New India Assurance Co. Ltd. vs V.R. INTERNATIONAL

APPELLANT was the opposite party before the State Commission, where the respondent had filed a complaint alleging deficiency in service on the part of the appellant.

BRIEFLY the facts of the case are that the complainant had obtained a burglary policy for the period from 16.11.1989 to 15.11.1990. There was a theft of stocks from the premises of the complainant located at 295, Industrial Area, Phase I, Chandigarh. This incident was reported to the police by way of FIR as also to the appellant Insurance Company. A Spot Surveyor was appointed, and later on a Surveyor was appointed to assess the loss. Then after 3 years of the incident, an Investigator was appointed based on whose report, the claim was repudiated in following terms : "Reg. Repudiation of your claim alleged dated of loss 15/16.12.1989, under Cover Note No. 174515, Policy No. 4035030500013. Sir, We may notify that your said claim has been repudiated, due to the reasons elaborated as under : 1. Your stocks were insured under lien to the Bank of Baroda, Sector 17, Chandigarh. 2. Your stocks were lying at 295, Industrial Area, Phase-1, Chandigarh. 3. But the Bank inspection report dated 3.11.1989 and 3.12.1989, mentions that stocks were lying at 277, Industrial Area, Phase-1, Chandigarh. 4. Thus, the statement of the firm cannot be relied upon. This is for your information. Yours faithfully, Branch Manager."

It is in these circumstances that a complaint was filed before the State Commission, who after hearing the parties and perusal of material on record, directed the appellant to pay Rs. 2,28,000 as per estimation of loss by the complainant along with interest @18% p.a. from the date of institution of complaint till payment along with cost Rs. 2,000. Aggrieved by this order, this appeal has been filed before us.

Learned Counsel for the appellant laid the foundation of his edifice to stand on two legs. Firstly, that no policy was issued hence there is no contract; cover note giving the details of the insured premises has been tampered with, hence cannot be taken note of, and secondly, what was purported to be insured was the premises No. 277, and not 295, Industrial Area, Phase I, Chandigarh.

AFTER hearing the learned Counsel for both the parties at some length and perusal of the material on record, we find that both the arguments are belied or have no legs to stand in view of the material on record. To start with, in the two pages written version filed on 27.4.1993, which is basically in a ''denial mode'' repeatedly stated that "no policy was issued and the Surveyor was deputed in routine..". In fact in the written version, it states that no claim whatsoever was lodged with the opposite party (the appellant before us). Rejoinder to this was filed by the respondent/complainant along with a copy of the ''cover note'' issued by the appellant Insurance Company. It seems that it is only then, that wisdom dawned on them that whatever they had stated earlier is not correct and they filed an application for the amendment to the written statement on 9.3.1995. It is worth noting that the episode of burglary relates to 16.12.1989. (emphasis supplied). If we compare the amended written statement with the written statement filed on behalf of the appellant earlier, an attempt now seems to be being made to salvage their own earlier stand. It is now stated that FIR was stage managed and the claim preferred by the respondent complainant is fraudulent and dishonest and also stating that the risk covered the premises 277, Industrial Area, Phase I, Chandigarh and not 295, Industrial Area, Phase I, Chandigarh. For this they relied upon the report of the Bank of Baroda. A rejoinder to this was filed and it is the case of the complainant that earlier policy related to godown located at 277, Industrial Area, Chandigarh, from where it was shifted to 295, Industrial Area Phase II, Chandigarh and subsequently it was located in 295, Industrial Area, Phase I, Chandigarh for which necessary documentation with regard to the hire agreement with the original owner is also brought on record. Affidavits were filed. The report of the Investigator was filed, based on which the claim was repudiated. It is very crucial and important to note that the report of the Surveyor was not produced before the State Commission and nor was it filed along with the appeal filed before us by the appellant. It is only on our specific instance that the report of the Surveyor was supplied to us as well as to the respondent / complainant. The above narration of facts was necessary in order to appreciate the conduct of the appellant in perspective.

DEALING with the pleas of the appellant, that cover note was interpolated, we have seen the cover note on record, in which we see that there is an apparent over-writing on the figure of 295. What surpasses our comprehension is that copy/counter foil of this would be/should be with the appellant Insurance Company. A very interesting plea has been taken before us by the learned Counsel for the appellant that the ''Book'' containing the counter foils of the cover note issued, has been lost. In fact, obliquely a hint was made that this has been done by the respondent/complainant. It is too naive an argument to find any favour with us. Suffice it to say there that in the written version filed after 4 years of the episode on 27.4.1993, there is no hint of this stand of the opposite party. We are somewhat more shocked that the report of the Surveyor dated 7.5.1992 was with them, in which there is no hint whatsoever that the loss was not caused in the 295, Industrial Area, Phase I, Chandigarh. In our view, this could be the reason that his report was withheld from the State Commission for which we are constrained to draw an adverse inference against the appellant. If we see the policy which is unsigned and not issued, which is now part of our record, clearly shows that the premises insured was 295, Industrial Area, Phase I, Chandigarh. This is the document of the appellant. The signature and issue of this would have only turned it into a contract but we will consider this as an important piece of evidence to show that what was purported to be insured against burglary was the premises of 295, Industrial Area, Phase I, Chandigarh. Too much emphasis/reliance has been placed on the report of the Investigator. If we see the report of the Investigator we see that it is more a comment on the report of the Surveyor Shri D.S. Rattan. We are unable to appreciate as to under what provision of law and since when the Investigators are appointed to look into the efficacy/efficiency/performance or otherwise of a licensed Surveyor? We are not too sure as to whether the so-called Investigator had any licence from any Competent Authority, who in our view did a third rate job of going into the Surveyor report of a licensed Surveyor and still more shocking is that this self serving report found favour with the appellant and they made this as a ground for repudiating the claim, sacrificing the report of a licensed Surveyor not only by withholding it from State Commission and initially from us but also not using this as a ground for repudiation or otherwise of the claim. Still more interesting is that after getting the report of the episode of burglary, the Spot Surveyor was appointed by the appellant, whose report is not on record. From the correspondence, between the appellant and the first Spot Surveyor, it appears that the report was never submitted. We do not know as to what were the contents because he was as good as the eye-witness, as he was the first one to reach the spot. If that report is not brought on record, then what action taken against that Surveyor is not on record? The contention of the appellant that the burglary took place in 295, Industrial Area, Phase I, Chandigarh is also supported by the FIR which is on record. The only ground taken by the appellant to repudiate the claim of the complainant is burglary took place in 277, Industrial Area, Phase I, Chandigarh and not in 295 of the same area. Investigator needs to be hauled up for preparing an outrageous report, especially when it states in the report (Para 2 of the Investigative part) that "Sh. Hari Bhushan (ASI of the concerned Police Station where F.I.R. was lodged) not only did not gather any evidence to establish the loss but also connived with the insured to conceal the actual facts....". Principle seems to be that give the dog a bad name and then beat it. Except for himself, he finds everything wrong with the licensed Surveyor as also with the insurers (see his cross-examination) as also with the ASI of the Police Station. Coming to the report of the Bank, even when stock statement submitted to the bank (Enclosure 5 of the Investigator''s report) relates to 295, Industrial Area, which is on record, yet in his cross-examination, the Investigator has only this to say, " I have seen enclosure 5 and the address given in it is No. 295, Phase I, but the form was submitted later on to the Bank". What did he find out from the Bank about the statement. He only records at Page-3 (C) of his report, that Bank sent this material to higher authorities for its verification to confirm that the insured godown was located at the said (295) premises with effect from 1.4.1989 to 15.12.1989. Nothing is done to ascertain the final status of outcome of the inquiry/verification to take it to its logical end, leaving us with a clear thought that inconvenient details which do not help the Investigator are not pursued and left unattended. The Bank in whose name the policy was to be issued (cover note clearly shows this) is not made a party. There is no such request from the appellant either before the State Commission or before us. Perhaps appellants were not interested to go into the bottom of the case for them investigators loose and open-ended report was enough-which we strongly deprecate. Thus, based on the report of the Surveyor Shri D.S. Rattan, the initial reaction, report made to the police as also to the appellant, we are quite clear that burglary took place in the premises, 295, Industrial Area, Phase I, Chandigarh, which is also supported by the ''Policy'' prepared in this regard-albeit unsigned-and not issued by the appellants. It was for the appellant, to prove based on some proof or evidence that it was 277, Industrial Area, Phase I, Chandigarh and not 295, Industrial Area, Phase I, Chandigarh which was insured. We are unable to accept the contention of the appellant that the whole book containing the counter foil of the policy has been lost. This is a deficiency and discrepancy on their part for which they cannot pass the onus of proof on the respondent/complainant. More so, when the policy - unsigned and not issued - bears No. 295, Industrial Area, Phase I, Chandigarh, this shakes the whole foundation of the arguments advanced by the appellant.

COMING to the second leg of the argument that policy was not issued, "we find that policy was prepared, premium was taken, cover note was issued, and in these circumstances, a Policy was not issued, the blame and deficiency must lie with the appellant and shall have not bearing on the outcome of this case".

INDEPENDENT of whatever stated above, we are somewhat intrigued to read from the cross-examination of the Investigator when he states, "it was a conspiracy from the very beginning between the Insurance Company and the insured and this was the reason that neither of them was cooperative with me to the extent I required.....". This statement speaks for itself and need no elaboration if as alleged, we do not know whether along with the Investigator report this statement has also been taken cognizance of by the appellant Company and if so what follow-up action has been taken. In view of the above discussion and perusal of material on record, we find no substance in the pleas taken by the learned Counsel for the appellant. The State Commission arrived at the figure of loss based on estimate given by the complainant since the report of the Surveyor, who assessed the loss, was not on record, they were right in awarding whatever they did but now that report of the Surveyor is part of the record, we direct the appellant Insurance Company to pay Rs. 1,90,062 amount of loss assessed by the Surveyor, along with interest @ 12% p.a. from the two months after the report of the Surveyor, i.e., from 1.8.1992 till the date of payment along with cost which we fix at Rs. 10,000. All the payments should be made within 6 weeks from the date of passing of this order. Appeal dismissed.