Raju Kumar Gupta Vs. United India Insurance Company Ltd. - Court Judgment

SooperKanoon Citationsooperkanoon.com/1112876
CourtBihar State Consumer Disputes Redressal Commission SCDRC Patna
Decided OnMay-19-2003
Case NumberComplaint No. 45 of 2002
JudgeD.P.S. CHOUDHARY, PRESIDENT & THE HONOURABLE DR. ASMA AHMAD, MEMBER
AppellantRaju Kumar Gupta
RespondentUnited India Insurance Company Ltd.
Excerpt:
consumer protection act, 1986 - section 2(1)(g) - result: complaint disposed of case referred: 2003 (1) cpj 33 (nc). comparative citation: 2003 (4) cpj 692d.p.s. choudhary, president: 1. the complainant preferred this case for a total compensation of rs. 17,14,355.30 which includes actual loss sustained to the insured premises, compensation for deficiency of service and litigation cost besides interest @ 12% per annum. 2. the brief fact of the case is that complainant is the proprietor of m/s. bahurani jewellers situated at patrakarnagar, district patna dealing in the jewellery items. the shop was hypothecated under financial assistance from canara bank, kankarbagh, patna (o.p. no. 3) under cash credit limit of rs. four lacs. the complainant took shopkeepers insurance policy with o.p. no. 3 for a sum insured of rs. 8,75,000/- effective from 2.4.1998 to 1.4.1999. the said policy lapsed on 1.4.1999 and it was renewed with insurance cover of rs. 16 lacs. the renewal policy was rs. 8,550/- per annum. the complainant was not provided the policy though renewal was made. it is alleged that on 28.4.1999 an incident of looting/robbery took place in the complainants shop. ornaments and cash, etc. were looted, the complainant was injured by the butt of the pistol. local police of patrakarnagar was informed which forwarded the case to kadamkuan police station and p.s. case no. 247/1999 was registered. estimated amount between rs. 15 to 18 lacs was mentioned in the fardbeyan but later on after verfication a list of stolen articles amounting to rs. 17,36,923/- was given to the police (annexure 2 and 2/1). the police submitted report stating that the entire incident is false and final form was submitted on 30.5.1999 (annexure 3). the complainant filed protest petition which was registered as complaint case no. 34(c)/2000 but it was dismissed by the judical magistrate on 16.3.2000 against which criminal revision no. 159/2000 was preferred and it was allowed by the order dated 29.5.2001 and it was found that incident/occurrence was true (annexure 4). the insurance company and the bank were reported about the occurrence vide letter dated 29.4.1999 (annexures 5 and 5/1). the insurance company deputed sri kaushal kishore, chartered accountant to assess the loss. the surveyor prepared physical inventory of the stock (annexures 6 and 6/1). the surveyor demanded some papers from the complainant vide letter dated 23.7.1999 and 2.8.1999 but it was not supplied by the complainant immediately and he replied that the same would be made available when his clerk will prepare the same (annexure 7 and 7/1). on 8.9.1999 the complainant submitted the entire documents to the surveyor vide annexures 8, 9 and 10. the complainant also submitted the balance sheet. the chartered accountant vide its report dated 6.5.1999 found total value of property on the date of incident worth rs. 17,36,923/- (annexure 11). after the order passed in criminal revision as mentioned above the complainant submitted the claim form duly filled up to the insurance company for rs. 17,36,923/- on 11.6.2001 (annexures 12 and 13). on demand of the insurance company the complainant has produced several papers, bills, etc. before the company. the insurance company did not settle the claim and later on deputed another surveyor, chandra shekhar prasad who also demanded some papers from the complainant which was complied with (annexures 16 and 17). the insurance company vide its letter dated 17.7.2002 repudiated the claim on the ground that the financial loss suffered by the complainant could not be conclusively proved (annexure 18). 3. the contention of the complainant is that repudiation by the insurance company was to defeat the claim of the complainant without assigning any valid reason. the surveyors report or the investigators report has not been furnished to the complainant, therefore, there was no valid ground to repudiate the claim. finally the complainant filed the case with the above relief. the complainant has filed some affidavits in support of the contention. an affidavit has been filed by chartered accountant, mr. s.k. prasad, who has prepared the audit report of the complainants shop and has assessed the loss to the tune of rs. 17,36,923/-. 4. the united india insurance company-o.p. has filed written statement and its main contention is that the case in not maintainable. the insurance company has the coverage to the canara bank account concerning the complainants shop. the canara bank has raised no dispute before the commission but it is the complainant who has raised the dispute. the receipt of payment of the premium filed on behalf of the complainant mentions the name of the canara bank and not of the complainant. the repudiation of the claim was made on the basis of the police report as per section 64-um(10) of the insurance act. the renewal of a policy is made on the same condition of the earlier policy and if the condition is to be changed a new proposal of insurance is to be made. the renewal of the policy was issued by the insurance company in the name of the canara bank and not in the name of the complainant. the police in this case has doubted the occurrence of loot, therefore, the surveyors report was not final nor to be accepted rather it was also doubtful. the final survey was made by surveyor, chandra shekhar prasad who opined that the entire claim of the complainant is fictitious and forged and on his report the claim was repudiated (annexure a). if the complainant was not satisfied with the surveyors report he may have approached insurance regulatory authority for final decision which is binding on the insurance company. 5. from the submissions of the parties it is admitted fact that complainants firm and shop was insured with the o.p. through canara bank. the only contention with this regard on behalf of the o.p. is that the policy of insurance in question was taken by the canara bank and not by the complainant, thus the complainant has no direct contact with the united india insurance company. any claim under the said policy will be paid to the canara bank and not to the complainant. we do not find any dispute with regard to this fact. the insurance company is at liberty to pay the claim of the complainant through canara bank and may not pay directly to the complainant. 6. the point in dispute is that insurance company has repudiated the claim of the complainant on the ground that final form has been submitted by the police mentioning that the report of occurrence of loot/robbery was false and did not take place as alleged by the complainant. in reply to this contention the complainant submitted that it has preferred revision against the submission of final form by the police vide criminal revision no. 159/2000 and the additional district and sessions judge in its order dated 29.5.2001 has allowed the revision and held that incident/occurrence of loot and burglary was true (annexure-4). the insurance company had not preferred any revision or appeal against this order, hence it become final. this judicial order is binding on the insurance company and it cannot take the plea that since the police has submitted his final form, therefore, the claim of the complainant is being repudiated. 7. we have perused annexure-4. the only contention of o.ps. is that the sessions judge has acted beyond the power of revision, hence the order is not binding. there is no susbtance in this submission of the o.p. which has not preferred any revision, or appeal against this order. therefore, this order of the district and sessions judge is binding to the insurance company also. this fact is also admitted that on 30.4.1999 the insurance company-o.p. has appointed surveyor, sri kaushal kishore who prepared the inventory of stock in presence of branch manager, united india insurance company and agent of the company and the remaining stock was valued at rs. 82,570.70 (annexure 6). the surveyor has made demand of several papers from the complainant vide annexures 6, 6/1 and 7. the balance sheet was prepared by the surveyor, sri s.k. prasad and had held that stock stolen amounted to rs. 16,54,352.30. the complainant has claimed rs. 17,36,923/-. thereafter, the surveyor has then enquired from the complainant on certain points seeking clarification which was replied by the complainant and thereafter the surveyor, sri kaushal kishore again assessed the loss to the extent of rs. 3,83,508/- only. thereafter, the insurance company appointed another surveyor/investigator, sri chandra shekhar prasad who opined that the entire claim of the complainant is fictitious and forged and recommended that claim be repudiated (annexure a). 8. on this point the contention of the complainant is that the first surveyor has assessed the claim of the complainant at lower side amounting to rs. 3,83,508/- but surprisingly this was also not acceptable to the insurance company and then he appointed a surveyor/investigator of his choice, namely sri chandra shekhar prasad who submitted the report. it is settled law that insurance company under section 64-um cannot appoint another surveyor without assigning valid reason for not accepting the report of the first surveyor. in several decisions the honble apex court as well as the national commission has held that reason for non-acceptance of report of first surveyor must be specified, insurer not free to appoint second surveyor to counter or contradict report of first surveyor. if the report of first surveyor is not proved as faulty then it is binding on the insurer. 9. the scheme of section 64-um particularly of sub-sections (3) and (4) would show that insurer cannot appoint second surveyor just as a matter of course. if the report of the surveyor or loss assessor is not acceptable to the insurer it must specify reason, but it is not free to appoint second surveyor. the appointment by the insurer of a second surveyor itself would be a reflection on the conduct of the first surveyor. surveyor or loss assessor is duty-bound to give a correct report. if the company find that surveyor or loss assessor has not considered certain relevant points, it has reservation about the report, it can certainly require the surveyor to give his views and then come to its own conclusion, but insurer cannot appoint second surveyor or loss assessor/investigator to counter or even contradict or rebute the report of the first surveyor. i (2003) cpj 33 (nc), national insurance company ltd. v. new patiala trading company]. 10. it is a statute which prescribed licence to surveyor or loss assessor who is to be appointed to assess the loss where it is equal to more than rs. 20,000/-. prima facie, therefore, credence will have to be given to the report of such approved surveyor or loss assessor. 11. we have scrutinised the report on record and there is nothing on record to show that report submitted by the first surveyor, sri kaushal kishore was in any way faulty nor the o.p.-insurer has pointed out any error or omission in this report. the o.p. also failed to make out any case before us for the reason to appoint second surveyor/investigator. as discussed above, the surveyor sri kaushal kishore has assessed the loss to the extent of rs. 3,83,508/- only. the complainant has claimed rs. 17,36,923/-. 12. in the fact and circumstances, we are of the view that insurer company (o.p.) is liable to pay the complainant the amount assessed by the surveyor, sri kaushal kishore to the extent of rs. 3,83,508/- only. we have already held above that repudiation of the claim by the insurer on the ground mentioned above was not valid and it amounts to deficiency in the service of the opposite party. 13. in the result, the o.p. is directed to pay to the complainant rs. 3,83,508/- only within three months from the date of the order with interest @ 12% from the date of repudiation, i.e., 17.7.2002 till the date of payment. since we have allowed interest on the above amount the claim of compensation of the complainant is not to be allowed because he is not entitle for double benefit. the litigation cost allowed is rs. 1,000/- only. complaint disposed of.
Judgment:

D.P.S. Choudhary, President:

1. The complainant preferred this case for a total compensation of Rs. 17,14,355.30 which includes actual loss sustained to the insured premises, compensation for deficiency of service and litigation cost besides interest @ 12% per annum.

2. The brief fact of the case is that complainant is the proprietor of M/s. Bahurani Jewellers situated at Patrakarnagar, District Patna dealing in the jewellery items. The shop was hypothecated under financial assistance from Canara Bank, Kankarbagh, Patna (O.P. No. 3) under cash credit limit of Rs. four lacs. The complainant took shopkeepers insurance policy with O.P. No. 3 for a sum insured of Rs. 8,75,000/- effective from 2.4.1998 to 1.4.1999. The said policy lapsed on 1.4.1999 and it was renewed with insurance cover of Rs. 16 lacs. The renewal policy was Rs. 8,550/- per annum. The complainant was not provided the policy though renewal was made. It is alleged that on 28.4.1999 an incident of looting/robbery took place in the complainants shop. Ornaments and cash, etc. were looted, the complainant was injured by the butt of the pistol. Local police of Patrakarnagar was informed which forwarded the case to Kadamkuan Police Station and P.S. Case No. 247/1999 was registered. Estimated amount between Rs. 15 to 18 lacs was mentioned in the Fardbeyan but later on after verfication a list of stolen articles amounting to Rs. 17,36,923/- was given to the police (Annexure 2 and 2/1). The police submitted report stating that the entire incident is false and final form was submitted on 30.5.1999 (Annexure 3). The complainant filed protest petition which was registered as Complaint Case No. 34(C)/2000 but it was dismissed by the Judical Magistrate on 16.3.2000 against which criminal revision No. 159/2000 was preferred and it was allowed by the order dated 29.5.2001 and it was found that incident/occurrence was true (Annexure 4). The Insurance Company and the Bank were reported about the occurrence vide letter dated 29.4.1999 (Annexures 5 and 5/1). The Insurance Company deputed Sri Kaushal Kishore, Chartered Accountant to assess the loss. The Surveyor prepared physical inventory of the stock (Annexures 6 and 6/1). The Surveyor demanded some papers from the complainant vide letter dated 23.7.1999 and 2.8.1999 but it was not supplied by the complainant immediately and he replied that the same would be made available when his clerk will prepare the same (Annexure 7 and 7/1). On 8.9.1999 the complainant submitted the entire documents to the Surveyor vide Annexures 8, 9 and 10. The complainant also submitted the balance sheet. The Chartered Accountant vide its report dated 6.5.1999 found total value of property on the date of incident worth Rs. 17,36,923/- (Annexure 11). After the order passed in criminal revision as mentioned above the complainant submitted the claim form duly filled up to the Insurance Company for Rs. 17,36,923/- on 11.6.2001 (Annexures 12 and 13). On demand of the Insurance Company the complainant has produced several papers, bills, etc. before the Company. The Insurance Company did not settle the claim and later on deputed another Surveyor, Chandra Shekhar Prasad who also demanded some papers from the complainant which was complied with (Annexures 16 and 17). The Insurance Company vide its letter dated 17.7.2002 repudiated the claim on the ground that the financial loss suffered by the complainant could not be conclusively proved (Annexure 18).

3. The contention of the complainant is that repudiation by the Insurance Company was to defeat the claim of the complainant without assigning any valid reason. The Surveyors report or the Investigators report has not been furnished to the complainant, therefore, there was no valid ground to repudiate the claim. Finally the complainant filed the case with the above relief. The complainant has filed some affidavits in support of the contention. An affidavit has been filed by Chartered Accountant, Mr. S.K. Prasad, who has prepared the audit report of the complainants shop and has assessed the loss to the tune of Rs. 17,36,923/-.

4. The United India Insurance Company-O.P. has filed written statement and its main contention is that the case in not maintainable. The Insurance Company has the coverage to the Canara Bank account concerning the complainants shop. The Canara Bank has raised no dispute before the Commission but it is the complainant who has raised the dispute. The receipt of payment of the premium filed on behalf of the complainant mentions the name of the Canara Bank and not of the complainant. The repudiation of the claim was made on the basis of the police report as per Section 64-UM(10) of the Insurance Act. The renewal of a policy is made on the same condition of the earlier policy and if the condition is to be changed a new proposal of insurance is to be made. The renewal of the policy was issued by the Insurance Company in the name of the Canara Bank and not in the name of the complainant. The police in this case has doubted the occurrence of loot, therefore, the Surveyors report was not final nor to be accepted rather it was also doubtful. The final survey was made by Surveyor, Chandra Shekhar Prasad who opined that the entire claim of the complainant is fictitious and forged and on his report the claim was repudiated (Annexure A). If the complainant was not satisfied with the Surveyors report he may have approached Insurance Regulatory Authority for final decision which is binding on the Insurance Company.

5. From the submissions of the parties it is admitted fact that complainants firm and shop was insured with the O.P. through Canara Bank. The only contention with this regard on behalf of the O.P. is that the policy of insurance in question was taken by the Canara Bank and not by the complainant, thus the complainant has no direct contact with the United India Insurance Company. Any claim under the said policy will be paid to the Canara Bank and not to the complainant. We do not find any dispute with regard to this fact. The Insurance Company is at liberty to pay the claim of the complainant through Canara Bank and may not pay directly to the complainant.

6. The point in dispute is that Insurance Company has repudiated the claim of the complainant on the ground that final form has been submitted by the police mentioning that the report of occurrence of loot/robbery was false and did not take place as alleged by the complainant. In reply to this contention the complainant submitted that it has preferred revision against the submission of final form by the police vide Criminal Revision No. 159/2000 and the Additional District and Sessions Judge in its order dated 29.5.2001 has allowed the revision and held that incident/occurrence of loot and burglary was true (Annexure-4). The Insurance Company had not preferred any revision or appeal against this order, hence it become final. This judicial order is binding on the Insurance Company and it cannot take the plea that since the police has submitted his final form, therefore, the claim of the complainant is being repudiated.

7. We have perused Annexure-4. The only contention of O.Ps. is that the Sessions Judge has acted beyond the power of revision, hence the order is not binding. There is no susbtance in this submission of the O.P. which has not preferred any revision, or appeal against this order. Therefore, this order of the District and Sessions Judge is binding to the Insurance Company also. This fact is also admitted that on 30.4.1999 the Insurance Company-O.P. has appointed Surveyor, Sri Kaushal Kishore who prepared the inventory of stock in presence of Branch Manager, United India Insurance Company and agent of the Company and the remaining stock was valued at Rs. 82,570.70 (Annexure 6). The Surveyor has made demand of several papers from the complainant vide Annexures 6, 6/1 and 7. The balance sheet was prepared by the Surveyor, Sri S.K. Prasad and had held that stock stolen amounted to Rs. 16,54,352.30. The complainant has claimed Rs. 17,36,923/-. Thereafter, the Surveyor has then enquired from the complainant on certain points seeking clarification which was replied by the complainant and thereafter the Surveyor, Sri Kaushal Kishore again assessed the loss to the extent of Rs. 3,83,508/- only. Thereafter, the Insurance Company appointed another Surveyor/Investigator, Sri Chandra Shekhar Prasad who opined that the entire claim of the complainant is fictitious and forged and recommended that claim be repudiated (Annexure A).

8. On this point the contention of the complainant is that the first Surveyor has assessed the claim of the complainant at lower side amounting to Rs. 3,83,508/- but surprisingly this was also not acceptable to the Insurance Company and then he appointed a Surveyor/Investigator of his choice, namely Sri Chandra Shekhar Prasad who submitted the report. It is settled law that Insurance Company under Section 64-UM cannot appoint another Surveyor without assigning valid reason for not accepting the report of the first Surveyor. In several decisions the Honble Apex Court as well as the National Commission has held that reason for non-acceptance of report of first Surveyor must be specified, insurer not free to appoint second Surveyor to counter or contradict report of first Surveyor. If the report of first Surveyor is not proved as faulty then it is binding on the insurer.

9. The scheme of Section 64-UM particularly of Sub-sections (3) and (4) would show that insurer cannot appoint second Surveyor just as a matter of course. If the report of the Surveyor or Loss Assessor is not acceptable to the insurer it must specify reason, but it is not free to appoint second Surveyor. The appointment by the Insurer of a second Surveyor itself would be a reflection on the conduct of the first Surveyor. Surveyor or Loss Assessor is duty-bound to give a correct report. If the Company find that Surveyor or Loss Assessor has not considered certain relevant points, it has reservation about the report, it can certainly require the Surveyor to give his views and then come to its own conclusion, but insurer cannot appoint second Surveyor or Loss Assessor/Investigator to counter or even contradict or rebute the report of the first Surveyor. I (2003) CPJ 33 (NC), National Insurance Company Ltd. v. New Patiala Trading Company].

10. It is a statute which prescribed licence to Surveyor or Loss Assessor who is to be appointed to assess the loss where it is equal to more than Rs. 20,000/-. Prima facie, therefore, credence will have to be given to the report of such approved Surveyor or Loss Assessor.

11. We have scrutinised the report on record and there is nothing on record to show that report submitted by the first Surveyor, Sri Kaushal Kishore was in any way faulty nor the O.P.-Insurer has pointed out any error or omission in this report. The O.P. also failed to make out any case before us for the reason to appoint second Surveyor/Investigator. As discussed above, the Surveyor Sri Kaushal Kishore has assessed the loss to the extent of Rs. 3,83,508/- only. The complainant has claimed Rs. 17,36,923/-.

12. In the fact and circumstances, we are of the view that insurer Company (O.P.) is liable to pay the complainant the amount assessed by the Surveyor, Sri Kaushal Kishore to the extent of Rs. 3,83,508/- only. We have already held above that repudiation of the claim by the insurer on the ground mentioned above was not valid and it amounts to deficiency in the service of the opposite party.

13. In the result, the O.P. is directed to pay to the complainant Rs. 3,83,508/- only within three months from the date of the order with interest @ 12% from the date of repudiation, i.e., 17.7.2002 till the date of payment. Since we have allowed interest on the above amount the claim of compensation of the complainant is not to be allowed because he is not entitle for double benefit. The litigation cost allowed is Rs. 1,000/- only.

Complaint disposed of.