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Judgment
THE Complainant Pradeshik Co-operative Dairy Federation Ltd., UP (herein after referred to as the PCDF) has filed this complaint against the United India Insurance Co. Ltd. (hereinafter referred to as the OPs), against repudiation of its insurance claim by the latter. As seen from the complaint petition, the matter arises out of an incident of fire, which took place in the PCDF Unit in Noida UP. Milk and its products including ghee and packing materials like poly-films, chemical etc. were stored there. All stocks and materials were insured under a fire policy for Rs.22 lakhs, taken from the OPs and valid for the period 27.4.1995 to 26.4.1996.
IT is stated that this fire had broken out on 21.4.1996, at about 9:00 pm. in the above premises. The Police and the Fire services were informed. The Insurance Company/OPs were informed, on the next day and were requested to depute a Surveyor to assess the loss.
THE current insurance policy, as already noted, had validity till 26.4.1996 i.e. only till five days after the incident of fire. As per the complaint petition, the Development Officer of the OP Company obtained a proposal form from the Complainant for renewal of fire insurance for the next year i.e. 27.4.1996 to 26.4.1997. He followed it up with a letter of 25.4.1996 for renewal of the fire and burglary policy. The location of the insured premises in this letter, as well as in the proposal form for the renewal, was mentioned as C-26, 27 Sector -06, Noida. The letter also stated:- "This is in reference to the discussions held with you regarding above captioned subject for your dairy plant which has been shifted to C 26, 27 Sec-6, Noida on 14th April'' 96."
This letter, as will presently be seen, is the beginning as well as the basis of the dispute, which has resulted in the present consumer complaint.
THE complaint petition states that on careful reading of the above letter they were surprised to see the comment about shifting of 14.4.1996 and wrote a letter on 10.5.1996 informing the OP that:- "On careful perusal of the letter, it has been noticed that your development officer has mentioned that our "Dairy plant which has been shifted to C-26-27, Sector-6, Noida on 14-04-96". We would like to clarify here that we had shifted only processing of milk to the sector-6 factory addressed above w.e.f. 14-04-96 and not the stores."
THIS was followed by a series of correspondence between the Complainant and the OP insurance company, on what was actually shifted on 14.4.1996 viz. the processing plant alone or the entire dairy plant, including the store. However, in the letter of 23.5.1996 from General Manager, V.P.Varma, PCDF to Branch Manager of OP insurance company at Noida, it was clarified that:- "The store was shifted to the new address on dated 26-04-96 and we informed your company for renewal of the policies at the new address (w.e.f.27-04-96) on dated 25-04-96 vide the Proposal Forms."
IN spite of the above correspondence, the claim of the Complainant/PCDF under the insurance policy, current from 27.4.1995 to 26.4.1996 was repudiated by the OPs. Their letter of 20.7.1997 clearly shows that it was based on the solitary ground that the premises had shifted, before the incident of fire, from D-23 Sector 11 to C-26,27 Sector 6, Noida. The relevant paras read- "4. Consequently the address of the premises where the Insured stocks were to be preserved or kept with effect from 14.4.1996 had become C-26, 27, Sector 06, NOIDA (U.P.) and our liability of coverage risk of the Insured Goods in terms of the Insurance Policy had become effective with respect to the stocks at the premises No.C-26, 27, Setor 6, NOIDA (U.P.) and not the premises No.D-23, Sector 11, NOIDA. Hence the Insurance Risk coverage at the originally insured premises No.D-23, Sector 11, NOIDA (U.P.) had ceased to exist or remain in operation with effect from 14.4.1996 onwards. 5. We have carefully perused the entire claim records and the correspondence exchanged between us and yourself. Consequently, we have reached the conclusion that in terms of the endorsement dated 11.4.1996 bearing No.02/96, the receipt of which has been duly acknowledged by you as per your letter dated 23.5.1996, we therefore, express our INABILITY to admit our liability vis-a vis the Fire Loss Claim lodged by you upon us on 22.4.1996."
CHALLENGING this repudiation, the Complainant has sought the following relief:- "i) To pay Rs.42,00,000/- (Forty Two Lacs) for the loss caused to the petitioners due to fire on dt. 21/22.4.96 at D, 23, Sector,11 Noida; ii) To set aside/quash the order dated 20.7.1997 received on dated 2.8.97 as the claim was rejected on false reasons; and/or iii) To pay damages to petitioners as per the facts and circumstances of the case And/or iv) To direct the respondent to make the payment soon in the interest of justice and all cost of this complaint also be given to petitioner; v) Pass such order(s) against the respondents in the facts and circumstances of the case."
PER contra, the case of the OPs, as per their Written Submission before the State Commission, was that the Development Officer of the OPs visited the premises of the Complainant on 11.4.2006 for renewal of the policy "he was informed that the stocks are being shifted to C-26-27, Sector 6 NOIDA (UP) and necessary amendment be made in the existing policy and premium of the renewed policy will be paid thereafter. The instructions were given by Mrs. Neerja Goel, Manager Administration and now the story has been changed to the shifting of the processing plant instead of stores. Had the instructions not been given, why the opposite party would have carried out the amendment when only 15 days were left in the expiry of the policy." The affidavit evidence of Mr. P.C.Yadav, Deputy Manager of the OP company, is more explicit on this point when it says- "6. That the complaint has informed the opposite party through the then Development Officer Mr. Sanjay Arora on 11.4.1996 that the entire stocks are being shifted from D-23, Sector 11. NOIDA to the newly elected premises No.C-26. 27, Sector 6, NOIDA and accordingly necessary changes in the policy by issuing endorsement were made and communicated to the complainant through post. The endorsement is from 14.04.96. The necessary amendments in the policy were carried out at the instructions of Mrs. Neerja Goel, Manager Administration in ordinary course of business." However, the OPs have not filed any affidavit of Mr Sanjay Arora, in support of the above. On this point, the affidavit evidence of Mr P C Yadav, states in para 3:- "That Mr. Sanjay Arora the then Development Officer who was looking after the complainant and to whom the instructions regarding change of address and shifting of the premises were given has taken a voluntary retirement otherwise the opposite party would have also filed his affidavit in support thereof."
AS for the Complainant, the affidavit evidence on behalf of the PCDF has been filed by Smt. Neerja Goel, Manager, herself. Her affidavit clearly records that:- "5. I say that on 11.4.1996 the development officer of respondent visited the office at Noida and advised for re-newel of insurance policy. Every thing like renewal of policy, risk concerned and number of items to be included were discussed, but no final decision was taken as petitioner were thinking to shift the ''Processing ''Plant which was under consideration, the latter is dt.9.4.1996, and is EX PW1/3."
ON the nature and quantum of loss, her affidavit says:- "6. I say that on 21.4.1996 on Sunday at 9 P M fire was broken out in store at D-23, Sector 11, Noida UP where all material was kept over there. The material was Polythine Film, Milk power, Milk products, Ghee Desi, Chemicals etc etc which was lying at the time of fire broken out. The material was of Rs.22 Lakhs Twenty two Lakhs."
THE affidavit of Mrs Neerja Goel, Manager PCDF also says that on 28.10.1996 details of the loss caused in this fire, were given to the Surveyor. But the report of the Surveyor was not made available to the Complainant, in spite of written request. A perusal of the affidavit of Mr. P.C.Yadav, Deputy Manager of the Insurance Company shows that there is no dispute that the fire had actually taken place in premises No.D-23, Sector 11 Noida. But, the amount of loss claimed in the fire, as per his affidavit, was excessive and included consequential losses, which are not payable under the policy.
THE affidavit evidence of the OP/Insurance company clearly states that the loss had been assessed by the Surveyor and his report had also been received. In view of this reference, to the report of the Surveyor, this Commission directed OP-2 on 29.7.2009 to file a copy of the Surveyor''s report. Later however, Shri K.L.Nandwani, counsel for the OPs, informed the Commission on 10.9.2009 that the report of the Surveyor was not available. Therefore, on 4.5.2010 this Commission directed OP Insurance Company to file the affidavit of the Surveyor himself, if his report is not available.
IN compliance with the above direction, the OPs have filed the affidavit of Shri Ramesh Tangri, the Surveyor. In his brief affidavit, Shri Tangri merely states that- "2. That the deponent was entrusted by United India Insurance Co. Ltd., Noida for survey and assessment of loss suffered by the complainant. Accordingly the deponent completed his job and submitted a copy of the survey report to the company. 3. That the Insurance Company has requested the deponent to supply another copy of the survey from the deponent''s record as the copy supplied to them has been misplaced by the company and is not traceable. 4. That the deponent also regrets to submit that no record is also available with the deponent since the computer in which the record from 1996 onward was saved has been spoiled/destroyed (it will depend on the surveyor what stand he wants to take as the survey reports are to be retained only for a period of three years as per rules and regulation) and cannot be retrieved. 5. That the deponent also humbly submits that as per rules and regulations, the survey report is to be retained only for a period of three years from the date of supply of the same to the insurer. 6. That the deponent however will be in a position to reassess the loss if directed by this Hon''ble Commission provided records as are supplied by the insured to the deponent."
WE have carefully examined the records submitted by the two sides and considered the evidence adduced on their behalf. A preliminary issue of limitation has been raised in the response of the OP, United India Insurance Company to the complaint petition. As per their own record, the claim of the Complainant was repudiated by the OP on 20.7.1997. The complaint petition of PCDF was received in this Commission on 20.4.1999. Therefore, the question of limitation does not arise.
MR. Virendra Kumar Sharma, counsel for the Complainant, PCDF has empathically argued that the incident of the fire took place in the premises of the PCDF, which was covered in the fire policy taken from OPs for the period 27.4.1995 to 26.4.1996. The fire took place on 21.4.1996 i.e. five days before the end of this policy. The intimation of the fire was given to the OPs in the letter of 22.4.1996 sent by Mrs. Neerja Goel, Manager, PCDF. Her letter clearly stated that the fire has taken place in the premises covered under the policy. The counsel argued that repudiation of the claim was not based on any communication from PCDF. In fact, the proposal for renewal of the insurance for 1996-1997 itself was signed on 25.4.1996 i.e. after the incident of fire and one day before end of the term of the existing insurance policy.
COUNSEL for the OPs /United India Insurance Company, Mr. K.L.Nandwani, argued that renewal of the policy was for the new location. The OP had relied upon oral instructions of the PCDF to change the address in the existing policy also, to the new location. However, he conceded that no documentary evidence was produced to show that the change of address in the existing policy was advised by the PCDF on 11.4.1996, as claimed by the OPs.
MR Nandwani, learned counsel for the OPs, also argued that the relevant fire policy covered only the following items- stocks of poly-thin films etc. -- Rs.15 lakhs, stocks of milk products -- Rs.7 lakhs, total-- Rs.22 lakhs.
But the claim made by the Complainant is for Rs.42 lakhs, which is beyond the limit of the policy. As per the affidavit evidence, it includes Rs.20 Lakhs for harassment and loss.
AS already observed, the sole justification for repudiation of the claim is that the insured premises had already been changed to the new location. On this claim of the OPs, from consideration of the evidence on record and arguments of the counsels, the following conclusions emerge- a. There is no documentary evidence to support this claim of the OPs. b. It is based only on the alleged conversation of Mr Sanjay Arora, who has not been examined. The OP has advanced a very feeble and unconvincing explanation for not producing his affidavit. c. On the other hand, the affidavit evidence of Mrs. Neerja Goel, Manager PCDF clearly denies and negates the claim of Mr Sanjay Arora about shifting of the insured premises before the fire. d. Even the records relied upon by the OPs are vague. The letter of Mr Sanjay Arora says "has been shifted" on 14.4.1996. The letter of repudiation of the claim says "being shifted". The written statement of the OP says "the goods were shifted to new premises on 11.4.1996". e. Admittedly, Mr Ramesh Tangri, the Surveyor appointed by OP insurance company, did visit the place of fire and did submit his assessment of loss. But, the OP has failed to produce the report. Even the affidavit of the Surveyor, filed under express directions of this Commission, is of no help whatsoever, to the case of the OPs. f. The report of the Fire Officer (Annexure P-12) is referred to in the affidavit evidence of the complainant. According to this report, in the fire of 21/22.4.1996 at PCDF unit in D-23, Sector 11, Noida the damaged goods included poly film for packaging, milk powder, Ghee, plastic crates, and chemical etc. These stocks were totally damaged.
We therefore, have no hesitation to conclude that the OP/insurance company has failed miserably to prove that the insured premises had shifted to the new location before the incident of fire. Consequently, the repudiation of the claim of the complainant is held to be unjust and a clear deficiency of service.
WE now come to the determination quantum of loss. Learned counsel for the OPs Shri K.L.Nandwani argued that the fire policy itself was limited to Rs.22 lakhs. The report of the fire officer shows that the loss suffered by the Complainant was of in order of Rs.18 lakhs. Despite sufficient opportunity given by this Commission, the OP has failed to produce any evidence to show what exactly was the quantum of loss assessed by the Surveyor. We therefore, have no option but to accept the only available assessment i.e. Rs.18 lakhs as assessed by the fire officer.
IN the result, the repudiation of the claim by M/s. United India Issurance Company Ltd. Is held to be unjustified. The Consumer Compalint of the Pradeshik Cooperative Dairy Federation (PCDF) UP is allowed. The OP is directed to pay Rs.18 lakhs in settlement of the claim of the PCDF with 7% interest from the date of this Complaint. Considering the facts and circumstances of the case, we also award costs of Rs.25,000/- in favour of the Complainant. The entire amount shall be paid within a period of three months. Delay, if any, shall carry interest at 12%.