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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
K.S. Gupta, Presiding Member and S.K. Naik, Member
NYLOFILS INDIA LTD. - Appellant
Versus
ORIENTAL INSURANCE COMPANY LTD. - Respondent
Original Petition No. 199 of 1999
Decided on : 18-08-2010
Ms. Shobha, Amicus Curiae with Mr. Mohinder Pal Thakur, Advocate, for the Appellant; Mr. Mohan Babu Agarwal, Advocate, for the Respondent
The main legal point established is the liability of the Insurance Company to pay the balance amount based on the assessment of loss and the award of interest to the complainant.
Headnote:
Insurance - Fire Policies - 27.1 of the Insurance Act, 1938 - 9, 13, 19 of the Consumer Protection Act, 1986 - The court discussed the assessment of loss by the Surveyor, the reduction of the claim amount by the Insurance Company, and the calculation of interest on the balance amount. Key legal provisions include the assessment of loss and the award of interest, which influenced the court's decision.
Fact of the Case:
Complainant, a manufacturing company, suffered a fire incident and claimed an amount from the Insurance Company. The Insurance Company contested the complaint, alleging voluntary acceptance of a lower settlement amount and fake/forged documents.
Finding of the Court:
The court found discrepancies in the assessment of loss and directed the Insurance Company to pay the balance amount with interest. The court also awarded costs to the complainant.
Issues: Discrepancies in the assessment of loss, voluntary acceptance of settlement amount, and authenticity of documents.
Ratio Decidendi: The court held that the Insurance Company was liable to pay the balance amount based on the assessment of loss and awarded interest to the complainant. The court also considered the authenticity of the documents and the withdrawal of a complaint made by a Member of Parliament.
Final Decision: The court disposed of the complaint by directing the Insurance Company to pay the balance amount with interest and awarded costs to the complainant.
ORDER
K.S. Gupta, Presiding Member - Complaint was filed, inter alia, alleging that the complainant is a limited company carrying on manufacturing of Nylon Filament Yarn and it makes fishnets out of it. Complainant purchased Fire Policies as detailed in para No. 1 of the complaint from the opposite party-Insurance Company.
2. During the currency of policies on 21.6.1997, a fire took place in the complainant's premises due to electrical spark and short circuiting in one of the electrical motors. Fire Brigade and the police were intimated of the occurrence. Opposite party-Insurance Company too was informed of the occurrence. Lastly, R.L. Agarwal was appointed as Surveyor by the Insurance Company to conduct a fresh survey. It was further alleged that the complainant was forced to agree to accept amount of Rs. 9,79,763 towards full and final settlement of the claim by the Insurance Company This amount was accepted by the complainant without prejudice to its rights. Attributing deficiency in service, direction was sought to be made to the Insurance Company to pay the balance amount of Rs. 33,98,604 being the actual loss suffered by the complainant with interest as also compensation of Rs. 10 lakh. Opposite party contested the complaint by filing written version. It was alleged that the amount of Rs. 9,79,763 was received by the complainant voluntarily towards full and final settlement of the claim and the complaint is, therefore, not maintainable. Complaint was stated to be bad for non-joinder of the bank named in the policies. Amount paid was arrived at after examining the Surveyor's report, Investigator's report and other documents after due application of mind by the opposite party. Documents/invoices submitted in support of the claim by the complainant were fake/forged. Denying deficiency in service, liability to pay the amount paid was emphatically denied.
3. Order dated 4.8.2010 notices that R.L. Agarwal, final Surveyor had assessed the loss at Rs. 14,00,762. Opposite party-Insurance Company had offered to pay to the complainant an amount of Rs. 13,80,780 by way of settlement of claim. However, the actual amount paid to the complainant was Rs. 9,79,763. There was no material on record to suggest how the loss as assessed by the final Surveyor was reduced by the Insurance Company from Rs. 14,00,762 to Rs. 9,79,763. A responsible officer of the Insurance Company was, therefore, directed to remain present along with the claim file showing how the claim was reduced from Rs. 14,00,762 to Rs. 9,79,763 on 9.8.2010.
4. Today the concerned officer of the Insurance Company has filed the communication dated 27.1.1999 which being material, omitting immaterial portion, is reproduced below:
"On the advice of Head Office, authorizing re-opening and settling of the above claim on merits immediately, RCC has re-opened and reviewed the claim approving the same for Rs. 9,79,763 subject to deduction of reinstatement premium. The amount approved of Rs. 9,79,763 has been arrived at as under:
Residue weight 2281.90 Kgs.
Add: 10% for washing away of
material. 228.18 Kgs.
2509.98 Kgs.
Original pre-fire weight
2:1 (2509.98 X 2) 5019.96 Kgs.
Value @ Rs. 191 per Kg. (as given by
Sri D. Ramakrishna, Chartered
Accountant in his report) Rs. 9,58,812.00
Less: Salvage @ Rs. 4 per Kg.
Total 1894.80 Kgs Rs. 7,579.00
Rs. 9,51,233.00
Add: Loss on building and machinery
as assessed by Sri RLN Sastry and
also confirmed by Sri R. L Agarwal Rs. 31,030.00
Rs. 9,82,263.00
Less: Policy excess. Rs. 2,500.00
Rs. 9,79,763.00
you are requested to release the amount immediately under advice to us.
Sd/-
Regional Manager"
5. Material portion of the report of R.L. Agarwal and Sons, Surveyor reads thus:
"2. On the basis of Laboratory report of I.I.C.T. dated 22.12.1997 100 Kgms of Polyfil-6 if burnt would leave 84 Kgs to 86 Kgs of residue when the burnt Residue was 2359.85 Kg the original one should have been only 2776.29 Kgs. (235
