CHANIANA RICE MILL vs NATIONAL INSURANCE CO

THIS complaint has been filed by Sardar Narinder Singh who is the proprietor of the Rice Mill which is being run under the name and style of "m/s. Chaniana Rice Mill" (hereinafter to be referred as the Mill ). On 28. 4. 1986, the mill had been registered with the District Industry Centre, Jammu under registration No. 07/04/3070/dmt/ SST. On 28/9/1999 the complainant got the said Mill insured with OP for Rs. 72 lakh and 50 thousands and obtained policy cover No. 04632 from OP''s Branch Office, Bari Brahamana, Jammu. The policy had become effective on 29. 9. 1999 and had to expire on 28/9/1999. The policy covered the risk in respect of machinery, building, stocks, furniture, and fixtures. The insured limit of the above said items has been specified in para No. 4 of the complaint. The yearly premium of the policy was Rs. 1,79,360. 00. It is alleged that on 30/5/2000 at about 9. 30 p. m. , due to heavy rain and lightning the building of said Mill sustained heavy damage upto the plinth level. That the velocity of the storm was so severe that it affected the entire stocks of paddy and rice lying inside the building as it was washed away and a loss to the tune of Rs. 50 lacs was caused. The incident was reported on the same day in the Police Station, Miran Sahib under Daily Diary Report No. 16. The complainant had made an attempt to get a certificate of the incident from Government, of India''s Meteorological Department Ram Bagh, Srinagar but vide their letter dated 12/7/2000 they issued a certificate that there was no departmental observatory at R. S. Pura. However, the observatory situated at Subash Nagar, Jammu has recorded the weather phenomenon of 30/5/2000 which has been reproduced in para 6 of the complaint. The complainant lodged a complaint with the OP for compensation tor the loss caused and damage suffered to the building, machinery and stocks and as a consequence thereof, Mr. Sham Sunder from ELITE Surveyor and Loss Assessors was deputed who visited the spot and asked the complainant to submit the requisite documents which he had produced in the form of stock statement, stock register which contained the details of stocks of rice and paddy in the godown, bills of the machinery, furniture and other infrastructure. After a lapse of 2 years, the OP informed the complainant that the loss assessed was to the tune of Rs. 6,78,708. 00 which is stated to have been received by him under protest. The complainant has claimed, compensation to the tune of Rs. 19,90,000. 00 as loss suffered along with interest thereon. Besides that, compensation for mental torture and agony has also been claimed.

THE OP has filed the objections wherein it is pleaded that no "cause of action" has arisen in favour of the complainant to file the complaint. The complaint is not maintainable as there is non-joinder of necessary parties. The complaint is also not maintainable because the complainant has received Rs. 6,78,708. 00 as full and final payment for the settlement of his claim. OP has admitted the liability of the policy to the extent of Rs. 60. 00 lacs which is delineated in para 4 of the objections. It is also pleaded that only a limited portion of the property of the complainant was damaged in the hail storm and the rest of the property which was safe was covered under fire policy ''c'' but the complainant has lodged the complaint in respect of the whole of the property claiming that it was also damaged. That OP in view of the report of the Surveyor has discharged its obligation. The claim in the sum of Rs. 19,90,000 is totally baseless and the complaint requires dismissal. The complainant Narinder Singh has appeared as a witness in support of his claim and stated that the OP has settled his claim on a meagre amount of Rs. 6,78,708 against the insured amount of Rs. 72. 00 lakh. That under compelled circumstances, he received the amount under protest which fact he had told orally before the concerned Branch Manager and specifically told him that the matter would be agitated in the Forum. In cross-examination, he had stated that stocks in the bags were damaged due to the collapse of the building and it took 10 days for their verification. His witness Amar Nath has stated that he had been working as a supervisor and is well versed in the affairs of the working of the mill in question. That the building had collapsed as a result whereof the stocks of paddy as well as rice worth Rs. 50. 00 lakh got damaged under the debris of the mill. Mr. Davinder Singh Sambyal second witness of the complainant was posted as Manager of the Jandk Bank, Miran Sahib Branch during the year 1999-2000 and has stated that the Bank had sanctioned the limit of loan in favour of the complainant to the extent of Rs. 50. 00 lakh. That in the month of ending April, he visited the premises of the mill and had found the stocks which were worth more than Rs. 50. 00 lakh in their value. In cross-examination, he stated that he visited the spot after the incident. Statement of stocks hypothecated to the Bank were duly verified and he produced a statement of those stocks. The Surveyor Mr. Sham Sunder was also produced as a witness and he stated that on 2. 6. 2000, he was deputed by the OP insurer to make the survey as well as to make the assessment of the loss. He visited the premises on the same day and according to him, the loss calculated was to the tune of Rs. 6,78,708 which encompassed the damage to the stocks, premises as well as to the machinery. In cross-examination, he admitted that he assessed the loss against each item which was insured. He did not remember the amount which was assessed by him against the stocks. He admitted that he counted the stocks himself including the number of bags lying in the premises. Though the stocks were insured for Rs. 62,50,000 yet actual stocks available in the premises were to the tune of Rs. 55,53,000. 00. Mr. D. K. Malhotra who is a Branch Manager with the insurer has appeared as a witness of the OP. He has admitted that during the night of 30/5/2000, the insured premises of the complainant were damaged by rain and strong winds. The information of the incident was received on 2/6/2000 and on the same day Elite Surveyor and Loss Assessor was deputed to conduct the assessment of the loss who assessed the loss to the tune of Rs. 6,78,708 which was approved by the company. The payment was received by the complainant towards the full and final settlement of the claim and he signed the discharge voucher. In cross-examination, he denied that complainant had received the loss under protest.

Heard the arguments.

THE learned Counsel appearing for the complainant has stated that though initially the complainant has made a claim of Rs. 10. 00 lakh only for the loss suffered by him but that was only an estimated loss because later on it was found that the loss was on the higher side. He has claimed that the loss with regard to the stocks claimed by the complainant may be paid to him to the extent of Rs. 19,90,000. 00 along with interest. Mr. Madan Lal, the learned Counsel appearing for the OP has countered the arguments by stating that the loss assessed by the surveyor is correct. The complainant has also an adjoining mill which is being run under the name and style of "jk Basmati Products" and is owned by his wife and that after the incident all the stocks were shifted in that mill. The Surveyor has correctly assessed the loss to the tune of Rs. 6,78,708, the payment thereof has been made in favour of the complainant against full and final settlement. Mr. S. C. Gupta, Advocate who also appeared for the insurer has pleaded that after the execution of the discharge voucher in favour of the insurer towards the full and final settlement of the payment of the alleged loss he is estopped to reagitate the matter again in the Commission because he is bound by his own admission. We have considered the respective contentions of the Counsel of the parties and gone through the record. In the case of United India Insurance v/s. Ajmer Singh Cotton and General Mills and Ors. , II (1999) CPJ 10 (SC)=vi (1999) SLT 590, the Hon''ble Apex Court has held that "mere execution of discharge voucher and acceptance of insurance claim, the insurer is not estopped from making further claim from the insurer with respect to deficiency in service or consequential benefits arising out of amount paid in default of service rendered but the consumer has to satisfy that the discharge voucher was obtained by fraud, mis-representation, undue influence or the like. Such claim cannot be termed to be a fastening liability against insurance companies over and above liabilities payable under the contract of insurance". Now adverting to the facts of the case, we find that Surveyor''s report has attached with it Annexure 4 which reveals that the net loss assessed by him in respect of the building has been stated to be at Rs. 5. 00 lakh when the building was insured for Rs. 6. 00 lakh. In Annexure 5 attached with that report he has assessed the net amount of the loss suffered to the stocks in the amount of Rs. 3,30,000 and the upper limit of the stocks was up to the extent of Rs. 50. 00 lakh. Vide Annexure 6 assessment of loss to machinery has been assessed at Rs. 13,800 and this is also within limits of insured amount. We have failed to understand how the said Surveyor in his report under the heading of "abstract of Assessment" has slashed down the above net losses to the extent of Rs. 6,78,708 only. His report is thus found self-contradictory. Mr. Madan Lal, the learned Counsel appearing for the OP had taken the pains to produce the Surveyor Mr. Sham Sunder personally in the Commission who gave the explanation that the assessed amount has been slashed down according to the prevalent practice which had to be followed as per prescribed norms contained in the Code. The learned Counsel could not satisfy the Commission how such alleged codal rules could be of binding nature for the complainant as there is no such a clause existing in the conditions of the insurance policy contract. By the terms of the insurance policy, the insurer has to indemnify the insured to the extent of actual loss suffered by him in case it falls within the prescribed limit. In the present case, the net losses assessed by the Surveyor as per the contents of Annexures 4, 5 and 6 referred above are in the following manner: (a) net loss assessed to the building Rs. 5. 00 lakh, (b) net amount of loss assessed to the stocks Rs. 3,30,000, (c) net amount of loss suffered to the machinery Rs. 13,800. The total of the above stated three losses comes to Rs. 8,43,800 The contradictory finding of the Surveyor in his report that net payable loss was to the tune of Rs. 6,78,708 has no legal basis. The law favours a bona fide consumer to be indemnified to the extent of actual loss suffered and not less than that. The complainant has already received an amount of Rs. 6,78,708 vide discharge voucher executed by him and that cannot be deemed as an estoppel against him to claim the difference of the amount awarded herein because the payment had been made under mis-representation based on the self-contradictory findings recorded in the assessor''s report which had to be read as a whole and not in parts. The contention raised by M/s. S. C. Gupta and Madan Lal Advocates thus finds no favour as it is misconceived. On the facts and in the circumstances of the case, the OP is directed to make the payment of the difference of the amount awarded herein and in case of failure to make the payment within a period of two months from today. It shall have to pay interest @ 6% per annum from the date of filing the complaint i. e. from 7/5/2003 till the final payment is made. The parties are left to bear their own costs of litigation. The complaint be consigned to the records. Complaint disposed of.