Priya Industries vs National Insurance Co Ltd

COMPLAINANT/Petitioner which deals in business of woolen Felt and Carnatting and Carpet took fire insurance policy on 14.9.2000 from the Respondent Insurance Company under cover note No. JRO 061802 covering the risk of Rs. 25 lakh in respect of building, plant and machinery and stock for the period from 14.9.2000 to 13.9.2001. Petitioner got the policy renewed for the next year from 14.9.2001 to 13.9.2002. On 24.3.2002, fire broke out in the factory of the Petitioner because of short circuit as a fault of which Petitioner suffered loss of Rs. 19,40,556. Petitioner gave the intimation regarding the said incident to the Respondent Insurance Company. Respondent appointed Surveyor, Rajesh Kumar Goyal to assess the loss. Petitioner gave the necessary documents and papers demanded by the Surveyor. As per Petitioner''s estimate the loss under various heads was as under: (i) Building Loss Rs. 7.50 lakh (ii) Plaint and Machinery Loss Rs. 7.00 lakh (iii) Raw Material and Finished Goods Rs. 7.50 lakh

RESPONDENT Insurance Company informed the Petitioner that it had settled the claim on the basis of report submitted by the Surveyor for Rs. 6,74,539 in full and final settlement. Petitioner accepted the sum of Rs. 6,74,539 under protest and filed the complaint seeking the following further amounts: S. No. Particulars Amount of loss (in Rs.) 1. Actual Loss Rs. 19,40,556 - Rs. 6,74,539 received under protest. Remaining loss suffered in fire Rs. 12,66,017 2. For delay in sanctioning amount Rs. 1,00,000 3. The mental agony Rs. 1,00,000 4. Litigation expenses Rs. 11,000 Total: Rs. 14,77,017

PETITIONER claimed this amount on the basis of reports (Annexures P-10 and P-11) given by Sanjay Sharma, Architect and Vijay Sharma, Civil Engineer respectively. After hearing the parties, District Forum dismissed the complaint. District Forum accepted the report submitted by the Surveyor and rejected the reports (Annexures P-10 and P-11) submitted by the Architect and the Civil Engineer on the ground that they were not authorized persons.

AGGRIEVED by the order passed by the District Forum, Petitioner filed the appeal before the State Commission which has been dismissed by the impugned order.

COUNSEL for the Petitioner contends that the Surveyor assessed the loss to the factory building/shed at Rs. 2,17,392. That the Surveyor had assessed this loss on the basis of the opinion obtained by him from the Civil Engineer whose report has not been placed on record. That in the absence of opinion relying upon which the Surveyor assessed the loss at Rs. 2,17,392 for factory building/shed, cannot be accepted. According to him, the report submitted by the Civil Engineer (Annexure P-11) is a detailed and reasoned report based on evidence and the same should be accepted. As against this, learned Counsel for the Respondent has supported the reasoning and the conclusion arrived at by the Fora below.

COUNSEL for the parties have been heard. Surveyor had assessed the net loss head-wise in the following manner: Head Insured Amount Amount Claimed Amount Assessed (in Rs.) (in Rs.) (in Rs.) Stock of finished goods, semi- finished and raw material 8,00,000 7,28,781 3,51,802 Factory building/ shed 8,00,000 7,22,000 2,17,392 Plant and machinery 9,00,000 4,55,170 1,01,500 Removal of salvage of stocks 14,605 14,605 Installation of machinery 20,000 Nil 6,85,299

IN the present Revision Petition, Petitioner has confined his claim to the loss to the factory building/shed only. He does not press his claim under the other heads. The Surveyor under the heading "Factory Building", assessed the loss to the factory building by observing as under: "I have visited to factory at the time of occurring of fire and seen that the fire originate from factory main shed came outside where the most of scrap were lying below the tin shed. There were stake or around 10 ft. high in all the open place outside the factory shed. The main fire was near to boundary wall which was controlled by breaking boundary wall. The main factory shed was around 30 ft. away from boundary wall. At the time of my visit when fire was in peak, there was smoke inside the factory shed."

IT would be seen that the Surveyor assessed the loss on the basis of opinion obtained by him from the retired Civil Engineer. The retired Civil Engineer has not been named. The opinion obtained from the Civil Engineer had also not been put on record. As against this, as per report submitted by the Civil Engineer (Annexure P-11) who was in Government service at the relevant time, the loss to the factory building/shed was to the tune of Rs. 7.22 lakh. He assessed the loss in two parts (a) for dismantling the parts which had been damaged in the fire at Rs. 34,283 and (b) the costs of new construction including the bricks, cement, rubble stone, steel, plastering, flooring, etc. at Rs. 6,88,070. The Fora below have rejected this report by observing that the Civil Engineer was not the authorized person to assess the loss which cannot be accepted. Insurance Company had got the loss assessed by the Surveyor. The report submitted by the Surveyor is an important piece of evidence and it has to be given due weight. But as observed by the Hon''ble Supreme Court in the case of New India Assurance Co. Ltd. v. Pradeep Kumar, IV (2009) CPJ 46 (SC)=IX (2009) SLT 17=IV (2009) ACC 356 (SC)=(2009) 7 SCC 787, the same is not sacrosanct and can be displaced by leading cogent evidence. In order to rebut the report of the Surveyor, Petitioner was entitled to lead its own evidence. Petitioner had in rebuttal filed the report (Annexure P-10) of the Architect and report (Annexure P-11) prepared by the Civil Engineer assessing the loss suffered by him. The Civil Engineer filed his affidavit in support of the report submitted by him. Respondent Insurance Company did not cross-examine him. The Surveyor appointed by the Respondent Insurance Company had assessed the loss to the building/shed on the basis of the opinion obtained from the Civil Engineer. Surveyor did not attach the opinion of the Civil Engineer with his report. The same has also not been placed on record. In the absence of the opinion of the Civil Engineer relying upon which the Surveyor assessed the loss at Rs. 2,17,392, the loss assessed by the Surveyor cannot be accepted. The loss assessed by the Surveyor is conjectural and based on no evidence. Surveyor has not given the basis of assessing the loss at Rs. 2,17,392. As against this, Civil Engineer in his report (Annexure P-11) had given the basis for his assessment of the loss item-wise. He assessed the cost of dismantling the damaged building/shed as well as the cost of re-construction of building item-wise on the PWD rates prevailing at the relevant time. We find the report submitted by the Civil Engineer as an expert to be more trustworthy and authentic then the report submitted by the Surveyor.

THE Civil Engineer has assessed the loss to the factory building/shed at Rs. 7.22 lakh whereas the Surveyor has assessed the loss at Rs. 2,17,392. Petitioner would be entitled to Rs. 7.22 lakh for the loss under the heading of building factory/shed. Petitioner has been given the sum of Rs. 2,17,392 under the heading of factory building/shed. Petitioner would be entitled to the difference between the two which comes to Rs. 5,04,608.

FOR the reasons stated above, the Revision Petition is allowed, order of the State Commission is modified and the Respondent is directed to pay the sum of Rs. 5,04,608 to the Petitioner along with interest @ 9% p.a. w.e.f. date of filing of complaint till realization. Revision Petition allowed.