Shree Shankar Sahakari Sakhar Karkhana Ltd vs New India Assurance Co. Ltd

C. Viswanath, J

The present Appeal is filed by the Appellant under Section 19 of the Consumer Protection Act, 1986 against Order passed by the State Consumer Disputes Redressal Commission Maharashtra (hereinafter referred to as the "State Commission") in Complaint No. 10/60 dated 12.03.2012.

In the Complaint Case, it was stated that Appellant/Complainant had taken fire insurance policy from the Respondent/Opposite Party as to provide insurance cover to storage of bagasse for the period from 23.01.2009 to 22.01.2010, after making payment of premium of Rs.42,472/- with sum assured of Rs.1,00,00,000/-. The description of the risk cover was stock of bagasse in open outside factory with add on risk of spontaneous combustion. During the validity period of the Insurance Policy, on 12.03.2009 fire occurred at about 12:45 in the afternoon, wherein insured baled bagasse caught fire and was burnt. Complaint was lodged by the Security Officer-Shri Sudhir Khaserao Pawar of the Appellant on the same day. With the help of local police station, efforts were made to extinguish the fire by requisitioning the fire brigade from nearby sugar factories, but the entire bagasse stored got destroyed in the fire. The Appellant immediately informed the Respondent Insurance Company about the incident. Preliminary survey of the incident was conducted by the Surveyor deputed by the Respondent, followed by detailed survey by another surveyor. Thereupon, the Complainant filed insurance claim, payable under the policy, on 17.03.2009 for Rs.78,03,109/-. The Respondent repudiated the claim on the ground that the claim was not covered under the terms and conditions of the policy. Aggrieved by the repudiation of the claim, Appellant has filed the consumer complaint before the State Commission.

The Respondent contested the Complaint by filing written version, whereby it was stated that the "Stock of bagasse in open outside factory compound" was covered under the policy. In the instant case, according to survey report the bagasse i.e. in loose and baled form stocked inside the factory compound was damaged by fire. Therefore, the loss claimed by the Appellant was outside the scope of the policy and was repudiated, since the bagasse destroyed by fire was situated inside and not outside the factory compound as specifically mentioned in the policy was not covered and held not eligible for insurance claim.

The State Commission, vide order dated 12.03.2012, partially allowed the appeal. Respondent was directed to pay an amount of Rs.35,79,313/- with interest @9% per annum from the date of repudiation of the claim i.e. from 08.06.2010 within 45 days from the date of the order. Rest of the claim of the Appellant was rejected as not specifically allowed. State Commission further found that the policy document in Part-1 i.e. Waste of Category II and III materials under the description of Risk "STOCK OF BAGASSE IN OPEN OUTSIDE FACTORY" was covered. The Counsel for Respondent had not come forward with any explanation as to the meaning of open outside factory, especially when the bagasse was stored in a conventional place. The surveyor calculated loss of all the bagasse destroyed in the fire to the tune of Rs.35,79,313/- as against claim filed of Rs.78,03,109.91/- by the Appellant. The affidavit on behalf of the Complainant of one Shri Dnyandev Vishwanath Karche, working with the Complainant for the last 37 years made a mention about the visit and inspection of the Opponent Insurance Company to the site, before the insurance policy was issued. There was no objection raised and the site was very much within the knowledge of the Opponent Insurance Company. Surprisingly, written version and the affidavit of evidence and also the affidavit of Surveyor are silent on the site visit by the Insurance Company Officer, prior to issue of the Insurance Policy. There was no rebuttal documentary evidence put forward by the Opponent Insurance Company to the contrary. There was, therefore, no reason to disbelieve the contention of the Complainant that the bagasse was stored in the open outside the factory. Respondent failed to appreciate the provision of policy coverage of insurance of the bagasse in right perspective and arbitrarily repudiated the claim of the Appellant, causing deficiency in service in settling the claim.

Being aggrieved by the order of the State Commission, the Appellant filed an Appeal before this Commission.

Heard the Learned Counsel for the Appellant as well as Respondent. They reiterated their contentions as stated above. We have also carefully gone through the evidence placed on record.

The Appellant is a cooperative society carrying on the business of manufacture of white crystal sugar from sugarcane at Solapur, Maharashtra. After crushing sugarcane dry bagasse is a byproduct, which was insured for a sum of Rs.1,00,00,000/- for risk of fire and allied perils as per standard fire and material damage policy with spontaneous combustion, with a premium inclusive of sales tax at Rs.42,472/- for the period 23.01.2009 to 22.01.2010. Fire took place on 12.03.2009 at 12:45 P.M. and the baled bagasse got burnt. The Appellant informed the Respondent as well as the Police immediately. The Appellant lodged a claim for Rs.78,03,109/- with the Respondent Company on or about 17.03.2009. The Respondent appointed a surveyor to conduct a preliminary survey and later another to carry out final survey. Both the surveyors submitted their report. The survey report dated 19.03.2009 states that 5957 MT of baled bagasse was assessed as burnt by the fire. The State Commission after hearing both the parties, vide the order dated 12.03.2012, directed the Respondent to pay Rs.35,79,313/- with the interest @9% from the date of repudiation of claim as against the claim of the Appellant.

Aggrieved by the order of the State Commission, the Appellant has filed appeal before this Commission on the ground that the State Commission allowed only Rs.35,79,313/- as against the claim of Rs.95,23,336.91ps. inclusive of interest and damages for harassment. The Surveyor in his report dated 19.03.2009 assessed the loss of 5957 MT baled bagasse valued at Rs.73,77,255/-, deducting the salvage value of Rs.2,29,904/-, the figure came to Rs.71,47,351/-. The total stock as on the date of loss, as assessed by the surveyor, was Rs.2,02,63,376/- as against the sum assured of Rs.1,00,00,000/-. Hence the surveyor arrived at the net loss after adjustment as Rs.35,27,226/-. The State Commission adopted the net loss assessed by the Surveyor and ordered payment of Rs.35,79,313/- with interest @9% p.a. from the date of repudiation of claim within 45 days from the date of the order. The State Commission arrived at the above compensation based on the report of the surveyor, who has correctly assessed the net loss payable after conducting detailed survey in the presence of the Complainant's representative. There is no reason to find any fault with survey report which is an important piece of evidence and the State Commission was justified in considering the survey report for settlement of the claim of the Complainant.

In view of the above, the present Appeal is dismissed and order passed by the State Commission is confirmed.