DURBAR WATCH CO Vs. UNITED INDIA INSURANCE CO

JUDGEMENT

(1.) THE complainant has alleged in this complainant the deficiencies in the service of the opposite party. THE complainant has also alleged that its justifiable, genuine and admissible claim has been denied belatedly by the United India Insurance Co. THE complainant has therefore, prayed for settlement of its full claim alongwith amounts of compensation and costs.

(2.) SHORTLY stated the facts giving rise to this consumer dispute are that the complainant was having a watch shop at Nagpur. The complainant was also having dealership of HMT watches and other reputed brands of watches such as Allwyn etc. The complainant was authorised to establish a authorised show-room for Titan Watches. The turnover of shop was alleged to be up to Rs. 25,00,000/- per annum. The complainant used to obtain shop-keepers combined policy every year to insure the goods in the shop. One such policy was granted to him by the opposite party on 12-8-1991 for the period upto 11-8-1992. The said policy was valued for Rs. 3,50,000/-. The policy covers the loss of stock-in-trade consisting of wrist watches of authorised names and accordingly paid the necessary premium to the opposite party on 31-7-1991. The complainant alleged that during the night of 6-9-1991 its shop was burgled. He was informed about it by the neighbour. The complainant immediately rushed to the shop and found that the police had already arrived at the site. The complainant noticed that the locks of his shop and shutters were found broken. The complainant in the presence of the police opened the shutter and along with police entered the shop premises. The police conducted the spot panchanama. According to complainant, the entire shop was ransacked and the wrist watches were stolen away in the incident of burglary. According to the complainant he could not give the exact valuation of wrist watches stolen immediately to the police as he was under a mental shock. However, he quantified the figure of his loss at Rs. 3,52,739/- on 19-9-1991. The survey was conducted by the surveyor at the instance of opposite party. The survey report rendered by M/s. Kapadia Bros. is dated 15-6-92 after a period of 9 months. The complainant alleged in this complaint that his closing stock on 31-1-1991 was Rs. 6,19,640.50 as per balance sheet. However, he was surprised to know that the surveyor arrived at the valuation of loss for Rs. 1,96,500/- only. The complainant alleged that he kept on constantly reminding the opposite party to settle his claim at an early date for his loss but for some or other reasons, his claim was not settled. Hence, he filed this complaint for settlement of his claim. The opposite party namely United India Insurance Co. filed its written version dated 16-8-1992 in reply to the allegations contained in complaint and denied the allegations and his claim. Interalia, it is contended by the opposite party that the policy has become void and all premiums paid, have been forefeited by the insurance company because of misrepresentation, misdescription or non-disclosure of material information. Another point by which the opposite party tried to oppose the claim is that the complainants claim as regards the quantum of loss is exaggerated and not in conformity with the stocks according to stock transactions. The opposite party also denied that there is deficiency in their service. The complainant has placed on record the copy of insurance policy with terms and conditions and receipts of amount of premium paid to the opposite party. The complainant has also placed on record a copy of spot panchanama rendered by the police and the statements of stock showing the position of various wrist watches stored in the shop. The complainant has also filed a copy of survey report of Kapadia Bros. dated 15-6-1992 with annexures and his affidavit in support of his allegations. The opposite party has filed its written version along with copy of F.I.R. lodged by the complainant to the police and survey report of Kapadia Bros. and a letter dated 11-5-1992 repudiating the complainants insurance claim.

(3.) WE are further shocked to find that the opposite party disowned its liability to settle the complainants insurance claim in writing on 11-5-1993 i.e. after complainant filed this complaint, and during its pendancy. If the insurance claim are not settled and if in the meantime the aggrieved party files either a suit or a consumer dispute then the deficiency in the service is apparent on the face of record. It is very easy for the insurance company to repudiate its liability after the aggrieved party lodges its claim against it. In the instant case the incident of burglary took place on 6-9-1991 and after the lapse of more than 2 years the opposite party i.e. United India Insurance Co. woke up from its slumber and hopelessly tried to deny its liability on untenable grounds. In our view apart from the delay caused in repudiating the complainants insurance claim in this consumer dispute, the opposite party have tried to find fault with their own survey report, police investigation and finally repudiated the liability alleging non-disclosure of material information. In our view the action of opposite party is against good conscious, fair play and norms while settling the insurance claim and thus constitutes negligence within the ambit of Consumer Protection Act, 1986, while assigning the reasons to repudiate the complainants insurance claim. In letter dated 11-5-1993 the opposite party has stated that "as against the stock of watches lying at the residence and shop of the complainant on 6-9-1991 valued at Rs. 7,27,049/-, the complainant has declared the stock of Rs. 3,50,000/- in the said policy." WE are unable to understand that how such a statement goes against the complainant. When he had a huge stock of more than Rs. 7,00,000/- watches he can choose to declare the stock in his shop at Rs. 3,50,000/- in the policy. The complainant by such declaration wants to cover the risk upto Rs. 3,50,000/- only. According to opposite party some of his stock was lying at his residence. WE find that there is nothing wrong when he has shown the stock in the shop for Rs. 3,50,000 only. This can hardly be a reason to reject the complainants insurance claim. Another reason stated by the opposite party to reject the complainants insurance claim is that the investigator pointed out in his report dated 20-2-1993 that the complainant in his affidavit dated 25-5-1992 on a stamp paper purchased on 25-5-1992 made affidavit before the Executive Magistrate. Shri Chedha, the learned Advocate for the opposite party has contended before us that the affidavit of complainant dated 25-5-1992 placed on record is a false document. In our view even if the affidavit is not acceptable to opposite party they can ignore it and consider other material. The said affidavit has been rejected by the insurance company on account of difference in the date. In any case, that cannot be a ground to reject the complainants insurance claim. The third reason given by the opposite party for rejection of the claim is that in stock statement the complainant has stated the stock valued at Rs. 3,50,000/- to Rs. 3,83,500/- in the shop, when the survey report shows the value of loss was Rs. 7,27,049/-. It is therefore submitted that there has been discrepancy in the quantum of claim. From the letter dated 11-5-1993, it is thus apparent that the reasons stated in the said letter to repudiate the complainants claim are flimsy, irrelevant and meaningless. WE are therefore not convinced about the reasons advanced by the insurance company in their letter dated 11-5-1993. In the said letter, it is stated that from the observations made by the investigator and their chartered accountant it has been contended that the complainant have not disclosed the material facts and therefore the complainant has violated the policy Terms and Conditions. The stand taken by the opposite party to reject the complainants claim relying on the opinions of investigator and chartered accountant are not supported by any affidavit from them. No affidavits of the investigator or the chartered accountant to support these allegations made by the opposite party as regards the reasons of rejecing the complainants insurance claim are tendered by the opposite party to support its stand. It is the duty of insurance company to support its contention by convincing and reliable documents or other evidence, since the burden lies on the insurance company to substantiate its stand while rejecting the genuine and bona fide claim of the policy holder. The insurance company in the instant complaint has rejected the complainants insurance claim merely on the alleged observations made by the investigator and chartered accountant. But no evidence has been tendered in the form of affidavits of the investigator and chartered accountant. WE therefore find that the reasons given by the opposite party to repudiate the complainants claim are flimsy, imaginary and meaningless. The National Commission in the case of M/s. Uniplas India Ltd., in Original Petition No. 42/91 decided on 2-1-1992 has held that the deduction of amount payable under the insurance policy are arbitrary and unfair and has not settled the claim with the reasonable expedition has been held guilty by deficiency in the service towards the insured. In the instant case, the complainants insurance claim has not only been reduced but totally rejected on the untenable and irrelevant grounds, that too after a lapse of more than 2 years period. Hence, in our considered view the facts and circumstances appearing in this complaint clearly demonstrates the deficiency in the service of opposite party. The complainant has proved his allegations beyond reasonable doubt, and hence the claim of the complainant requires to be settled.