,00,000/-. It is also not in dispute that the Opponent also appointed M/s. N. Velayutham and Company, Chennai to assess the loss and prepared the final survey report. Survey report is in the compilation of the complaint and surveyor has assessed the loss of Rs.1,33,75,163/- after adjustment of excess of Rs.10,000/- under the policy. In the survey report the surveyor has further observed that if the insurer decides to apply shortfall of 35.13% as per the Bhiwandi Claim Coordination Committees report then the claim would be revised to Rs.86,72,955/-.

[15] It is on the record that the Complainant had accepted from the Opponent an amount of Rs.64,21,588/- vide a cheque dated 29/2/2008 in respect of the fire claim. Now, the question that would arise for our consideration is as to whether it is full and final settlement of the claim or whether the Complainant establishes that he had accepted the amount of Rs.64,21,588/- under protest without prejudice to his rights.

[16] With a view to ascertaining the facts we directed the Opponent to produce on the record the original voucher. Opponent has produced on the record an affidavit of Mr. Vijay Paunikar, Senior Divisional Manager. Mr. Vijay Paunikar, in his affidavit, had stated that after the fire claim was lodged at his office and after verification of the relevant documents through surveyor/investigator and as per the terms and conditions of the policy, office has made payment of Rs.64,21,558/- on 29/2/2008 as full and final settlement of the claim. He further stated that the Honble State Commission had directed the Opponent to produce on the record original discharge voucher duly signed by the Complainant at the time of full and final settlement of the said insurance claim. Further, Mr. Paunikar in his affidavit has stated that his office met with fire on 7/5/2010 at their old address viz. Motil Mahal, 6^th floor, J. T. Road, Mumbai and, therefore, most of the record of the office was destroyed and burnt in the said fire. He has enclosed a copy of F.I.R., which shows that a huge fire had occurred on 7/5/2010. Mr. Vijay Paunikar has produced on the record a copy of Settlement Intimation Voucher for an amount of Rs.64,21,558/-, Claim Disbursement Voucher for an amount of Rs.64,21,558/-, covering letter dated 27/2/2008 requesting the Complainant to send the claim settlement voucher and a letter dated 10/3/2008 enclosing cheque for Rs.64,21,558/-. From the Opponents office record it does appear that the Complainant had accepted the amount towards full and final settlement of his claim. The Complainant has also adduced on the record settlement intimation voucher and claim disbursement voucher alongwith the complaint. Perusal of the same shows that the Complainant has accepted the amount without any protest.

[17] No doubt, the word ‘full/partial is not scored. On the basis of this, Learned Advocate for the Complainant vehemently contended that from the settlement voucher it is not clear that whether it is full or partial settlement of the claim. Learned Counsel for the Complainant mainly relied upon the decision of the Apex Court in Civil Appeal No.5733 of 2008, (In the matters of National Insurance Co. Ltd. Vs. M/s. Boghara Polyfab Pvt. Ltd.) decided on 18/9/2008 and contended that besides this the Apex Court in the case of United India Insurance Co. Ltd. Vs. Ajmersingh Cotton and General Mills and Others ~ (99)-6-SCC-400; has observed that mere execution of discharge voucher and acceptance of Insurance claim would not estopp the Insured from making further claim from the Insurer under the circumstances which can be termed as undue influence or coercion or the like. In the present case after accepting the part-payment on 2/3/2008, persistent demands were made by the Complainant for balance payment as can be seen from letter dated 8/12/2008, page (84) Exhibit-F and letter dated 9/12/2008, page (86) Exhibit-H. The Learned Counsel for the Complainant vehemently tried to argue that from the voucher and record and subsequent communication made by the Complainant with the Opponent Insurance Company it cannot be construed that the Complainant has accepted the payment as full and final settlement of the claim.

[18] Perusal of the settlement voucher shows that there was no undue influence or coercion exercised by the Opponent on the Complainant. Learned Counsel for the Complainant is relying on the letters dated 8/12/2008 and 9/12/2008. It is clear that the Complainant accepted the payment on 2/3/2008 and filed complaints regarding the full and final payment on 8/12/2008 and 9/12/2008. Had there been undue influence or coercion exercised by the Opponent, the Complainant would have accepted the amount under the insurance claim under protest or upon reserving his right. As against this, the Complainant has accepted the amount in the month of March-2008 and raised an objection in the month of December-2008. This conduct on the part of the Complainant proves that at the time of accepting the amount under the insurance claim there was no undue influence or coercion exercised by the Opponent.

[19] Learned Counsel for the Complainant tried to place on the record a decision of the Apex Court in Civil Appeal No.5733 of 2008, (In the matters of National Insurance Co. Ltd. Vs. M/s. Boghara Polyfab Pvt. Ltd.) decided on 18/9/2008 and contended that paragraphs 28(iii) and (iv), 29, 30, 31, and 32 squarely apply to the facts in the present case. We have gone through observations made by Their Lordships of the Honble Supreme Court in these paragraphs and we find that these paragraphs are not relevant in the present case. In view of these facts, the contention of the Learned Counsel for the Complainant regarding the legality of Bhivandi Claims Co-ordination Committee, non-standard deduction contrary to the provisions of sub-clause (5) of Section-64UC of the Insurance Act, do not hold good.

From the aforesaid circumstances, we find that the Complainant has failed to prove his case of alleged deficiency in service and unfair trade practice on the part of the Opponent. We hold accordingly and pass the following order:-

ORDER

The complaint stands dismissed.

No order as to costs.

Inform the parties accordingly.