GINNI FILAMENTS LTD Vs. NEW INDIA ASSURANCE CO LTD

JUDGEMENT

(1.) THE complainant, a 100% export oriented unit had taken out with the opposite party Nos. 1 and 2 namely. New India Assurance Co. Ltd. and United India Insurance Co. Ltd. on sharing basis two insurance policies dated 15.1.1992 to cover inter alia risks of loss occasioned by fire, for Rs. 27,2l,71,000/ -in respect of building, machinery and stocks and for Rs.8,00,00,000/ - on declaration basis in respect of stocks of cotton yarn stored in godown at factory premises. According to the complainant, there was a fire in its factory premises on 28.10.1992 causing enormous loss and damage to the goods. This was intimated by me complainant to the opposite party -New India Assurance Co. Ltd. whereafter a team of officials of the opposite party alongwith Surveyor M/s. Adarsh Associates, visited the factory on 29.10.1992 and 30.10.1992 to assess the loss. On 6.11.1992, the complainant made the fire claim on the opposite party for a sum of Rs.

(2.) ,86,04,109/ -also indicating a claim of interest at 21 % till the settlement of the claim. As per list of dates filed alongwith complaint the Surveyor visited the factory four times in November, 1992, and seven times upto July, 1993, the last visit being in October, 1993. It is the complainant's case that from 30.12.1992 the Surveyor kept raising queries from time to time which the complainant responded to by supplying the required clarification or information. The final report of fire brigade and the interim police report were sent to the opposite party on 9.12.1992 and 11.1.1993 respectively. A copy of the certified final police report accepted by the Chief Judicial Magistrate, Mathura regarding the conclusion reached by the Police to close the matter, inter alia, on the ground that the culprits could not be identified was furnished on 26.4.1993. The complainant wrote to the opposite party on 11.5.1993 intimating that : (i) it had provided to the Surveyor the information required from time to time, (ii) permission had been obtained from the concerned Excise Authorities regarding the disposal of the salvage, and (iii) it was suffering heavily and incurring considerable expenses on account of interest on borrowings due to non ­ settlement of its claim. This was followed by another letter and meeting of the representatives of the complainant with the officials of the opposite party in June, 1993. The complainant again wrote in August, 1993 for immediate finalisation of the Surveyor's report as also for release of ad hoc payment. Thus the complainant was pursuing the matter with opposite party through reminders and personal contracts. The Surveyor submitted their report only on 30.11.1993 and the Board to Directors of the opposite party gave their approval on 9.2.1994 whereafter the amount was disbursed to the complainant in two installments on 22.2.1994 and 10.3.1994. The complainant's grievance is that as a result of the delay, default, failure, imperfection and inadequacy in providing the service by the opposite party, it had been subjected amongst others to a loss of interest on the sum of its claim of Rs. 286 lakhs. The complainant has therefore, prayed before us for reliefs by way of interest of Rs. 60,88,197/ - reckoned on the amount of claim and other appropriate reliefs. 2. In their reply opposite party No. 1 -New India Assurance Co. pointed out that there was no inordinate delay on their part and that it was due to the delay on the part of the complainant in furnishing the requisite information to the Surveyor that the final survey report was submitted only on 30.11.1993. The opposite party stated that the insurance claim in question was fettled after thorough investigation and scrutiny of relevant papers in view of the heavy loss and nature of the claim and after receiving the approval of the Board. The amount was paid to the complainant in two instalments after the latter submitted no objection certificate from financial institutions and the complainant issued discharge vouchers accepting the aforesaid payments in full and final settlement of his claim in both the insurance policies and also without raising any objection. Opposite party No. 1 contention is that thereafter the complainant is no longer a consumer aua opposite party No. 1 within the meaning of the Act. Opposite party No. 1 further contended that at no stage during die process of settlement the complainant had alleged that it would claim interest at the rate of 21%per annum until the date of settlement of the claim. Opposite party No. 2 - United India Insurance Co. have also made submissions similar to those of opposite party No. 1.

(3.) WHEN the case was taken up for hearing on 27.2.1996, Counsel for both the complainant and the opposite party were present. On the request of the Counsel for complainant on that date, time was granted to enable him to file rejoinder to the counter of the opposite party and the case was directed to be posted on 21.3.1996. When the case was finally taken up on the said date. Counsel for opposite party remained absent. We have carefully gone through the records. The questions for determination are : (i) whether interest on the claim is payable from the date of incident as claimed by the complainant ? (ii) whether after giving discharge of full and final settlement of the insurance claim, the complainant retains his title as 'consumer' to file a complaint? and (iii) whether there was delay in the present case on the part of the opposite party in settling the claim and if so, the period of delay? Claim for interest from the date of the incident cannot be maintained as the Insurance Company has to be allowed a reasonable time to assess the loss and finalise the amount payable. As regards the second question of maintainability the National Commission has earlier held that the full and final discharge receipt issued by a complainant is in respect of the policy and that even after giving such a discharge the complainant can claim compensation under me Act in case of delayed settlement for deficiency of service due to negligence. M/s. Asa Singh Cotton Factory v. United India Insurance Co. & Ors., First Appeal No. 202 of 1992, decided on 4.3.1993 reported in II (1993) CPJ 203 (NC). In the case on hand, the incident occurred on 28.10.1992. Surveyor of the opposite party first visited the site on 29.10.1992 and 30.10.1992. The Survey Report was submitted on 30.11.1993 i.e. about 12 months after the incident and opposite party released the payment in two instalments on 22.2.1994 and 10.3.1994 i.e. about 16 months after the incident. We do not find force in the opposite parties' submission that the quantum of loss was so heavy that the Investigator had to thoroughly examine the nature and extent of damages before submitting the report. This is because, (i) commensurate with the huge value of the insurance policies, the complainant had paid a corresponding premium, and (ii) examination of the nature and extent of damages should not only be thorough and careful but should also be prompt and timely keeping in view that the complainant was also under liability to pay interest on his borrowings from financial institutions. Reputed and experienced Surveyors who are in the business of assessing such losses are expected to have on hand a check list of queries and information required from the claimant and to finalise their report within a definite time frame. It also devolves on the opposite party -Insurance Company who have a contractual relationship with the insured to monitor the pace of progress of the Surveyor, The opposite party have not furnished any material information to substantiate that the complainant delayed in giving to the Surveyor critical information that had vital bearing on the assessment of the claim. The complainant has stated that the Surveyor ceased asking for information after July, 1993. The complainant was all along requesting for adhoc payment and the opposite party could have made the same when they received the Survey Report; at any rate they could have finalised the examination and released the payment by mid December, 1993 because every day of delay increases the complainant's liability for interest. Taking into account the facts and circumstances of the case, we are of the view that the opposite party could have released the payment by 15.12.1993. There has thus been deficiency of service due to negligence on the part of the opposite party resulting in delayed payment and the complainant is entitled to interest, therefor as compensation. We, therefore, direct opposite party No. 1 and opposite party No. 2 to jointly and severally pay interest to the complainant at 18% per annum on the amount of first instalment of payment from 16.12.1993 to 21.2.1994 and on the second instalment of the payment from 16.12.1993 to 9.3.1994, The opposite parties are given two months' time from the receipt of this order to pay the amount whereafter the amount will carry interest of 18 per cent per annum. The complainant is also allowed Rs. 2,000/ - as costs.