DHARIA ICE And COLD STORAGE PVT. LTD. vs Oriental Insurance Company Ltd.

THIS appeal has been filed against the order dated 21.3.94 passed by the State Consumer Disputes Redressal Commission, Delhi by which it dismissed the complaint filed by the complainant subject to the observations that the complainant may seek remedy, if so advised, in a Civil Court. Aggrieved with this order, the complainant, M/s. Dharia Ice & Cold Storage Pvt. Limited has filed this appeal. The respondents are Oriental Insurance Co. Ltd. (for short Insurance Company) and Punjab National Bank, Chapraula, Distt. Ghaziabad (for short Bank). These respondents were opposite party Nos. 1 & 2 in the complaint before the State Commission.

THE facts as gathered from the record are that the complainant, M/s. Dharia Ice & Cold Storage Pvt. Limited installed an ice factory at the cost of about Rs. 11 lakhs at Chapraula, Distt. Ghaziabad, U.P. THEy took a loan of Rs. 7,50,000/- from the Bank. THE complainant got insured plant and machinery for a sum of Rs. 11 lakhs against burglary with the Insurance Company for the period from 31.3.89 to 30.3.90. After the lapse of a year another policy from 31.3.90 to 30.3.91 was taken. According to the complainant, a burglary took place on 7th November, 1990. Its report was lodged with the Police Station on the same day. A claim was lodged with the Insurance Company on 8.11.90. THE Surveyor appointed by the Insurance Company asked the complainant to submit certain documents which according to the complainant were irrelevant. Later on the claim was rejected on 29.4.92 on the ground that the bills produced for the repurchase of machinery were bogus. THEreupon the complainant filed the complaint claiming Rs. 4,14,215.67 as compensation for the loss of machinery plus compensation of Rs. 1,49,000/- as they have been deprived of the use of money legitimately due to them from the opposite parties. In fact the compensation has been claimed as interest @ 18% on Rs. 4,14,215.67 from 7.11.90 (date of loss) till 25.9.92 (date of filing of this complaint). The Bank is sought to be made liable merely on the ground that it had got the insurance effected.

The Insurance Company admitted the factum of policy but took the plea that the complainant did not co-operate with the Surveyor in the investigation of the incident and the assessment of the loss inspite of repeated requests made for the same by the said Surveyor to the complainant. It was also averred that documents asked for by the Surveyor were not irrelevant papers. The Surveyor wrote registered letters to the complainant to comply with the requirements so as to enable him to assess the loss without any further delay. Even thereafter the complainant did not bother to furnish any document. Thereafter the said Surveyor vide letter dated 10.12.91 informed the Insurance Company that the complainant did not supply the required documents and information inspite of repeated requests and that in the absence of any such information and documents he has no option but to submit the report on the basis of the documents available with him. The Surveyor reported that the complainant has submitted bogus bills and documents in order to get an exaggerated amount of insurance claim and deliberately and knowingly concealed the real facts regarding the actual loss. Hence, the insurance claim of the complainant was not payable and accordingly the claim was repudiated. According to the Insurance Company the complainant tried to play fraud and furnished incorrect information regarding the loss and charges of new machinery.

THE case of the Bank is that at the time of disbursement of loan the complainant had executed loan documents including Deed of Hypothecation of machinery/plant. One of the conditions of the agreement was that the complain-ant will get the machinery/plant insured and in case he fails to do so the Bank shall be at liberty, but not bound to do so, to get the insurance effected in its absolute and unfettered discretion. In view of the above clause contained in the Deed of Hypothecation the Bank got the insurance effected as the complainant failed to get the insurance effected on his own. According to the clause in the Hypothecation Deed the Bank shall not be considered responsible or liable for the non-payment wholly or partly by the Insurance Company or for the omission to ensure or deficiency of insurance. According to the Bank the complainant was bound to satisfy the Insurance Company about the alleged burglary and also should have furnished facts and figures which were within their control, power and knowledge to the Insurance Company. THE Bank was not required to give any information to the Insurance Company as they (i.e. Insurance Company) were directly dealing with the complainant. THEy were certainly interested and were pursuing the claim with the Insurance Company for making the payment. THE repudiation of the claim by the Insurance Company is not based on any defect in the policy but due to alleged concealment of facts by the complainant for which the Bank could not be made responsible in any manner. After perusal of the Surveyor''s report, extracts from which have been reproduced in extenso by the State Commission in its order it came to the opinion that full investigation has been made but the complainant did not cooperate to supply the documents to the Surveyor. They further pointed out that from the report of the Surveyor and facts and circumstances of the case, it is evident that the complainant has no filed the complaint with clean hands and it is not possible for them to decide the matter in these summary proceedings and only the Civil Court is a proper Forum for adjudicating on such matters where the parties can prove documents, cross-examine the witnesses, issue interrogatories, examine witnesses on commission etc. Accordingly, they have passed the impugned order. As noticed above complainant has challenged this order before us.

WE have heard the learned Counsel of the parties and gone through the record. WE are of the opinion that the order of the State Commission in the facts and circumstances of the case has to be upheld. WE need not reproduce the extract of the Surveyor''s report since it has been extracted in the order of the State Commission. WE may only reproduce the conclusions arrived at by him which are as under : "(i) It appears that the materials vide C.M. No. 762 of M/s. Geetika Steel Traders dated 13.12.89. C.M. No. 224 dated 19.2.89 of M/s. Aggarwal & Co., for Rs. 2,70,774.40 bill/C.M. No. 227 dated 21.2.89 for Rs. 1,37,280/- of M/s. Aggarwal & Co. were never initially purchased by the insured. Out of which the insured has shown / claimed Ice Cans for Rs. 1,23,327/- & therefore when the cans were never purchased, how the burglary has occurred of the same? It appears that it is wrongly claimed as it stands no insurable interest unless otherwise proved by the insured.

(ii) Similarly purchase of the new machines for Rs. 3,64,839.20 has not been established to replace the items under burglary i.e., for motors, ice cans, sleeves, white metal etc. Documents submitted by the insured as discussed above appear not to be genuine ones. It means, it is further a case of concealment of facts.

(iii) Rest as per report of our Chartered Accountants M/s. A.R. & Co. as per enclosure. In the above circumstances, with documents available the burglary as claimed by the insured is not proved and therefore no assessment of loss has been made by us accordingly with our following remarks : Remarks : It appears that it is a case of concealment of facts and accordingly, the claim is not payable as per policy condition against the claimed amount of Rs. 4,14,215/-. However, the claim can be further investigated, if so, desired by the insurer. Whatever documents have been so far submitted by the insured to us and as per our investigations, we are of the opinion that it is not a case of burglary as claimed by the insured."

According to the complainant the erection work of the factory commenced in January, 1989 and was completed in February, 1989 and electric connection was obtained on 10.4.89 and the production started from 14.4.89. According to the Surveyor the articles covered by Cash Memo No. 224 dated 19.2.89 of M/s. Aggarwal & Co. for Rs. 2,70,774.40 bill/Cash Memo No. 227 dated 21.2.89 for Rs. 1,37,280/- of M/s. Aggarwal & Co. were never purchased by the insured and out of the above the insured had shown/claimed ice cans of the value of Rs. 1,23,327/- and therefore when the cans were never purchased how the burglary of the same occurred. It was urged on behalf of the appellant that the documents produced before the Surveyors were not the cash memos but were quotations/estimates obtained from the companies referred to in those quotations/estimates for the reinstatement of the machinery/plant. Prima facie this argument does not appeal to us. Those alleged estimates/quotations relate prior to the period when production is said to have been started in the ice factory of the complainant and, therefore, prima facie those must be cash memos and not estimates or quotations as urged by the complainant.

THE Chartered Accountant appointed by the Insurance Company has also reported that the machinery alleged to have been purchased as replacement after burglary has been established.

HENCE, in light of the above observations we are of the opinion that the State Commission has rightly directed the complainant to seek his remedy in a Civil Court where the dispute in question can be gone into in a proper manner and not in time bound proceedings before the Consumer FORA under the Consumer Protection Act. Accordingly, we dismiss the present appeal with no orders as to costs. Appeal dismissed.