M/S. PADMA INDUSTRIES vs ORIENTAL INSURANCE CO. LTD., & ANR.

These revision petitions have been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 10.06.2008, passed by the Karnataka State Consumer Disputes Redressal Commission (hereinafter referred to as ''the State Commission'') in two appeals nos. 2525/2007 and 2526/2007, vide which, both the appeals were dismissed and consequently, the consumer complaints in question, were also dismissed.

The facts of the case are that the complainant, M/s. Padma Industries are a small-scale industry which is the manufacturer of spices, turmeric powder, chilly powder, garam masala etc. They had obtained standard fire and special perils policy (material damage) from two different insurance companies, the Oriental Insurance Company and the National Insurance Company, covering risk to building and stocks in their unit bearing No. 5-33, Plot No. 20, Sl. No. 61A, Badepur, Jamuna Nagar, Gulbarga. The policy taken from the Oriental Insurance Company was for a sum of 2 lakh and covered risk for the period 21.01.2003 to 20.01.2004. The policy taken from the National Insurance Company was for a sum of 25 lakh and covered risk for the period 22.10.2002 to 21.10.2003. It is stated that the incident of fire occurred in the said unit on 23.07.2003, causing huge damage to plant & machinery and the stock was also burnt to ashes. It is stated in the consumer complaint filed against the Oriental Insurance Company that the said company settled their claim to the extent of 75,000/- only, because the surveyor had not made his assessment based on the situation on the spot. In fact, the Bank had verified their stocks on 15.07.2003, i.e., only a few days before the fire incident and had found their value to be 15,97,215/-. The complainant sought directions to the Oriental Insurance Company for payment of the sum assured of 2 lakh, a compensation of 1 lakh for mental agony etc. and a further compensation of 1 lakh for deficiency in service alongwith interest @12% p.a. In the second complaint filed against the National Insurance Company, the complainant stated that the company had settled the claim to the extent of 6,71,730/- only, based on the assessment of the surveyor. However, they had refused to accept the amount sent by the insurance company and sought directions to the National Insurance Company to pay a sum of 14,58,270/- alongwith interest @12% p.a. from the date of accident till realisation.

The District Forum dismissed both the complaints vide their order dated 29.06.2006. However, the complainant preferred appeals before the State Commission, upon which, the said Commission remanded the case back to the District Forum vide order dated 30.11.2007. The District Forum again dismissed the complaints saying that the same were not maintainable, as the complainant did not fall under the definition of consumer. Being aggrieved against the said order of the District Forum, appeal Nos. 2525/2007 and 2526/2007, were preferred by the complainant before the State Commission. Vide impugned order, the State Commission observed that the finding of the District Forum that the complainant was not a consumer and hence, the complaints were not maintainable, was erroneous. The State Commission held that the complaints were maintainable and that the complainant came under the definition of consumer. However, the State Commission dismissed the appeals and consequently the complaints, saying that the complainants had received the amount from the insurance companies in full and final satisfaction of the complaints and hence, there was no deficiency in service on the part of the insurance companies. Being aggrieved against the said orders of the State Commission, the complainant is before this Commission by way of the present revision petitions.

The main line of argument taken by the learned counsel for the petitioner says that the petitioner/complainant had received the amount "under protest", as was made out from a copy of the discharge voucher placed on record. The learned counsel further stated that as per letters addressed by the Oriental Insurance Company to the State Bank of Hyderabad, it was clear that the endorsement made on the discharge voucher was "under protest". The learned counsel stated that the statement of stocks had been duly authenticated by the Bank a few days before the fire incident. However, the surveyor, while making their reports, had not taken the true facts of the case into consideration. Both the consumer fora below had not discussed the reports of the surveyors at all. The orders passed by the Consumer Fora below did not present a realistic assessment of the facts and circumstances of the case and deserved to be set aside.

The learned counsel for the Oriental Insurance Company stated, however, that "letter of consent" for a total assessment of loss to the extent of 7,57,594/- for damage to stocks as well as building was there on record, meaning thereby that the complainant was agreeable to the assessment made by the surveyor. There had been no element of any force/coercion etc. upon the complainant in the whole episode.

The learned counsel for the National Insurance Company has also drawn attention to the "letter of consent" stated to have been written by the complainant himself. He further stated that the complainant had signed discharge voucher of their free will, "without protest". The orders passed by the consumer fora below should be upheld.

We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

A bare perusal of the order passed by the District Forum indicates that they dismissed the consumer complaints, taking the only ground that the complainant did not fall within the category of consumer, as defined in the Consumer Protection Act, 1986. The said finding was, however, reversed in appeal by the State Commission, wherein it was held that the complainants were maintainable and the complainant did fall within the definition of consumer. The Insurance Company have nowhere challenged the said finding of the State Commission. Further, the State Commission dismissed the complaints, taking the plea that the complainant had accepted the amounts in question as full and final settlement of the claim. This version is controverted by the complainant by presenting copies of certain documents, upon which, the words "under protest" have been written. It was the duty of the State Commission to have gone into all aspects of the case in detail and brought out clearly, whether the plea of the complainant that they had accepted the amount in question "under protest" or not, is correct.

Based on the discussion above, there is no alternative but to accept these revision petitions, as there is material defect in the order passed by the State Commission, having not taken into account all the facts on record. The order passed by the State Commission is, therefore, set aside and the matter is remitted back to the State Commission with the direction that they should scrutinize the case once again and bring out, whether the plea of the complainant that they accepted the amounts ''under protest'' is correct or not. The State Commission is also directed to go into the assertion made by the complainant that the assessment made by the surveyor was not in order. The State Commission should examine the reports of the surveyor and bring out, whether there is realistic assessment of the loss on the part of the surveyor or not. The State Commission, thereafter, shall pass their final order after taking into account all the facts on record. The revision petitions are, therefore, allowed and the orders passed by the State Commission are set aside. There shall be no order as to costs.