KALAMKARI DESIGNERS Vs. UNITED INDIA INSURANCE CO LTD

JUDGEMENT

(1.) -the present complaint has been filed under Sec.17 of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act') on behalf of M/s. Kalamkari Designers against the United India Insurance Company Limited and Another, alleging deficiency in service on the part of the O. Ps. in not settling the claim of the complainant expeditiously and further allowing the claim of the complainant on non-sub standard basis without sufficient cause.

(2.) The facts of the case, in brief, are as follows : the complainant firm had taken out an insurance policy No.040701/46/05/3134/94 for an amount of Rs.45,00,000/- valid from 17.11.1994 to 16.11.1995. It is stated that on the night falling on 24/25.6.1995 a burglary took place at the godown of the complainant situated at C/40, Okhla Phase-II, New Delhi. An FIR was lodged with the South District Police Station at Okhla Industrial Area in respect of the said burglary in which clothes and other fabrics and finished garments were stolen. The complainant also lodged a claim with O. P. No.1 for Rs.5,13,300/- as the stock was covered under the insurance policy. It is stated by the complainant that in the said godown goods of the complainant and its sister concern Maatra Ancillaries Pvt. Ltd. were stored and consequently the initial FIR was got registered by M/s. Maatra Ancillaries Pvt. Ltd. covering the entire burglary. Subsequently the complainant vide its letter dated 19.11.1996 wrote to the Officer Incharge of Okhla Police Station that its name be also included in the name of the complainant. The O. P. appointed M/s. Lloyd Services as Surveyors to investigate the burglary. It was also investigated by the police and the final report of burglary was prepared and submitted by the police on 8.1.1996. According to the complainant, the Surveyors and Investigators appointed by O. P. No.1 took one year to conclude the assessment of the loss at the complainant's godown purportedly raising different queries, but the complainant was not informed of the assessment made by the Surveyor. The police completed the investigation and recovered 50 metres of cloth and arrested three persons with respect to the stocks of Maatra Ancillaries Pvt. Ltd. The complainant wrote several letters to officers of O. P. No.1 as to why there was inordinate delay in processing and completing the claim of the complainant. The case of the complainant is that although the claim was filed in the year 1985 and all the formalities had been completed, examination by Surveyors and Investigators of the O. P. , the O. P. failed to settle the claim of the complainant in a fair and satisfactory manner and subsequently sought to coerce the complainant into accepting partial payment as full and final settlement of the claim. It is stated by the complainant that its claim for Rs.5,13,300/- was sought to be reduced by O. P. No.1 to Rs.3,15,873/- after making deduction on account of average value and salvage value. It is further stated that the assessed loss by O. P. No.1 was only 75% of the complainant's claim which was dubbed as non-substandard by O. P. No.1. It is also stated by the complainant that the assessed loss computed by O. P. No.1 was erroneous and the calculations drawn by O. P. No.1's Surveyor were inconsistent with the document submitted by the complainant. In spite of several representations and letter of the complainant the O. P. failed to settle the claim, the complainant approached the Public Grievances Cell of Government of India also and refused to accept the payment of Rs.3,15,873/- as full and final settlement. It is also stated that earlier the claim was fixed for Rs.3,03,802/- but subsequently on the representations of the complainant it was reviewed and the claim amount was enhanced to Rs.3,15,873/-. The complainant thereafter sent a legal notice to the O. Ps. to pay the full amount of the claim. The O. Ps. also did not release the admitted amount of the claim unless the discharge voucher is signed by the complainant mentioning full and final settlement of the claim. Hence it is alleged that O. P. No.1 has rendered deficient and inadequate service by its failure to settle the complainant's claim and also on account of inordinate delay in assessing the claim. Hence the present complaint has been filed claiming the amount of insurance claim amounting to Rs.5,13,300/-, compensation for rendering deficient service on account of inordinate delay in settling the claim of Rs.1,00,000/-, compensation for mental agony, pain and harassment on account of non-settlement of the claim of Rs.1,00,000/- and Rs.50,000/- as compensation for financial hardship and loss including legal costs and expenses. The complainant has thus claimed compensation of Rs.7,63,300/-. The complainant besides filing the affidavit of Mr. M. Midha, Director of the firm has also filed a copy of insurance policy (Ex. A), copies of correspondence between complainant and the O. Ps. , the letter received from the Surveyor, a certificate from M/s. Batra and Co. , Chartered Accountants verifying the stock of the complainant and the letter received from the O. P. allowing the settlement claim of the complainant on non-substandard basis, i. e. , 75% of the loss besides other documents.

(3.) In its reply the O. P. raised a preliminary objection that the insurance policy has been issued in the name of M/s. BNP, Tolstoy Marg, New Delhi and the complainant has no locus standi to file the present complaint in its name and the insured being the Bank should have been impleaded as the O. P. The O. P. also stated that the Insurance Company after fully assessing the claim, offered the amount finally recommended by the Surveyors. It is stated that the claim of the complainant has been settled on non-sub-standard basis i. e. , 75% of the claim amount and the O. P. admitted its liability to the extent of Rs.3,15,873/-. It is also stated that it is not a consumer dispute as it is a 'quantum dispute' which is referable to arbitration as per Clause 11 of the policy. O. P. also stated that complicated issues are involved which require elaborate oral and documentary evidence which can be adjudicated by a Civil Court. It is also denied that the complainant is a consumer. It is also stated that the FIR of the theft had been lodged by a third person and not by the complainant and it is also doubtful whether it is a case of forcible entry for burglary or theft. It is stated that the police authorities had not made the investigations as the case pertaining to loss to the complainant as no complaint was lodged by the complainant. It is also stated that two policies were obtained, one in the name of M/s. Kalamkari Designers (Policy No.3134) for Rs.45,00,000/- and another in the name of M/s. Maatra Ancilliary Private Limited (Policy No.3135/94) for Rs.5,00,000/-. It is stated that stocks of similar type of the above two companies were kept in the same premises. There was no document available to establish the accuracy of the statement of stock and hence the possibility of inter change of stocks cannot be ruled out. It is further stated that the delay in settling the claim took place as the complainant failed to produce the various documents required by the Surveyors. It is stated that it was difficult for the Surveyors to identify the cloth belong to the two companies separately as both the companies were reported to be dealing with similar varieties of clothes which were stored in the same godown. The O. P. denied that the complainant had completed all the formalities and furnished the required documents in time. The complainant had delayed submissions of documents relating to the loss and also details of the stock reported to have been stored along with proof of purchase and ownership. Moreover, security contract with the agency, who were providing guards at the godown, has also not produced. Thus there was no deficiency in service on the part of the O. P. and the claim has been settled after detailed investigation. It is further stated that considering the fact that no FIR was lodged by the complainant, no separate stock of both the companies were produced and no authentic documents were available from which the accuracy of the statement of stock could be ascertained and that the loss of the complainant was not fully proved, the O. P. decided to settle the claim on non-substandard basis (i. e. , 75% of the loss) vide letter dated 17.2.1997. The claim of the sister concern was assessed and paid an amount of Rs.63,154/-. However, the complainant had not submitted the discharge voucher and as such settlement is pending but it is on account of the lapse on the part of the complainant. Since the complainant refused to issue discharge voucher, the amount of admitted claim could not be released to the complainant. It was again reiterated that it is a case of 'quantum dispute' which requires adjudication as per arbitration Clause 11 as appearing in the policy. Hence the complaint be dismissed. The O. P. has filed copy of the policy, copy of the FIR, copy of the Surveyor report, copy of various letters written by the Surveyor M/s. Lloyd Services Pvt. Ltd. to the complainant, and other connected documents including the letter dated 24.2.1997 written by O. P. No.1 to the complainant settling the claim on non-substandard basis.