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Judgment
R.K. Agrawal, President
The present Appeal has been filed against the Order dated 13.06.2012 passed by the State Consumer Disputes Redressal Commission Gujarat, Ahemdabad (hereinafter to be referred to as “State Commission”), whereby the Complaint filed by the Complainant was partly allowed and the Opposite Party Insurance Company was directed to pay 20,60,322/-towards loss suffered by the Complainant alongwith interest @6% p.a. from 30.05.2007 till realization and 25,000/- towards mental torture and cost of the Complaint.
Brief facts of the case are that the Complainant/Respondent is sole proprietor of the “Green Card” firm which is engaged in the business of readymade garments. Complainant/Respondent had been obtaining Special Perils Policy from Appellant, New India Assurance Company Ltd. (hereinafter referred as the ‘Insurance Company’) for its stock of readymade garments, furniture, fixtures & air conditioners, generators, TV cameras, electric fitting since 1996. In the year 2006-2007, Respondent/Complainant obtained Special Peril Policy No. 230400/11/05/11/00001331 from the Appellant Insurance Company for 20,78,000/- (Plant-Machinery 25,000/-; Electric Installation – Generator 15,000/-; TV Camera 8,000/-; electric equipments 30,000/-; Furniture, Fixtures, Fittings 5,00,000/- and Stock 15,00,000/-). During the currency of the Policy, on 07.08.2006 due to flood in Tapi river, universal damage took place in Surat city. The flood water entered in the Complainant’s shop. The basement was full of flood water and there was water of above 5 to 7 ft. on the ground floor. The water remained in the Shop for about 5 days and due to inundation stock of goods kept in the basement, furniture & fittings and electrical installation etc. were severally damaged. The Complainant informed the Appellant Insurance Company for the damage caused by the flood and lodged a claim for 21,97,547/-(loss of readymade garments worth 15,93,582/-; furniture-fixtures worth 4,26,000/-; Air Conditioner worth 13,275/-; electrical Fittings worth 26,965/-; and washing charges 1,37,225/-). The Appellant Insurance Company appointed Mr. Vimal Desai, Surveyor to assess the loss, who visited the site on 17.08.2006. As alleged, he did not take any photograph and remained at the site only for 2 – 3 minutes. Complainant provided all the documents, i.e., Account Statement, Account Book, Bills etc. to the Surveyor. Despite making repeated oral requests and letters dated 18.05.2007 and 23.05.2007, Surveyor did not prepare the report on one pretext or the other. Ultimately, on 30.05.2007 the Appellant Insurance Company sent a letter alongwith claim voucher of 3,16,539/- towards full and final settlement. The Complainant sent a letter dated 13.06.2007 to the Appellant Insurance Company for knowing the reason as to why claim voucher of 3,16,539/- was sent against a claim of 21,97,547/-. Finding no response, Complainant filed a Complaint alleging deficiency in service on the part of the Appellant Insurance Company before the State Commission and seeking direction to the Appellant Insurance Company to pay 21,97,547/-towards damage caused due to flood alongwith interest @12% and 50,000/- for physical, mental torture and harassment.
The Appellant Insurance Company contested the Complaint before the State Commission. The main contention of the Insurance Company was that in the absence of proof of transportation and delivery of the material, Surveyor did not take into consideration stock worth 11,24,354/-, which the Complainant alleged to have purchased from M/s. Siddharth Apparel, and accordingly assessed the loss at 3,16,539/-. Therefore, the Appellant Insurance Company had offered 3,16,539/- on the basis of the Surveyor’s Report as full and final settlement.
After hearing both the parties and perusal of material on record, the State Commission partly allowed the Complaint by observing as under:-
“….Opposite side has taken defence that no such goods have arrived from M/s. Siddharth Apparels of Ahmedabad as per the Surveyor’s Report in their documentary evidence and having accepting the Survey Report has partly allowed the claim of the Complainant and in that regard have produced Survey Report of Surveyor Sh. Vimal Desai vide page No. 71 and on reading the said Survey Report in that Report it is mentioned that due to inundation for 5 days water remained in the premises of the Complainant due to which Complainant’s electric fittings, wooden racks, table counter and mirrors were damaged which is reported and in Plant & Machinery Section A/c etc. has got damaged which is also accepted.Goods Stock which drowned in water got spoiled with mud and the repairing expenses of the floor was opined to be 4,26,000/- as stated in the report after deducting the depreciation the assessment what he has carried out calculating was on the basis of the market value that is what is stated by him and of the salvage for as is where is condition for goods standard was made applicable to calculate and he has accepted total damage to the electrical installation and where the Complainant had sent the stock for washing, name of the person was not given and hence the same could not be verified which is also noted in the Report.The fact stated about the purchase of goods from Ahemdabad is found not proved.As per the bills which were produced before him and on stating that goods worth 11,24,354/- for such a huge amount goods were purchased at a one stroke is not possible and hence was not accepted.Also the sum is paid over to the sender of goods is also not available and that he is a unpaid vendor and therefore the said goods cannot be said to be of the ownership of the Complainant and therefore, that claim was disagreed but an affidavit of Mr. Arvind Jwalaprasad at page No. 137 is produced who is the businessman of Ahmedabad who sent the goods to the Complainant and in that whatever goods were sent to the Complainant supportive evidence is there and the said witness is not cross-examined and the affidavit is not challenged by the Opposite Party Insurance Company nor they have verified in any respect which shows that the Insurance Company not cross-examined the evidence of the Complainant and indirectly have supported the evidence of the Complainant and have created such circumstances and for that the Opposite Party Insurance Company is a responsible party.In that way Affidavit of Surveyor Shri Vimal Desai is produced at page No. 124 which is also not cross-examined or challenged by the Complainant’s side but perusing the documents on record in which on going through the Affidavit of the businessman of Ahemdabad Sh. Arvind Jwalaprasad is supportive to the claim of the Complainant and from that it is observed that the say of the Surveyor that goods were not purchased from Ahemdabad and the claim for goods is not true as stated by the Surveyor is not acceptable and for that part of the report it is not correct and is not acceptable.
Complainant had purchased goods from Ahemdabad from M/s. Siddharth Apparels, which is shown by documentary evidence and oral evidence and is supported and as per the terms and conditions of the Insurance Policy, Complainant’s claim is insurable and is decided accordingly and for that part Surveyor’s say is not accepted and for that part defence of the Opposite Party is not acceptable.
Further that the Complainant side did not provide sufficient evidence about the expenses incurred by them before the Surveyor as claimed for getting washed the garments at Vapi and Surat for 1,37,225/- and hence that fact is found unproved and it is decided accordingly.
But as there is no adverse evidence available against the loss due to damage caused to readymade garments to the tune of 15,93,582/- is on record it is believed that such damage is caused and therefore, after deducting 1,37,225/- the expenses for washing the readymade goods from the amount claimed by the Complainant, it is decided that the Complainant has suffered loss of 20,60,322/- and it is proved.
Complainant’s Insurance Policy was for 20,78,000/- which was in force during that period the loss occurred to the Complainant firm and, therefore, it is decided that the Complainant firm is entitled to recover 20,60,322/- from the Opposite Party as Insurance Claim amount as per the terms and conditions of the Policy and in accordance to that issues no. 1 & 2 are answered partly positive and issue No. 3 is answered negatively.
The Insurance Company has offered the Complainant insurance claim amount 3,16,549/- , which is less than the actual loss occurred and therefore, the Surveyor’s Report in its entirety is not found acceptable in toto and in making corrections.As per the standards and directions laid down by the Hon’ble National Consumer Disputes Redressal Commission, the Complainant is not supposed to accept the claim amount which is sanctioned by the Insurance Company and in terms of the illegal trade practices carried out by the Insurance Company. ”
Aggrieved by this order, the Appellant Insurance Company has filed the present Appeal before this Commission.
Mr. S.M. Tripathi, learned Counsel for the Appellant Insurance Company submitted that the Complainant claimed to have purchased stock of readymade garments on 06.07.2006 under four invoices from M/s. Siddharth Apparel for 11,74,784/- but failed to provide the proof of transportation, delivery of material, receipt of payment of VAT to Commercial Authority and payment of Octroi to Municipal Corporation to the Surveyor, who concluded that the goods were not at the insured premises at the time of incident and did not take into account the same while assessing the loss. The State Commission erred in allowing full claimed amount by ignoring the deductions towards salvage value of 15% value of stock as assessed by the Surveyor and 5% being the excess clause of the Policy. The State Commission also ignored the fact that although the Complainant himself has shown stock value 14,85,650/-as on 07.08.2006, which also included 57,140/- on account of VAT, thus, the real value of Stock as on 07.08.2006 was 14,28,510/-, yet awarded full sum insured of 20 lakh on account of stocks. He submitted that the Insurance Company has settled the claim in terms of the Surveyor’s Report and prayed that the Impugned Order passed by the State Commission be set aside.
Per contra, Mr. Sunil, learned Counsel for the Respondent, supported the Order passed by the State Commission as according to him the State Commission had passed a well-reasoned and justified Order, which is based on a correct and rightful appreciation of evidence and material available on record and does not call for any interference.
I have heard Mr. S.M. Tripathi, learned Counsel appearing for the Appellant Insurance Company, Mr. Sunil Mund, learned Counsel appearing for the Respondent/Complainant, perused the material available on record and given a thoughtful consideration to the various pleas raised by them.
The Surveyor’s Report is not the final word and it is not binding upon the insured or insurer. A reference can be made to the Judgment passed by the Hon’ble Supreme Court in “ New India Assurance Co. Ltd. v. Pradeep Kumar , (2009) 7 SCC 787” in which it has been held as under:-
64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as ‘approved surveyor or loss assessor’):
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.”
The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is 20,000 or more, the loss must first be assessed by an approved surveyor (or loss assessor) before it is admitted for payment or settlement by the insurer. The proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor).
In other words although the assessment of loss by the approved surveyor is a prerequisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be the basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.”
In the instant, so far as the dispute relating to stock of 11,74,784/-, not taken into account by the Surveyor, while assessing the loss is concerned, the State Commission after taking into account the Bills, VAT Receipts, Lorry Receipt and evidence by way of affidavit filed by Arvind Jwalaprasad Tulsiyan, sole proprietor of M/s. Siddharth Apparels, i.e., Supplier confirming to supply the goods to the Complainant and despite giving opportunity to Insurance Company, it did not cross-examine Arvind Jwalaprasad Tulsiyan, indirectly has supported the evidence of the Complainant, has rightly observed that the Complainant was entitled for this amount.
The closing stock of the Complainant as on 07.08.2006 was 14,58,650/- and after deducting incidence on account of VAT 57,140/- the affected stock at the insured premises was 14,01,510/- and since the stock insurance was for 15,00,000/- excess clause would not apply in the instant case. After applying the salvage value @15% the Complainant shall be entitled for net stock loss of 11,91,284/-. In addition to above, the Complainant is also entitled for 4,26,000/- towards loss of furniture – fixture, 13,000/- towards loss of A.C. and 26,964/- towards loss of electrical fittings. Since the Complainant had failed to provide cogent proof in support of his claim towards Washing charges, the said charges will not be payable to him. Accordingly, the Complainant is entitled for a sum of 16,57,248/- towards loss from the Opposite Party Insurance Company. The Impugned Order passed by the State Commission stands modified in above terms.
In compliance of Order dated 08.10.2012, the Opposite Party Insurance Company has remitted a sum of 3,16,539/- alongwith interest @9% p.a. and further in compliance of Order dated 22.05.2013, a sum of 7 lakh deposited by the Opposite Party Insurance Company, has also been withdrawn by the Complainant.
For the reasons stated hereinabove, the Opposite Party Insurance Company is directed to pay the balance amount of 6,40,709/- (16,57,248/- – 10,16,539/-) alongwith interest @9% p.a. from the date of filing of the Complaint till realisation to the Complainant within four weeks from today.
The First Appeal is partly allowed in above terms. Keeping in view the peculiar facts and circumstances of the case, there shall be no order as to costs.
The Registry is directed to return the statutory amount alongwith accrued interest, if any, to the Insurance Company within two weeks.