M. Devappa Kanchan vs UNITED INDIA INSURANCE CO. LTD.

PETITIONER in this case is the original complainant and the respondent Insurance Co. was the OP before the District Forum. Briefly stated, the facts leading to the filing of this revision petition are that the complainant got his fishing vessel called "Gowri Shankar" bearing Regn. No. KDP 3224 insured by the respondent/opposite party for a sum of Rs. 9 lakhs for the period from 22.11.2003 to 21.11.2004.

AT about 4.00 p.m. on 19.5.2004, the said fishing vessel got involved in an accident by dashing against a manganese jetty and got damaged. It was salvaged and was brought to the Mahaganapathi Boat Builders for the purpose of repairs. The repairer estimated the cost of Rs. 6,85000/ -. Intimation about the accident was given by the complainant/petitioner to Kundapur Branch as well as Karkal Branch of the respondent Insurance Co. Surveyor appointed by the Insurance Co. inspected the vessel and submitted a report. The Insurance Co., however, offered only Rs. 98,000/ - against the claim of Rs. 6,85,000/ - by the complainant which offer was rejected by the complainant and hence he filed this consumer complaint alleging deficiency on the part of the Insurance Co. The OP Insurance Co. contested the claim before the District Forum mainly on the ground that the claim was excessive and also involved concoction on the part of the complainant while claiming the amount. On appraisal of the issues and the evidence adduced before it by the parties in support of their contentions, the District Forum vide its order dated 30.12.2005 allowed the complaint awarding a compensation of Rs. 6,75,000/ - for the damages along with 12% interest p.a. from the date of repudiation till payment for the damages sustained by the complainant in respect of his mechanized fishing vessel, Rs. 5,000/ - as damages for mental agony and deficiency in service and Rs. 3,000/ - by way of cost of the proceedings. Aggrieved of this order of the District Forum, the OP Insurance Co. preferred appeal bearing No. 493 of 2006 before the State Commission contending that the amount awarded by the District Forum is excessive and not based on legal evidence. The State Commission vide its order dated 11.1.2007, partly allowed the appeal and directed OP Insurance Co. to pay to the complainant/petitioner Rs. 2,50,000/ - as recommended by the surveyor with interest thereon at the rate of 10% p.a. from 1.7.2004, i.e., the date of surveyor''s report till the date of payment. Rest of the order of the District Forum was confirmed by the State Commission. Aggrieved of this impugned order passed by the State Commission modifying the amount of compensation substantially to his disadvantage, the complainant has now challenged the same before this Commission through the present revision petition.

THE limited point which has arisen before us for consideration is as to whether the State Commission was justified in reducing the amount of compensation awarded by the District Forum keeping in view the evidence placed on record. We have heard learned Shri K. Singhal, Advocate and Shri Sharan Dev Singh Thakur, Advocate, counsel for the petitioner and Shri V.S. Chopra, Advocate appearing for the respondent Insurance Co. and perused the record.

LEARNED counsel for the petitioner has contended that the State Commission has modified the order of the District Forum thereby reducing the compensation amount awarded to the petitioner from Rs. 6,75,000/ -to Rs. 2,50,000/ - without appreciating the evidence on record. He submitted that the State Commission has wrongly concluded that the petitioner has not examined the person who had issued the bills and receipts and thereby not proved their documents. Regarding the report of the surveyor which has been adopted as the basis by the State Commission for assessing the amount of compensation, learned counsel contended that the surveyor has not given any reasons in his report while assessing the amount of damage under various heads. He said that boat in question was out of work for a long period of 2 and half months and the claim submitted by the petitioner was on account of genuine loss/damage suffered by the petitioner in respect of his boat. His contention was that even though the surveyor''s report is an important document, it is essential that the surveyor gives reasons and justification for the assessment in respect of each item particularly when it involves substantial reduction from the amount of claim supported by the bills. In view of these aspects, learned counsel submitted that the impugned order suffers from serious infirmities and is perverse and hence cannot be sustained in the eye of law calling for interference by this Commission under section 21(b). Therefore, the revision petition be allowed by setting aside this order and the well -reasoned order passed by the District Forum be restored. On the other hand, counsel for the respondent Insurance Co. supported the report of the surveyor and the impugned order based on it. He pointed out that as mentioned by the surveyor in his report, his assessment was restricted to the extent of damage suffered by the hull members in the accident in question and as such it should be accepted as a fair assessment. Learned counsel, however, fairly admitted that the surveyor''s report does not give any reasons for substantial reduction under different heads of claim submitted by the petitioner.

HAVING considered the rival contentions carefully and perused the record, we are of the considered view that the State Commission gravely erred in blindly relying on the report of the surveyor and modifying the well -reasoned order of the District Forum while partly accepting the appeal of the Insurance Co. In this context, we may reproduce the details of the assessment as contained in the surveyor''s report: - -

Hence, an amount of Rs. 2,50,000/ - (Rupees Two lakh fifty thousand only) may be considered reasonably for the settlement of the above claim, subject to policy conditions.

REMARKS

The engine number has been physically noted by me.

The weather prevailing at the time of the above mishap was stated to be seasonable and was not in any way connected with the nature and cause of the above accident.

The insured vessel was found in good condition during my survey other than the damage mentioned in the earlier part of this report.

Against the backdrop of my findings and the information gathered by me from various sources, I conclude that there is no breach of warranty in the above claim.

26 Nos. photographs taken by me have been enclosed herewith alongwith their negatives."

IT would be seen from the above assessment given by the surveyor that even while he has reduced the claim drastically in respect of Wild Jack Wood from Rs. 5,40,000/ - to Rs. 88,695/ - and carpentry labour charges from Rs. 1,45,000/ - to Rs. 65,000/ -, he has failed to give any specific reasons for this reduction except the general remarks "reasonably assessed and recommended". We agree with the counsel for the petitioner that it was incorrect on the part of the State Commission to have accepted this part of the assessment done by the surveyor because no justification has been given by the surveyor even though the reduction is drastic. It is more so because the same surveyor has found the claim fully acceptable in respect of other 7 out of 9 items of claim. In this context, the observations of the District in para 16 of its order may be reproduced thus: "The complainant has claimed Rs. 6,95,000/ - as loss suffered by him on account of the accident to the boat. The complainant has claimed aforesaid amount after estimating the damage he has submitted the estimation along with the claim form. As per the evidence of CW -1, CW -2, CW -3 & CW -4 they have supported the claim of the complainant. Ex. C -11 & Ex. C -12 are the original receipts issued by CW -3 & 4 respectively it has come in the evidence of CW -3 that he has issued the original receipt for having received the amount from the complainant towards the salvage charges. And the CW -4 has issued a original stamped receipt for having received Rs. 6,85,000/ - from the complainant towards the wholesale repair charges. According to the complainant documents in Ex. C -11 and Ex. C -12 was handed over to the surveyor and it was with the surveyor till September 2005 and only in the course of evidence the complainant came to know that the surveyor has not sent the aforesaid documents along with the survey report. And subsequently he took back said receipt from the office of the surveyor and produced the same before this forum."

We may thus note that the owner of the boatyard where the damaged boat had been repaired during a period of more than 2 months, had also been examined by the petitioner and cross -examined by the respondent. Both these documents are placed on record. The deposition of this person is very important and perhaps most relevant document and he has specifically stated that the report of the said boat had been carried out in his yard and that he had the bills in respect of the purchase of the material required for the repairs of the said boat and the same could be produced by him, if required. He had also admitted on oath that he had received an amount of Rs. 6,85,000/ - from the petitioner in respect of this repair. Simply because, the amount was paid by the petitioner in cash, the claim cannot be suspected or denied. The final bill of the repairs/replacements dated 15.9.2004 which was produced before the District Forum also indicates payment of Rs. 6,85,000/ - on account of the cost of materials and the labour charges in respect of this boat. Besides this, the claim for repairs is well within the insurance limit under the policy. As regards the surveyor''s report, not only the surveyor has failed to give cogent reasons for drastic reduction in respect of the two items, no reasons were forthcoming for such a reduction even during his examination in -chief The examination and cross -examination of the surveyor by the petitioner also indicates that the petitioner did challenge the report of the surveyor by questioning him regarding the contents of the report. In such a situation and in the face of this evidence, it was incorrect on the part of the State Commission to have placed reliance on the report of the surveyor which did not contain any cogent reasons for drastic reduction in the claim. In the circumstances, we find merit in this revision petition and hence set aside the impugned order of the State Commission and allow the revision petition. There shall be no order as to costs.