BEFORE THE HOM’BLE STATE CONSUMER DISPUTE REDRESSAL COMMISSION
WEST BENGAL BHABANI BHAWAN, KOLKATA-700027
CONSUMER COMPLAINT NO _CC35/2012
In the Matter of:
A complaint under section 17 of the Consumer Protection Act 1986 and the Rules made thereunder
In the Matter of
THE STATE TRADING CORPORATION OF INDIA LTD
( A GOVT OF INDIA ENTERPRISE)
NILHAT HOUSE( 9TH & 10TH FLOOR)
11, R. N MUKHERJEE ROAD KOLKATA-1
UNITED INDIA INSURANCE CO. LTD.
( A GOVT OF INDIA UNDERTAKING)
KOLKATA REGIONAL OFFICE,
HIMALAYA HOUSE 3RD FLOOR,
38B JAWAHARLAL NEHRU ROAD
ADVOCATE- ON -RECORD.
18/8/1 DANESH SK LANE , HOWRAH-9
TEL – Xxxxxx
VALUE OF THIS COMPLAINT Rs.- 90,94881/-
The Hon’ble President and his Companion members of the State Commission
The humble complaint of the complainant above-named most respectfully submits as follows:-
The claim in brief
Standard Fire Policy was taken for nine consecutive months for 44,048 Mt Non- Cooking coal@ Rs. 2043.22 PMt.
Due to unilateral imposition of the of Policy Excess at the second and third phase of policy spanning for nine months of a continuous Standard Fire Insurance Policy was settled by Rs.71.728/- against the claim of Rs. 80,59,881 /-due to spontaneous combustion caused huge loss.
The Lose in brief
The first incident of fire was reported by the insured STC on 25.01.2006 to the united India insurance Co., against that they replied vide letter dated 25.01.2006, inter alia directed not to disturb the affected area and let the stock remain as it was with the ignite state and then the second incident of fire was reported by STC on 16.02.2006, against that insurance replied on 17.02.2006 inter alia stated that unless and until there is any physical lose of the coal stock due to any insured peril for which physical inspection has to be carried out by IRDA accredited surveyor they will not entertain any incidents although reported by STC from time to time, then further on 21.02.2006 STC wrote that without manipulation of the pile of coal there was no possibility to quantify the loses and by the same letter they requested for appointment of surveyor to measure the lose. Then other incidents of fire was reported 21.04.2006, 26.04.2006, 08.05.2006, 23.05.2006 and 12.05.2006, which was as per report received from STC appointed surveyor in the occasion of insurance`s failure to appoint their surveyor to ascertain the lose. The dates of loses were intimated as per volumetric measurement of gross lose of 4439.364MTs as the under writers did not authorize segregation of the burnt coal and the same time request for surveyor from the side of insurance also went unheeded. After a hectic exercise of correspondence a surveyor from the side of insurance were issued after a long lapses of time, and a joint survey report on 28.08.2006 was prepared and the lose was estimated 3948.590 MT which is only 11% less of above estimation.
The law points
Whether Fire Insurance Tariff (Wording & Rates) is a Public Document like Railways & Custom Tariff and whether the insurance company has any right to change and or alter it for imposing Special Condition of policy deductibles or excess at heir sweet will?
Whether Joint Survey Report of Assessment of Loss by two IRDA accredited Surveyors representing insured and insurers can be disowned under any circumstances when it is recommended by the Insurers?
Whether when there is no “Duration Clause” under Fire Policy, then in that circumstances a claim of any duration is payable under the policy can be repudiated under Indian Contract Act?.
Whether a single incident of continuous Self Combustion of Coal can be segregated in parts subsequently in different occation on the visual basis of reporting after reporting the first incident to adjust the Special Policy Excess clauses in favour of insurer?
Whether the Insurer can go against their own direction?
1. That the State Trading Corporation(Here in after STC) of India is a Govt of India undertaking entered into a insurance contract with the United India Insurance Company Ltd( Here in after UII) and had taken Standard Fire Insurance Policy for for a period of three months. And the policy was extended for next three months and again the same policy was extended with the same condition for another three months.The United India Insurance Company Ltd issued multiple policy numbers for a total policy period covering a span of total none months from 26.1.2005 to 25.7 2006 for their 44,048 Mt Non- Cooking coal lying in two plots (OLD GENERAL GOOD SHED AND “B” TYPE QUARTER PLOT) of Visakhapattanam Port( Andhra Pradesh). A full description of the policies are as under.
NO POLICY PERIOD POLICY NO SUM INSURED RISK COVERED POLICY EXCESS RS.
1. 26.10.2005 TO 25.1.06(three months) 031100/11/05/00353 NINE CRORE SPONTANEOUS
COMBATION 10, 000/-
2. 26.1.2006 TO 25.4.2006(three months) 031100/11/05/00508 NINE CRORE SPONTANEOUS
.3. 26.4 2006 TO 25.7 2006(three months) 031100/11/06/11/00000096 EIGHT CRORE NINETY NINE LAKH NINETY-NINE THOUSAND EIGHT HUNDRED EIGHTY NINE ONLY SPONTANIOUS
COMBINATION 20, 00000/- (imposed later unilaterally without knowledge of the insured by using forged documents)
2. That the whole stock of Non- Cooking coal ( bulk) was insured for a sum of Rs. Nine Crores and no portion of the stock was removed in the policy period i.e 26.10.2005 to 25.7 2006(total nine months ) or misused by the Complainant State Trading Corporation(STC) at any relevant time. Fire insurance Policy with Spontaneous Combustion peril Add- on Cover of coal stock as valued @ Rs. 2043.22 per metric Ton for a Stock of quantity weighting 44048MTs was initially taken for three months then extended for consecutively three months and three months on the same conditions and for the same insured money. Total policy period was Nine months.
Xerox Copies of the Insurance policies are attached herewith and collectively marked as A-1/ A-2 /A-3 (INTERNAL PAGE NO- )
3. That under the first two policy period covering a period of six months from 26. 10 .05 to 25. 4. 2006, in its policy paper included a clause of ”policy excess” of Rs. 10,000/- for each and every loss, which the Insurer and the Insured were well aware and mutually agreed. and on the same basis , for the third time when the policy was extended for a period of three months (26 .4 2006 TO 25.7 2006), it was understood that the same condition as agreed for the first two policies would be extended. Policy proposal from the side of STC was advanced with the same impression of facts that the policy Excess will be Rs. 10,000/- as earlier. But later shockingly it was discovered that the insurance company unilaterally imposed “Special excess of 2% of sum insured subject to minimum of RS. 20 Lacks” clause without the knowledge of STC and in violation of provisions made in Indian Contract Act 1882. Discovering this STC immediately registered their protest with insurance company.
A Xerox copy of the letter dated 1.9.2006 by STC TO THE UII attached herewith and marked as B (INTERNAL PAGE NO- )
4. That the complainant STC in several instances communicated with the Insurance Company highlighting it`s Unilateral imposition of 20 Lacs of Policy Excess in the third policy, but the Insurance Company chose to be remain silent . STC took the pain to rise the issue with Insurance Regulatory authority pointing the absurdity of the of the Policy Access clause if taken in its face value, over looking the violation of Indian Contract Act against a Govt . Company( STC) by an another Govt company( United Insurance) of imposition of unilateral “Excess” clause. .
5. Xerox copies of the letter dated 30.8.2006 to the UII and the Communication to the IRDA dated 1.9.2006 are annexed herewith and collectively marked as C , D (INTERNAL PAGE NO- )
6. That after discovery and being aware of the unilateral imposition of the extraordinary and exorbitant Special excess of Rs. 20 Lacs on the third policy period , STC approached National Insurance , Kolkata DO-XI 19 R.N Mukherjee Road Kol-1. National Insurance ( Another Govt Company indulging in the same general insurance business) agreed with the standard Policy Excess of Rs. 10,000/- and issued a policy affected for a period from 26.07.06 to 24.10.06 as per then prevailing All India Fire Tariff norms and regulation. This proved beyond doubt that UII is indulging in “restrictive trade practice” along with “unfair trade practice” in the area of Insurance business. Due to this STC incurred huge losses.
In this policy its spontaneous combustion clause suggests that ” in case of any smoke comming from coal stock immediately water is to be spread in order to cooling down the coal”
A xerox copy of the policy dated27.7.2006 with the National Insurance is attached here with and marked as E (INTERNAL PAGE NO- )
7. That by a letter dated 17.7.2006 STC while pointing out the above mentioned fact inter alia wrote to the UII–
“ You have never informed us about the above condition( 20 lacs policy excess) while we paid the premium to you . The “ standard Fire and Special Peril Policy” for which we proposed for the insurance and the policy you have issued to us must be governed by the Fire Tariff Of IRDA in respect of rates /wordings/ endorsements/ add- on covers etc. and as per norms all Fire policy must be in strict conformity with the codified provision s of All India Fire Tariff( AIFT). We request you please appreciate that we, as a public Sector Company can not compromise with the risk coverage at all. as an underwriter , of course you had the option not to accept the risk . But having accepted the risk under AIFT you can not unilaterally impose any condition outside the ambit of the AIFA, on the back door without the knowledge of the insured. We consider this as a gross violation of the Tariff.”
By this letter STC requested and call upon the insurance company to correct the anomaly .
A xerox copy of the letter dated 17.7.2006 is attached here with and marked as – F- (INTERNAL PAGE NO- )
8. That by a letter dated 1.11.2006 to the IRDA, STC made a representation about the failure of the United Insurance to supply the Proposal form .
Again by a letter dated 1.11.2006 STC made a heartily request to the United Insurance to supply the proposal pertaining to the third insurance being policy number 03 /11/06/11/00000096 which they failed to supply within the 30 days of acceptance of the Policy . in this letter STC wrote –
“ In view of the above , we would once again request you to kindly comply with IRDA regulations. Since the dispute of unilateral imposition of Rs. 20 Lacs excess under the above policy was referred to IRDA, We need to send the proposal form to them for their decision.”
A xerox copy of the letter dated 1.11.06 to the IRDA and United Insurance attached herewith and collectively marked as G1, G2 (INTERNAL PAGE NO- )
9. That On 6.11.2006 the United insurance supplied the much-expecting Proposal form which was signed by the STC at the time of acceptance of the policy. This proposal Form was devoid of any Policy Access condition and in printed formate. but after receiving it , it was found that last page ( Page Three) at the side of the Declaration somebody penned “ As per your proforma bill dated 25.4.06“ which was initially not at the time of making. STC promptly communicate this over telephone.
A Xerox copy of the Proposal dated 25.4.06 has been attached herewith and marked as H (INTERNAL PAGE NO- )
10. That by a letter dated 18.7.2006 UII inter alia accepted the following-
“ As per your contention that Standard Fire and Special Peril Policy is governed by the Fire Tariff you are correct in this regard. However , imposition of excess/ special condition warranties and endorsement are imposed considering the exposer/ type/ nature of risk by the underwriters during the time of acceptance”
The above mentioned Proposal does not support the view of the UII and further more imposition of any thing contrary to the standard Tariff regime is contravention of law to deprive the lawful claim of the insured , in this case the victim is STC.
Again in this letter UII put blames on the STC that it had discussed the matter pertaining to the Policy excess with STC official MR. Sharma( Manager Marketing) is pure invention,imagination and conjecture, which is cooked up and after thought at the occasion of the claim. Without prejudice under the strict proof of evidence STC is challenging the UII.
A Xerox copy of the letter dated 18.7.06 attached herewith and marked as I (INTERNAL PAGE NO- )
11. That the proposal was preferred on 25. 4.06 from the side of the STC and after due deliberation it was accepted by the UII on 26.4.25 for a period of three month dated from 26.4.06 to 25.7.06 . Receipt was issued on 28.4.2006. But policy schedule document ( ANNEXURE A-3) was manufactured after the policy had been taken out by the STC . The Computer generated paper shows the date of origin of that paper , which is AKG L36361-03/05/2006. IN THIS DOCUMENT 20 LACS POLICY ACCESS CLAUSE IMPOSED WITHOUT THE KNOWLEDGE OF STC. This mischief had been organized to frustrate our claim under the third phase of extended policy.
12. That by a letter dated 25.1 2006 for the first time to the United insurance, STC informed the following-
“ WE have been informed today morning by ———- our Clearing & handling Agent that they have noticed some smoke in the stocks of coal lying at Vizag, which they put of by sprinkling water on it. This has been intimated to our surveyor M/S BSI Inspectorate India Pvt Ltd regarding above incident.”
By this letter inter alia request was made to deploy a surveyor from the side of UII.
A Xerox copy of the letter dated of STC 25.1.06 attached herewith and marked as J
13. In reply to the said intimidation vide their letter Ref 031100/ Fire-CLM/06 dated 25.01.06 inter alia instructed “ not to disturb the affected area and let it remain as it was “. Due to this standing instruction, the surveyor on behalf could not able to ascertain the actual loss due to fire .
A Xerox copy of the letter dated 25.1.06 of UII attached herewith and marked as- K
14. The second intimation had been communicated on behalf of STC to the UII by a letter dated 16.2.06. in response to the to that letter UII by a letter dated 17.2. 06 inter alia stating –
“ Unless and until there is any physical loss of coal stock due to any insured peril for which physical inspection has been carried out by IRDA accredited surveyor, we will not be in position to proceed to entertain any of your such alleged incidents being reported by you from time to time . Please take note of the same and revert back”
Again by a letter dated 21.2.2006 STC inter alia mentioned -” In view of your advice not to disturb the area , it was not possible for us to ascertain the losses. Please appreciate the fact that unless the peril is dug up and brunt out ash removed/ segregated it would not be possible to quantify the losses.
You are , therefore, requested to depute your representative/ surveyor to Visakapattanam so as to conduct survey in presence of our surveyors, BSI Inspectorate india Pvt. Ltd and ascertain the loss quantity “.
A Xerox copy of the letter dated 17.2.06 and 21.2.2006 attached herewith and marked as -L1 ,L2
15. That when the first incident was reported to the United India Insurance , it put an embargo for not disturbing the affected stock and leave it as it is and as it is where. STC surveyor M/S Inspectorate Griffith India ( IGI), an accredit surveyor time to time took the volumetric measurement of the stock and the same was communicated to the UII accordingly. By a letter dated 14.7.2007 STC gave a feed back to the UII, inter alia citing the policy wise loss and the quantum of loss thereunder assessed by volumetric measurement. It was measured a loss of 4439.364MTS Then again by a letter dated dated 25.7.06 STC finally intimated to the UII that as per volumetric measurement total Spontaneous combat ion of coal stands 4439.364 MT. Due to non segregation or bifurcation stipulated by the standing instruction on part of the UII, only volumetric measurement could be possible and M/S Inspectorate Griffith India ( IGI) . In this regard standard practice and survey norms were followed. Later in there joint measurement UII’S surveyor also followed the same standard and norms. as a Public sector company STC could not accept any unscientific methodology. Full particular of the incident is as below-
POLICY PARTICULARS NAME OF THE PLOT DATE OF THE INCIDENT LOSS OF QUANTITY(MT)
1.(a) 031100/11/05/00353 OLD GENERAL GOOD SHED 25.01.06 22.000
031100/11/05/00353 B” TYPE QUARTER PLOT ( 25.01.06 18.000 TOTAL 40MT(1+2) ON 25.1.06 VALUE RS 87729/-
POLICY EXESS RS. 10000/-
031100/11/05/00508 OLD GENERAL GOOD SHED
(VALUE 10.02.06 TO 11.02.06,
15.2.02.06 TO 16.02.06,
20.02.06 TO 22.02.06 90.000
031100/11/05/00508 “B” TYPE QUARTER PLOT 10.02.06 TO 11.02.06,
15.02.06 TO 16.02.06,
.20.02.06 TO 22.02.06 50.000TOTAL 140MT (3+4)ON 25.1.06
POLICY EXESS RS. 10000/-
VALUE RS 286048/-
031100/11/05/00508 OLD GENERAL GOOD SHED 24.02 .2006 TO26.02.2006 1039.868 POLICY EXESS RS. 10000/-
VALUE RS 2124679/-
031100/11/05/00508 B” TYPE QUARTER PLOT 14.03.2006 TO 16.03.2006 957.496 POLICY EXESS RS. 10000/-
VALUE RS. 1956375/-
2(b) 031100/11/06/11/00000096 OLD GENERAL GOOD SHED 27.04.2006
TO 29.4.2006 1062.000SPECIAL POLICY ACCESS OF RS 20 LACS INPOSED
031100/11/06/11/00000096 OLD GENERAL GOOD SHED 3.5.2006 TO 8.5.2006 1200.000SPECIAL POLICY EXCESS OF RS 20 LACS IMPOSED
TOTAL LOSS ASCERTAINED 4439.364 MT.VALUE RS. 50,16,59/-AFTER DEDUCTING RELEVANT POLICY EXESS
A Xerox copy of the letter dated14.9.2007 and 25. 7.06 attached herewith and marked as M1, M2
16. That by several letter STC intimated the occurrence of fire and requested the United Insurance to appoint their surveyor . By a letter dated 11.8.06 STC in formed that if united India fails to a- ppoint surveyor then in that occasion STC would appoint IRDA acredited “A” category surveyor and put up the claim bill to the insurance company accompanied with the survey fees bill . In this regard STC appointed M/S J. B Boda Surveyors Pvt Ltd to assess the loss.
A Xerox copy of the letter dated 11.8.06 attached herewith and marked as N ( Internal page no )
17. That a series of communication had been send to the UII and consequential request of appointing of surveyor had been made. UII choose not to pay heed of this . From the day one that is 25.1.2006, when it was for the first time reported that smoke had been detected on the superficial level of the stock till the end of the third policy period , the fire was never extinguished in depth of the pile / bulk of the stock. Only an honest attempt was made to stop it by sprinkling water on the outer surface. That attempt might stopped gussying out of the smoke but never ceased to exist at the bottom of the pile. If there no un- intelligent embargo was put to the STC and had the STC been allowed to dig or segregate the pile , may the fire could be stopped to spread its tentacle. Fire never extinguished , so occasional vomiting of smoke is very natural or consequential. STC reported the same and requested to appoint surveyor promptly. Inspectorate Griffit India Pvt Ltd, a well known survey agency was deputed by the STC to assess loss periodically and the same was passed to the UII. UII was duty bound to appoint their surveyor to assess the quantum of loss then to believe STC or its survey or Inspectorate Griffit India Pvt Ltd, who made volumetric measurement time to time and finally the quantum of loss assessed a loss of 4439.364MTs. By a letter dated 25.7.2006, this was communicated to the UII.
A Xerox copy of the letter dated 25.7.06 attached herewith and marked as N1 ( Internal page no- )
18. That after a long time after the completion of the policy period ended on 25.7.06 , united insurance appointed one surveyor Mr Prasad Babu . By a letter dated 14.8. 2006 United Insurance communicated this to the STC . Mr Prasad babu By his letter dated 16. 8.06 confirmed his appointment as a surveyor . In his letter he mentioned about his personal knowledge-
“ As per the information gathered by me that you have imported thermal coal in bulk was 44,048 MT and stored at the above two plots for for the period from July , 2005 to till date and during this period number of times or occasions , they have reported that smokes was emanated from these due to spontaneous combustion and when ever they were observing smoke they use to sprinkle water and they have not sought any service of VPT fire wing.
It was also further ascertained by me that your Surveyor M/S Inspectorate Griffith India Private Ltd, have conducted joint physical stock verifications, issued reports and based on those report, you have intimated to the insurers through letter dated 25th July that 4,439.36MT was involved or damaged due to reported spontaneous combustion on number of occasions, kindly provide me such copies of survey reports along with measurements.”
As per his demand all necessary papers were supplied. In his letter inter alia he had shown interest in joint physical examination for volumetric measurement.
A Xerox copy of the letter dated 14.8.06 of UII and letter dated 16.8.06 by Prasad Babu attached herewith and marked as O ( Internal page no- )
19. That on 28.08. 06 a joint verification was made by D.S Prasad Babu and the stock verified stands 40099.410 MT against the discharged quantity of 44048 MT. So apparent loss of stock due to combustion was 3948.59 MT. of thermal coal.
A xerox copy of the stock verification certificate dated 28 .08. 06 attached herewith and marked as P ( Internal page no- )
20. That by a letter dated 22.1 2008 to the UII, the STC inter alia registered their objection about the joint Survay report by the following way in page no 1-
“ It was imperative for the surveyor to let us know about the assessment of loss before submission of the Survay report but your Surveyor preferred to keep us in dark in the matter contrary to the market practice”
In this letter STC pointed out some major inconsistency or contradiction of the Survey Report.
A Xerox copy of the letter dated 22.1.2008 by STC attached herewith and marked as Q ( Internal page no- )
21. That again by a letter dated 23.6.2008 STC clarified the whole matter encompassing the loss along with the policy excess matter and an assessment of loss in terms of money to the UII. in this letter in page number 5 the loss computed Rs 43,94,832/- for the first two policy period and Rs 621764/- for the third policy period taking under consideration of 20 lacs policy excess. Though STC never recognize this unilateral imposition of policy excess. With all honesty , and conformity with the policy contract the assessment was made . The total loss was calculated Rs. 50,16,595/- after deducting policy excess in each reported incident. Though there was several reporting of the incident to the UII for appointing of the surveyor to assess the loss then and there and settle it accordingly. However the STC always maintained that there exist but only single case of fire due to self combustion which never ceased or passivated and started again afresh to constitute a second incident. But for the taming and controlling the escalating controversies settled it once for all with Rs. 50,16,595/-.
Unfortunately the matter never settled so STC are orced to start this proceeding.
A xerox copy of the stock verification certificate dated 23 .06. 08 attached herewith and marked as R ( Internal page no- )
22. That D.S Prasad Babucould could able to made his observation only on 6 th October 2008 . Inter alia in his observation in page no two that-
“ even thou , the cost of above observed shortage of imported coal works out to Rs 80, 66, 969. 37/—- but after application number of excess considering number of events or accidents, locations, finally net loss assessment is NIL”.
Prasad Babu came to this conclusion after putting several blames on the head of STC, however he never disclosed in his letter that why he not appreciated his own measurement done in joint stock verification dated 28.8.06.
A Xerox copy of the letter dated 6.10.2008 by Prasad Babu attached herewith and marked as RI ( Internal page no- )
23. That by a letter 17 Apl.2008 regarding the anomalies in the survey report the STC categorically addressed the issues point -wise but there was no response either from the side of UII or its Surveyor, then again by a letter dated 5.11.2008 to the Surveyor D.S Prasad Babu again clarified the whole objections and the back grounds of the reported incidents. In this letter inter alia in the para no 11 the STC clarified-
“ technically there was only one loss of spontaneous combustion in each of the stake during the whole policy period( from Oct 2005 to Jul 2006) of three policies since there was no destacking/ rolling etc of the both coal stacks( as per instructions of the underwriter vide their letter— 21.1. 06). As IGI, our Surveyor does not know insurance policy conditions , they noted and considered the dates of loss only when fire surfaced on the top of the coal stacks. Scientifically, spontaneous combustion should continue ceaselessly in undisturbed coal stacks untill and unless the oxidization which results the combustion can be stopped by destaking or by any other means. From the view of the matter scientifically it is a single loss and the dates of losses are not relevant at all but STC reported losses to the underwriters from time to time as in event IGI ‘s report and thus the under writer need s to consider their relevance vis- a-vis the impact of varying policy excess.
A Xerox copy of the letter dated 17.4.2008 and 5.11.2008 by STC attached herewith and marked as S1 , S2 ( Internal page no- )
24. That subsequently on the basis of the report submitted by Prasad Babu, United India insurance by its letter dated 24.7.2009 agreed to settle the claim ( claim no. 031100/11/05/11/90000010) arising out of damages caused by fire firstly reported no 25.1.06 and it was reported for the last time and finally on 8.5.2006. In their settlement letter they put policy excess Rs Ten Lacs for the second policy period which is completely wrong and without any basis and in this regard no body has any in formation of this . This has only 10000/- policy excess. this one is pure invention to frustrate the claim of the STC . And about Rs 20 lacks excess STC always objected the same in all quarters.
United India insurance agreed to settle the claim with a paltry amount in the following manner–
DATE OF LOSS WITH POLICY NO LOSS OF QUANTITY VALUE POLICY EXCESS NET LOSS ASSESSED
25/1/2006, 26/10/05 TO 25/1/2006
031100110511000000353 40 MT 81728.40 10000/- 71728.40
10/11.2.06, 15/16.2.06, 20/22.2.06, 26/10/06 TO25/4/06
03110011051100000508 140MT 286049.40 100000/- NIL
27/28.4.26, 26/04/06 TO 25/7/06 03110011051100000096 749.094MT 1530556.30 200000/- NIL
3/4.05.2006 757.496MT 1547723.40 200000/- NIL
A Xerox copy of the letter dated 24.7.2009 by UII attached herewith and marked as T ( Internal page no- )
25. That Insurance Surveyor, Mr. D.S. Prasad Babu submitted Survey Report recommending repudiation of claim on ground that spontaneous fire was continuously occurring and claim is not payable. There is no Duration Clause in Standard Fire And Special Perils Policy taken by STC. So, the Surveyor was utterly wrong in claim repudiation on that ground. So, Survey Report violated the policy condition and biased/motivated and prejudicial to the interest of STC. If, the insurance Surveyors contention is taken as correct and claim is considered as a single case continuance spontaneous combustion of coal, only one policy excess of Rs.10,000/- shall be deducted. as the first incident was reported in the consumption of the first policy period, which has 10,000/- standadr policy excess. The payable loss should be (3949.59 MT X Rs.2043.22)-Rs10000/- = Rs 80,59,881/
26. That In a joint meeting with United India, Surveyor and STC at Kolkata Regional Office of United on 30.09.08 it was decided that Surveyor should review the matter and obtain further details/information/ clarification, if any from STC. A detail letter was sent to Surveyor by STC. Accordingly, the Surveyor submitted his Addendum Report (Ref.PB:UI:STC:024:2009 dated 25/3/09) and re-assessed the loss of only Rs.9.49,519.80. This was contested by STC as Surveyor had planted different date(s) of loss on the third policy so that major part of the loss falls under the last policy. Details are as under :
Date(s) of loss reported by STC Date(s) of loss changed by Surveyor
24/26th February, 2006 27/28th April, 2006
14/16th March, 2006 3rd/4th May, 2006
27/29th April,2006 27/29th May, 2006
Surveyor appointed in mid-August, 2006 (after several months of loss) and can not change date(s) of loss under any circumstances. This is perennially an arbitrary action of Surveyor and proves his biasness beyond any doubt.
A Xerox copy of the letter dated 20.8.2009 by STC attached herewith and marked as U ( Internal page no- )
27. That In mid-2009 a Voucher of Rs.71,728/- was sent by United India to STC as against Surveyor’s above recommendation of Rs.9.49,519.80. The insurance co.’s Divisional Office provided a xerox copy of an Endorsement bearing No.031100/ 11/ 05/11/ 8200082 which states imposition of Special Excess of minimum of Rs.10 Lacs on the 2nd policy No.031100/11/05/00508 which was evidently issued on expiry date of policy (25/04/06 –the system generated date on Endt.) without any knowledge of STC whatsoever prior to that date in 2009.Interestingly, United India Ins. Co. provided all insurance documents to Surveyors but evidently this totally arbitrary Endorsement No.031100/ 11/ 05/11/ 8200082 was not given to Surveyors else the assessment could not be for Rs.9.5 Lacs. This arbitrary Special Excess on every loss date had reduced claim form Rs.9.50 Lacs to Rs. 71,728/-. The issuance of Claim Voucher admits liability under the policy. The matter was taken up with Divisional Office/ Regional Office/Head Office of United but no response received by STC so afar. Approach by Director of STC to CMD/United India could not also evoke any response.
28. That by a letter dated 8.7.2011 United India insurance communicated the STC—–
“ With reference to your letter Ref 574 dated 20th August 2009 regarding the above , we would like to inform you that we have once again checked our underwriting and claim file and come to a conclusion that our stands regarding settlement of last three claims( for value Rs. 2,86,049/- Rs.-153055.30 and Rs. 15,47,723.40) remain unchanged.”
It is evident from their own admission that how deliberately they delay the process as they are responding on 8.7.2011 to a letter which delivered them two years back. This high handedness proof their culpable laziness to frustrate a legitimate claim. However they accepted their liability . Which is Rs.71.728/- only (according to clause 13 of the policy documents) . Which is prejudicial to the interest of the STC. Which is against the claim of STC.
A Xerox copy of the letter dated 8.7.2011 by UII attached herewith and marked as V
29. HUMBLE SUBMISSIONS BY THE COMPLAINANT
i. The claim was reported by STC Kolkata on 25.01.2006 to United India Ins. Co without mentioning the loss quantity. United responded on same day and advised ‘not to disturb the affected area’. Loss quantity informed to Insurance company as per report of Inspectorate Griffith India (IGI), Surveyor.United informed vide letter dated 12.06.06 that claim falls within stipulated Policy Excess limit and stated that ‘thus the alleged claim stands as NO CLAIM’. Second repudiation letter issued by United.United had not even appointed Surveyor for assessment despite repeated reminders for six (6) months and STC was compelled to appoint IRDA accredited Surveyor, M/s J.B.Boda, keeping United informed of this Surveyor appointment to lodge the claim bill on the strength of M/s J.B.Boda, Survey Report.When STC appointed M/s. J.B.Boda Surveyor by formally informing United India , they were perhaps unnerved and ultimately United India appointed Mr. D.S.Prasad Babu, Surveyor from Visakapatnam in Aug. 06. There was a Joint Survey of loss on 28.08.06 quantifying the then available stock 40099.410 MT and thus the total quantity loss stood to 3949.59 MT and not 4439.410 MT as intimated earlier. The variation is only 11% as claimed by STC. Therefore, the gross estimated loss stands to around Rs.80 Lacs. Special Policy excess (deductibles) of Rs.20 Lacs on third policy period 25/4/06 to 24/07/06, net adjusted payable loss stood around Rs.38 Lacs. THE JOINT SURVEY REORT BY TWO IRDA ACCRIDITED SURVEYORS (both insured and insurers) IS THE MOST VALUABE VITAL DOCUMENT FOR STC IN CASE OF ANY JUDICIAL PROCEEDINGS. Since the Special Excess of Rs.20 Lacs for each loss was imposed by United in last policy (period 25.04.06 to 24.07.06) would eat away almost the entire loss, matter taken-up with IRDA against Tariff policy gross deviation by United and about the legality & propriety of Special Excess which virtually takes back the promise of policy itself. The IRDA disposed the complaint because STC was informed about Special Excess of Rs.20 lacs before accepting policy by United India in their Proforma Bill. So, complain was rejected. The IRDA did not consider the legal point that the then Tariff Rates & Tariff Wording in 2006 were public document and there is no provisions for any kind of Special Excess as per Tariff Rates & Tariff Wording and therefore, the insurance companies has no authority to change the policy contrary to Tariff.
ii. No scientific calculation of Spontaneous combustion in undisturbed coal stack is possible unless survay is conducted immediately after the loss. debris are need to removed and de- staking is done to stop the continuity of the peril and minimize further losses.
iii. The opposite party UII incurs liability by committing offence under section of 420 IPC by causing wrongful loss to the complainant through imposition of Policy Access fraudulently without the knowledge of STC and gain wrongfully through the policy excess. UII has committed breach of confidence which is worst kind of mal practises on part of UII and caused injury to the business interest of the complainant.
iv. From all circumstances including act and conduct of UII, it is amount to gross deficiency of service to the complainant.
30. That the cause of action arose on and from dated 8.7.2011 when the opposite party UII through its Sr. Div. Manager refused to settle the legitimate claim of the STC and decided to pay arbitrarily a paltry amount against to a huge loss. And relief for complained valued at Rs. 90,94,881/-. This claim is within the limitation period from the date on which the cause of action has arisen.
31. That the complainant has incurred a loss of Rs.80,59881/- due to deficiency in service on the part of the opposite party. The complainant has to undergo mental torture, harassment and mental strain due to course of transactions and negotiations to settle the claim. The complainant is entitled to recover a ,sum of Rs 80,59881/- towards the loss due to fire and Rs 10,00000 as a compensation for mental torture , harassment , mental strain and business loss and again Rs 35,000 as legal expenses and correspondence. Thus the total claim stands total Rs 90,94,881/-.
32. That this forum has jurisdiction to entertain this complaint.
33. That for the purpose of the jurisdiction, the complainant has transacted all the business documents through it`s office in kolkata at to the opposite party`s office in kolkata.
34. STC HAS PAID THE REQUIRED FEES BY DEMAND DRAFT of Rs 4000/- , NO 302364, DATED_13/09/2011, issued by SBI- CAG BRANCH- KOLKATA. The complainant hereby giving an undertaking that in any reason the demand draft is not honoured on demand, the complainant will deposit a new demand draft without fail.
It is , therefore , most respectfully prayed that your Honour may gracefully be pleased to grant the following relief/ relives to the complainant:-
1. Declaration of the unilateral imposition of RS. 10 lacs and 20 lacs Policy excess is illegal and fraudulent and the effect of the policy excess clause in policy number 033/11/06/11/00000096 is null and void.
2. Declaration of the settlement offer dated 24.7.2009 by the UII is null and void and without any effect.
3. Realization of Rs .80,59,881 /-.
4. Realization of Rs . 10,00,000 towards compensation
5. Realization of Rs 35,000 towards legal expenses and correspondence.
6. Cost, interests and other relief/ relieves etc . as the Hon’ble commission deems fit and proper.
I, Mr. son of residing at
do hereby solemnly declare and state that the statements contained in the complaint above are true to the best of my knowledge and belief and the rest are my humble submission and that I have not suppressed any material fact.
Verified at kolkata
this _____th day of ________ 2012
Place: Signature of the deponent