New India Assurance Co. Ltd vs M/s Sunil Pharma

Subhash Chandra, Member

This revision petition assails the order dated 23.09.2011 of the State Consumer Disputes Redressal Commission, Bihar, Patna (in short, ‘State Commission’) in First Appeal No. 633 of 2007 by which the order of the District Consumer Disputes Redressal Forum, Gaya (in short, the ‘District Forum’) dated 18.10.2007 in consumer complaint number 117 of 2006 was upheld. The impugned order of the District Forum has directed the revision petitioner/insurance company to pay Rs.14,74,000/- along with interest at 8% per annum from 15.09.2006 till realization along with Rs.2000/- by way of compensation for mental agony and litigation cost.

The facts of the case, in brief, are that the complainant/respondent M/s Sunil Pharma who is a wholesale stockist of medicines, had obtained a shop insurance policy for Fire and Burglary for an amount of Rs.16,00,000/- for the stock of medicines and Rs.1,00,000/- towards furniture in the shop. The policy was valid from 13.02.2006 to 12.02.2007. He had also obtained a credit loan facility of Rs.15,00,000 from the State Bank of India, Purani Godown, Gaya and hypothecated the entire stock in the name of the bank for which a monthly statement of stock was submitted for verification. During the validity of this policy a fire broke out in the shop of the respondent on the night of 14-15.03.2006. The fire brigade it was called and the fire was put out. The local police was also informed. On 16.03.2006 the petitioner was informed of the fire accident and a Surveyor, Shri Ajay Kumar was appointed to inspect the loss due to the fire. An inspection was carried out on 17.03.2006 and on 22.03.2006 and a list of the damaged medicines was prepared as all records had been burnt. The price of the medicines was provided by the insured as Rs.12,69,000/- which according to the petitioner was exaggerated. The Surveyor addressed the Drug Inspector, Gaya to ascertain whether the medicines could be used after the fire. Since the respondent had hypothecated the stocks to the State Bank of India, Gaya the surveyor informed the bank that the documents had not been provided to it. The surveyor submitted his Final Report dated 17.07.2006 which stated that there was no evidence to show that the respondent had invested Rs.25,00,000/- in the shop. It was also stated that the credit loan was only for Rs.10,50,000/- and that no tax returns or stock statement had been had been submitted to enable verification of the value of stocks. In the absence of the relevant books of account the surveyor assessed the damaged medicines at Rs.1,75,000/- and furniture at Rs.30,756/-. The total loss was assessed at Rs.3,35,815/- after deduction of excess. The respondent, however, returned the loss voucher under protest.

Thereafter the respondent filed CC No. 117 of 2006 before the District Forum, Gaya claiming Rs. 17,00,000/- for the loss suffered by him along with Rs.2,00,000/- towards compensation. On contest, the District Forum vide its order dated 08.10.2007 allowed the complaint and directed the petitioner to pay Rs.14,74,000 along with interest at 8% from 15.09.2006 till the date of realization along with Rs.2000/- as compensation. In appeal, the State Commission held that there was no denying that the respondent was running a wholesale medicine business which could not be done with a paltry stock of Rs.1,50,000/-. It was held that the order the order of the District Forum was based on due consideration of facts and circumstances and accordingly the appeal was dismissed. The present revision petition has been filed against this order on the grounds that the lower fora did not appreciate fact that the surveyor had prepared the list of identifiable damaged medicines and advised the respondent to enter the cost price which had been done on an exaggerated basis. It has also been contended that the survey report should have been given weightage as it has not been proved to be unreliable. It is also contended that the complainant did not produce any evidence in support of his allegation against the surveyor and that even though the stocks were hypothecated to the State Bank of India, the Bank had not preferred any specific claim which indicated collusion between the bank and the respondent. It has been prayed that the order of the State Commission and the District Forum be set aside.

We have heard the learned counsel for both the sides, perused the documents on record and given careful consideration to the submissions made.

In the present case it is not denied that there was a fire in the respondent’s shop which was a covered peril under the insurance policy for Fire and Burglary obtained by the respondent in respect of his shop. The surveyor appointed by the petitioner had also inspected the site and noted that the damage was due to fire. He had obtained independent reports from the Drug Controller, Gaya. It is also evident from his report that apart from the medicines whose details could be established there was also a stock of medicines whose details could not be determined on account of the fire. The claim has been allowed for an amount that is much less than the claim based upon the value of stocks which is alleged to be the reason for deficiency in service. The surveyor’s report has not submitted any specific, independent valuation of the stock of medicines and therefore the contention of the petitioner that the value was inflated is not justifiable. It is also not disputed that the respondent was in the business of wholesale supply of medicines and that the fire had been the cause for the stocks kept for business were destroyed in it. There is no evidence produced by the petitioner or the surveyor appointed by him to indicate any discrepancy between the stock valued by the insured and that hypothecated with the bank. Both the lower fora have concluded concurrently in favour of the respondent and upheld the finding that the claim for damages was justifiable under the insurance policy.

This Commission, in exercise of its revisional jurisdiction, is not required to re-assess and re-appreciate the evidence on record when the findings of the lower fora are concurrent on facts. It can interfere with the concurrent findings of the fora below only on the grounds that the findings are either perverse or that the fora below have acted without jurisdiction. Findings can be concluded to be perverse only when they are based on either evidence that have not been produced or based on conjecture or surmises i.e. evidence which are either not part of the record or when material evidence on record is not considered. The power of this Commission to review under section 21 of the Act is therefore, limited to cases where some prima facie error appears in the impugned order. Different interpretation of same sets of facts has been held to be not permissible by the Hon’ble Supreme Court.

The Hon’ble Supreme Court in Mrs Rubi (Chandra) Dutta vs M/s United India Insurance Co. Ltd., (2011) 11 SCC 269 has held that:

“23. Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two Fora.”

Reiterating this principle, the Hon’ble Supreme Court in Lourdes Society Snehanjali Girls Hostel and Ors vs H & R Johnson (India) Ltd., and Ors  (2016) 8 Supreme Court Case 286 held:

“17. The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has either failed to exercise their jurisdiction or exercised when the same was not vested in them or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons.”

Again, the Hon’ble Supreme Court in T Ramalingeswara Rao (Dead) Through LRs and Ors vs N Madhava Rao and Ors, dated 05.04.2019 held as under:

“12. When the two Courts below have recorded concurrent findings of fact against the Plaintiffs, which are based on appreciation of facts and evidence, in our view, such findings being concurrent in nature are binding on the High court. It is only when such findings are found to be against any provision of law or against the pleading or evidence or are found to be perverse, a case for interference may call for by the High Court in its second appellate jurisdiction.”

From the records it is apparent that the petitioner has challenged the impugned order on the very same grounds which were raised before the District Forum as well as the State Commission in appeal. The concurrent findings on facts of these two foras are based on evidences led by the parties and documents on record. The present revision petition is therefore an attempt by the petitioner to urge this Commission to re-assess, re-appreciate the evidence which cannot be done in revisional jurisdiction. Learned counsel for the petitioner has failed to show that the findings in the impugned order are perverse.

The foras below have pronounced orders which are detailed and have dealt with all the contentions of the petitioner. It is seen that the orders of these fora are based on evidence on record.  In view of the settled proposition of law that where two interpretation of evidence are possible, concurrent findings based on evidence have to be accepted and such findings cannot be substituted in revisional jurisdiction, this petition is liable to fail.

We, therefore, find no illegality or infirmity or perversity in the impugned order. The present revision petition is, therefore, found to be without merits and is accordingly dismissed.