AI Structured Summary
Not yet generated for this judgment
Judgment
The present Consumer Complaint has been filed by Complainant under Section 21 of the Consumer Protection Act, 1986. The Complainant is a Partnership firm carrying on business of paddy, rice, broken rice, husk and bran. The Complainant had taken Standard Fire and Special Perils Policy No.031603/11/13/11/00000058 valid from 21.05.2013 to 20.05.2014 covering his business as well as plant & machinery for sum of Rs.5,09,50,000/-.
Case of the Complainant is that on 08.11.2013, about 6:50 am, fire broke out in the rice mill due to short circuit, causing damage to the building, plant & machinery and stocks of rice and paddy. The Complainant immediately informed the Opposite Party as well as the Fire Station. The Complainant submitted a claim for Rs.4,16,89,670/-. On 12/13.11.2013, the Opposite Party deputed Mr. Manabendra Chatterjee as Surveyor, who visited the site on 12.11.2013 and assessed the loss at Rs.1,42,94,868/- , vide report dated 18.03.2014. Challenging the report of the Surveyor, the Complainant made representation to the Opposite Party alongwith supporting documents. Correspondence between the Complainant, Surveyor and the Opposite Party went on till beginning of 2015. Ultimately, on 05.03.2015, 13.03.2015 and 18.03.2015, the Complainant made representations to the Opposite Party for settlement of claim. Alleging deficiency in service, the Complainant filed the instant Consumer Complaint seeking the following reliefs:-
i. “A sum of Rs.4,16,89,670/- on account of loss due to accidental fire.
ii. Interest @ 18% from the date of accrual of cause of action till the date of payment.
iii. Cost of the proceedings.
iv. Cost of harassment and mental agony
v. Any other order or orders as this Hon'ble Commission may deem fit and proper.”
The Opposite Party/Insurance Company resisted the Complaint by filing written statement stating that the Complaint was not maintainable as the Complainant did not qualify as a “Consumer” under Section 2 (1) (d) the Consumer Protection Act, 1986. The instant Complaint was an attempt to unlawfully extract money from the Opposite Party. The dispute involved complicated facts and legal issues that could not be resolved in summary jurisdiction under the Consumer Protection Act, 1986. The Complaint could be decided by a Civil Court.
On merits, it was stated that the cause of the fire could not be determined. The surveyor's report indicates that the most probable cause was an electrical short circuit. The Surveyor assessed the loss on the basis of documents provided by the Complainant. The Complainant with mala fide intention prepared certain documents after the incident of fire. The Consumer Complaint is misconceived, frivolous, and untenable and deserved to be dismissed with exemplary costs.
Heard the Learned Counsel for the Complainant and Learned Counsel for Opposite Party No.1 and carefully perused the record. Opposite Parties No.2 & 3 were deleted, vide order dated 22.05.2015.
The learned Counsel of the Complainant submitted that the Complainant submitted daily account books of the stock as well as the monthly statement to the Surveyor. He also supplied the Income Tax Statement of the relevant period. The value of paddy rice bran was Rs.3,66,60,113/- as on 07.11.2013. The Surveyor was also supplied Audit Report of the stocks. The Surveyor, however, based his report on conjecture and surmises. The Surveyor observed that the fire was accidental and not by willful act or willful negligence of the Insured. He also observed that there was no violation of any specified terms & conditions of the Policy and the claim was admissible. It was submitted that the Insurance Company was hand in glove with the Surveyor just to defeat the legitimate claim of the Complainant. Learned Counsel submitted that the Surveyor’s Report is not the final word. If the Surveyor’s Report is not in line with the terms of the contract, it is liable to be set aside.
Learned Counsel of Opposite Party No.1 submitted that the Complainant is not a “Consumer” under Section 2 (1) (d) the Consumer Protection Act, 1986 as it is involved in commercial activities. It was also submitted that the dispute involved complicated facts and legal issues that could not be resolved in summary jurisdiction under the Consumer Protection Act, 1986. The Complaint could be decided by a Civil Court. The Complaint is liable to be dismissed as not maintainable.
On merits, the Learned Counsel for Opposite Party No.1 submitted the Inspector’s Report, Valuer’s Report submitted by the Complainant were merely opinions and lacked an actual assessment of the loss. The Audit Report of M/s P.R. Saha & Co. on behalf of the Complainant's banker revealed that the Complainant had not maintained proper books of accounts. The Surveyor appointed by the Opposite Party, after finding the Complainant's documents unreliable, cross-checked the information and adopted volumetric method for assessment of loss. By measuring the affected and unaffected stocks and applying the volumetric principle, the Surveyor arrived at the quantity of stock. The Complainant has questioned the surveyor's assessment, claiming that their books of accounts were sufficient. However, the Surveyor explained in his report as to why the books of accounts could not be solely relied. The Complainant failed to provide any specific breakdown or justification for their claim of Rs.4,16,89,670/-, nor have they demonstrated any error in the Surveyor's assessments of each claim item.
This Commission in Harsolia Motors v National Insurance Company Ltd. [I (2005) CPJ 26 (NC)] held that a contract of insurance is a contract of indemnity and, therefore, there is no question of commercial purpose in obtaining insurance coverage. Aforesaid view of the National Commission was upheld by Hon’ble Supreme Court, vide judgment dated 13.04.2023 in Civil Appeal No.(S) 53525353 of 2007 and other connected Appeals holding that “the definition of “consumer” under Section 2 (1)(d) of the Consumer Protection Act, 1986 (“CP Act”) includes a commercial entity provided that the goods purchased, or services availed are not linked to any profit generating activity.” In view of the law laid down by Hon’ble Supreme Court in Harsolia Motors (supra), the Complainant is a “Consumer” and the Complaint is maintainable.
Opposite Party No.1 also challenged the Complaint on the ground that the Complaint involved complicated questions of fact which cannot be decided by the Consumer Forum in summary proceedings.
“It cannot be denied that Fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of the Fora established under the Act. These Fora have been established and conferred with the jurisdiction in addition to the conventional Courts. The principal object sought to be achieved by establishing such Fora is to relieve the conventional Courts of their burden which is ever-increasing with the mounting arrears and whereat the disposal is delayed because of the technicalities. Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved.”
From the facts and circumstances of the case, it is seen that there are no complicated questions of facts and law involved in this case, which cannot be decided by this Commission. Moreover, as held above by Hon’ble Supreme Court, involvement of some questions of fact and law cannot be a ground for shutting the doors of any Forum under the Act to the person aggrieved. This Commission is, thus, competent to adjudicate the instant Consumer Complaints.
The observation of the Surveyor regarding cause of loss is as follows: -
“The exact cause of fire could not be ascertained. The fire Brigade also failed to ascertain the cause of fire in their Fire report (Annexure-I). The most probable cause could be electrical short-circuit or arcing, but since the electrical wiring of the affected portion of the mill house were totally destroyed, no physical evidence of the same was available at site.”
The Surveyor observed that the most probable cause of fire could be electric circuit or arcing. As the electrical wiring of the affected portion of the mill was totally destroyed, no physical evidence of the same was available at site. As there is no evidence contrary to the Surveyor’s report regarding cause of fire and the Surveyor has not mentioned any foul play by the Complainant or any other reason, we accept that fire was caused due to electrical short-circuit and the Complainant is entitled for reimbursement of claim.
The Complainant submitted claim of Rs.4,16,89,670/-. On the other hand, the Surveyor assessed the loss at Rs.1,42,94,868/-. While assessing the loss to the stock, the Surveyor observed as follows: -
“Since this particular variety of paddy is known for its flavor, it would not be possible to retrieve any paddy of totally sound quality as the same had absorbed foul smell of fire and smoke. But, though the Food Inspector declared the paddy as unfit for human consumption, the paddy could be utilized as animal feed after milling. Since the condition of the damaged paddy was getting aggravated and further delay in disposal would result in diminishing its recoverable value, I had a prolonged discussion/deliberation with the Insured, and after much persuasion, the Insured agreed to retain the damaged paddy as well as partially damaged paddy contained in Raw Paddy Godown on the following allowances, which may be considered reasonable in the prevailing circumstances:
Description
Quantity
(Qtl)
% age of
Allowance
Qty. of paddy badly damaged by fire & water having some recovery value
2013
75
Qty. of paddy damaged by fire & water having a better recovery value
1502
60
Partially and water damaged paddy cleaning section
96
25
Rest 3004 qtl. of paddy was found totally damaged with no recovery value. The average purchase rate of paddy has been worked out from the entire purchases including the opening stock.”
From the above, it is clear that after discussion with the Surveyor, the Complainant agreed to retain the damaged as well as partially damaged paddy, subject to aforesaid allowances. While assessing the loss to the stock, the Surveyor had given detailed reasons.
Regarding loss to the plant & machinery, the Surveyor observed that the loss had been assessed on the basis of estimates of repair submitted. The observations of the Surveyor are as follows: -
“The loss on building and plant & machinery has been assessed on the basis of my findings and the estimates of repair submitted. The rates of various items as per the estimate was found reasonable but the quantities were allowed on the basis of my inspection depreciation @ 3.33 p.a. for building and 10% p.a. for plant & machinery subject to maximum 50% has been deducted. Suitable salvage was deducted to obtain the net assessed loss.”
The Surveyor observed that the loss to the building and plant & machinery was assessed on the basis of estimates submitted by the Complainant. On the basis of the aforesaid observation, the Surveyor assessed the loss to the building at Rs.1,52,820/-, loss to the plant & machinery at Rs.14,080/- and to the stocks at Rs.1,47,83,525/-. After deducting adjusted amount and the amount for removal of debris and fire-fighting expenses as well as policy excess, the Surveyor assessed the total net amount at Rs.1,42,94,868/-. The Surveyor had given detailed reasons for assessment of loss. The Complainant failed to produce any evidence to show that the assessment made by the Surveyor was not correct. The report submitted by a Surveyor is an important piece of evidence and has to be given due weight, though it is not sacrosanct and can be ignored, provided there is cogent evidence otherwise.
In view of the above, Opposite Party No.1 is directed to pay Rs.1,42,94,868/- as assessed by the Surveyor with 9% interest from the date of filing the Complaint till payment. Order be complied within 8 weeks from the date of this order, failing which 12% interest shall be payable. Opposite Party shall also pay Rs.50,000/- as litigation cost to the Complainant. The Complaint stands disposed on the above terms.