New India Assurance Co. Ltd. vs B.K. VASHIST

THIS revision petition is directed against the order dated 20th March, 1996 passed by the State Consumer Disputes Redressal Commission, Delhi, directing the revision petitioner to pay Rs. 70,112.30 with interest. The facts giving rise to this revision petition are briefly stated as follows:

MR. B.K. Vashist, complainant took a policy of Rs. 3 lakhs for the period 24th April, 1991 to 23rd April, 1992 with regard to his godown containing goods of Praveen Enterprises which was his sole-partnership concern. According to the complainant in between 17th August, 1991 and 22nd August, 1992 a burglary took place in the godown. The complainant reported the matter to the police as well as the Insurance Company. The complainant submitted a claim for Rs. 69,611.33. The Insurance Co. appointed M/s. M.P. Baxi Surveyors Pvt. Ltd. to survey the loss. The surveyor submitted an interim report dated 10.9.1991 and final report dated 14.1.1992 recommending a payment of Rs. 70,112.38 on account of loss sustained by the complainant. On 31st March, 1992 the Insurance Company appointed MR. J.C. Bhagat, Insurance Investigator, to investigate the case. MR. Bhagat submitted his final report of 19th March, 1993 commenting that no burglary had taken place. Thereafter, the Insurance Company appointed S.K. Dua & Associates, Insurance Investigators, who further investigated into the matter. They submitted their report on 6.10.1997 with the conclusion that the claim was false and bogus. Accordingly, the Insurance Company repudiated the claim. The complainant filed the present complaint with the District Forum for recovery of an amount of Rs. 69,611.33 alongwith interest. The Insurance Company contested the claim on various grounds. It was pleaded by the Insurance Company that the Insurance Company had appointed Mr. Bhagat, an Investigator to carry on the investigation of the alleged theft. They submitted their interim report dated 10.9.1991 stating therein that the complainant had been advised to submit the FIR so that the inquiries could be instituted at the Police Station and the progress made by them ascertained. They submitted their final report dated 14.1.1992 wherein it was stated that they had verified the contents of the FIR from S.I. Harbans Singh, Investigating Officer, who allegedly had registered the FIR on 14.9.1991 under Section 457/ 380, IPC, and that he further confirmed that the case was filed as untraced as neither the culprit could be apprehended nor the stolen property could be recovered. The opposite party on perusing the FIR No. 276/91 dated 14th September, 1991 submitted by the complainant, found that the same did not pertain to the complainant''s case but rather related to a household burglary in the house of one Mr. Niranjan Singh. Accordingly, they appointed another Investigator, J. C. Bhagat, to investigate into the matter. The Investigator on the basis of detailed investigation came to the conclusion that the claim was not genuine and no burglary had taken place. In the light of the circumstances of the case the respondent also appointed M/s. S.K. Dua & Associates as their investigator in the case to inquire the complaint dated 22.8.1991 and the complaint was registered at Police Station, Najafgarh and whether the complaint was investigated as to the genuineness of the alleged untraced report submitted by the complainant-Company. M/s. S.K. Dua & Associates submitted their investigating report dated 6.10.1993 stating therein that in the daily diary register dated 22.8.1991 of Police Station of Najafgarh, there was no entry about the receipt of the complaint dated 22.8.1991 of the complainant. The Investigator also reported that at no stage of time, any criminal case was registered at Najafgarh Police Station on the basis of the written complaint dated 22.8.1991 of the complainant. It was further found that Mr. Harbans Singh, S.I., who purportedly issued the untraced report was not associated with any such investigation at any time. The claim was repudiated on the basis of the investigation report. After considering the relevant contentions of the parties the District Forum by its order dated 17th August, 1994 returned the finding that the issue involved got to be decided in another Forum of competent jurisdiction and the complainant was not entitled to any relief asked for in these proceedings. Accordingly, the complaint was dismissed.

The complainant assailed the order of the District Forum by filing an appeal before the District Forum which was allowed and the Insurance Company was directed to pay Rs. 77,311.33. The Insurance Company has approached this Commission by way of invoking the jurisdiction of this Commission under Section 21(b) of the Consumer Protection Act, 1986 by way of Revision Petition.

WE have heard the learned Counsel for the parties and perused the records very carefully with their help. Mr. Jos Chariamel, appearing for the petitioner contended that the order of the State Commission suffers from legal infirmity and could not be sustained in law. The learned State Commission failed to appreciate that the petitioner. Insurance Co. had repudiated the claim after taking into consideration the report submitted by the Investigator who was of the opinion that there was no burglary and the claim of the complainant was false; that the State Commission acted in the exercise of jurisdiction illegally and with material irregularity in directing the petitioner to pay a compensation of Rs. 70,112.38, the State Commission failed to appreciate that the petitioner had diligently processed the claim by the respondent and came to the conclusion that the claim was not genuine on the basis of the available records. It was also canvassed that the State Commission exercised jurisdiction not vested by law and contravened the well-established principle of law as settled by this Commission in the case of Janata Machine Tools v. M/s. Oriental Insurance Co. Ltd. reported in I (1991) CPJ 234 (NC). On the other hand, the contention of Counsel for the respondent was that the order of the State Commission was justified in the facts and circumstances of the case and it did not suffer from any legal infirmity.

WE have given our thoughtful consideration to the entire matter. In our opinion, the order of the State Commission cannot be sustained in law. The State Commission only relied upon the report of the first surveyor and did not take into consideration the report submitted by the two other investigators. Even the first surveyor in his report dated 14th January, 1992 had mentioned that they had on telephone verified the contents of the FIR from the Investigating Officer, S.I. Harbans Singh, who had confirmed that the case was registered on 4th September, 1991 and was subsequently closed as untraced. This observation of the surveyor was obviously wrong as admittedly, no FIR was registered in respect of the alleged theft. Mr. J.C. Bhagat, Investigator, in his report dated 19th January 1993 reported that the Police Authorities did not register the case. M/s. S.K. Dua & Associates in in their report dated 6th October 1993 reported that FIR No. 276/91 had been registered in the Police Station on 4.9.91 on the complaint of one Shri Narain Singh and the investigation of that case was entrusted to S.I. Joginder Singh and not to S.I. Harbans Singh. FIR No. 276/91 related to some other theft and did not pertain to the theft in question. From the material placed on record we are of the opinion that the Insurance Company had fully investigated into the claim put forward by the complainant, got the surveys conducted and had finally come to the conclusion that the claim put forward by the complainant was false and accordingly the claim was repudiated. The case in hand is squarely covered by the decision of this Commission rendered in the case of Janta Machine Tools v. Oriental Insurance Co., Ltd., (supra) wherein it was held as under: "This is a claim primarily against the respondent-Oriental Insurance Co., on the allegation that there has been a deficiency in the service which the Company was bound to render to the complainant under two policies of general insurance that the complainant had taken out with the Company. From the facts disclosed by the record and particularly the averments contained in the counter affidavit filed by the first respondent, it is seen that the Insurance Company had fully investigated into the claim put forward by the complainant, got surveys conducted and had finally come to the conclusion that the claim put forward by the complainant was false and accordingly informed the complainant that his claim was rejected. Thus this is not a case where the Insurance Company did not take prompt and necessary steps for deciding the claim under the policies of insurance. It may be that the complainant is not satisfied with the said rejection of his claim by the Insurance Company. Having regard to the facts and circumstances of this case and the nature of the controversy between the parties we consider that this is a matter that should be adjudicated before a Civil Court where the complainant as well as the respondent will have ample opportunities to examine witnesses at length, take out Commission for local inspections, etc. and have an elaborate trial of the case. Without prejudice to the right of the complainant to take resort to the remedy by way of civil suit before the proper Court we dismiss this petition."

The District Forum was right in returning the finding that the issue could be decided by another Forum of competent jurisdiction. The State Commission exercised its jurisdiction illegally and with material illegality. As a result of the above discussion the Revision Petition is allowed, the order of the State Commission is set aside and the order passed by the District Forum is restored and the complaint is dismissed. However, the parties are left to bear their own costs. Revision Petition allowed.