BRANCH MANAGER, UNITED INDIA INSURANCE COMPANY LTD. vs JAGANNATH COCONUT STORE

BOTH these appeals arise out of the decision of the District Forum, Puri in C.D. Case No. 61 of 1995. M/s. Shree Jagannath Coconut Store situated at Sakhigopal represented by its proprietor Sri Gangadhar Behera was the complainant in the aforesaid case. He claimed a compesnation of Rs. 65,000/- (Rupees sixty five thousand) from the United India Insurance Company alleging that the premises where the business was being carried on was covered by a policy of insurance for the period from 31.3.1994 to 30.3.1995. The coconuts stored in the godown were damaged and washed away during heavy rains in the month of August, 1994 when the godown premises was seriously affected by flood water. The complainant reported the matter to the Insurance Company and claimed a compensation of Rs. 25,000/- (Rupees twenty five thousand). His further averments in the complaint petition are that on 18.8.1994 one Mr. Pradip Banerjee came to the godown premises for making an assessment of loss suffered by the complainant. It is alleged that during his visit the flood water had not receded which the Surveyor also noticed during his inspection. The Surveyor advised the complainant to produce the Sale Register, Purchase Register, Stock Register, copy of the insurance policy and the copy of the F.I.R., if any for the purpose of estimation of the loss suffered by the complainant. Though the complainant requested the Insurance Company to inspect the records in his godown premises, the Insurance Company turned deaf ears to such requests. After the flood water receded, the complainant was in a position to assess the actual loss and in his application dated 15.12.1994 revised his claim by enhancing the same to Rs. 65,000/- (Rupees sixty five thousand). It is also alleged that the Insurance Company settled the loss at Rs. 132/- (Rupees one hundred thirty two) on 19.12.1994 which according to the complainant is grossly inadequate, for which he did not receive the said amount. He filed the application before the Consumer Forum for appropriate redressal.

THE Insurance Company filed a show cause denying the allegations made in the complaint petition. It was stated therein that the policy taken by the complainant was a policy of shopkeepers'' which covers the articles inside the premises. THE Surveyor, therefore, made an assessment of the loss sustained by the complainant that on account of damage to the coconuts which according to him were stored inside the godown and not outside the godown. It was also denied that the estimate of the loss by the Surveyor was justified and as the complainant did not receive the said amount in spite of notice, the claim was closed. The District Forum after hearing both parties and looking to the documents which were placed before it allowed the claim of the complainant awarding Rs. 30,000/- (Rupees thirty thousand) and also awarded a cost of Rs. 500/- (Rupees five hundred). Being dissatisfied with the aforesaid order of the District Forum, the Insurance Company has filed C.D.A. No. 421 of 1995, whereas the complainant has filed the other appeal, namely C.D.A. No. 649(A)/95 claiming higher compensation.

We have heard the learned Counsel for both parties at length. The admitted facts of the case are that the complainant''s godown premises was covered by a policy of insurance and the complainant suffered loss due to flood during the period covered by the policy of insurance. The initial question which is required to be decided is as to whether the policy covers the entire premises where coconuts had been stored by the complainant firm or it covers only the coconuts stored inside the house.

DEPENDING upon the conclusion to be reached on the aforesaid question, it has to be decided as to what was the probable loss suffered by the complainant and whether the settlement of the claim made by the Insurance Company at Rs. 132/- only was with due application of mind. Referring to the policy of insurance, a copy of which is on record, we find that the stock of dry coconuts worth Rs. 3,00,000/- (Rupees three lakhs) had been insured. As against the description of the property insured under the aforesaid policy, it has been clearly mentioned that the stock in trade to the extent of three lakhs of coconuts had been insured. There is no mention in the policy that only the coconuts which were inside the house used as godown had been insured. Though the size of the godown has not been reflected in the complaint petition, the Surveyor in his report indicated its size to be 12'' x 50''. The Surveyor has also indicated it to be a thatched house on the date of survey, that is, 18.8.1994 and he found that there was an enclosure made of bamboo sticks over which dry coconuts were floating in 1''6" depth of water. Since it was outside the godown (thatched house), he did not make any assessment of the coconuts stored outside the said godown house and confined his assessment to the coconuts inside the thatched house. The house according to him is not a "A" Class construction and the depth of water inside the said godown house at the time of his visit was " to 1". He however verified the Stock Register and the Sale Register and found that the closing stock of July, 1994 was 1,87,835 (one lakh eighty seven thousand eight hundred thirty five) coconuts, the price of which will be Rs. 4,24,507/- (Rupees four lakh twenty four thousand five hundred seven) calculated at the rate of Rs. 2.26 p. per coconut. By the time the Surveyor went for inspection the claim before the Insurance Company was Rs. 25,000/-. The Surveyor found that 10% of the coconuts stored inside the godown which came into contact with water had been damaged out of which 68 coconuts had been partially damaged. He calculated the loss at Rs. 132/-. It appears to us that a clarification was sought for by the Insurance Company in reply to which the Surveyor in his letter dated 8.3.1995 stated that the concerned godown was below the road level and the drainage system was not maintained properly by which ordinary rain water could enter into the godown premises. He also observed that the insured had not taken proper precautions for the protection of his coconuts violating the condition of the policy. He further stated that in the absence of relevant documents which he wanted the insured to be produced before him, he assessed the loss as per physical verification and oral statement of the consignee. After carefully looking to the policy of insurance we have no hesitation to conclude that the entire premises used for stocking coconuts was covered by the policy of insurance. As already stated in the proposal form the stock of three lakhs of dry coconuts had been insured and it is probably not possible for three lakhs of coconuts to be stored inside a godown premises having the dimension of 12'' x 50''. That apart the proposal form clearly mentions the premises where the aforesaid amount of coconuts had been kept as stock in trade. It is, therefore, not acceptable that the coconuts stored in the godown house only were insured and not the stock inside the enclosure and outside the godown house. The Surveyor clearly writes in his report that he did not make any assessment of the coconuts affected outside the godown house but which were stored inside the boundary of the premises for the reason that it was a shopkeepers'' insurance policy and the coconuts stored outside the godown house are not covered by the policy of insurance. This analysis being erroneous, the report of the Surveyor that only 10% of the coconuts inside the godown house were affected by flood cannot be the basis of assessment. The Insurance Company having blindly accepted the report of the Surveyor the same amounts to non-application of mind and, therefore, available to be questioned before the Forum.

THE next question as already stated is the assessment of loss suffered by the complainant due to heavy rain and flood. Soon after the claim was lodged, the Surveyor was deputed who found one feet to one half feet water standing over the open field outside the godown house inside the bamboo enclosure. He also found half inch to one inch of water standing inside the godown house. Thus the allegation of the complainant that the stock of dry coconuts was seriously affected cannot be doubted. THE Surveyor in his report stated that he had verified the Stock Register and Sale Register and its closing stock of July, 1994 was 1,87,835 coconuts. Some of these coconuts which were available on the date of flood might be inside the godown house and some outside the godown house, but inside the bamboo enclosure. THE complainant in his letter dated 10.9.1994 informed the Insurance Company that it was difficult to carry all the registers to the office of the Insurance Company due to its bulk but it would be easier to inspect the records in the business premises at Sakhigopal. In that letter the loss earlier estimated by the complainant was not revised nor anything was said about the same. It is only on 15.12.1994 that the complainant wrote a letter to the Insurance Company that subsequently they verified their stock and came to a conclusion that 21,000 numbers of coconuts had been damaged the cost of which would not be less than Rs. 65,000/-. THE District Forum in its final order rightly discarded the assessment of the loss made by the Insurance Company at Rs. 132/- only but the Forum does not disclose the basis of estimating the loss at Rs. 65,000/-. The complainant in his complaint petition has mentioned that he requested by a letter dated 10.9.1994 to inspect the records as by then the flood water had been cleared from the godown premises. Thus it was possible for the complainant to estimate the actual loss suffered by him after the flood water receded and could have revised his claim at least by the middle of September, 1994. We find that the complainant had for the first time raised his claim from Rs. 25,000/- to Rs. 65,000/- in the middle of December, 1994, that is about three months after the flood water receded from the premises of the complainant. The aforesaid enhancement of claim cannot be said to be genuine. Before the District Forum, the complainant did not produce any Stock Register or other records from which the actual loss could be calculated. Taking a liberal view of the matter it can be said that because of the inaction of the Insurance Company in not making assessment of the loss of coconuts outside the godown house on a flimsy plea that it was not covered by the policy of insurance, the actual loss could not be estimated at the relevant time. We, therefore, accept that the loss suffered by the complainant was Rs. 25,000/- (Rupees twenty five thousand) which he had initially claimed and on the basis of which the Insurance Company had sent a Surveyor to assess the loss. Subsequent escalation of the claim being without any basis the same cannot be allowed. That apart the complainant cannot be allowed compensation more than what he had claimed initially as no justification for the enhanced claim has been established before the Consumer Forum. We, therefore, modify the order of the District Forum by allowing the claim of the complainant at Rs. 25,000/- (Rupees twenty five thousand). The award of cost of litigation allowed by the District Forum at Rs. 500/- (Rupees five hundred) however remains unchanged. On the discussion made above, it has been made abundantly clear that the complainant was not entitled to more than Rs. 25,000/- and, therefore, we do not find any merit in C.D.A. No. 649 (A)/95 and accordingly the same is dismissed.

IN the result, we allow C.D.A. No. 421 of 1995 in part by reducing the compensation by Rs. 5,000/- (Rupees five thousand) awarded by the District Forum and dismiss C.D.A. No. 649(A) of 1995. The aforesaid amount be paid within two months from the date of receipt of the order, failing which the same will carry interest at the rate of 12% per annum from the date of default till the date of payment.