RAJENDRA PLASTICS vs New India Assurance Company Ltd.

COMPLAINANT, M/s. Rajendra Plastics, Bombay has filed this complaint against the opposite party, the New India Assurance Company alleging deficiency in service on the part of the opposite party.

BRIEF facts of the case are that the complainant is engaged in the business of purchase and sale of all kind of plastic raw material and plastic goods. To protect their interest they had taken a Fire Policy ''C'' from the OP amounting to Rs. 35 lakhs effective 30.10.90 to 29.10.91. The fire policy covered the following five godowns: "1. M/s. Akshaft Warehousing Corp., Bombay 2. Store N. Shift, Bombay 3. M/s. Akshaft Warehousing Corpn., New Bombay 4. M/s. Paras Warehousing Corpn., Bhiwandi 5. M/s. Salfonation & Chemical Corpn. Ltd., New Bombay."

There was a fire incident on 6.12.1990 in the Godown No. 4 M/s. Paras Warehousing Corporation in Bhiwandi where the goods of the complainant was stored which were completely destroyed. The intimation of this was given to the complainant claiming a loss of Rs. 28 lakhs. It is the case of the complainant that they had sent a letter to the OP dated 7.11.1990 which was delivered in their office on the subject of cancellation of other godowns and requesting the OP to limit the liability of insurance to one godown belonging to M/s. Paras Warehousing Corporation. When upon filing the fire claim, referred to above was not getting settled after correspondence matter was taken up with the higher authorities and finally vide their letter dated 30.8.1993 the OP repudiated the claim which reads as follows: Re: Fire Claim No.11/110400/90/0016 Policy No.11/110400/05288 We refer to the claim form dated 15.12.1990 submitted by you in respect of damage to your goods by fire on 6.12.1990, whilst lying in one of the five godowns covered under the above mentioned policy. Since occurrence of the fire on 6.12.1990 in the godown of M/s. Paras Warehousing Corporation. You have been continuously insisting upon our deleting the remaining godowns. You have alleged on several occasions that you informed us to delete remaining godowns vide your letter dated 7.11.1990. We have confirmed every time that we have not received the alleged letter dated 7.11.1990 and, therefore, the question of deleting the remaining godowns from the above policy does not arise at all. Your continuous insistence on deleting the remaining godowns by falsely alleging that the letter dated 7.11.1990 is sent to the company is a clear and deliberate attempt on your part to claim more amount from the Insurance Company than what you had, in fact, lost. In view of this, we hereby reject your claim in toto in terms of condition No.8 of the above insurance policy. The condition No. 8 reads us under: "If the claim be in any respect fraudulent, or if any false declaration be made or used in support, therefore, or if any fraudulent means or devices are used by the insured or by any one acting on his behalf to obtain any benefit under the policy or if the loss or damage be occasioned by the wilful act, or with the connivance of the insured, all benefits under the policy shall be forfeited."

Aggrieved by this letter of repudiation and alleging deficiency in service on the part of the OP a complaint was filed before this Commission. Written version by the OP was filed only on 15.11.2001 rebutting the claim and the plea of the complainant , stating that they never received this alleged letter of 7.11.1990 and secondly that as per terms of the policy, the liability of the OP is limited to 10% of the total sum insured for each godown. It was also their case that whatever information was sought by the Surveyor appointed by them the complainant did not supply the information. They had also appointed an investigator and his report was obtained. After considering the reports of the surveyor and investigator, the claim was not found to be payable hence was repudiated, which is just and proper and as per law. A rejoinder was filed by the complainant specifically stating that the letter dated 7.11.1990 was duly delivered to the office of the OP. It was also stated by them that policy was issued to them after the fire incidence had taken place as also after the claim had been preferred. Policy was issued only on 12.12.1990 whereas the fire incidence has taken place on 6.12.1990. Hence, the liability limitation of claim up to 10% of the insured sum for each godown was not known to them as it was not forming part of the cover note issued to the complainants. It was also their case that the OP is not correct in stating that this was a ''Floater'' Policy; in fact as the policy on record will show that while premium of Rs. 19,355/- paid was towards the insurance of Rs.35 lakhs, additional amount of Rs. 9,678/- had been charged towards separate and additional risk covering 50% floater extra. Under the circumstances, the OP cannot escape its liability of covering the loss in the godown belonging to M/s. Paras Warehousing Corporation.

ONE affiavit each by way of evidence was filed by the complainant and OP. Arguments were heard. Since all the basic facts are not disputed we are not reproducing them. The only controversy is whether the policy covered the 5 godowns as pleaded by the OP or only one godown after issue of letter dated 7.11.1990 as claimed by the complainant.

EVEN though not specifically admitted, but in the absence of any denial on the part of OP, it is clear that the policy came to be issued only on 12.12.1990 while the fire incidence took place on 6.12.1990 which in our view itself is a deficiency and any term which was not part of the cover note does not bind the complainant. We don''t see on record the cover note, hence we are unable to confirm the point about limiting the liability up to 10% for each godown one way or the other. Receipt of letter dated 7.11.1990 has also been vehementlyand repeatedly denied by the OP both before us as well as in the correspondence exchange between the party from 7.12.1990 onwards till the time of the repudiation letter issued on 30.8.1993. Besides an affidavit of the Proprietor Mr. Rajendra H. Salot, there is no evidence on record. Since it was their case that letter had been sent, it was for the complainant to prove his case, by evidence of the person who delivered/sent the letter or other documentary record/evidences of their office or for that matter by cross-examining the OP which was not done in this case. The position before us is one affidavit of the Complainant Proprietor saying this letter was sent which is rebutted in the written version as well as by an affidavit filed by the Sr. Divisional Manager of the OP, saying that they never received the said letter. In our view the complainant has failed to prove the despatch of this Fletter dated 7.11.1990. On the other hand we see that the OP has neither produced the report of the Surveyor or for matter of the investigator which does not really help their case. It is admitted by the learned Counsel for the OP that the Surveyor indeed had assessed the loss at Rs. 4,48,352/-. No other details are available. It is an admitted position that the godown termed M/s. Paras Warehousing Corporation, which is one of the five godowns covered by the Insurance Policy, did catch fire and loss did take place and our view will be that since loss had taken place in that godown also, the assessment of the loss made by the Surveyor of the above-mentioned again will relate to this godown and it is no one''s case that this godown was not covered by the Insurance Cover irrespective of the existence of letter dated 7.11.1990 or otherwise. In this background we find that the repudiation of the claim on the basis of condition 8 of this policy has neither been substantiated nor been proved by any evidence as to how this claim was fraudulent or based on a false declaration. OP has also failed to satisfy about the arithmetic of the coverage. If one was to accept the totally unacceptable plea of the OP that the outer limit of loss for coverage for each of the godown was 10% and it is admitted position that there was only 5 godowns thus it only adds up to 50%. There is no explanation as to how this figure came to be arrived at and how does the OP explain the remaining 50%? In this regard we are inclined to agree with the plea taken by the complainant that the policy covered loss of Rs. 35 lakhs and there was extra premium for 50% floater which was paid extra. In our view the OP has deliberately made an effort to confound the issue without coming clean on this point as also withholding the report of the Surveyor and investigator from this Commission.

UNDER the circumstances, as per principle laid down by the Hon''ble Supreme Court in other cases that the report of the Surveyor has to be given due importance, we will like to limit the relief to the amount of the loss assessed by the Surveyor which is Rs. 4,48,352/- which we direct the OP to pay to the complainant alongwith interest of 12% from 3 months after the date of fire incident up to date of payment. We also see that the OP took almost 3 years to repudiate the claim which itself is a deficiency in service on the part of the OP for which we grant Rs. 50,000/- as compensation to the complainant. We also see that there had been a delay of almost 2 months for issuing the main policy which also we hold to be another instance of deficiency in service on the part of the OP as this kept the complainant in the dark about any terms/conditions which prima facie have been added specifically in the policy and not referred to in the cover note. For the deficiency in service, we award another Rs.10,000/- as compensation to the complainant. The complaint is allowed in part only and the OP is directed to pay the above amounts within a peirod of 6 weeks of passing of this Order alongwith cost of Rs. 5,000/- Complaint partly allowed.