NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
First Appeal No. 142 of 2002
(from the order dated 07.03.2002 in complaint No. 31 of 1999 of
the State Commission,
The Oriental Insurance Company Ltd., Appellants
Oriental House, PB No. 7037
The Oriental Insurance Co. Ltd.,
Quite Office No. 15,
Sector 35 A
Through The Manager
Oriental Insurance Co. Ltd.,
M/s Western Nutrients Ltd Respondents
SCO No. 341 342
Sector 35 B
Honble Mr Justice K S Gupta, Presiding Member
Honble Dr P D Shenoy, Member
For the Appellant : Shri L R Goyal, Advocate
For the Respondent Shri Ashok Kumar, Advocate
Ms Shikha Maliyan, Advocate
PER DR P D SHENOY, MEMBER
and aggrieved by the order of the State Consumer Disputes Redressal Commission,
UT of Chandigarh, in complaint No. 31 of 1999 dated
Brief facts of the case :
Complainant M/s Western Nutrients Limited is running an industry for manufacturing of biscuits at their factory at Kuranwala village, Derabassi. They had taken a fire policy on 06.04.1998 which was valid upto 05.04.1999 covering building, machinery, stocks, packing material etc., A fire took place on 27.10.1998 at about 09.00 P M and the fire brigade was immediately informed, which extinguished the fire by 01.30A M on 28.10.1998. Thereafter the complainant lodged an FIR with PS Derabassi on 30.10.1998. It is the case of the complainant that the fire caused a loss of Rs. 12,86,772/- but the Insurance Company awarded only Rs, 2,09,756/-. According to the complainant he was hard pressed for the money for adjusting the working capital limit taken from the Andhra Bank, Mohali and hencehas received the said claim under protest. Therefore, the complainant filed a complaint before the State Commission to pay the claim of Rs.12,86,772/- with interest @ 18% per annum.
The opposite party Insurance Company appointed M/s Duggal Gupta and Associates as Surveyor who inspected the premises and examined the stock. On the basis of their report the Insurance Company awarded Rs.2,09,756/-. According to the Insurance Company, they relied upon the report of the surveyor who had assessed the loss at Rs.1,99,756/- but it increased the amount of loss by a sum of Rs.10,000/- and awarded Rs.2,09,756/-. The Insurance Company alleged that this was accepted as full and final settlement, hence no more amount is payable to the complainant as there is no deficiency in service.
Submissions of the learned Counsel for the appellant :
Learned Counsel for the appellant Insurance Company submitted that they had paid a sum of Rs.2,09,756/- which was received by the complainant without any murmur. The complainant has filed a complaint before the State Commission after two months. The State Commission has awarded Rs.10,77,015/- in addition to the amount collected by the insured without any basis. The survey report is very clear and it is worth-while to go through para 6 of the survey report wherein it is clearly mentioned that the insured had not submitted some of the important documents and there are also differences in the quality of biscuits as well as the insured had reportedly received back certain quantity of biscuits which were rejected due to lack of taste and quality. The insured had also claimed relief from the Excise Department towards these rejected biscuits, and, he cannot be benefited twice by claiming compensation from the Insurance Company. A perusal of the form of Discharge for Fire Loss signed by the Insured Rs.2,09,756/- indicates that it is in full settlement of all the claims upon the said company for loss or damage and expenses sustained by the complainant and of all the demands arising from fire which occurred on 27.10.1998. The learned Counsel also submitted that high rich protein atta manufactured by Unit No. 2 is not covered by the Insurance Policy. In view of the discharge voucher which is clear that it is a full and final settlement and which is based on the survey report, the appeal deserves to be allowed.
Submissions of the learned Counsel for the respondent :
The respondent was the complainant before the State Commission. The learned Counsel submitted that the complainant was facing financial crunch and had to adjust the working capital limit over drawn from the Andhra Bank. Hence, he was under duress and had no choice but to give the discharge voucher. He quoted the judgement : United India Insurance vs Ajmer Singh Cotton and General Mills and Ors II (1999) CPJ 10 (SC) to support his contention that issue of discharge voucher was as a result of coercive bargaining. However, without any delay he has filed the complaint before the State Commission.
He also drew our attention to the coverage of the Insurance Policy which reads as follows :
To the extent of Rs.34 lakhs only :-
Rs.20,00,000/- On stocks of finished goods such as Biscuit + Confectionery items.
Rs.10,00,000/- Packing material
Rs. 2,50,000/- On the stock of raw material for manufacturing of Biscuits + Confectionery items.
Rs.1,00,000/- Stocks in process
Rs. 50,000/- Diesel in tanker
The said stocks are lying in the building of Ist class construction belonging to the insured i.e. M/s Western Nutrients Ltd., at village Kuranwala, Derabassi, District Patiala.
Unit No. 2 which manufactures protein rich atta which itself is a raw material for biscuits manufacturing is located in the same building and is not excluded from the coverage . He showed several lacunae in the surveyors report. Survey report is signed for M/s Duggal Gupta and Associates, Surveyors and Loss Assessors by Shri Sanjeev Duggal and Shri Sanjay Gupta, whereas it can be seen from the order of the State Commission wherein Shri Sanjeev Duggal had categorically admitted in his cross examination that he had not accompanied Shri Sanjay Gupta for conducting joint survey and as a matter of fact that he did not go at all to the said premises. Whereas Shri Sanjeev Duggal has stated in his cross examination about deputing Shri Mukesh Gupta his partner to visit the premises at Derabassi, but neither Shri Mukesh Gupta has signed the survey report nor he has been examined in this case and further Shri Mukesh Gupta has not filed any affidavit, so both the affidavits lose their importance. The ld Counsel submitted that the company has been regularly filing the statement before the Bank and had declared the stocks to the bank. Further the complainant had filed an affidavit and he was not cross examined by the Insurance Company. In support of his contention he has submitted that in 2001 (3) Civil Court Cases 622 (SC) Rajinder Pershad (Dead) by L Rs vs Darshana Devi which reads as under :
Evidence Act, 1872, S 138 Cross examination To impeach the credit of a witness an opportunity must be given to him to explain his statement by drawing his attention to that part of it which is objected to as untrue, otherwise his credit cannot be impeached.
The incident : The biscuit factory of M/s Western Nutrients Ltd was covered by fire policy issued by the appellant and the policy was in currency on the date of fire accident on 27.10.1998. Fire accident is not disputed and that the fire force doused the fire in more than 2 hours and subsequently FIR was lodged with the police department is also not disputed. The claim was filed with the Insurance Company within the time limit prescribed is also not disputed. The Insurance Company wants to rely upon the report of the surveyor. Whether the factory Unit No. 2 manufacturing protein rich atta was covered by the policy. The policy document does not make any distinction between Unit Nos. 1 and 2 located at the same premises. It reads as follows :
The said stocks are lying in the building of M/s Western Nutrients Ltd., at village Kuranwala, Derabassi, District Patiala, belonging to the insured built at the class Ist construction.
As observed by the Apex Court in M/s Shobika Attire vs New India Assurance Co. Ltd., and Anr (Supra) :
Where the insured has discharged the initial burden regarding destruction, damage of the showroom and the stocks therein by fire and riot in support of the claim under the insurance policy, it is then for the insurance company to disprove such claim with evidence, if any.
It was for the Insurance Company to have taken efforts to disprove the same.
discharge voucher is not a bar in filing a complaint before the Consumer fora.
In this case, it is worthwhile to go through in detail the relevant paragraphs
of the judgment of the
The mere execution of the discharge voucher would not always deprive the consumer from preferring claim with respect to the deficiency in service or consequential benefits arising out of the amount paid in default of the service rendered. Despite execution of the discharge voucher, the consumer may be in position to satisfy the Tribunal or the Commission under the Act that such discharge voucher or receipt had been obtained from him under the circumstances which can be termed as fraudulent or exercise of undue influence or by mis-representation or the life. If in a given case the consumer satisfies the authority under the Act that the discharge voucher was obtained by fraud, mis-representation, under influence or the like, coercive bargaining compelled by circumstances, the authority before whom the complaint is made would be justified in granting appropriate relief. However, where such discharge voucher is proved to have been obtained under any of the suspicious circumstances noted hereinabove, the Tribunal or the Commission would be justified in granting the appropriate relief under the circumstances of each case. The mere execution of the discharge voucher and acceptance of the insurance claim would not estopple insured from making further claim from the insurer but only under the circumstances as noticed earlier. The Consumer Disputes Redressal Forums and Commissions constituted under the Act shall also have the power to fasten liability against the Insurance Companies notwithstanding the insurance of the discharge voucher. Such a claim cannot be termed to be fastening the liability against the Insurance Companies over and above the liabilities payable under the contract of insurance envisaged in the policy of insurance. The claim preferred regarding the deficiency of service shall be deemed to be based upon the insurance policy being covered by the provisions of Section 14 of the Act. (Emphasis supplied).
In this case the complainant borrowed loan from the Andhra Bank and the working capital limit was exhausted and he was under pressure to adjust the working capital limit. So it is a clear case of coercive bargaining.
Affidavits: In this case the complainant filed a detailed affidavit indicating the date of accident, insurance coverage and the loss sustained to the tune of Rs.12,86,772/- but the Insurance Company has not cross examined the complainant. Accordingly, his evidence has gone un-rebutted. The case cited (Supra) by the learned Counsel for the complainant/ respondent that in 2001 (3) Civil Court Cases 622 (SC) Rajinder Pershad (Dead) by L Rs vs Darshana Devi is relevant wherein it is held that:
there is a age old rule that if you dispute the correctness of the statement of a witness you must give him opportunity to explain his statement by drawing his attention to that part of it which is objected to as untrue, otherwise you cannot impeach his credit.
On the other hand, the evidence of affidavit of the surveyors are full of loopholes. Shri Sanjeev Duggal who has not at all gone to inspect the premises, has signed the survey report and has also admitted the same during his cross examination. On the other hand, one Mr Mukesh Gupta a partner of Shri Sanjeev Duggal has gone to the premises but has not filed any affidavit and accordingly, he was not examined in this case.
The following is the extract of affidavit of Shri Sanjeev Duggal, Surveyor where in he has stated that :
I alongwith Shri Sanjay Gupta, jointly conducted the survey of the property at the premises of M/s Western Nutrients Ltd., at their factory at Dera Bassi under the instructions of the Senior Divisional Manager of the Oriental Insurance Company.
In his cross examination, Shri Sanjeev Duggal has stated as follows:
The report dated 01.01.1999 Annexure R 1 has been seen by me and it was prepared by me and bears my signatures. It is correct that I was working with Shri Tarsem Garg, C A on salary basis but it was about 14 years ago. It is correct that I did not visit the premises in question. It was only Shri Mukesh Gupta, my partner who visited the premises at Derabassi on 28.10.1998 and 16.12.1998.
Since I myself did not visit the factory, I am unable to tell how recycling process is carried out. It is correct that I did not visit the premises at all.
The following is the extract of affidavit of Shri Sanjay Gupta, Surveyor wherein he has stated that :
I alongwith Shri S Duggal, jointly conducted the survey of the property at the premises of M/s Western Nutrients Ltd., at their factory at Derabassi under the instructions of the Senior Divisional Manager of the Oriental Insurance Company.
In his cross examination Shri Sanjay Gupta, Surveyor has stated as follows:
I alongwith Shri Mukesh Gupta and one person concerning the complainant went to the premises on 16.12.1998. I went there in the capacity of joint surveyor alongwith Shri Mukesh Gupta.
High Protein Atta may or may not be used for manufacturing the biscuits. It depends upon the type of biscuits which is proposed to be manufactured.
The report of the valuer M/s Creativ Consortium, Annexure A 9 was not adopted by because it was on higher side. It was not necessary to mention in our report that the assessment made by the valuer was on higher side. It is correct that fire continued for two days and the remains continued simmering for seven days.
The above extracts leads us to the conclusion that their affidavits have lost much of their evidentiary value.
Whether there were declared stocks : The complainant had been submitting his stocks statement regularly to the Andhra Bank, Mohali. For example, the insured had submitted the following stocks statement :
S No. Date/Month Amount (Rs.)
1. 15.09.1998 Rs.30,14,700/-
2. 30.09.1998 Rs.29,62,075/-
That the insured had submitted his statement is not in dispute. The surveyor has stated that the report of the valuer M/s Creative Consortium was not adopted because it was on a higher side. The rationale of this conclusion for treating the report of the valuer on a higher side has not been explained by the surveyor
Shri S S Dawan, Director of the respondent in his affidavit has submitted that :
the respondent company have not received any excise benefit and also not claimed any excise benefit of the product received back from the customers and lying at the time of fire of factory.
Accordingly, as the Company had not received any excise benefit from the returned stocks, it may not be proper to deduct any amount towards the same.
In view of the above analysis we do not find any infirmity in the order passed by the State Commission. Accordingly, the appeal is dismissed. There shall be no order as to costs.
[ P D Shenoy ]