ANKUR Vs. NATIONAL INSURANCE COMPANY LIMITED

JUDGEMENT

(1.) THIS complaint case filed by M/s. ANKUR, a proprietary firm, having its office -cum -godown at Doctor Danga, Chaibasa Road Bye Lane, Holding No. 312, Purulia, related to a claim arising out of Standard Fire and Special Perils Policy subsequent to a devastating fire occurring on 28.12.2006 and supposed denial of insurance claim therefor by the OP Nos. 1 and 2 namely M/s. National Insurance Company Ltd., with Proforma OP namely Canara Bank, with whom given stock of goods of the complainant was hypothecated. Admittedly, the complainant was engaged in dealing with wholesale business of readymade garments and hosiery goods, purchases of which were made from various village markets (Huts) of Kolkata, Budge Budge, Salkia, etc. in cash and credit and the sales comprised of only wholesale to various vendors of Purulia, Jamshedpur and suburbs in cash and credit against bills and receipts. The complainant s firm was located in a premise where the ground floor was stated to be utilized as sales counter and the first and the second floors were used as godown. The complainant was covered by Standard Fire and Special Perils Policy bearing numbers 150503/11/05/3100000474 and 475 for the period from 6.1.2006 to 5.1.2007 when insurance coverage included stock of readymade garments, sarees and hosiery goods. Subsequently the business premises was shifted from Holding No. 38(Old) to Doctor Danga, Holding No. 312 (New) and the insurance policy was stated to be duly rectified and endorsed with change of address so effected. Since the stock of material was hypothecated to Canara Bank, Purulia, Canara Bank was also made Proforma opposite party, against whom, however, no relief was claimed. The incident of devastating fire took place at Purulia in the location of the complainant/insured at Holding No. 312 at Purulia on 28.12.2006 at about 23.25 hours at night and as a result, the complainant suffered extensive damage and loss of nearly all the stock -in -trade, furniture, fixtures and electrical installations and also for the building. Immediately local police station and fire brigade were informed and fire was extinguished by two fire tenders, which took about 2 hours. The entire incident of fire was reported and recorded with Purulia Town P.S. under G.D. No. 1210 dated 29.12.2006. The OP No. 1 namely the Branch Manager, National Insurance Company Ltd., Purulia Branch, was intimated immediately about the incident and a Surveyor was appointed forthwith who conducted preliminary survey and submitted his report with some documents. On 2.1.2007 the complainant filed its claim of Rs. 60.00 lakh for total loss of the materials in respect of both the policies and in due course filed other reports like certificate issued by Canara Bank, Purulia Branch, police report and relevant other documents including balance sheet as prepared and certified by chartered accountants with relevant stock statement, purchase register, invoice/bills, sales register, sales invoices, cash memos, cash book, etc. The OPs subsequently appointed another Surveyor namely Apex Surveyors Pvt. Ltd., which firm conducted further survey with assistance and cooperation from the complainant in every way possible and submitted its final report to the OP No. 1 on 22.12.2008 assessing the loss to the tune of Rs. 53,17,790 after deducting the salvage amount of Rs. 1.00 lakh and factoring sound stock being saved after fire at Rs. 51,969, but the OP Nos. 1 and 2 did not pay the claim. The complainant then started pursuing the matter with the OP Nos. 1 and 2 trying to satisfy all its queries by providing records as were available and explanations as were feasible, but in spite of its best efforts, failed to receive the claim amount. Meanwhile, after serving due notice upon the complainant Canara Bank proceeded with action under SARFAESI Act, 2002 and the complainant was unwittingly cornered on litigation at that end as well. After exhausting all its efforts and in failing to secure any amount on the claim preferred by it on the OP Nos. 1and 2/Insurance Company and in not having any resolution on its claim of damages suffered due to fire, this complaint was lodged on the OP Nos. 1 and 2 praying for a decree for Rs. 60.00 lacs against the OP Nos. 1 and 2 on account of loss of damaged materials by fire and for Rs. 1.00 lakh as compensation for harassment, mental agony and serious loss in business due to inordinate delay in settlement of legitimate claim with interest at 12% from 28.12.2006 over the claim amount of Rs. 60.00 lakh and any other relief(s) that the complainant is entitled to, in law and in equity.

(2.) THE OP Nos. 1 and 2 namely National Insurance Company Ltd., entered appearance and contended inter alia that the Insurance Company took exceptional, prompt and sincere action by appointing IRDA approved Surveyor Mr. Pravakar Kumar Roy on 29.12.2006 on the incident of 28.12.2006 asking the Surveyor to carry out preliminary physical inspection of fire affected loss and other aspects. The said Surveyor visited the spot on 29.12.2006 and submitted his report on 3.1.2007 with specific comments that some garments on the ground floor remained still untouched from fire and that the complainant dealt in wholesale readymade garments having a single counter in the ground floor in the building jointly with M/s. Saree Point and the complainant did not deliver record books and daily selling receipt books as some might have been burnt and that 13 specified quantified items of goods were found in good condition. It was submitted that the preliminary Surveyor could not identify and quantify the nature and quantity of goods lost/destroyed due to such fire. Immediately thereafter on 4.1.2007 the OP No. 1 engaged M/s. Apex Surveyors Pvt. Ltd., who visited the spot on 5.1.2007 and wrote letter to the complainant requesting him to submit six specified documents/records. However, the complainant miserably failed to produce the stock registrar duly certified by auditor, chartered accountant, which position prevails till today. Stating that the final Surveyor did not recommend the admissibility of the claim for payment in terms of Chapter -IV , Clause -13 of Insurance Surveyors and Loss Assessors (Licensing Professional Requirements and Code of Conduct) Regulation 2000 it was submitted that day -to -day stock register was not maintained and the documents, records produced by the complainant to the Surveyor were all unreliable and unauthentic and assessment of loss on the basis of such could be treated as void and quashed on merit of reasonableness, fairness and lawfulness. Pointing out that subsequently the Insurance Company issued several letters to the insured asking for filing of various documents like stock registrar, return, etc., it was submitted that those having not been produced the dispute was not adjudicable in summary jurisdiction and should be referred to a Civil Court for proper adjudication and examination in order to ascertain the veracity of the claim as made out by the complainant. Denying that there was any element of deficiency of service on part of National Insurance Company Ltd. at any stage and pointing out to its promptness in engaging successive Surveyors immediately after the incident and in adhering to reports of such authorities the O.Ps. submitted that the complaint was liable to be dismissed.

(3.) THE OP No. 3, Canara Bank, entered appearance and filed written version when it stated that the OP/Bank sanctioned a credit facility to the complainant to the tune of Rs. 35.00 lakh against the hypothecation of the stocks and mortgage of immovable property. Stating that account of the complainant became irregular and in spite of repeated reminders the same was not regularized, the OP/Bank issued a notice under Section 13(2) of the SARFAESI Act and thereafter the account was classified as N.P.A. on 1.3.2008. It was submitted by the OP No. 3/Bank that as per Bank s record the stock at the time of incident of fire was for Rs. 60.00 lakh and the same was claimed to have been burnt due to fire. It was also stated that the Insurance Company did not release the payment for the loss due to fire and the Bank could not realize its dues from the complainant. The OP/Bank denied all the allegations against it and left the dispute at the end of this Commission for proper adjudication.