K.P. Sinha, Member:
1. This is a complaint filed by M/s. Mona Silk, Burha Nath Road, Bhagalpur (hereinafter referred to as the complainant) against the National Insurance Company Limited, Bhagalpur Branch (hereinafter referred to as the O.P.) for non settlement of their claim under the Burglary Insurance Policy No. 7502200 of 1989-90 in respect of theft of silk fabrics and silk yarns, committed in the night of 28th and 29th September, 1989 from the insured premises of the complainant. An FIR about the above theft was lodged with the Kotwali Police Station who registered Bhagalpur Kotwali P.S. Case No. 607 dated 29.9.89 for the above theft. On 29th September itself the Branch Manager of the National Insurance Company was informed about the incident of theft. A Surveyor was deputed by the Insurance Company who visited the premises and collected relevant informations. Subsequently on 24th October, 1989 another Surveyor of the National Insurance Company visited the insured premises and again collected detailed information of the incident as well as the total stock position since l.4.89 till the date of occurrence i.e. till 28.9.89. The police after completing the investigation submitted final report on the complaint made by the complainant as "Case true-no clue " u/Sec. 457/ 380 of the Indian Penal Code. This final report of the police was accepted by the Chief Judicial Magistrate. It is alleged by the complainant that in spite of above facts several rejoinders, telephonic talks and personal visits of the complainant the Insurance Company did not take any decision in the matter of his claim relating to that the Burglary Policy No. 7502200 taken by the complainant from the Opp Party which was valid till 28th June, 1990. The complainant has, therefore, claimed a total sum of Rs. 1,92,667.50 against the O.Ps. comprising of the following items:â
| ( a) | The amount representing the value of goods stolen at | Rs. 77,667.50 |
| (b) | Compound interest charged by the Bank on the claimed amount at | Rs. 25,000.00 |
| (c) | Estimated business loss suffered for 18th months @ Rs. 5000/- per month | Rs. 90,000.00 |
| Â | Total:â | Rs. 1,92,667.50 |
3. In reply to these contentions made in the written statement of the O.Ps. rejoinder has been filed in which it has been mentioned that the complainant suffered unwarranted harassment on account of negligence of the O.Ps. in finalising the claim made by him. It has been pointed out that the First Surveyor submitted his report on 30.9.89 but another Surveyor was appointed who surveyed on 24.10.89, the final form was submitted by the Police and accepted by the CJM, Bhagalpur and the complainant gave the original police final report as accepted by the CJM to the O.P. on 31.5.90 and still the O.Ps. did not take necessary steps to finalise this matter till the date of filing of the complaint petition before the State Commission. They did not even care to reply to the correspondences made by the complainant. It is further contended that the occurrence of the had not been denied by any of the two Surveyors appointed by the Insurance Company. It is further submitted that it was false to suggest the complainant was not the owner of the stolen goods since the Surveyor himself has recommended compensation for the theft of the properties of the insured.
4. The O.Ps. have also filed additional written statement in which they have stated that they appointed on 29.9.89 itself, a Survey or to conduct the preliminary survey of the loss who submitted his report on 11.10.89. On receipt of the report it was found that the loss seems to be colossal in nature hence it required thorough check-up of relevant documents and books of accounts and, therefore, another Surveyor was appointed on 13.10.89. His report got delayed because the complainant did not produce relevant papers. In spite of several reminders sent by the O.Ps. to the Surveyor, the last one on 22.1.91 the report was ultimately submitted by second Surveyor on 15.4.91. It is contended that the delay in submission was on account of the complainant not having furnished due papers and further that the Insurance Company has no control on Surveyors who are independent persons. It is also asserted that the complainant is only a Commission Agent and was not the owner of the goods said to have been stolen and he did not have any coverage for the goods retained by him on commission and, therefore, that the claim was not maintainable as it was not covered under Insurance. It has been submitted that the O.Ps. offered to the tune of Rs. 34,935.00 on compassionate ground and commercial interest in order to upkeep the credibility of the Insurance Company in the market and since the complainant has not accepted the amount offered, the matter is fit to be referred for arbitration. This additional written statement on behalf of the O.P. was filed before the Commission on 24.8.92 after the complainant had filed a petition before this Commission on 18.8.92 contending that he was not a Commission Agent and this was a manufacturing/processing unit in silk and cotton clothes registered as a small scale industries unit under the Government of Bihar. In this petition it was further contended that the O.P. is neither settling the claim nor replying to the correspondences of the complainant. The complainant has filed an affidavit supporting the contentions made by him in his complaint petition, in the rejoinder petition to the written statement of the O.Ps. and his petitions dated 24.4.92, 18.8.92 and 18.9.92.
5. We have perused the documents filed by the both parties and heard the learned Counsels for the parties. As regards insistence of the O.Ps. on arbitration rather than redressal of the complainant's grievance by a Forum under the Act, suffice it would to refer to the rulings of National Commission in Nitesh Agrawal v. Union of India I (1991) CPJ 203 (NC) Bihar State Warehousing Corporation v. Commercial Officer Telecom, Patna I (1991) CPJ 42 (NC) and Dr. Tarun Bhathuar and Others v. District Manager, Telecom, Patna and I (1992) CPJ 47 (NC). It has been held by the National Commission that in spite of provision for arbitration under the various Acts proceedings under the Consumer Protection Act could continue and these proceedings under this Act should not be stayed.
6. With regard to the O.Ps.' contention about the claim of the complainant having been repudiated, it would be worthwhile to point out the ruling of the National Commission in United India Insurance Company v. P.S. Mani II (1992) CPJ 354 (NC) that merely because the insurer repudiates the claim under the policy, it is difficult to hold that the Redressal Forums constituted under the Act had no jurisdiction in the matter. The National Commission have upheld that the State Commission has full jurisdiction to go into the matter and satisfy thereunder that the claim had been properly repudiated by the Insurers. In view of these rulings cited above no weight can be attached to the case of the O.Ps. against the maintainability of the present complaint.
7. Coming to the facts of the case it is clear to us that there was a theft in the premises which were duly insured under the Burglary Insurance Policy mentioned above. The matter was promptly reported to the police who investigated the case and submitted report as "Case true-no clue", which was duly accepted by the CJM, Bhagalpur. This fact of theft has also not been denied by any of the 2 Surveyors. It is also clear that the premises from which the theft occurred was covered by the Burglary Policy. With regard to, however, the Insurance coverage of the goods stolen the contention of the O.PS. is that the goods did not belong to the O.Ps. and they belong to some other parties on which goods the complainant was only entitled to a commission and these goods were, therefore, not covered by the policy, which only covered stocks upto the extent of Rs. 5,00,000/- of stocks pertaining to the business of the propose and not on similar property held in trust by the Insured for which he was responsible. This contention of the O.Ps. has been made in the light of observations made in the final report dated 15.4.91 of the second Surveyor Shri P.K. Peeyush. It is mentioned by the Surveyors in his report that "It has been observed by going through the memos supplied by the concerned parties along with the goods that the memos are only challans and not Invoice "meaning thereby that the insured is not the owner of the property for which he is involved as medium for getting the process done for professsional purposes. He earns only the commission on it. The Surveyor proceeds to say that this can be made clear by going through one of the Memo sent by Bharat Silks of 149-2, D.N. Singh Road, Bhagalpur dated 21st October, 1989 vide order No. 90/89-90 in the name of M/s. Mona Silk.
8. We have perused the photo copy of the order of M/s. Bharat Silk referred to above by the Surveyor (Annexure-A) to the affidavited petition of the complainant received by the learned Advocate for the O.Ps. on 24.4.92. The order says that the yarns were being to Mona Silk for the production of the fabrics of M/s. Bharat Silk and that M/s. Mona Silk will be responsible till the work is done and the fabrics handed over to them and that M/s. Mona Silk did not and otherwise transfer to use the yarn. With this order raw silk yarn was issued to the complainant on 21st October, 1989, the value of which was Rs. 17,500.00. Against this order the complainant handed back weave silk fabrics to M/s. Bharat Silk, the value of which was calculated at Rs. 36,120/-and after deducting Rs. 17,500/- the cost of yarns an Invoice for Rs. 18,620/- was issued against M/s. Bharat Silk (Annexure-B) of the complainant affidavited petition dated 24.4.92. If the contention of the O.Ps. that the complainant was only a Commission Agent was correct then it beats common sense completely that a commission of Rs. 18,620/- would be earned on yarns of Rs. 17,500/- The Surveyor who was examined by the O.Ps. as his witness was not examined on this point at all. Merely issuing of raw materials and purchasing of the finished goods for these raw materials does not make the complainant a commission agent. If it were so then all the Ancillary Industrial Units to whom raw materials are issued by the concerned parent unit for manufacturing as per the specifications of the parent unit and the finished goods are purchased back by the parent unit, would become commission agents and not Industrial Units doing business of their own. Further the complainant is also registered as a Small Scale Unit of the Government of Bihar which Registration is granted after due inquiries by the Industries Department. Moreover, the first Surveyor in his report at Page-3, Para-13 has said that the firm's main business is to get silk fabrics manufactured, that the order for manufacturing silk fabrics to the firm comes from exporters mostly from Bombay and Madras. Only export quality furnishing silk fabrics are manufactured. The firm also purchases silk yarn directly from the market. In the light of the discussions we over-rule the contention of the O.P. that the stock stolen were not covered under the Insurance Policy.
9. Coming to the calculation of the amountstolen it is seen that the first Surveyor has given his opinion in para-18 at page-4 of his report that he has thoroughly inquired into the case and he came to understand that the claim is genuine and the loss actually incurred, this means that as per the report of the first Surveyor the claim of Rs. 77,612/- on account of the loss of stock due to theft was cancel. In the report of the second Surveyor this amount, however, has been reduced to Rs. 34,935.00. The argument for this reduction given in the report at page 9, para (C) is that the Insurance covered was only for Rs. 5,00,000/- though the value of the stock in book was for the order of Rs. 11,11,585/-and therefore this was a case of under Insurance and the loss claimed was, therefore, reduced in the proportion of Rs. 5,00,000/- to 11,11,585/- and, therefore, the claim of Rs. 77,667/- gets reduced to Rs. 34,935.00. The complainant in his duly affidavited petition on 18.9.92 has said that the value of stock in his go down on 29.8.89 was only Rs. 4,25,241/- and adding the amount of theft i.e. Rs. 77,667/-, the total value of stock in the go down was only Rs. 5,02,908/- and against this value the Insurance covered was for Rs. 5,00,000/-. It was an Insurance of Rs.5,00,000/- against the stocks of Rs. 5,02,908/- and not against Rs. 11,11,585/-. The complainant conceded that the claim amount could be reduced to Rs. 77,218/- which will be in proportion of Rs. 5,00,000/- to Rs. 5,02,908.00. This statement of the complainant is also borne out by the Annexure-E of the additional written statement of the O.P. (Page- 14) where it is clearly shown that the value of stocks in go down was Rs. 4,25,241/-and the value of stocks will weavers was Rs. 6,86,344/- and the total value of stock is Rs. 11,11,585/-. The second Surveyor was examined on oath as witness No. 1 of the O.P. In his cross-examination and he has admitted that while calculating the value of stock at Rs. 11,11,585/- he had added the value of those stocks also which were with the weavers. We fail to see as to why the second Surveyor had to take into account the stock lying with the weavers because they were not the subject matter of the Insurance Policy. Only the stocks in the go down of the complainant were insured and, therefore, if the matter of under insurance was to be considered, it was only with reference to the value of stocks in the go down as on 29th August, 1989 along with the value of stocks claimed to have been stolen in the night of 28/29.9.89. Obviously the second Surveyor did not fully apply his mind to the matter. This conclusion is also supported by the observation of the second Surveyor at Page-6 of the report, para-9 about a difference in credit and debit side of balances for the period 1.4.89 to 29.9.89. While showing this difference he has shown the purchases from 1.4.89 to 29.4.89 at Rs. 30,94,622.00. From the statement, however, filed by the O.Ps. themselves (Annexure-E) page-15, we find that the total value of purchases viz. Rs. 30,94,622/- includes opening balance of Rs. 6,63,586/-. The second Surveyor, however, has shown the value of opening stock in addition to the figure of Rs. 30,94,622/-. Much of the difference therefore, as pointed by him in the credit and balance side of the manufacturing account of the complainant is explained by double calculation of showing opening stock being shown separately and again showing the value of purchases including the value of the opening stock at Rs. 30,94,622/-. The Balance Sheet of the complainant has been duly audited by a Chartered Accountant. With regard to the query made by us as to why a second Surveyor was appointed when the report of the First Surveyor was received promptly, it was submitted by the learned Advocate for the O.Ps. that the claim amount was considered colossal and hence this necessited appointment of the Second Surveyor. This fact of the amount being colossal is also mentioned in the written statement of the O.Ps. We fail to see as to how a claim of Rs. 77,667/- could considered colossal against the insured value of Rs. 5,00,000/-. Accordingly, therefore, there was not enough justification for reappointment of a Second Surveyor immediately on receipt of First Surveyor's Report on 17.10.89. The O.Ps. should have applied their mind to the report of the First Surveyor and if they found any thing wrong in the report then they should have appointed Second Surveyor giving specific direction to the Second Surveyor to looked into specific matters arising out of the Report of the First Surveyor. The appointment letter to Second Surveyor dated 13.10.89 copy of which has been filed by the O.Ps (Annexure-B) of his Additional Written Statement shows no such thing and Shri Peeyush was only advised that he was being appointed a Surveyor to survey and investigate with regard to the above claim. The Second Surveyor, however, did not submit report till 15.4.91 that is more than one and half years of his appointment. Nor was he reminded about non-submission of the report till 22.1.91. That is the first reminder (Annex. C) to the additional written statement of the O.Ps. which was sent only on 22.1.91. The first reminder was, therefore, after about 1¼ years. It is the first and not the last reminder as contended in the written statement of the O.P. obviously the O.P. did not take due interest about the obtaining promptly the report of the Second Surveyor. It has been mentioned in the written statement that the Surveyors are independent professional people and the O.P. have no control on them.
10. While it is true that the Surveyors are independent professionals, their profession is wholly depended on the work of survey entrusted to them by the Insurancy Company. While delivering their order in the case of United India Insurance Company v. P.S. Mani II (1992) CPJ 354 (NC) the National Commission have reiterated while Para-9 of the order their findings in the case ofNew India Assurance Company v. Vipro Electronics I (1991) CPJ 335 (NC) that "It has to be remembered that Surveyors bread comes from their employer". The fact that the O.P. did not take any interest in obtaining the report till one and a half years of the appappointment of the Second Surveyor was clearly a case of negligence on the part of the O.P. on account of which the complainant suffered financial losses. The Second Surveyor was examined as a witness by the O.Ps. but no questions were asked about the reasons for delay in the submission of his report. Nor much credence can, therefore, be given to the O.Ps. contention that the delay in the submission of the Surveyor's Report was on account of any default on the part of the complainant.
11. In result, therefore, we consider that the claim amount reduced by the proportion for under the Insurance already discussed above at Rs. 77,218/- is payable by the O.P. to the complainant along with the interest charged by the Canara Bank on this amount till March, 1991 i.e. Rs. 25,000.00.
12. As regards the estimated business loss suffered by the complainant he had claimed @ Rs. 5,000/- per month for 18 months viz. Rs. 90,000.00. He has given us no details about the above calculation. Obviously it is an estimate in support of which the complainant could have furnished us with his Income Tax Returns and assessment thereon for the immediate proceeding years which could give us an idea about the total income of the complainant during a financial year and the loss he could have sustained on account of non-payment of a sum of Rs. 77,218.00 by the Insurance Company in time. However, keeping in view the loss and anxiety suffered by the complainant on account of his claim not being paid by the Insurance Company in time, we would award a compensation of Rs. 10,000/- to be payable to the complainant by the O.P. over and above the amount mentioned above.
13. The total amount, therefore, payable to the complainant by the O.P. on account of their negligence resulting in the loss suffered by the complainant would be Rs. 77,612.00+ 25,000/- + 10,000.00 =Rs. 1,12,612.00.
14. We, therefore, direct the O.P. to pay this amount to the complainant within three months from the date of the order.