PERMA NAND JOGINDER PAL vs G.M.P. FINISHING MILLS COLD STORAGE

M/s. Perma Nand Joginder Pal & Co., a partnership concern filed the present complaint against M/s. G.M.P. Finishing Mills Cold Storage, Amritsar as well as the Oriental Insurance Co. Ltd., Branch, Amritsar. The complainant-firm is working as Commission Agent. One of the items in which the complainant deals is Red chillies. In the business, such chillies are stored in different Cold Stores by the complainant namely Punjab Cold Storage and Saraswati Cold Storage apart from the Cold Storage of opposite party No. 1. There was a fire at the Cold Storage of opposite party No. 1. The stocks lying therein of Red Chillies belonging to the complainant were destroyed on May 4,1996. FIR No. 31 was got registered at the police station by one of the partners of opposite party No. 1 at Police Station Islamabad, District Amritsar. On account of such loss, compensation is being claimed from opposite party No. 1 - the Cold Storage as well as from the Insurance Company- opposite party No. 2. As far as opposite party No. 1 is concerned, the allegation of deficiency in rendering service and negligent act on the part of the opposite party No. 1 is alleged in not keeping the stored goods in safe custody for which premises of Cold Storage were requisitioned.

AGAINST the Insurance Company, deficiency in rendering service is alleged as the claim regarding loss suffered was not settled as per the terms and conditions of the policy. At this stage, it may further be observed that the complainant - firm had taken two insurance policies covering risk of fire and burglary in respect of their goods, Red Chillies stored at the two other Cold Stores - Punjab Cold Storage and Saraswati Cold Storage. It was on the basis of an endorsement in respect of one of such policies that the claim regarding loss of Red Chillies stored in the Cold Storage of opposite party No. 1 is being claimed in the complaint. That being the position, the version submitted by both the opposite parties is to be separately noticed and to be dealt with. Opposite party No. 1, the Cold Storage while admitting the factum of fire and destruction of the stocks of Red Chillies stored by the complainant asserted that the fire was only in some portion of the Cold Storage and the stocks which were not affected by the fire were returned to the owners including the complainant. Several receipts issued by the complainant in respect of receipt of such stocks were referred to and produced. In the version, it was further stated that a Surveyor was appointed by the Insurance Company who had assessed the loss and liability was of the Insurance Company. The version submitted by the Insurance Company was to the effect that the goods lying at the Cold Storage of the opposite party No. 1 were not covered by the insurance policies issued, which related to stocks stored at two other Cold Stores namely Punjab Cold Storage and Saraswati Cold Storage. The alleged endorsement on which the complainant relied was stated to be the result of coalition between the Development Officer, employee of the Branch of the Insurance Company and the complainant. The matter was got investigated and the Surveyor had checked the Stock Register of the two Cold Stores referred to above indicating no movement of the goods of the complainant therefrom at the relevant time for their shifting to the Cold Storage of opposite party No. 1. Thus, the Insurance Company denied its liability with respect to the stocks of the complainant lying at the Cold Storage of opposite party No. 1, which were not at all insured. At this stage details of the stocks are not being noticed. The following points arise out of the pleadings of the parties for consideration. 1. Whether the stocks of Red Chillies stored at the Cold Storage of opposite party No. 1 were covered by the risk under the insurance policy issued by opposite party No. 2 ? 2. Whether there was deficiency in rendering service on the part of the Insurance Company ? 3. Whether there was deficiency in rendering service on the part of the opposite party No. 1-the Cold Storage resulting in damage to the stocks of the complainant stores in their Cold Storage ? 4. Whether opposite party No. 2 had returned unaffected stocks of Red Chillies to the complainant, if so, to what effect ? 5. To how much compensation the complainant is entitled to and from which of the opposite parties ? 6. Relief. Point Nos. 1 and 2.

These questions can be considered together. In the reply filed by opposite party No. 2, the Insurance Company, reference has been made to the two insurance policies issued in favour of the complainant with respect to their stocks stored at Punjab Cold Storage and Saraswati Cold Storage in the sum of Rs. 12 lacs each. The letter of the complainant has been reproduced in the preliminary objections, which is dated March 29, 1996, indicating transfer of stocks to the Cold Storage of opposite party No. 1 for which request for issuing endorsement to the policy was made to the Branch Manager of the Insurance Company, Amritsar Branch. It is significant to be noticed that in the said letter policy number was not mentioned. It was only mentioned "Policy Number/Misc. Policy No. for Rs. 12 lacs." A request was made to transfer the shifting and issue of necessary endorsement. The aforesaid letter was stated to have been given to the Development Officer. The following endorsement was issued on March 29, 1996 as stated in the version : "Notwithstanding anything contained herein in the contrary, it is hereby declared and agreed that at the request of the insured vide letter dated 29.3.1996 the stock covered under the within mentioned has been transferred from the said policy to the New Premises known as M/s. GMP Finishing Mills Cold Storage build of ''A'' Class construction situated at Phatak No. 2, Link Road P.O. Khalsa College, Amritsar. All other conditions, terms and exceptions of the policy remains unaltered."

From the material aforesaid, it was asserted that the endorsement was in respect of any particular policy either of Punjab Cold Storage or of Saraswati Cold Storage. Apart from that reference was made to the report of the Surveyor who had inspected the records of the two Cold Storages referred to above and had reported no movement of stocks therefrom on March 29,1996. Copy of Surveyor''s report is Annexure OP. 2/1 (N. Kumar Chhabra & Co.). At internal page 15 of this report, it is mentioned as under : "The letter of insured dated 29.3.1996 states that stocks covered under the within mentioned policy has been transferred from the said policy to the Cold Storage known as M/s. G.M.P. Finishing Mills Cold Storage. But as per records of M/s. Saraswati Cold Storage there were no transfer of stocks of insured on 29.3.1996 or on nearby dates. (Annex, vii). The records of Punjab Cold Storage and Ice Factory also do not Reflect any transfer of stocks of insured on 29.3.1996 (Annex, viii)."

In para 8, it is mentioned as under : "xxx xxx xxx It also indicates that the stocks of Red Chillies, on lien to the Bank, having Bank''s insurable interest, was still lying at Punjab Cold Storage and Ice Factory on the day of fire." It is on the basis of this report that the stand has been taken by the Insurance Company that factually no such stocks from the two Cold Storages were transferred to the Cold Storage of opposite party No. 1 on or around March 29, 1996. The stand taken by the complainant in the present complaint appears to be that from time- to-time the complainant purchased stocks of Red Chillies vide different bills Annexure A14 to A73. As per details given in Annexure A13 such stocks were stored at the Cold Storage of opposite party No. 1. Reference be made to the Index of giving details of such bills. In Annexure A13, it is mentioned as under: "The details of Lal Mirch purchased from the market Mandi Bhagtanwala and after that the same was taken to complainant''s godown and after preparing the lot, the same was stored in the Cold Storage of the opposite party No. 1."

This would show that the stand taken up by the complainant that the stocks were transferred from the two Cold Storages to the Cold Storage of opposite party No. 1 is absolutely belied. Since stocks stored in the Cold Storage of opposite party No. 1 were not insured by taking any third policy. Only an attempt was being made to defraud the Insurance Company by projecting that the stocks from the two Cold Storages referred to above, which were covered under respective insurance policies were being transferred to the Cold Storage of opposite party No. 1 in March, 1996 for which endorsement on the policy was being taken. Since factual position is otherwise, no benefit can be derived by the complainant on the basis of alleged endorsement, which was obtained in contravention of the fact or in other words projecting false statement of facts.

AT this stage it may further be observed that against the Insurance Company compensation was being claimed on account of damage caused to 984 bags of Red Chillies. The assessment was got made from the Surveyor N. Kumar Chhabra and Co. as would be indicated in the report Annexure OP 2/1. The compensation for 660 + 939 bags, total 1599 bags was got fixed. Since the stocks transferred was less than that, proportionate compensation was reduced. The policy of insurance was stated to be of Rs. 12 lacs whereas compensation for 1599 bags of chillies was stated to be Rs. 17,61,161.03. The loss which was covered by the policy was stated to be Rs. 4,92,803/-. This would show that in fact total stocks of the complainant of Red Chillies in 1599 bags was being projected. In the versions submitted by opposite party No. 1, it is specifically stated that unaffected stocks were returned to the complainant although before the Surveyor it was asserted that the entire stocks of the complainant were destroyed and none was returned to the complainant. Reference be made to the FIR, copy Annexure A81 wherein partner of opposite party No. 1 admitted that 984 bags of the complainant were lying stored and none was returned. Alongwith the version submitted by opposite party No. 1, photo-copies of receipts issued on behalf of the complainant were produced of return of unaffected bags of Red Chillies after the alleged fire. The total number of bags returned as per these receipts Annexure R1 to R10 are 697. On behalf of opposite party No. 1, affidavit of Arun Behl, its partner, was produced. It is alongwith that affidavit that receipts Annexures R1 to R10 were produced. The complainant in his affidavit or evidence produced did not deny the genuineness of these receipts. This would further support the contention of Counsel for the Insurance Company that the complainant has not approached this Commission with clean hands and the entire attempt was to defraud the Insurance Company. We find merit in this contention and decide the two questions, Nos. 1 and 2, in favour of the Insurance Company and against the complainant holding that the stocks of the complainant lying at the Cold Storage of opposite party No. 1 were not insured or covered under the policy and the endorsement obtained by the complainant was on incorrect facts and is not binding. There was no deficiency in rendering service on the part of the Insurance Company in not settling the claim of the complainant. The complaint against the Insurance Company deserves to be dismissed and we order accordingly. Point Nos. 3, 4 and 5. These points relate to the deficiency in rendering service on the part of opposite party No. 1. As far as occurrence of fire in the Cold Storage of opposite party No. 1 is concerned, it is not being disputed. According to the complainant''s case, cause of fire was short circuiting of the electricity. The wiring was not up to the standard quality. According to the evidence produced by the opposite party No. 1, report of the Fire Brigade Officer, Amritsar (Annexure R11), cause of fire was unknown. ''Be that as it may, it was incumbent upon opposite party No. 1 with whom the goods were entrusted for safe custody in the Cold Storage to explain how fire had occurred. Otherwise, non-delivery of the stocks per se would amount to deficiency in rendering service, the same having been destroyed in the fire while in custody of opposite party No. 1.

THE argument was addressed that in the absence of any cause of fire being available, it should be considered as an act of God for which opposite party No. 1 cannot be held responsible. We are afraid that this contention cannot be accepted. In spite of the fact that some fire-fighting equipment was available as is stated in the version submitted by opposite party No. 1, it was expected of the opposite party No. 1 to explain as to how the fire ignited. It is not the case pleaded that there was lightning, which resulted in causing fire in the Cold Storage or any other cause over which the opposite party had no control, which could be described as an act of God. THE usual modes of ignition of light/fire being creation of spark resulting in fire. This could be either by act of man i.e. igniting the match box or lighter or throwing away smoking cigarette bud or Bidi etc. or by combustion the fire could ignite, which is not the case of the parties in the present case and the third source of fire is only by lightning in the sky which could only be treated as an act of God. In the absence of any evidence in this respect, the opposite party No. 1 has to be held negligent. THEre is evidence of taking steps for preventing the fire after it had set on, for extinguishing it. No doubt it is stated that within few minutes the fire was controlled by requisitioning the Fire Brigade. But the fact cannot be lost sight of that in this process, stocks of Red Chillies of the complainant and others were destroyed for which opposite party No. 1 has to be held to be responsible. At this stage, it may further be observed that another complainant had filed a complaint before the District Forum against the Cold Storage for the damage caused to his stocks by the said fire and the complaint was allowed. The contention of the opposite party that it was on account of act of the God was repelled. Further comment at this stage is not being made as it was stated that appeal against that order Annexure A83 is pending in this Commission. As and when such appeal comes for discussion, the same would be decided on its own merits and evidence produced in that case. In the present case, it is therefore, held that opposite party No. 1 was deficient in rendering service in not returning the entire stocks of Red Chillies stored in the Cold Storage. Such stocks were destroyed on account of negligent act of opposite party No. 1. At this stage, it is required to determine as to how much stocks belonging to the complainant in fact were damaged for which the complainant is to be compensated. The complainant relies upon Annexure A81, FIR registered at the instance of Rakesh Behl, partner of opposite party No. 1. In the FIR, it was stated that 984 bags of Red Chillies belonging to the complainant-firm were in the Cold Storage and none of the same was returned, meaning thereby all these bags were destroyed. In fact in the FIR details of all the stocks of different persons were given mentioning therein the number of bags returned which were not affected and the remaining which were damaged. On behalf of opposite party No. 1, it is explained that Rakesh Behl was a sleeping partner and was not fully conversant with the facts of the case and the facts given in the FIR should not be treated as admissions made by opposite party No. 1, which otherwise have been proved to be incorrect. There is force in this contention. When parties have led detailed evidence, it is not appropriate to base finding on one of such piece of evidence to be treated as conclusive. In our view, the facts given in Annexure A81, copy of the FIR cannot be taken as true for the purpose of determining compensation payable to the complainant. In view of the fact that other convincing and clinching evidence has been produced by opposite party No. 1 in the form of receipts of return of unaffected bags of Red Chillies, alongwith the versions submitted by opposite party No. 1, Annexures R1 to R10 (total bags 697). Since the complainant has not controverted this piece of evidence of return of bags to the complainant - firm, the same has to be taken into consideration while coming to the conclusion about the total number of bags of Red Chillies belonging to the complainant, which were destroyed.

TAKING into consideration that 984 bags of Red Chillies were stored the Cold Storage of opposite party No. 1, which belonged to the complainant as is apparent from Annexure A81, the number of bags having been returned as per Annexures R1 to R10 (697 bags), the remaining bags of the complainant which got damaged were in fact 287 bags. It is only on account of damage caused to such number of bags that the complainant deserves for compensation. At this stage, it may further be observed that the complainant even in his case against opposite party No. 1 has not approached this Commission with clean hands. All attempts were made to confuse the issues and put up incorrect pleas in order to extract huge compensation from opposite party No. 1.

FOR 287 bags of Red Chillies belonging to the complainant which were destroyed as found above, compensation is to be determined which would be payable to the complainant. Divergent pleas regarding value of the Red Chillies have been put forth by the complainant as well as by opposite party No. 1 with respect to the rate. It is not considered necessary to refer to the same. The benefit of Surveyor''s report can be taken for calculating or determining the loss suffered by the complainant in respect of 287 bags of Red Chillies. The Surveyor in his report OP 2/1 applied average of 26.54 kgs. of Red Chillies weight of a bag and applied rate of Rs. 41.50 per kg. Applying the same in the present case, it would be 287 bags x 26.54 kgs. = 7616.98 kgs. x 41.50=Rs. 3,16,104.67. The complainant is, therefore, held entitled to the amount of Rs. 3,16,104.67, loss suffered on account of fire of his Red Chillies lying in the Cold Storage of opposite party No. 1 with interest @ 18% p.a. with effect from the date of fire i.e. April 24,1996 till payment, Point Nos. 3, 4 and 5 are decided accordingly. Relief. For the reasons recorded above, the complaint filed against the Insurance Company is dismissed with costs of Rs. 2,000/- to be paid by the complainant to the Insurance Company within one month from receipt of copy of the order. The complaint is allowed against opposite party No. 1 - Cold Storage, who is directed to pay Rs. 3,16,104.67 with 18% p.a. interest thereon w.e.f. 24.4.1996 till realisation along with costs of litigation of Rs. 2,000/-. The directions be complied within one month from receipt of copy of this order. Complaint against Insurance Company dismissed with costs. Complaint against opposite party No. 1 allowed with costs.