V.N. Mishra, Member:
1. The present complaint has been filed by Shri Sheo Dutta Mishra, President, Akhil Bhartiya Grahak Panchayat on behalf of Kedar Prasad Gupta, proprietor of India Alloys Company against United India Insurance Company and others for payment of compensation of Rs. 11.50 lakhs with interest at the rate of 18% for the loss and injury- suffered by the complainant due to negligence of the opposite parties.
2. The brief facts of the case are that India Alloys, a manufacturing factory, manufactures aluminium shots and notched bars and non- ferrous casting, etc. The complainant had got the materials of the Company in respect of which theft was committed insured against loss or damage due to burglary and/or house-breaking for a sum of Rs. 7.50 lakhs for which he paid a premium of Rs. 734/-. The insurance cover was for the period from 26.9.1991 to 25.9.1992. The premises was fully secured with outer doors constructed of steel gate and shutters, front, back and side windows made of wooden frame secured with iron rods. Burglary was committed in the premises at night on 26th/27th of April, 1992, in which non-ferrous castings, aluminium notched bars, electric motors and tools worth Rs. 6,48,960/- were lost. F.I.R. regarding the theft was lodged in Balidih P.S., Bokaro. The complainant just after the theft/burglary filed claim for Rs. 6,48,960/- with the Chas Branch of Insurance Company on 27.4.1992. The complainant again filed a petition on 27.5.1992 to the Officer-in-charge, Balidih to recover the stolen property. The police had registered Balidih P.S. Case No. 55/92 under Section 380, I.P.C. in respect of the aforesaid theft and submitted final report stating that the case is true but no clue was found. This was accepted by C.J.M., Bokaro. The opposite parties 1 and 2 failed to pay the claim of the complainant as a result of which the production of the factory had to be stopped after December, 1992. He had to forego the first order of 1993 worth Rs. 2.80 lakhs as he was not in a position to lift aluminum ingot orders for which were issued from Bokaro Steel Plant for conversion. He had also to forego two orders of Rs. 50,000/- each due to lack of fund. All the above losses were sustained by him due to non- finalisation of the insurance claim by the opposite parties. He suffered a loss of Rs. 11.50 lakhs in total on account of the idle time of the factory, rent of the premises, electric and telephone charges, loss of goodwill of the Company and on account of payment of stock due to deficiency in service on the part of the opposite parties 1 and 2.
3. The opposite parties 1 and 2, on being noticed, filed written statement disputing that the insured factory does not come within the definition of consumer as defined under Section 2(1)(d) of the Consumer Protection Act. The complainant has not filed any paper regarding the turnover of the factory before the Commission as it would have proved at the first instance that it does not come under the definition of consumer as defined in law. The complaint case has been filed by the President of Akhil Bhartiya Grahak Panchayat in a representative capacity but he has not filed any paper in support of his authority to file this complaint on behalf of a small scale industry. The opposite parties 1 and 2 contended that if the complainant had a case, it should have been filed before different Forum and not before this Commission. They further contended that the alleged burglary was committed on 26th/ 27th April, 1992 but the F.I.R. was lodged on 27.5.1992 after one month. The plea taken for the delay by the complainant according to the opposite parties 1 and 2 was that the report was sent to the Police Station through the watchman of the factory but no action was taken by the police on his report. The proprietor of the factory failed to pursue the matter and get the F.I.R. registered in time. The opposite parties therefore alleged that he had pre-planned this event to cheat the opposite parties. The police had registered the case under Section 380, I.P.C. But while submitting the final form it was submitted under Sections 461/379 against unknown persons as the evidence given by all the persons was on hearsay basis. The opposite parties 1 and 2 further stated that the Surveyors appointed by them did not find any sign of burglary in their investigation as the lock claimed to have been broken at the time of burglary was found to be intact and in use and no sign of forceful entry was found. The claim of interest at the rate of 18% by the complainant is contrary to Sections 2(b) and 3 of the Interest Act, 1978. They again contended that the claim for loss in the burglary was shown as Rs. 6,48,960/- only when the complainant has made a claim of Rs. 11.50 lakhs, thus mispresenting the facts about the total loss which is not corresponding to the survey report and the final form submitted by the police. The Surveyor in his report has submitted that only two electric motors have been stolen as supported by the evidence of the workers also. The motors were not covered under insurance. The claim is therefore not payable. They therefore prayed that the complaint case in view of the facts and circumstances mentioned above may be dismissed.
4. The complainant filed counter affidavit to the written statement of the opposite parties. The complaint case was admitted to have been filed by the complainant in representative capacity as he is the President of Akhil Bhartiya Grahak Panchayat, Patna Branch, which is registered under Societies Registration Act. The complainant filed the authority slip given by the proprietor of India Alloys, Shri Kedar Prasad Gupta for filing the complaint. The complainant reiterated that India Alloys comes within the definition of consumer of the opposite parties. He further submitted that there was no need for him to have filed papers regarding the turnover of the factory as the claim for loss suffered in the burglary was less than the amount covered under insurance policy. Such insurance policies are issued only after assessing the capacities of the insured. He further stated that the F.I.R. was lodged on 27.4.1992 before the Police and a reminder was sent on 27.5.1992 for taking immediate action. The police had investigated the case and came to the conclusion that the occurrence of buglary and the allegations made in the F.I.R. were true. The final report was also accepted by the C.J.M. The complainant gave information of the said burglary in Chas branch of the opposite parties 1 and 2 on 27.4.1992 itself enclosing the copy of the report sent for lodging F.I.R. He emphatically denied the allegations of cheating the opposite parties 1 and 2. He further alleged that the Surveyor appointed by the opposite parties were biased in favour of the opposite parties 1 and 2. He was managed by the opposite parties 1 and 2 after the complaint case was filed before the Commission. The opposite parties 1 and 2 have tried to disown their genuine and lawful liabilities on flimsy grounds. There was abnormal delay on the part of the opposite parties in disposing of the claim of the complainant which amounts to deficiency in service. The break-up of total claim of Rs. 11.50 lakhs has been given as under :
| 1. Value of goods stolen | Rs. | 6,68,960.00 |
| 2. Loss caused due to non- availability of Bank Guarantee as a result of which the industry could not get aluminium issued from Bokaro Steel Plant as mentioned earlier. | Rs. | 3,80,000.00 |
| 3. Loss due to interest till date of complaint | Rs. | 1,21,000.00 |
| Â | Rs. | 11,50,000.00 |
6. The opposite parties have not filed affidavit in support of the contents of the written statement. The Deputy Manager of the opposite parties has however sworn affidavit and filed the same on 9.5.1995. The fact of insurance of the raw materials in the factory has been admitted in the affidavit. It has also been accepted that the proprietor of the factory had sent the information to the opposite parties on 27.4.1992 about the theft wherein loss of Rs. 6,48,960/- was claimed which included two electric motors. As per said affdavit, these motors were not covered under the insurance policy. In the affidavit it has been further stated that Shri S.K. Shahi, Surveyor in his report dated 19.5.1992 stated that he was surprised to note that the theft had been committed from the middle by opening the lock. He doubted if theft had been committed as lock was not damaged and there was no entry of theft in the police diary when the Surveyor had visited Balidih P.S. in connection with survey and investigation of the incident and no information had been given to the Bank also.
7. The case was referred by the opposite parties to Commercial Investigation Bureau, Calcutta and Mehta and Padamsey, Surveyors for final survey. Commercial Investigation Bureau submitted their final report on 31.3.1993 confirming the report of Shri Shahi. The Deputy Manager in his aforesaid affidavit has further stated that total loss of goods as claimed in weight was for 10,366 kgs. The Surveyors have expressed doubt that removal of such a huge quantity is not possible in such a short time. It can be possible by a large number of labour force and a truck and so the claim of the complainant is baseless and not tenable in law.
8. The complainant filed supplementary affidavit sworn by the proprietor of the factory and filed on 7.11.1996 which inter alia is to the effect that the photostat copies of the documents brought on record are the true copies of the originals. The concerned file was brought before the Commission by the opposite party-Insurance Company which was inspected by the complainant in presence of the learned Lawyer of the opposite parties 1 and 2. The complainant thereafter again filed supplementary affidavit. The complainant has averred that the opposite parties on receipt of written information dated 27.4.1992 about burglary appointed Shri S.K. Shahi, Surveyor to make preliminary survey. Shri Shahi made survey on 9.5.1992 and submitted his report on 19.5.1992. Second para of page 4 of Shri Shahi's report has been quoted as under :
"The main entrance is protected with iron rolling shutter without lock and its back- side door is protected with one iron sheet door used to be closed from inside without lock. This back-side iron sheet door was found uprooted from the wall. It was stated that two electric motors and brass rods about 746 bags were burgled from this room. There is no coverage for the loss of the electric motors under the insurance policy."
9. The opposite parties subsequently appointed Mehta and Padmasey, Surveyors to assess the loss who inspected the premises on 19.6.1992. But the opposite parties did not place their survey report in the concerned file although the survey and investigation was entrusted to them by the Head Office of the opposite parties as evident from their letter dated 10.6.1992. The opposite parties-Insurance Company had engaged Commercial Investigation Bureau vide their letter dated 5.5.1992. The office copy of the letter dated 5.5.1992 was again concealed by the opposite parties. The last para of the letter written by the opposite parties 1 and 2 to Shri P.L. Mehta, Director, Commercial Investigation Bureau has again been quoted by the complainant as under :
"From the perusal of the enclosed report, you will find adequate steps have been taken by Shri S.K. Shahi to bring down the loss from the reported Rs. 6.50 lakhs to something below one lakh". Shri P.L. Mehta after keeping the matter pending for eleven months submitted his report on 31.3.1993. The above report of the Commercial Investigation Bureau at page-10, Clause 4 has reported as noted below :
'Since the insurers have appointed independent Surveyors to determine the quantum of loss and assessment of the same, we are not going into this aspect of the claim'."
10. The report of the Commercial Investigation Bureau at nowhere, according to the complainant, indicated that any of the documents of the complainant is forged or fabricated. As per the complainant, the report of the above Bureau did not at all consider the report of Shri Shahi, who held the spot survey and had supported the theft and violence. The report of Shri Shahi as quoted above, shows that the back door was found uprooted from the wall. Again the averment of the opposite parties is that only two electric motors were stolen as per version of witnesses. The complainant has in the supplementary affidavit referred to the statements of witnesses from the file of the opposite parties like Sarju Kumar Ravi, Ram Nandan Prasad and Umesh Singh who all supported loss of materials from the factory besides the motors. The complainant brought the repudiation letter dated 5.12.1996 issued by the opposite parties on record on 21.3.1997 with his supplementary affidavit dated 6.3.1997. The opposite parties 1 and 2 had not bothered to file even a copy of the repudiation letter before the Commission on any of the dates after 5.12.1996.
11. Opposite party No. 3, State Bank of India, Steel City, Bokaro, had appeared before the Commission on 21.3.1997 and informed that the account of the complainant in their Bank had already been closed on 24.7.1996 and since no relief has been sought for from the Bank, the Bank is not a necessary party in the instant case and its name may therefore be deleted.
12. The learned Lawyers on behalf of the complainant and opposite party No. 1 and opposite party No. 2 were finally heard.
13. We would, at the outset, like to deal with the point regarding allegations that the insured factory does not come within the definition of a consumer as raised by the opposite parties-Insurance Company in their written statement. Section 2(1)(d) of the Consumer Protection Act says "Consumer means any person who hires or avails of any services for consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who (hires or avails of) the services for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.
14. The apprehension of the opposite parties- Insurance Company appears to be because of the word "any person" mentioned in the aforesaid section when M/s. India Alloys is the insured who according to the opposite parties-Insurance Company is not a person. Person has however been explained in 2(1)(d), (m), (i) as person includes a firm whether registered or not. The definition of the word "service" as given in Section 2(o) would show that the same includes insurance also.
15. In view of the above provisions in the Act we hold that the insured is a consumer. Under the Act a registered Consumer Organisation is competent to file complaint on behalf of a consumer.
16. It may be seen from the record that it is admitted that the factory in question had been insured by the opposite party-Insurance Company against burglary for a sum of Rs. 7.50 lakhs on payment of required premium. It is not in dispute that the proprietor of the factory sent his letter dated 27.4.1992 to the Chas Branch of the opposite party-Insurance Company informing them about the burglary alleged to have been committed in the factory on 26th/27th April, 1992. It is also not in dispute that F.I.R. was registered in the Balidih P.S. after one month of occurence of the alleged burglary. It is also not disputed that Shri S.K. Shahi, Surveyor was appointed by the Insurance Company-opposite party to make preliminary survey who submitted his report on 19.5.1992. The said report has not been filed by the opposite parties 1 and 2. The case was then referred by the opposite parties- Insurance Company to Commercial Investigation Bureau, Calcutta and Mehta and Padmasey, Surveyors for final survey. The report of the Commercial Investigation Bureau submitted their final report on 31.3.1993. Mehta and Padmasey, Surveyors also submitted their survey report to the insurer-opposite parties. But copies of none of these reports were filed before the Commission by them. The opposite party-Insurance Company had brought the concerned file before the Commission on 19.8.1996. The complainant on inspection of the file in presence of the learned Lawyer on behalf of the insurer-opposite parties filed supplementary affidavit. He gave quotations from the report of the first Surveyor, Shri S.K. Shahi as mentioned earlier which clearly indicates use of force as back door was found uprooted from the wall. Quotations from statements of the three witnesses taken by the Surveyors as per his supplementary affidavit also support commission of theft and use of force in the incident.
17. The insurer-opposite parties neither controverted the points raised in the supplementary affidavits filed on behalf of complainant nor filed copies of the reports before the Commission for its perusal and record.
18. The insurer-opposite parties have not explained the context in which they wrote their letter dated 15.6.1992 to Shri P.L. Mehta. The quotation from the aforesaid letter in the supplementary affidavit of the complainant lends support to his allegation that the Surveyor was attempted by the opposite party-Insurance Company to be influenced. Copy of this letter has also not been filed by the opposite party- Insurance Company to check the veracity of the complainant's allegations. The insurer-opposite parties have admitted on affidavit that after preliminary survey done by Shri S.K. Shahi, the case was referred to Commercial Investigation Bureau, Calcutta and Mehta and Padmasey for final survey. Shri P.L. Mehta, Director, Commercial Investigation Bureau is said to have stated in his report that since the insurers have appointed independent Surveyors to determine the quantum of loss and assessment of the same, they are not going into this aspect of the claim. The opposite parties-Insurance Company have not brought any paper on record to show what was the finding of that independent Surveyor.
19. So far the question of delay in lodging of F.I.R. is concerned, the complainant has explained that the F.I.R. was sent to the police station through his watchman, Umesh Singh on 27.4.1992 just next day of the occurence which was not registered on that day. The proprietor of the factory had gone out in connection with the serious illness of his brother. On his return, he sent a reminder dated 27.5.1992 to P.S. in continuation to his first letter for F.I.R. F.I.R. was registered on 27.5.1992. The police has not raised any objection in this regard. It may therefore be presumed that either the watchman might have made delay in giving the information to the police or the police might not have registered the F.I.R. in time. The proprietor of the factory had however written to the Chas Branch of the insurer- opposite parties on 27.4.1992 itself enclosing a copy of the draft for lodging F.I.R. The insurer- opposite parties had appointed Shri S.K. Shahi on the basis of information received from the complainant vide his letter dated 27.4.1992. Shri Shahi had inspected the site of occurence on 7.5.1992 when he had found the back door of factory uprooted from the wall. He had also mentioned at page-4 second para as per supplementary affidavit of the complainant that two electric motors and brass rods about 746 bags were burgled. He has stated that electric motors were not covered under the insurance policy. During inspection of the premises on 7.5.1992 Shri Shahi is reported to have found that the lock in the factory was not damaged. It is quite likely that lock might have been opened by the burglars anyhow. From the copy of the police report brought on record by the complainant it would appear that the police had found the case true but no clue was found by the police and final report to the same effect was submitted. In view of the facts mentioned above it is therefore difficult to resist concluding that burglary had been committed in the insured factory.
20. The insurer-opposite parties have doubted that 10,366 kgs. of materials cannot be burgled in such a short time. It may be seen that it is hardly one truck-load of materials which may not be unlikely to have been removed in these years of anarchy when sizable part of materials were in bags and the backdoor was uprooted. This may not therefore be a sufficient ground for rejection of the claim. This Commission is totally in dark if any of the Surveyors had asked for the stock register, ledger and vouchers from the complainant to find out the stock position on the date of occurrence of burglary and if the complainant had failed to produce the same before them. No effort therefore appears to have been made by the opposite parties-Insurance Company to assess the loss.
21. The complainant had stated that he had got orders worth Rs. 2.80 lakhs in one go and laso two orders for Rs. 50,000/- each from Bokaro Steel Plant which shows that his factory was functioning satisfactorily. The complainant has claimed that materials Worth Rs. 6,48,960/- were lost during the burglary. This is less than Rs. 7,50,000/- for which insurance policy was taken. The valuation report of none of the Surveyors are available on record. They have not specifically controverted that the loss of materials worth Rs. 6,48,960/- is inflated.
22. Further we find that the insurance claim was repudiated on 5.12.1996 wherein it is stated that the insurer-opposite parties had taken decision on 16.5.1995 to repudiate the liability. If the decision had been taken on 16.5.1995, reasons for delay of one year and six months even from the date of taking decision in communicating the same to complainant have not been explained by the insurance-opposite parties. They claim to have informed the Commission about it .on 28.9.1995 which is not supported by the order sheet of that date. Even if we accept that they might have informed the Commission on that day, it was incumbent upon them to have informed the complainant in writing. Repudiation was done after one and a half years of decision taken and after four years and seven months of the occurrence of burglary which clearly indicates deficiency in service on the part of the insurer- opposite parties.
23. Extract of relevant portion of the repudiation letter to the complainant is given below :
"Your file was examined thoroughly by the claim committee of our Regional Office and the decision has been taken on 16.5.1995 to repudiate the liability in the light of survey report". But as pointed out earlier, there is no survey report of any of the Surveyors available on record on the basis of which the claim was rejected. On perusal of the cryptic repudiation letter of the opposite parties-Insurance Company, it will be apparent that insurance claim has been repudiated in the most cavalier manner without application of mind and assigning any reason thereof.
24. The complainant has claimed Rs. 6,48,960/- as the price of the insured materials taken away by the burglars. Such materials also include one 3 H.P. electric motor worth Rs. 3,500/- and one 2 H.P. electric motor worth Rs. 2,300/-. According to opposite parties 1 and 2 the electric motors were not under insurance cover. Copy of the Insurance Policy is on record. The learned Counsel for the complainant could not point out any thing in the insurance policy to show that the electric motors were also covered by the insurance. Under the circumstances, the claim concerning the price of electric motors cannot be allowed. As mentioned above, the price of electric motors has been shown as Rs. 3,500/- + Rs. 2,300/- = Rs. 5,800/-. On deducting the amount of Rs. 5,800/- from the amount of Rs. 6,48,960/-, the loss on account of insured materials comes to Rs. 6,43,160/- which the complainant is held to be entitled to get from the Insurance Company.
25. The complainant has claimed Rs. 3.80,000/- on account of loss caused due to non- availability of Bank Guarantee as a result of which the Company could not get aluminium issued from Bokaro Steel. From the insurance policy it would appear that such loss was not covered by the insurance policy. That being so, the claim of Rs. 3,80,000/- on the aforesaid count cannot be allowed.
26. The complainant has claimed Rs. 1,21,000/- as loss due to interest till the filing of the complaint case. From the complaint petition it appears that interest has been claimed at the rate of 18% per annum. From the prayer portion of the complaint petition it would appear that the complainant has prayed for adequate compensation for the expenses incurred by him in making correspondence and personal contact. It may be pointed out that the complainant has not given the details of the amount spent by him on alleged correspondence and personal contact. That being so, it is difficult to allow his prayer for compensation. Furthermore, when he has claimed interest, the claiming of compensation as well may amount to double claim. In this connection, the opposite parties-Insurance Company have referred to the decision of Supreme Court in United India Insurance Company Limited v. M.K.J. Corporation, reported in III (1996) CPJ 8 (SC), stating that claim of 18% interest is not tenable.
27. Keeping the above decisions of the Apex Court in mind, we are of the view that the insured cannot be allowed interest @ 18%. However, the complainant is held to be entitled to interest @ 12% per annum with effect from the date of filing the complaint case.
28. In the light of the above discussion, we are constrained to allow an insurance claim of Rs. 6,43,160/- with interest @ 12% from the date of filing the complaint case till the date of payment. Opposite parties 1 and 2 will also pay Rs. 500/- (five hundred) as cost to the complainant. The said amount with interest and cost shall be payable within two months from the date of receipt of the copy of this order failing which the complainant will be entitled to realise the same through the process of the Court.
Complaint allowed with costs.