Subhash Chandra, Presiding Member
1. The present appeal filed under section 19 of the Consumer Protection Act, 1986 (n short, ‘the Act’ ) assails the order dated 24th March 2017 of the Telangana State Consumer Disputes Redressal Commission, Hyderabad (in short, ‘the State Commission’) in Complaint no. 151 of 2013.
2. This order will also dispose of first appeal nos.1489 and 1490 of 2017 which arise from the same order of the State Commission. For the sake of convenience, the facts are taken from first appeal no.1488 of 2017.
3. Briefly stated, the facts of the case as stated by the appellant, are that the appellant being a partnership firm availed a loan from the Andhra Bank, R C Puram Branch, Medak District to run its business. The appellants also obtained an insurance policy no. 050502/11/10/1100000167 (192 New) for Rs.4,00,00,000/- for the period 26.11.2010 to 25.06.2011 towards coverage of stocks from respondent no.1. Policy no. 050500/11/10/11/00000629 for Rs.2,00,00,000/- for 04.11.2010 to 03.05.2011 towards coverage of pyrotechnic materials, stock of raw materials, semi-finished, finished goods, goods held in trust and packing materials, cotton seeds, cotton etc. from respondent no.2 and policy no.050200/11/10/11/00000078 for Rs.3,00,000/- for the period 25.05.2010 to 25.05.2011 for cotton gin and pressing houses, i.e., for coverage of factory building for Rs.40,00,000/-, plinth and foundation for Rs.5,00,000/- compound wall for Rs.5,00,000/- and plant and machinery and accessories for Rs.2,50,00,000/- from respondent no.3. Respondent no.4 was the Regional Office of the respondent nos.1 to 3. On 02.04.2011 at about 04.30 a m, due to a fire accident extensive loss of Rs.6,15,41,760/- was incurred. The appellant’s claim, however, was assessed by the respondent at Rs.3,96,60,403/- through M/s Alok Shankar and Co., Surveyor appointed by the respondent. After extended correspondence between the appellant and the respondents, respondent no.1 finally paid an amount of Rs.2,58,54,567/- on 23.08.2012. Respondent no.2 paid Rs.1,30,31,636/- on 26.04.2012 and respondent no.3 paid Rs.7,74,200/- on 08.03.2012 out of the total of Rs.3,96,60,403/- directly to the Financier Bank to the credit of the appellant’s account but without any intimation. Due to the abnormal delay of one year and four months in making the payment, the appellant’s firm suffered a loss in their business. The appellant alleges that as per the Surveyor’s report the extent of depreciation and salvage amount for the balance amount was incorrect, therefore the respondents are liable to pay the balance amount of Rs.61,22,545/- with interest @ 18% per annum on the part payment of Rs.2,58,54,567/- from 02.04.2011 till 23.08.2012 amounting to Rs.22,02,242/-.
4. The appellant also states that the respondent failed to supply the Survey Report. It is contended that the surveyor depreciated the building @ 2% per annum or 4% over two years and that the depreciated value of the building was considered as at Rs.98,17,992/- as against the insured amount of Rs.40 lakh. The Surveyor also applied and deducted 59.26% towards under insurance. The Surveyor also deducted 20% on plant machinery/ accessories for two years. The surveyor has not allotted the dismantling charges, earth work excavation, plain cement concrete, RCC, stone masonary ventilators, front side shutters, RCC bars etc., while considering the loss. While estimating the loss of plant and machinery, Surveyor is alleged to have not considered hydraulic oil and gear oil, fire equipment electric items and panels, tarpaulin etc., while applying depreciation of Rs.1,48,037/-.
5. Appellant contends that respondent erred in adopting the assessment of bales on volumetric analysis basis as the appellant had produced all the purchase bills, sales bills, stock registers, way bills, bank statements and other documents since thousand cotton bales were gutted in the fire. Appellant contends that respondent failed to follow IRDA Regulations, 2002 in settling the claim and as such they are liable to pay interest 2% above the bank rate. The appellant also stated that the mere execution of a discharge voucher would not always deprive the consumer from preferring a claim with respect to deficiency in service or consequential benefits arising out of the amount paid in default of the service rendered. Hence, appellant has prayed to award the balance claim amount with interest and also compensation of Rs.5,00,000/- and cost of Rs.50,000/- i.e., a total of Rs.88,74,787/-. Hence, the appellant has prayed that:
(a) Allow the appeal and set aside the order dated 24.03.2017 passed in Cc no. 151 of 2013 by the Telangana State Commission, Hyderabad;
(b) Allow the claim of the complainant as prayer in the complaint; and
(c ) Pass any other or further orders as may be deemed fit and proper in the circumstances of the case.
6. The respondents resisted the claim before the State Commission by a common written version. It is submitted that the appellant was not a ‘consumer’ under the provisions of the Act in view of the business activities undertaken by it. The appellant did not submit all the required documents to the Surveyor and as such it cannot challenge the final Survey Report dated 23.01.2012. It was also stated that as per the terms and conditions of the policy, respondents have remitted the assessed amount of loss directly to the account of the appellant firm with the Financier Bank and that as such there was no need to intimate it separately. The respondents further stated that the appellant vide letter dated 23.01.2012 had accepted to the amounts assessed by the Surveyor through its Managing Partner by signing the documents on 24.04.2012 towards the full and final discharge of the claims. The respondent contended that the Financier Bank had not been made a party to the proceedings and that the claims were split intentionally under different policies and filed three cases separately with an intention to avoid court fees to be paid before the competent Civil Court. Respondents submit that the Surveyor followed the Regulations of the IRDA in assessing the loss and the case was filed as an afterthought which should be dismissed with costs.
7. The State Commission dismissed the appeal and ordered as under:
In view of the aforesaid discussion we hold that the alleged deficiency in service on the part of the opposite parties has not been duly established and that as such the complainant’s firm is not entitled for the balance claim amount of the insurance policy much less any compensation.
In view of the conclusion arrived at point no.5, we hold that the complaint is liable to be dismissed.
In the result, the complaint is dismissed but in the peculiar circumstances the parties shall bear their own costs.
8. We have heard the learned counsel for the parties and have given our thoughtful consideration to the rival contentions.
9. Learned counsel for the appellant submits that the appellant had obtained three insurance policies from the respondents, i.e., Standard Fire and Special Perils Policies vide (i) policy no. 050502/11/10/11/00000167 (192 new) for Rs.4,00,00,000/- for coverage of stocks valid from 26.11.2010 to 25.06.2011; (ii) policy no. 050500/11/10/11/00000629 for Rs.2,00,00,000/- for coverage of pyrotechnic materials – stock of raw materials, semi-finished, finished goods, goods held in trust and packing materials, cotton, cotton seeds, cotton etc., valid from 04.11.2010 to 03.05.2011; and (iii) policy no. 050200/11/10/11/00000078 for Rs.3,00,00,000/- for cotton gin and pressing houses, i.e., for coverage of factory building Rs.40,00,000/- plinth and foundation for Rs.5,00,000/- compound wall for Rs.5,00,000/- and plant and machinery and accessories for Rs.2,50,00,000/- valid from 25.05.2010 to 24.05.2011. It is stated that on 02.04.2011, a fire took place at the Battery Condenser in the ginning unit and the entire stock, building, plant and machinery worth Rs.6,15,41,760/- were damaged. It is also submitted that after one year and four months, the insurance company and the bank officials without intimation and notice to the appellant directly credited the amount of Rs.3,96,60,403/- out of Rs.6,15,41,760/- claimed to his account. Appellant was forced to sign the consent vouchers under coercion as they were suffering financially and interest was accumulating on the loan amount due to delay in settling of the claim. A legal notice was sent to the insurance company. The respondent/ insurance company in their common written version stated that the claim was settled on 24.04.2012 as per the Surveyor’s Report dated 23.07.2012 and the appellant’s consent letter dated 23.01.2012 and the amount credited into the loan account of the Banker which was not objected to by the appellant.
10. Learned counsel for the appellant submitted that the State Commission had dismissed his complaint by observing that ‘no doubt, the complainant’s firm has disputed the said settlement but there is no material evidence on record to cause undue influence upon the Managing Partner of the Firm who signed the vouchers’. He further submits that the appellant had on the basis of the stock register, bank statements and other documents estimated the loss of machinery and stock at Rs.6,15,41,760/-. Thereafter, on various dates without notice, the respondent no.1, 2 and 3 sent three cheques directly to the Banker for different policies. The appellant issued a legal notices on 27.08.2012 calling upon the respondents to pay the balance amount of Rs.2,74,75,380/-. However, the respondent in their reply dated 15.09.2012 replied that the claim was settled as per the recommendation of the Surveyor. Learned counsel for the appellant further alleges that the respondent had failed to furnish the Survey Report to the complainant. Hence, the learned counsel for the appellant prays that the appeal be allowed and to set aside the orders of the State Commission, Telangana dated 24.03.2017 in CC no.151, 152 and 153 of 2013.
11. Learned counsel for the respondents submitted that the appellant had three policies from the respondent for Rs.4,00,00,000/- for the period from 26.11.2010 to 25.11.2011 towards coverage of stocks, Rs.2,00,00,000/- for the period from 04.11.2010 to 03.05.2011 towards the coverage of pyrotechnic materials etc., and for Rs.50,00,000/- for building and Rs.2,50,00,000/- for the period from 25.05.2010 to 24.05.2011 respectively. The fire on 02.04.2011 at about 04.30 a m and loss on account of it was not disputed. The insurance company on 05.04.2011 appointed surveyor Alok Shanker and Company. On the basis of physical verification and documents furnished by the appellant, the surveyor assessed the loss at Rs.3,96,60,403/- as per Survey Report dated 23.01.2012. The respondent insurance company on the basis of the assessment made by the Surveyor paid Rs.2,58,54,567/- on 23.08.2012, Rs.1,30,31,636/- on 26.04.2012 and Rs.7,74,200/- on 08.03.2012 as per the insurance policy to Andhra Bank since there was an agreed Bank clause. Learned counsel for the respondents submitted that all the amounts were paid to the Andhra Bank account in the name of M/s Saptagiri Cotton Industries. It was submitted that the appellant had consented to the amounts assessed by the surveyor vide letter dated 23.01.2022. It is also submitted that the State Commission had rightly observed that letter dated 23.01.2012 and settlement intimation voucher dated 24.04.2012 have not been disputed by the complainant’s firm and that there was no allegation of any fraud or concealment of any material facts by the insurance company by the appellant. Hence, the appellant is not entitled for the balance amount claimed in the appeal.
12. Learned counsel for the respondents relied upon the judgment of this Commission in M/s M L Spinners Pvt. Ltd., vs UIIC, in RP no. 2668 of 2013 decided on 16.12.2013 held that “mere pleadings without any corroborating evidence cannot take the shape of proof”, on National Insurance Company Ltd., vs P J Thomas FA no.71 of 2009 decided on 05.01.2017 (2017) CPJ 435 (NC) which held that “………… the consent given by a person would be deemed to be a free consent and should be binding upon the parties to the contract, unless it can be shown that it was obtained by exercise of coercion, undue influence, fraud, misrepresentation etc., as declined in sections 15, 16, 17 and 18 or by mistake subject to provisions of sections 20 to 22 of the Indian Contract Act.” And the judgment of the Hon’ble Supreme Court in UIIC vs Ajmer Cotton Mills, II (1999) CPJ 10 SC wherein it was held that “consumer has to ratify authority under Act that discharge was obtained by fraud, misrepresentation, undue influence or the like and Consumer Disputes Redressal Forums and Commission under the Act are empowered to fasten liability against insurance companies notwithstanding issuance of discharge voucher.”
13. From the record it is seen that the appellant had provided the discharge voucher in full and final settlement of his claim for the three policies for Rs.2,58,54,567/- on 23.08.2021, Rs.1,30,31,636 on 26.04.2012 and Rs.7,74,200/- on 08.03.2012 respectively. Thereafter, a legal notice dated 27.08.2012 was issued on behalf of the appellant calling upon the respondents to pay a sum of Rs.2,74,35,380/- within 15 days failing which appropriate legal action would be initiated. It was contended by the complainant that against a claim of Rs.6,15,41,760/- only Rs.3,96,60,403/- had been settled after a long gap of one year and four months. This contention has been considered as per settled law as per which a claim which has been accepted by way of full and final settlement can be accepted either under protest or after acceptance of letter of protest can be issued within a reasonable period of time setting out the reasons for the protest. In this case, no letter of protest has been issued. A legal notice dated 27.08.2012 issued by the respondent is contended to be a letter of protest. Even if this letter is considered to be a letter of protest, it is seen that the claims under the respective policies were settled on 23.08.2012, 26.04.2012 and 08.03.2012. Therefore, this legal notice/ protest was issued after nearly five months of having accepted the full and final settlement. The acceptance of discharge voucher is not denied by the appellant. The reasons for protest are stated to be the abnormal delay of one year and four months which alone cannot be the ground for protest.
14. The respondent has settled the claim on the basis of the report of its surveyor. As laid down by the Hon’ble Supreme Court in the case of Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd. & Anr. in CA No. 4487 of 2004 dated 24.08.2009 (2009) 8 SCC 507, under section 64 UM of the Insurance Act, 1938, appointment of a surveyor is a mandatory requirement and his report is to be the basis on which the insurance company has to proceed in case where the claim exceeds Rs.20,000/-. In the case of New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787, the Hon’ble Apex Court has further laid down that the report of the surveyor is not so sacrosanct and that it cannot be departed from, provided there are cogent reasons to establish perversity in the report of the surveyor. In the instant case, the appellant has not established any perversity in the report of the surveyor, viz., Shri Alok Shanker and Company. The only reason stated is that of delay in settling of the claim. In view of the foregoing, the contention of the appellant that the settlement was accepted in full and final settlement under protest cannot be accepted both on account of delay in filing of any protest and for the reasons stated in the legal notice. The appeals are therefore liable to be disallowed.
15. For the reasons stated above, the appeals are disallowed. The impugned order of the State Commission are accordingly, upheld. There shall be no order as to costs.
16. All pending IAs, if any, also stand disposed of by this order.
