GEETA PLASTIC WORKS vs DEV. MANAGER, NEW INDIA ASSURANCE CO.LTD

THE complainant-M/s. Geeta Plastic Works, Hoshiarpur through its General Attorney Shri Joginder Singh has filed this complaint before the State Commission praying that the opposite parties may be directed to pay to the complainant Rs. 1,29,770-75 as detailed in paragraph 13 of the complaint.

FOR the limited purpose of this order relegating the complainant to the arbitration (if so advised) it is not only necessary but would be wasteful to delve too deeply into the facts and merits. It suffices to notice them in the barest out-line. The complainant-firm, which is engaged in the manufacturing of plastic articles such as electric shades, bottles, glasses etc. since 1989, got insured all its stocks, machinery and building with the National Insurance Company, Hoshiarpur (for short ''the Insurance Company'') for Rs. 3,50,000/- for the period commencing from 28-3-1991 and valid upto 27-3-1992. Since the machinery etc. were hypothecated with the Central Bank of India, Hoshiarpur the Insurance was got effected by it on behalf of the firm. Suffice it to mention that on the night intervening 20/21-11-1991, the fire broke-out in the factory-premises of the complainant at about 1.00 a.m. The complainant lodged the F.I.R. with Police Station, Sadar, Hoshiarpur on 21-11-1991 and on the same day the Insurance Company was also informed about the said incident and a claim of Rs. 1,85,010-75 was filed for the loss suffered by it. The Insurance Company appointed a Surveyor who assessed the loss to the tune of Rs. 44,415/- and the same was credited to the account of the complainant-firm in the Central Bank of India, Hoshiarpur on 7-7-1992 and a copy of the same was sent to the complainant-firm for information. It is alleged that the said amount was never accepted by the complainant-firm. The complainant-firm represented to the Insurance Company that its case be re-considered and the amount of Rs. 1,75,016/- as assessed by its Surveyor be awarded to it. Unable to get redress, the present complaint was filed by Shri Joginder Singh, General Attorney of the complainant-firm to seek relief as prayed in the complaint.

On notices being issued, the opposite paries resolutely defended the complaint and raised a preliminary objection that there was not the least deficiency in the service undertaken to be rendered. It was pleaded that the claim amounting to Rs. 44,415/- in respect of the policy had been accepted by Shri Rajinder Singh, a partner of the complainant-firm and the Central Bank of India, Hoshiarpur, insured towards full and final settlement of the claim and as such the complaint was not maintainable under the Consumer Protection Act, 1986 and that even otherwise had the complainant been dissatisfied with the quantum of the claim amount, he could have gone in arbitration under the terms and conditions of the policy. On merits, whilst admitting the factum of insurance cover, it was firmly pleaded that the premium had been paid by the bank under the terms and conditions of the policy as there was an agreed bank clause whereby all payments in respect of the claims were payable by the bank and the latter was competent to accept the amount towards full and final settlement of the claim and had given full discharge in respect of the fire claim under the policy. It was also averred by the opposite-parties Nos. 1 and 2 that the loss suffered by the complainant-firm was only to the tune of Rs. 44,415/- and the assessment was agreed and accepted by Shri Rajinder Singh, a partner of the complainant-firm. It was however, denied that the stocks lying in the factory were worth Rs. 1,48,620/-. The other averments of the complainant were controverted and denied.

IN support of its claim, the complainant-firm rested itself content by filing the documents Annexures A to G. The learned Counsel for the complainant had stated before us that these documents might be treated as evidence to be adduced on behalf of the complainant. The INsurance Company placed on record the documents Annexures R-1 to R-7. On the request of the learned Counsel for the parties, their evidence was closed by the order of the Commission. The gravamen of the submission of the learned Counsel for the complainant is that the complainant was not bound by the discharge receipt Annexure R-6 vide which the full and final discharge of the claim had been extended to the Insurance Company. We are afraid this stand of the complainant-firm has to be necessarily repelled. It is not in dispute that the stocks and the machinery of the complainant stood hypothecated with the Central Bank of India, Hoshiarpur and as a matter of practice, the said bank required that the same be provided insurance cover. Consequently it is the admitted position that the Insurance policy was taken out jointly in the name of the bank and the complainant-firm. There is thus no dispute that the aforesaid bank was a co-insured with regard to the policy and its interest in the goods in regard to which loss occurred subsequently. What is, however of greater significance in this context is the agreed bank clause, which is duly incorporated in the policy of this nature and admittedly in the particular policy governing the parties. The relevant first two conditions of this agreed bank clause in Annexure R-1, deserve notice in extenso:- " 1. That upon any monies becoming payable under this policy the same shall be paid by the Company to the Bank and such part of any monies so paid as may relate to the interests of other parties insured hereunder shall be received by the Bank as Agents for such other parties. 2. That the receipts of the Bank shall be at complete discharge of the Company therefor and shall be binding on all parties insured hereunder."

IT deserves highlighting that the very foundation of claimant''s claim rests on the insurance policy and its terms and the afore-quoted agreed bank clauses are an integral part thereof. IT needs no great erudition to hold that after an express stipulation by the parties that the receipts of the bank shall be a complete discharge of the Insurance Company, the insured cannot now attempt to wriggle out of the same. In this context, the relevant part of Annexure R-6, which is an undisputed document, deserves notice in extenso:- "Received from the New India Assurance Company Limited the sum of Rupees Forty Four Thousand Four Hundred Fifteen only which I/we agree to accept in full satisfaction snd discharge of all claims present or future under Policy No.1135190101175 in respect of Fire Claim which occurred on or about the A/c M/s. Geeta Plastic Works. Sd/- Rajinder Singh."

In view of the above, it seems too late and futile on the part of the complainant-firm to now ingeniously wriggle out of all the stipulations to which it was admittedly a willing party. Mr. Aman Kashyap, learned Counsel for the complainant had then firmly stated that the amount of Rs. 44,415/- as assessed by the Surveyor of the Insurance Company was not acceptable to the complainant as a full and final settlement. However, he fairly took the stand that as the complainant was dissatisfied with the aforesaid assessment, it would now have recourse to the arbitration as provided under Clause 11 of the Fire Policy ''A''. The relevant part of the said clause is in the following terms:- "11: If any difference shall arise as to the quantum to be paid under this policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference, or if they cannot agree upon a single Arbitrator, to the decision of two dis-interested persons as Arbitrators of whom one shall be appointed in writing by each of the parties within two calendar months after having been required so to do in writing by the other party in accordance with the provisions of the Arbitration Act, 1940, as amended from time to time and for the time being in force."

IT deserves to be pointed out that the parties have differed as regards the quantum to be paid under the policy and consequently Clause 11 would clearly come to play. The complainant has claimed Rs. 1,29,777-75 as compensation. The complainant is clearly entitled to have its claim settled within a reasonable time of lodging the same before the Arbitrator to be appointed by the Insurance Company with its concurrence, who would compute the loss in the present case, within five months from the date of this order. In the light of the above, the complaint is allowed to the extent as noted above with no order as to costs. Complaint allowed.