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Judgment
This revision petition has been filed by the petitioner United India Insurance Company Ltd. against the order dated 07.05.2013 of the State Consumer Disputes Redressal Commission, Kerala, (in short 'the State Commission') passed in Appeal No.133 of 2012.
Brief facts of the case are that on 23.09.2009, respondent has obtained 'Standard Fire & Special Perils Policy' in respect of stock in business premises from the petitioner insurance company by paying premium of Rs.2,117/- for the period commencing from 23.09.2009 to 22.09.2010 vide policy No.100804/48/09/34/00000949 for the sum insured for Rs.25,000/- towards furniture and Rs.4,00,000/- towards stock. The business was being conducted with the financial assistance of the Syndicate Bank by availing a loan of Rs.2,00,000/-. On 21.06.2010 at about 7:30 pm the complainant/respondent closed the abovesaid shop and went to his house and at about 09:30 pm, the complainant/respondent was informed by one Basheer who was running foot wear business near the shop of the complainant about the occurrence of fire in the shop and the complainant/respondent reported that accidental fire which caused damage to stocks and furniture kept in the shop. The said fire has reportedly occurred by electric short circuit. The insurance Company deputed a surveyor, who assessed net loss to the tune of Rs.33,387.89. The complaint was resisted by filing the written statement. It was stated by the Insurance Company that the surveyor has correctly assessed the loss taking into account all relevant facts, dates and circumstances and submitted his report. The District Consumer Disputes Redressal Forum, Kasaragod, (in short 'the District Forum') allowed the complaint and directed the Insurance Company to pay Rs.33,388/- along with interest @9% from the date of complaint.
Aggrieved by the order of the District Forum, the complainant preferred an appeal bearing No.133 of 2012 before the State Commission. The State Commission allowed the appeal and directed the opposite party to pay the claim amount deducting the salvage value from the claim amount of Rs.3,00,000/-. The non-compliance will entitle the appellant to claim interest @9% from the date of order.
Aggrieved by the order of the State Commission, the present revision petition has been filed by the opposite party/Insurance Company.
Heard the learned counsel for the parties and perused the record. Learned counsel for the petitioner stated that the surveyors are appointed under the Insurance Act, 1938 and their report cannot be brushed aside without any cogent reasons. The State Commission has rejected the report of the surveyor without any reasoning. The State Commission has accepted the claim on the basis of a certificate issued by the Syndicate Bank wherefrom the loan of Rs.2,00,000/- was taken by the complainant, mentioning that the bank verified stock of Rs.4,00,000/- on 31.03.2010. Learned counsel argued that the surveyor in his report has clearly stated about inquiries with the bank as follows:-
"Verification and Analysis of Documents Provided:
Vide Surveyor's letter dt. 24/06/10 and again reminded vide letter dt. 12/08/10, Insured was advised to provide all the required documents. Copies of both the letters are attached. However, Insured has not provided the Stock Register or inventory of stock held, stating that all the documents are lost in the fire. Inquiry with the bank has revealed that only the originally declared stock list is held in their records.
Hence, it is reasonably concluded that the above mentioned purchase bills include all the purchases made by the auto parts trader during the recent past. The purchases made against these bills have been analysed in Annexure 'C' in order to arrive at the expected stock balance in respect of each item claimed by the Insured as damaged and lost.
It will be observed that almost all the items in the claim list such as Engine Oil, Gear Oil, Grease, fan belts, bulbs etc. are recurring purchases made by the trader for periodical replenishment of the stock. The purchases have been made at certain intervals depending on the sale in the shop. Hence, the stocks do not accumulate, as in any similar retail trading business. The analysis clearly show that the expected stock balance is far less than the quantities claimed by the Insured.
In conclusion, it is inferred that quantities claimed by the Insured are highly exaggerated and without any basis. In the report of the Fire & Rescue Station, it is mentioned that the team has worked only for 7 minutes to fight the fire and that they have remained in the location only for 15 minutes in all. My physical inspection also reveals that the fire was minor in nature, as also visible in the photographs. Hence, quantities physically found as damaged during the survey inspection, in fact, represent the actual loss suffered by the Insured."
Inspite of clear observations by the surveyor, the State Commission has accepted the certificate given by the bank in respect of the verification of the stock on 31.03.2010. It was argued that the bank would obviously be interested in getting the claim of the complainant allowed to the maximum so that the bank loan is recovered to the maximum limit. The District Forum has not given any importance to the certificate because no supporting evidence was filed by the complainant. The District Forum has clearly recorded the same in its order. It was further mentioned by the counsel for the petitioner that even if the stock position is taken to be Rs.4,00,000/- on 31.03.2010, it is difficult to assess the stock position on the date of fire i.e. 21.06.2010 because the complainant did not produce any register of sale or purchases in respect of various items of stocks and therefore, the stock position given on 31.03.2010 cannot be relied upon to reach to any conclusion regarding the actual stock as on date of fire. The District Forum in its order has further recorded that the joint verification of physical stock was carried out by the surveyor and complainant during the survey on 23.06.2010, which contained the details of damaged items as well as the remaining items. When the complainant has himself verified the stock in the joint verification, the report of the surveyor cannot be denied. The surveyor has taken into account all the items of these two lists. Thus, any list given to the bank roughly before three months cannot be accepted for assessing the loss.
It was requested that the order of the State Commission be set aside and the order of the District Forum be upheld.
Learned counsel for the petitioner further stated that the State Commission has relied upon the certificate given by the bank, however, this certificate has been obtained by the complainant only after the survey report was submitted and therefore, it is only an afterthought by the complainant who has any how obtained this certificate from the bank to counter the report of the surveyor. Learned counsel further mentioned that the Insurance Company could not object to this certificate in its written statement as the same was not filed with the complaint. Even if the State Commission has not agreed with the report of the surveyor, the State Commission should have examined the claim of the complainant for Rs.3,00,000/-. The State Commission has not given any calculation in respect of award of claim of Rs.3,00,000/-. The complainant has also not filed any certificate of any Government agency like the sales tax or service tax department confirming his sale or purchases. Thus the claim of the complainant was not supported by any documents which could have been relied and the State Commission has accepted the total claim as claimed by the complainant without any reasoning.
To support his arguments, learned counsel for the petitioner referred to the following judgment:-
Ramku Bai Jain Vs. United India Insurance Co. Ltd. & Anr., RP No.2049 of 2010, decided on 31.05.2016 (NC). It has been held that:
"17. From the above pronouncements, it is clear that the surveyors are appointed under the Insurance Act, 1938 and their reports have to be given due importance in deciding insurance claims. In the present case, no specific lacunae have been pointed out against the final report of the surveyor. State Commission has rightly observed that the claim could not be settled because of non-submission of bills of repairs against the estimated repairs. The submission of actual bills for repairs could have been the best counter to negate the report of the surveyor, but the same have not been produced because the vehicle could not be repaired for want of money as allegedly claimed by the petitioner. In such circumstances, relying on the above judgments, we are of the view that the order of the State Commission is based on correct appreciation of facts, evidence and law on the subject. We thus, find no illegality, material irregularity or jurisdictional error in the order dated 24-02-2010 of the State Commission."
On the other hand, learned counsel for the respondent/complainant stated that the stocks were auto parts and various options of lubricant oil, grease oil which were highly inflammable and were burnt away before the surveyor actually made any list of those items. Learned counsel further stated that the total stock at the time of fire was about Rs.6,00,000/-, however, the claim was submitted only for Rs.3,00,000/-. Obviously, the complainant could not submit stock register as everything was lost in the fire. Learned counsel for the respondent further stated that the complainant had taken a loan of Rs.2,00,000/- from the Syndicate Bank and the bank has verified stock of Rs.4,00,000/- on 31.03.2010. The State Commission has relied upon this certificate given by the bank and it was not disputed by the opposite party/Insurance Company and this fact is recorded by the State Commission. The State Commission has clearly not agreed with the surveyor report as it was a faulty report and the assessment was not properly done. It is not necessary to accept the report of the surveyor even if it is unjust and improper.
I have given a careful consideration to the arguments advanced by learned counsel for the parties and have examined the material on record. First of all, I agree with the learned counsel for the petitioner that the surveyors are appointed under the Insurance Act, 1938 and they are supposed to be an independent surveyor whose report is to be given due weightage for settlement of the insurance claim. The State Commission has not given any reasoning for disregarding the report of the surveyor and accepting the certificate of the Syndicate Bank wherein the stock position has been verified by the bank on 31.03.2010 and has been stated to be Rs.4,00,000/- . Coming to the surveyor report, it is seen that the surveyor has observed the following:-
"Inside the shop room, the three walls and the ceiling were not found affected by the deposit of smoke or soot. All the showcases inside the shop were also found unaffected, except that some PVC containers in the front were slightly affected by heat of the fire. The fire was in fact confined to a small area right behind the rolling shutter where a wooden furniture having racks was placed across on which stocks such as oils and greases were lying on display. The wooden furniture was the first and only item to catch fire and the half burnt furniture was found thrown outside the shop. None of the oil or grease cans kept on the wooden rack had caught fire. Many of these were also lying around in physically damaged condition, with the lids open, can broken and contents partially spilled out. Had any of these oils or lubricants caught fire, the extent of fire would have been much more than that actually occurred. The burn marks in half the area of the shutter indicate that only the wooden rack/furniture has ignited and that the fire was detected immediately and put off without any delay. Fire Force team have taken only 7 minutes to extinguish the fire.
All the stocks found lying around in physically damaged condition, due to distortion of the PVC containers by heat and contamination by water/wetness, were collected, mustered and listed in the presence of the Insured. List of damaged items found was prepared and signed by the Insured on the spot, attached with this report."
The surveyor has further observed that:
"Depreciation:
Stock items are fresh and do not attact any depreciation. For furniture/fixtures which are about 4 years old, depreciation of 20% @ 5% per year, is considered as fair and reasonable."
From the above it is evident that the surveyor has not even allowed the depreciation and has prepared two lists- one for damaged item and another for undamaged items. There lists have been prepared after joint inspection of the stock and the same have been signed by the complainants as well. The description of the fire and damage given in the above paragraph of the surveyor's report reveals that it was minor fire accident and the loss would not have been much. The assessment of the surveyor cannot be disputed without any cogent evidence. There is no stock register available to verify the stocks. Therefore, the surveyor has assessed the loss on the basis of two lists prepared. However, the State Commission has relied upon the certificate of verification of stocks on 31.03.2010 given by the Syndicate Bank. As is clear from the report of the surveyor, there was no verification report available with the bank when surveyor contacted the Bank. Surveyor has observed that the Bank had only the first stock statement available with them, but no up-dation was there. In these circumstances, this verification of stock is not credit worthy as it has been issued after the accident of fire. Obviously, the Bank would benefit for such a certificate, therefore, it seem to have been given.
No error or shortcoming has been pointed out by the complainant or the State Commission, hence I find no reasons to discard the report of the surveyor and insurance claim needs to be settled on the basis of this report. Otherwise also if State Commission was not satisfied with the surveyor's report, then the State Commission should have examined the claim of the complainant. But State Commission has allowed the total claim of Rs.3,00,000/- without examining the same. Thus, order of the State Commission seems to be arbitrary without any cogent reasoning.
Based on the above discussion, the Revision Petition No.3702 of 2013 is allowed and the order dated 07.05.2013 of the State Commission is set aside and the order dated 30.11.2011 of the District Forum is upheld.