NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Residing Member and Ram Surat Ram Maurya, Member
New India Assurance Co. Ltd. and Ors. – Appellants
versus
Srinivasan Automobile Pvt. Ltd. and Anr. – Respondents
First Appeal No.172 of 2011 and First Appeal No.214 of 2011
Decided on 11.8.2021

IMPORTANT POINTS
(1) Appellant/Insurer did not disclose the name of the officer, who had settled the claim nor adduced any evidence in this respect.
(2) Although the stock of spare parts as submitted by the Appellant/Insured were verified to be true but its value was found on MRP basis.
(3) Loss was rightly assessed taking into account of Distributors Price basis and deduction of 5% total for dead stock and 5% for salvage.

Headnote:

Consumer Protection Act, 1986 – Section 15 (Consumer Protection Act, 2019 – Sec. 41) – First Appeals – Against the Order dt. 03.02.2011 in Appeal of the State Commission by Respondent - Appeal also filed by Respondent u/s 19 (Consumer Protection Act, 2019 – Sec. 24) – Per State Commission’s Order, complaint was allowed and Appellant/insurer was directed to pay Rs.59,01,604/- after deducting the amt. of Rs.37,05,006/- (already rcvd. by the SBI), i.e., bal. amt. of Rs.21,96,598/- along with interest@9% p.a. and cost of Rs.10,000 to Respondents – Respondent dealer of Bajaj Auto used to sell two wheelers and spare parts, took working capital facility from SBI, with hypothecation of vehicles, spare parts, accessories - SBI got Std. Policy from the Appellants/Insurer, for coverage of Rs.30,00,000/- and Rs.20,00,000/- for its two showrooms – Fire broke out at one showroom store – Insured Respondent informed Appellant and told them to do survey, assess loss and reimburse it – Loss assessed Rs.20,00,000/- per preliminary rpt - Loss assessed Rs.59,01,604/- per final rpt. – No settlement made - State Commission found that the alleged settlement was not signed by Insured or any of his employee - Receiving cheque and its deposit in the bank do not amount to full and final settlement of the claim – Appellant/Insurer did not disclose the name of the officer, who had settled the claim nor adduced any evidence in this respect although the stock of spare parts as submitted by the Appellant/Insured were verified to be true but its value was found on MRP basis- Loss was rightly assessed taking into account of Distributors Price basis and deduction of 5% total for dead stock and 5% for salvage.

Held: State Commission, after hearing the parties, by judgment dated 03.02.2011 found that the alleged settlement was not signed by the Insured or any of his employee. The bank has already received entire dues before the settlement. Receiving cheque dated 09.06.2009 and its deposit in the bank do not amount to full and final settlement of the claim. Relying upon the judgments in New India Assurance Company Vs. Shree Shyam Cotspin Ltd., (2009) CPJ 110 (NC) and Sri Venkateshwerya Syndicate Vs. Oriental Insurance Company, (2010) CPJ 1 (SC), it has been held that appointment of J. Basheer & Associates Surveyors Pvt. Ltd. without permission of IRDA as fresh surveyor on 23.04.2008 was illegal. The complainant submitted the statement of the stock of July 2007, showing value of the spare parts as of Rs.58,38,316/-, then the bank sought for enhancement of the coverage of the policy of the stock, on which coverage was enhanced through endorsement dated 03.08.2007.Cunningham Lindsey International Pvt. Ltd. has considered audited balance sheet of the earlier years and provisional balance sheet for 2006-2007, Income Tax Returns, monthly returns of VAT, statement of the stock of the bank and submitted his report dated 30.11.2007, showing the value of the stock as Rs. 59,01,604/- after deducting salvage. J. Basheer & Associates Surveyors Pvt. Ltd. in his report dated 21.03.2009 has raised a presumption that the stock included the stock of three wheelers, to the extent of 45% of the total stock as the business of three wheeler was being done from another premises, from long before the incident as such he had reduced 45% of the value of the stock on presumption, which is not liable to be accepted. On these findings, State Commission accepted the report dated 30.11.2007 and awarded compensation on its basis along with an interest @ 9% p.a. from 09.06.2009 and cost of litigation as Rs.10,000/-

We have considered the arguments of the counsel for the parties and examined the record. The counsel for the Insurer argued that cheque dated 09.06.2009 was for full and final settlement; The cheque was received by Mr. Suri Babu, the accountant of the Insured and deposited in State Bank of India, who has granted cash credit facility to the Insured and goods of the stock were hypothecated with it; as such in view of Agreed Bank Clause, full and final settlement of the claim, has been done. The Insured was not entitled to file the present complaint, after final settlement of the claim.

From these provisions, it is clear that clause-ii talks about the money becoming payable under the policy. Till issuing the cheque dated 09.06.2009, there was serious dispute between the Insured and the Insurer about the amount of money payable under the policy as such even if the bank of the Insured accepted the cheque (which according to the Insurer was of full and final settlement and according the Insured it was part payment of the claim), it does not amount to complete discharge of the Company. Under clause-iv, the bank has been authorised for the adjustment, settlement or compromise. The Insurer did not disclose the name of the officer, who had settled the claim nor adduced any evidence in this respect. In the absence of any pleading, it cannot be determined as to who had signed the alleged Settlement Voucher (Ex-B-5). In written statement, the Insurer took plea that Mr. Suri Babu, the accountant of the Insured, who was pursuing the claim on his behalf, had agreed for settlement. But no such paper was produced, in which Mr. Suri Babu had agreed for settlement. Mr. Suri Babu had authority to pursue the claim and not to enter into any settlement with the Insurer for lesser amount as such this argument is not liable to be accepted. The letter dated 09.06.2009 was addressed to the Bank and not to the Insured. It came to the knowledge of the Insured through the Bank. Then the Insured protested the matter through his representation. This Commission also by order dated 18.05.2011, passed in F.A. No. 172 of 2011, given time to disclose the name of the person, who had authority to settle the claim and had settled the claim but the name has not been disclosed. As such the arguments in this respect is not liable to be accepted.

The Insured and the Insurer both are not satisfied with the report dated 30.11.2007. According to the Insurer, this report was not consistent with the claim of the Insured. Apart from this objection, the Insurer could not point out any other illegality. According to the Insured, Cunningham Lindsey International Pvt. Ltd. in his report dated 30.11.2007, has illegally reduced the amount of his loss from Rs. 74.02 lakhs to Rs.59,01,604/-. As stated above, although the stock of spare parts as submitted by the Insured were verified to be true but its value was found on MRP basis. For assessing the loss, it was assessed on Distributors Price basis and 5% total for dead stock and 5% for salvage were deducted from it. Loss was rightly assessed taking in to account of Distributors Price basis and deduction of 5% total for dead stock and 5% for salvage. State Commission has rightly relied upon this report. We do not find any illegality in the order of State Commission. Both the appeals have no merit and liable to be dismissed. (Paras 7, 8, 10 & 15)

Result: Both Appeals dismissed.