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Judgment
Subhash Chandra, Presiding Member
This revision petition under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order dated 17.09.2012 in First Appeal no. 695 of 2009 of the State Consumer Disputes Redressal Commission, Delhi (in short, the ‘State Commission’) partly allowing the appeal against order dated 15.05.2009 of the District Consumer Disputes Redressal Forum, New Delhi (in short, the ‘District Forum’) in consumer complaint no. 1133/2006. This order will also dispose of RP no.366 of 2013 a cross revision petition filed by the respondent challenging the same order.
The relevant facts of the case according to the petitioner are that respondent took a standard fire & special peril policy of Rs.22 lakhs for Plant and Machinery and accessories for Rs.10 Lakhs and Stocks for Rs.60 lakhs for premises at B-294, Okhla Industrial area, Phase-1 New Delhi - 110020 for the period from 16.05.2005 to 15.05.2006. A fire took place at insured premises at about 4:30 pm on 23.09.2005 which caused damage to the stocks. The respondent informed about the fire to the Manager, Punjab National Bank, International Bank Branch (IBB), DCM Building, 16th Barakhamba Road, New Delhi vide letter dated 24.09.2005. The Bank, on receiving the said letter, intimated the fire incident to the insurance company vide letter dated 26.09.2005. On receiving the information from the bank, the petitioner appointed M/s Atul Kapur and Co., as surveyor to survey and assess the loss. On 27.09.2005 police locked the premises, therefore, the inspection could not be carried out. The surveyor requested the respondent on 27.09.2005 to submit various documents in order to assess the claim. As the respondent did not submit the required documents within 7 days to the surveyor, it was presumed that respondent was not interested in pursuing the claim and same should be treated as withdrawn. The surveyor submitted his survey report dated 05.06.2006 to the petitioner assessing the adjusted loss of stock at Rs.2,09,775/- and building at Rs.22,975/-, aggregating to a sum of Rs 2,30,75/- from which Rs.10,000/- was deducted towards the excess clause. Therefore, a net assessment of Rs.2,22,75/- was arrived at by the surveyor. Based on provisional trading account till date of loss and after reducing the stocks lying outside the affected location, the value of stock at risk was calculated by the surveyor to be Rs.127.17 lacs against the sum insured of Rs.60 lakhs. Accordingly, the insurance company paid amount of Rs.2,20,329/- which was accepted by the bank in full satisfaction and discharge of the claim upon the petitioner. The respondent alleged that there is deficiency in service on part of the petitioner and therefore, filed a complaint against the petitioner seeking compensation of Rs.14,20,652/- towards residual amount of loss to the respondent with interest @ 18%.
The contentions of the petitioner are that the claim had been settled with the insured's banker, Punjab National Bank, in full and final satisfaction by paying a of a sum Rs. 2,20,399/-. The receipt of such payment was incomplete discharge of the petitioner’s claim and was binding on the respondent. The discharge voucher was issued by the banker to the respondent is considered to be in complete discharge of the petitioner. Therefore, it is contended that there is no deficiency in service on part of the petitioner.
The District Forum upheld the respondent’s complaint and ordered payment of Rs.4,20,652/- subject to clearance of hypothecation of the Bank, Rs.1,00,000/- as compensation for mental agony and harassment and Rs.10,000/- towards litigation costs. However, on appeal in the State Commission, it was held that in addition to the loss of Rs.2,20,750/- determined by the Surveyor, the respondent would be entitled to Rs.2,52,758/- i.e. a total of Rs.4,73,097/- on the ground that the District Forum did not give any reason for not accepting the report of the Surveyor which was “exhaustive and did not appear one-sided”. The State Commission relied upon the order of this Commission in M/s Target Plywood Industries Ltd. Vs. Sr. Divisional Manager & Ors., in OP No.426 of 2000 dated 19.07.2006 which upheld the right of the Bank to be entitled to any amount by way of settlement in order to protect the interest of the Bank. The order of the State Commission is impugned before this Commission.
The case of the respondent is that the State Commission is erroneous as it has reduced the award of the District Forum arbitrarily without reasons while stating in its order that the surveyor has given no particulars or details or reasons for its conclusion in arriving at a figure of Rs.2,20,750/-. Therefore, it is argued this figure is based on assumptions and has been wrongly accepted. It is submitted that the Surveyor’s report has arrived at a figure of Rs.4,73,097/- for which no reasoning is provided and the District Forum’s finding that the Surveyor was an agent of its principal, the insurance company, had not been disproved.
I have heard the learned counsel for both the parties and perused the material on record carefully.
During arguments the learned counsel for the respondent limited his arguments to the issue of the quantum of the amount ordered by the State Commission. It was stated that the reduction of the amount to Rs.4,73,097/- inclusive of the amount of Rs.2,20,339/- was based upon an erroneous appreciation of the order of the District Forum. The State Commission had held that the crediting of the amount to the Punjab National Bank was justified in view of the National Commission’s order in OP No.426 of 2000. It was argued by the petitioner that the issue was not of settling the dues of the bank but the crediting of the amount without consent of the petitioner and which was incorrectly determined for an amount that was far less than the claim. It was also argued that the reduction of the amount was based upon the application of excess by the Surveyor which was not reasoned or justified. The impugned order did not set out reasons for the acceptance of the Surveyor’s report. Finally, it was also argued that the Hon’ble Supreme Court had held in National Insurance Co. Ltd. Vs. Hareshwar Enterprises (P) Ltd & Ors., in Civil Appeal No. 7033 of 2009 vide order dated 18.08.2021 that while the assessment of loss by an approved surveyor is a prerequisite for the settlement of insurance claims and a surveyor’s report is statutorily recognized as a basic document in determining claims, it is not the last and final word and is not sacrosanct that cannot be departed from. It is neither binding upon the insurer nor the insured and can be relied upon if it inspires confidence but not if it is perfunctory. In the present case it was argued that the report did not set out reasons for the reduction of the compensation claimed and, therefore, could not be relied upon. Therefore this order was liable to be set aside.
On behalf of the petitioner/insurance company it was argued that the loss was assessed on the basis of the Surveyor’s report which was detailed and reasoned. It is contended that the ‘Assessment of Loss’ was detailed in para 6 of the report and para 7 had detailed the ‘Adjusted Loss’ based on the provisional trading account till date of loss after reducing the stocks lying outside the affected location. The value of stocks had been calculated to be Rs 127.17 lakhs against the sum insured of Rs.60 lakhs and, therefore, underinsurance had been applied for stocks and the adjusted loss considered accordingly. Even in the case of the building, the value at risk was based on the covered area and since this was higher than the sum insured, under insurance had been applied. Finally, excess clause of Rs.10,000/- was applied to reduce the amount since fire policy was subject to excess clause.
From the record it is evident that the impugned order has not set out reasons for accepting the calculation of the petitioner while settling the claim. It is manifest that the claim was settled for an amount of Rs.2,20,339/- by the petitioner which it credited to the account of the respondent with the Bank on 01.08.2006. It is not denied by the petitioner that the amount was settled with consent of the respondent or credited to the Bank with prior consent or knowledge of the respondent. The State Commission has not gone into the reasons why even the amount of Rs.4,73,097/- was not settled by the petitioner insurance company as calculated by it. It has relied upon the order of the National Commission to justify the crediting of the bank account as an entitled settlement. The order of the State Commission has considered only the report of the Surveyor and worked out the compensation due after deducting the amount already credited to the bank account against hypothecation of goods. The reasoning of the District Forum, on the other hand, notes that the Surveyor has admitted that readymade garments worth Rs.15,22,991/-, plant and machinery estimated at Rs.48,000/- and building estimated at Rs.70,000/-, totalling to Rs.16,40,991/- were destroyed in the fire. The District Forum ordered payment of balance of Rs.4,20,652/- subject to clearance of hypothecation of the bank along with compensation and cost of litigation. The total claim settlement is thus Rs.6,41,051/- including the Rs.2,20,339/- paid to the Bank. In view of the analysis above, this is a fair and reasoned amount arrived at after applying excess adjustment on the loss worked out which does not deserve to be disturbed by the State Commission.
In the result, the revision petition no. 344 of 2013 filed by the petitioner insurance company is found to have no merits and is accordingly dismissed. The impugned order of the State Commission is set aside and the order of the District Forum is upheld.
This order also disposes of RP no.366 of 2013 in the above terms.