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Judgment
This first appeal has been filed by the appellant M/s. Sorout Mushroom Farm and Training Centre against the order dated 07.10.2015 of the State Consumer Disputes Redressal Commission, Haryana (in short 'the State Commission') passed in Appeal No.91/2014.
Brief facts of the case are that on 09.09.2012, the appellant has insured his Mushroom Farm from the respondent No.1 through respondent No.2 vide Insurance policy No.361102/46/7500000289 valid from 09/09/2012 to 08/09/2014 for insurance of the material including machinery etc. vide policy namely "Standard Fire and Special Perils Policy". The Risk cover as per the policy under various heads is as under:-
Particular
Sum insured
Building
Rs.30,00,000/-
Plant/Machinery and Accessories
Rs.25,00,000/-
Category (stock of Mashrum and Raw materials)
Rs.6,00,000/-
On 16.5.2013 at about 12:00 o' clock in the night suddenly the Mushroom Farm got fire due to which all the machinery and other materials relating to production of Mushroom got burnt in the said fire incident.On the date of the fire accident, the concerned police station was also informed and DDR No.13 dated 16/05/2013 was registered.On 17.05.2013, the appellant informed the respondent No.2 through his bank and also gave the details of the goods and machinery and total loss/damage of about Rs.50,00,000/- which was caused due to fire.On 01.02.2014, the surveyor appointed by the respondent No.1 visited the premises of the accident and prepared the report regarding the damage caused by the fire.On 30.09.2014, when all the representations and communications of the appellant went in vain and no claim was given by the respondent No.1 for the loss caused due to fire accident, the appellant filed a complaint No.91 of 2014 under the Consumer Protection Act, 1986 before the State Commission. The State Commission vide its impugned order/judgment dated 07.10.2015 allowed the complaint andawarded Rs.3,54,000/- as compensation/claim of the loss caused due to fire.
Hence the present appeal by the appellant/complainant.
Heard the learned counsel for the appellant as well as respondent Nos.1 & 2.None appeared on behalf of the respondent No.3 at the time of hearing.
Learned counsel for the appellant stated that the State Commission has failed to appreciate that the surveyor in his report dated 01.02.2014 has categorically noted under the heading of machinery that a Fridge of Scope company make worth Rs.92,500/- was damaged due to fire.But while calculating the loss caused by fire, the surveyor has failed to include the Fridge of Scope company in the loss caused by fire and instead of the same only included the value of damaged 165 ltr. Fridge of LG make as Rs.8000/- thereby depriving the appellant from getting the reimbursement of the fridge of Scope Company.
Learned counsel for the appellant stated that the State Commission has failed to appreciate that the surveyor while assessing the market value of the machinery which was damaged due to fire accident in the farm, has reduced the value of the machinery by 50% by applying depreciation.The surveyor while finally calculating the loss caused to all the machineries by fire, again applied 20% depreciation and further reduced the value of the machineries to calculate the insurance amount on these damaged machineries. Thus, the surveyor has depreciated the value of the machinery twice thereby reducing the value of the machines by 70%.This application of depreciation twice is illegal and arbitrary.
It was stated by the learned counsel that Mr. S.K.Aggarwal, Surveyor of respondent No.1/Insurance Company recorded his statement and was cross-examined by the appellant.In cross-examination he admitted the fact that he had no knowledge about the machineries and buildings and his estimate of the loss to the building and machineries during fire was just a guess work. It was further stated that the State Commission has failed to appreciate that the assessment of the loss of plant, machinery and stock was done by such a person/surveyor of the respondent/Insurance Company who has no knowledge about the plant and machineries.Therefore, the arbitrary fixation of value of the damaged machineries by the surveyor without any basis for the same wassufficient ground to reject the report of the surveyor when the surveyor himself admitted in the cross-examination that he had no knowledge about the machines as he was Charted Accountant by qualification.
Learned counsel for the appellant further argued that the State Commission has failed to appreciate that in the fire accident, the rooms in which the farming of mushroom was being done were badly damaged and the building expert appointed by the appellant to quantify the loss caused to the building due to fire in its report dated 26.08.2013 quantified loss at Rs.15,00,000/- approximately.The surveyor who has no expertise in the construction or buildings arbitrarily awarded Rs.50,000/- only for the loss/damage to the building/two rooms caused due to fire.During the cross-examination of the surveyor, he admitted the fact that he had no knowledge/expertise in construction or buildings field and his estimate of the loss to the building/two rooms damaged by fire was totally speculative.
Learned counsel for the appellant stated that the State Commission has failed to appreciate that the surveyor in his report while assessing the loss caused due to fire, has not taken into consideration the stock of mushrooms which were totally damaged by fire causing heavy loss to the appellant herein.In the details of the damages submitted by the appellant to the Insurance Company, it was specifically mentioned that the stock of mushrooms to the extent of 150 quintal/6000 kg., was damaged and thereby causing loss of Rs.15 lakhs approximately and the raw material required for the farming of the mushrooms to the extent of Rs.99,850/- was also damaged.
On the other hand learned counsel for the respondent Nos.1 & 2 stated that the appellant has not raised any shortcoming in the report of the surveyor before the State Commission and the report of the surveyor cannot be disregarded while finalising the insurance claim.The State Commission has basically accepted the report of the surveyor, but has allowed about Rs.99,000/- more for the cost of the two air conditioners (two tons) though the surveyor has not recommended the same because as per the policy conditions the electrical appliancewhere the fire/short circuiting breaks out is not entitled for indemnification.The Insurance Company has not come in appeal as the amount was small.Thus, the complainant has already been compensated for more than the surveyor's assessment and therefore, he has no further claim which can be considered in the first appeal.
Learned counsel for the respondents cited the following judgments in support of his argument that surveyors report cannot be rejected without any cogent reasons and the report has to form the basis of settlement of insurance claim.
(1) National Insurance Company Ltd. Vs. Ramdo Modi and ors., RP No.549 of 2016, decided on 29.03.2017 (NC).It has been held that:-
"18.Based on the above authoritative judgments, I am of the view that both the fora below should not have dismissed the surveyor's report without mentioning any reasons.I have also perused the surveyor's report and prima-facie it seems reasonable and as per the accepted norms of survey as well asthe policy conditions.The surveyor has recommended indemnification of loss of Rs.6,00,092/-. The surveyor has also assessed the salvage value as Rs.28,000/-.Thus, Insurance Company is definitely liable to pay Rs.5,72,092/- as cash settlement. Based on the above discussion, the revision petition is partly allowed and the petitioner is directed to pay Rs.5,72,092/-( Rupees Five Lakh Seventy Two Thousand Ninety Two only) along with interest @8% p.a. from the date of filing of the complaint i.e. 26.09.2013 till actual payment to the respondent No1/complainant.The petitioner is also liable to pay cost of Rs.50,000/-( Rupees Fifty Thousand only) to the respondent No.1/complainant on account of condonation of delay in filing the revision petition.The order dated 08.09.2015 of the State Commission and order dated 16.02.2015 of the District Forum stand modified accordingly.Petitioner is directed to comply with this order within a period of 45 days, failing which, an additional interest of 3% shall be chargeable to the petitioner from the date of this order till actual realization.The award of Rs.5000/- for mental agony and litigation expenses by the District Forum is maintained. No order as to costs for this revision petition."
(2) National Insurance Company Ltd. Vs. Noli Ram & Sons., RP No.2060 of 2016, decided on 23.05.2017.It has been held that:-
"10.The District Forum or the State Commission did not give any forceful reason to disregard the report of the surveyor and therefore, as observed by the Hon'ble Supreme Court in the aforesaid cases, the surveyor's report cannot be disbelieved and cannot be rejected without any forceful evidence on the part of the complainant. The certificate of Railways may have worked as a strong evidence against the surveyor's report but the same has not been produced by the complainant. So there is no reason to disregard the surveyor's report".
The learned counsel for the respondent Insurance Company further stated that no reliance can be placed on the report of the surveyor/expert appointed by the complainant.In this regard, the learned counsel referred to the case of Reliance General Insurance Co. Ltd. Vs. Sumit Kumar Saha & Ors.,FANo.182 of 2014, decided on 16.02.2018 (NC).It has been held that:-
"10. As there is no provision in the Insurance Act for a surveyor to be appointed by the complainant/policy holder and only provision is thattheInsurance Company can appoint the surveyor for assessing the loss.Thus, prima facie State Commissionhaserred in considering and accepting the report of the surveyor appointed by the complainant/policy holder.Obviously, it was open to the State Commission to examine the report of the surveyor appointed by the Insurance Company and then to arrive at the finding for the settlement of the claim."
I have given a thoughtful consideration to the arguments advanced by the leaned counsel for the parties and have examined the material on record.The first objection of the complainant is that deep freezer of scope company, which was costing Rs.92,500/- has been omitted by the surveyor in his assessment.It is mentioned in the ground of first appeal that the surveyor has mentioned this deep freezer in the list of damaged machinery, but the fact is that at all places surveyor has only mentioned LG165 ltr. freezer for which he has allowed Rs.8000/-.Under the head Plant and Machinery the surveyor has stated the following:-
"a) Plant & Machinery
During survey, we noted that the following machines were found affected as visible externally & need repair/replacement:
Sr. No.
Item Description
Qty. (Pcs.)
Extent of Damage
3
Refrigerator LG 165 Ltr.
1
During our visit we noted that LG165 Ltr. Refrigerator was damaged. The insured have claimed for Deep fridger. We have considered LG 165 Ltr. Refrigerator in our Assessment.
The surveyor in the assessment has clearly stated the following:-
"b) The insured have claimed Rs.92,500/- towards Deep freezer. However during our visit we noted that LG 165 Ltr. Refrigerator was damaged and we considered amount of Rs.8000/- being fair & reasonable."
16.From the above, it is clear that the complainant has mentioned the wrong facts in the first appeal that surveyor has mentioned a deep freezer in the list of damaged machinery.So far as the contention of the complainant in respect of depreciation of 50%for the machinery and then applying 20% depreciation is concerned, the surveyor has clarified the issue in his report and it has been clearly stated that the complainant did not submit purchase bill for any of these machines and therefore, he has taken 50% of the value claimed by the complainant as is clear from his following observation:-
"The insured have claimed Rs.1,17,126/- towards ducting, rack repair etc. The insured did not provide purchase bills for these items nor got the same verified.However we have considered 50% i.e. Rs.58,563/-being fair & reasonable.
We have further deducted suitable depreciation depending on the type and usage of affected items being fair and reasonable."
From the above observations of the surveyor it is clear that the complainant himself was deficient in supplying the relevant documents and therefore, the surveyor has to apply some approximations to arrive at certain value based on the surveying principles and other existing practices.The complainant cannot claim benefit of his own wrong.The learned counsel for the appellant has argued that the surveyor was a Charted Accountant and he has no knowledge of plant and machinery for the mushroom industry and therefore, he has not assessed the plant and machinery correctly or for that matter even the building or the stock.The surveyors are independent loss assessors appointed under the Insurance Act, 1938.They are approved by the Insurance Regulatory and Development Authority of India (IRDA). Insurance Company is free to appoint any IRDA approved surveyor.It was not a complicated machinery, which required any specific knowledge of the industry and the surveyor in his examination-in-chief and in cross examination has admitted that he has conducted many such surveys.Keeping this in view, I do not find any merit in this assertion of the complainant.
Complainant has also alleged that the surveyor has not properly assessed the building part and particularly the two rooms where mushroom was being grown, which were badly damaged by fire.The surveyor appointed by the complainant has given an estimate of Rs.15,00,000/- for the repair of the building.However, the surveyor appointed by the Insurance Company only assessed a loss of Rs.50,000/- in this regard. First of all, it is to be noted that the complainant can appoint surveyor only for his own satisfaction, but in the Insurance Act, 1938, it is the Insurance Company that has to appoint a surveyor for the loss assessment.The insurance claim is to be settled on the basis of the report of the loss assessor appointed by the Insurance Company.The surveyor has clearly stated in his report that there is only a crack in one of the walls of the room and he has in fact assessed many items of loss for the building and has come to the conclusion that the estimated loss was only for Rs.50,000/-.
So far as the assertion of the complainant in respect of loss of stock is concerned, it is seen that the complainant is alleging that the surveyor in his report while assessing the loss caused due to fire, has not taken in consideration, the stock of mushroom, which was totally damaged by fire.First of all, the appellant has not filed the copy of the claim that he submitted before the Insurance Company.Moreover, in the complaint, the complainant has not given any details of the loss and he has only stated the following:-
"That on 16.05.2013 at about 12:00 0' clock in the night suddenly the mushroom farm got fired and due to which all the machinery and other materials relating to manufacturing of mushroom burnt in the said fire incident on 16.05.2013.The copy of fire report issued by fire bridge Haryana centre Palwal and the copy of the DDR no.13 dated 16.05.2013 are collectively annexed."
From the above, it is clear that the complainant has not clearly mentioned that there was any loss to the stock of mushroom.The surveyor in his report has observed the following:-
"8 (b) Stocks
During our visit, the insured informed us that in one crop season of 3 months, 6000 kgs of Compost is used in the 2 Production rooms and provided details of components of Compost which was damaged as under:
Total Qty. Compost in 2 rooms
Maan
150
For 1 Crop season of 3 months
Kg.
6000
Composition of Compost
Qty.
Rate (Rs.)
Amount (Rs.)
Tude
Kg.
2000
7.5
15000
Binola Khal
Kg.
600
23
13800
Chokar
Kg.
700
12.5
8750
Laat
Kg.
100
50
5000
Urea
Kg.
100
6
600
DAP
Kg.
100
24
2400
Gypsum
Kg.
800
3
2400
Checken Ma
Kg.
2400
3.5
8400
Spon (seed)
Kg.
60
200
12000
Material Cost =
68350
Labor for 3 months =
90000
Electricity for 3 months=
15000
Total=
173350
The insured further stated that following material got damaged due to fire:
11) Insured's Claim and Our Assessment of Loss C) Stocks
The insured have claimed Rs.15,86,821/- towards the loss of stocks.
However the following shall form the basis of our Assessment of Loss:
The quantity by the insured verified and recommended as explained in para 8 (b) of this report.
We have considered the rate as per invoices provided by insured (Annexure-XXI).
Based on above, our Assessment of Loss towards stocks is as under:-
Total Qty. Compost in 2 rooms
Maan
150
For 1 Crop season of 3 months
Kg.
6000
Composition of Compost
Qty.
Rate (Rs.)
Amount (Rs.)
Tude
Kg.
2000
7.5
15000
Binola Khal
Kg.
600
22
13200
Chokar
Kg.
700
12.5
8750
Laat
Kg.
100
40
4000
Urea
Kg.
100
6
600
DAP
Kg.
100
24
2400
Gypsum
Kg.
800
3
2400
Checken Ma
Kg.
2400
3.5
8400
Spon (seed)
Kg.
60
100
6000
Material cost =
60750
Labour =
90000
Electricity
15000
Total =
165750
Damage Material due to Fire
60750
Labour 1 Month =
30000
Electricity for one month=
5000
Total Loss for stock=
95750
Therefore,
Total Loss = Rs.95750/- "
21.From the above, it is clear that surveyor has considered the total claim made by the complainant in respect of the stocks and has finally assessed different items of stocks on the information provided by the complainant and has reached to the conclusion that the total loss of the stock was Rs.95,750/-.Thus, it is clear that no claim in respect of damaged mushrooms was made by the complainant before the surveyor and whatever claim was made before the surveyor has been assessed by the surveyor.No claim of loss due to damaged mushrooms is mentioned in the complaint as well. In these conditions, I do not find any merit in the allegation that the surveyor has not assessed the loss due to damaged mushrooms.
The surveyor has assessed the total loss of Rs.2,54,407/- including the loss in building, plant and machinery and stocks.It is seen from the order of the State Commission that the State Commission has already allowed addition of Rs.99,000/- for the two air conditioners for which the claim was not allowed by the surveyor as the same was not payable as per the conditions of the policy.As the State Commission has allowed this additional amount and the Insurance Company has not come in appeal before this Commission,I do not intend to interfere with the order of the State Commission in this regard. So far as the present appeal filed by the complainant is concerned, on the basis of above detailed examination, it has been seen that none of the assertions made in the appeal for enhancement of claim in the headings of buildings, plant and machinery and the stocks is justifiable.It goes without saying that the insurance claim is basically to be settled on the basis of the surveyor's report until there are cogent reasons for not accepting the same.In the present case, the appellant/complainant has failed to point out any specific shortcoming in the report of the surveyor and all the assertions of the appellant in his appeal have been thoroughly examined and none has been found to be justifiable.
Based on the above discussion, I do not find any merit in the appeal and consequently First Appeal No.69 of 2016 is dismissed.