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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ram Surat Ram Maurya, Presiding Member
Subrat Jalan – Complainant
versus
New India Assurance Co.
Ltd. and Ors. – Opp. Parties
Consumer Case No.80 of 2015
Decided on 28.1.2022
For the Complainant:Mr. Ashok Anand, Advocate
For the Opp. Party Nos.1 and 2:Mr. J.P.N. Shahi and Mr. Saddam Hussain, Advocates
For the Opp. Party No.3: Nemo
IMPORTANT POINTS
(1) Adhocism or Arbitrariness – Once it is found that there was no inadequacy in quality, nature and manner of performance of the duties and responsibilities and once it is found that the report is not based on adhocism or arbitrariness then the consumer forum will have no jurisdiction to ignore it.
(2) Seller’s risk – Insurer has illegally remarked the after issue of invoice and handing over the goods to the transporter, the goods were not insurable. Section 26 of The Sale of Goods Act, 1930 provides that unless otherwise agreed, the goods remain at the seller’s risk, until the property therein is transferred to the buyer.
Headnote:
(A) Consumer Protection Act, 1986 – S.21(b)[Consumer Protection Act, 2019 – S.58(1)(b)] – Insurance – Fire Accident – Entitlement for Amount – Compliant filed seeking claim for loss occurred due to fire accident – Repudiation of Claim by Insurer without contradictory evidence – permissibility – Insurer ignoring the report of Surveyor dated 05.06.2012, held that there was no proof that the goods as mentioned in various bilty were actually stored in the above godown. Without any contradictory evidence, it was not open to the Insurer to record any such finding in the repudiation letter, when the surveyor and investigator have verified and confirmed it – complaint is allowed. The opposite party is directed to pay Rs.7829985/- along with interest @12% per annum from November, 2011 till the date of payment to the complainant, within two months from the date of delivery of this judgment. [Paras 7, 12].
Held: Regulation 9 of The Insurance Regulatory and Development Authority (Protection of Policyholder’s Interest) Regulations, 2002 directs the Surveyors to submit their Survey Report within 30 days and in any case within 45 days, from the date of his appointment. Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within seven days from the date of acceptance of the offer of by the insured. In case of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2 per cent, above the bank rate prevalent at the beginning of the financial year, in which the claim is reviewed by it.
(B) Consumer Protection Act, 1986 – S.21(b)[Consumer Protection Act, 2019 – S.58(1)(b)] – Insurance – Fire Accident – Floater policy – Denial of liability to indemnify the loss – when justified – Insurer cannot deny its liability to indemnify the loss, only of the ground that after handing over the goods, the transporter has become its bailee. In the present case, from the bilties and statement of proprietor of K Transport, it was fully proved that the goods were stored at 2-A, which place was insured under the Floater Policy in question. The insurance claim cannot be denied on this ground. [Para 9].
(C) Consumer Protection Act, 1986 – S.21(b)[Consumer Protection Act, 2019 – S.58(1)(b)] – Insurance – Fire Accident – “Internal Audit system” – “internal audit” as provided under Companies Act, 2013 if applicable in the facts of present case – plea by insurance company for Violation of Insurance Policy for failure to maintain internal audit – The “internal audit” as provided under Companies Act, 2013 is not applicable in the present case, as the complainant is not a company nor it was requirement of the policy. The Surveyor in Final Survey Report dated 05.06.2012 and the Investigator, in his report dated 25.10.2013, found that the Insured maintained the data relating to all the transactions of his business, in the computer. All the activities relating to the business are fully maintained in the computer. There was “internal audit system” of the Insured and there was no violation of the terms of the policy. [Para 11].
Held: The dictionary meaning of “internal audit’ is “an audit performed by an organizer’s personnel to ensure that the internal procedures, operations and accounting practices are in proper order”. It is required to maintain the records of the business, in order to protect the assets, detection of tortious act and error, causing loss/profit to the business.
Result: Complaint allowed.
ORDER
Ram Surat Ram Maurya, Presiding Member.—Heard Mr. Ashok Anand, Advocate, for the complainant and Mr. J.P.N. Shahi, Advocate, for opposite parties-1 and 2.
2. Subrat Jalan has filed aforementioned complaint for directing New India Assurance Company Ltd. (the Insurer) to pay (i) insurance claim of Rs.10506735/- with interest @12% per annum, from the date of the loss till its actual payment, (ii) Rs.5/- lacs as the compensation for mental agony and physical harassment, (iii) the cost of litigation and (iv) any other relief which may be deemed fit and proper, in the facts and circumstances of the case.
3. The facts, as stated in the complaint and emerged from the documents attached with the complaint, are as follows:-
(a) The complainant was a sole proprietor of M/s. Kamadgiri Fabrics Sahebganj, Gorakhpur (hereinafter referred to as the Insured). The Insured was engaged in manufacture of different kind of fabrics and trading to various cities in India. For supply of the fabrics to other cities, the Insured had contracts with the transporters, under which, the Insured used to supply the fabrics in bales to the transporters at its factory premises in Gorakhpur, who used to transport and store at their own godowns, from where, it used to be supplied to the traders, as per order. The Insured had contract with M/s. Kaka Transport Company (opposite party-3) for supply of the fabrics to Delhi, who had its godown at 32-A, Shyam Enclave, U.P. Border, Sahibabad, Ghaziabad.
(b) New India Assurance Company Ltd. (for short the Insurer) is a public insurance company, engaged in the business of providing insurance services of different types. The Insured obtained Policy No.421300/11/10/13/00000031, i.e. Standard Fire & Special Perils Policy (Floater Policy) for a sum of Rs.325/- lacs, for the period of 19.04.2010 to 18.04.2011, of “Industrial Manufacturing Risk” i.e. stock with jobbers, the factory premises and the transporter’s godowns, total of forty-eight locations in the country, a list of which has been attached with the policy. Godown of M/s. Kaka Transport Company, 32-A, Shyam Enclave, U.P. Border, Sahibabad, Ghaziabad, was mentioned at serial No.35 of the list, attached with the policy.
(c) The fire was broke out in the godown at 32-A, Shyam Enclave, U.P. Border, Sahibabda, Ghaziabad, on 12.04.2011 at about 8:10 hours, due to electric short circuit. Ravi Dube, an employee present there, informed Hindon Fire Service Station, from where, fire tender was sent on the spot. By the time, fire tender could reach on the spot, the fire spread to the whole godown as such other fire tenders from Link Road, Modi Nagar, Hapur and Noida were also called for and they extinguished the fire. U.P. Fire Service, Hindon has given its report dated 15.04.2011. Information regarding incident was also given to Sahibabad Police Station, where it was registered vide Rapat No.48 on 13.04.2011.
(d) On receiving information of the fire, the Insured informed the Insurer at its office in Gorakhpur on 15.04.2011. The Insurer appointed V.P. Singhal & Company, Noida, on 15.04.2011, for preliminary survey. The representative of V.P. Singhal & Company inspected the godown on 16.04.2011 and submitted his preliminary report dated 17.04.2011, mentioning that fire was caused due to electric short circuit in the godown and damaged the entire stock.
(e) The Insurer appointed Sanjay Dwivedi & Associates, Surveyor & Loss Assessor, Ghaziabad, on 15.04.2011, for survey and assessment of the loss. The Surveyor inspected the godown on 16.04.2011, 17.04.2011 and 18.04.2011 and took photographs and prepared inventories. The Surveyor demanded various papers from the Insured time to time and also took statement in writing of the Proprietor of M/s. Kaka Transport and other persons. The Insured supplied the required documents. The Surveyor submitted his Final Report on 05.06.2012, stating that cause of fire was electric short circuit and quantum of loss was assessed to Rs.7829985
