Budhanath Patel vs NEW INDIA ASSURANCE CO LTD

THIS revision petition has been filed by Budhanath Patel (hereinafter referred to as the ''Petitioner '') challenging the order of the State Consumer Disputes Redressal Commission, Orissa (hereinafter referred to as the ''State Commission '') in Appeal Nos. 656 & 684/2006 which has ruled in favour of the New India Assurance Co. Ltd. and another (hereinafter referred to as the ''Respondent '').

THE facts of the case as stated by the Petitioner who was the original complainant before the District Forum are that he was proprietor of Lilima Cloth Store at Konark Bazar selling readymade garments which he had set up after taking a financial loan from Bank of Baroda (hereinafter referred to as "Respondent No.2 ") for Rs.1,75,000/-. Petitioner had got the business establishment insured with Respondent/Insurance Company which was valid from 29.01.1999 to 28.01.2000. On 29-30 October, 1999 because of the Super Cyclone that had struck the area, the entire roof of the shop was damaged and taking advantage of the same, some miscreants committed theft of cloth materials worth Rs.13,000/- kept in the wooden rack of the upper room in the business premises. Apart from this, cloth materials worth Rs.1,46,000/- were either partially or completely damaged due to the cyclonic wind and rain. When the impact of the cyclone had receded, Petitioner entered the shop and after assessing the various losses immediately lodged a F.I.R. with the Konark Police Station and also informed both Respondent/Insurance Company and Bank of Baroda (Respondent No.2) about the loss. Petitioner also requested for early settlement of the insurance claim. However, despite this and various reminders, Respondent/Insurance company declined to settle the claim and Bank of Baroda (Respondent No.2) started pressing for return of Rs.3,02,000/- i.e. the amount of loan with interest. Aggrieved by this, Petitioner filed a complaint before the District Forum on grounds of deficiency in service and requested that both Respondents be directed to jointly and severally pay him Rs.3,02,000/- for mental agony and financial harassment. The above contentions were denied by Respondent/Insurance Company who stated that on receipt of the claim, it had deputed a Surveyor for investigating and assessing the loss and after conducting a detailed survey, the Surveyor concluded that the loss due to the theft was Rs.13,000/- and there was no other loss.

THE District Forum after hearing both parties and on the basis of evidence filed before it concluded that apart from the theft of material worth Rs.13,000/- there was evidence of loss of Rs.1,46,000/- as a result of the Super Cyclone which has also been investigated and confirmed by the Police and concluded that Respondent/Insurance Company had illegally and wrongly repudiated the claim and directed it to pay the Petitioner Rs.13,000/- and Rs.1,46,000/- totaling to Rs.1,59,000/- within two months from the date of receipt of the order failing which interest @ 12% per annum will be applicable from the date of repudiation till realization of the entire amount. The complaint against Respondent No.2 was dismissed.

AGGRIEVED by this order, Petitioner and Respondent No.1 filed separate appeals before the State Commission. While Petitioner ''s appeal for enhancement of compensation amount was dismissed, Respondent ''s appeal was partly allowed by reducing the claim awarded by District Forum to Rs.50,000/- including interest. Respondent/Insurance Company was accordingly directed to pay the Petitioner, 50,000/- by 31.10.2007 failing which the operative part of the order of the District Forum will be restored. The relevant part of the State Commission is as follows: "The insurance company appointed surveyor and loss assessor Satyaranjan Chand. He conducted survey on 14.11.1999 and assessed the loss at Rs.13,000/- due to burglary. It is not the case of the insurance company that burglary was not covered under the policy. In view of the aforesaid finding of the surveyor in his report the complainant is entitled to Rs.13,000/-. The further allegation of the complainant is that stock of cloth materials worth Rs.1,46,000/- was damaged due to rain water which entered inside the shop. The surveyor has observed in his report that some cloths bore water marks on them and some cloths were giving filthy smelling. This indicates that some stock of cloth was damaged due to the rain. On the basis of the F.I.R. lodged by the complainant the police registered case under Section 457/380/461/379 I.P.C. After investigation it filed final report saying that the case was true but "no clue ". In the final report the police has stated as follows: "Besides this, cloth materials worth about Rs.1,46,000/- were completely/partially damaged due to rain and wind of the cyclone which were seized in course of investigation and left in zima of Budhanath Paital in presence of witnesses. " The surveyor has also taken note of the above observation of the police but he did not assess the loss of the damaged cloths. Keeping in view the report of the surveyor and the final report of the police we are inclined to hold that some stock of cloth materials was damaged due to rain but in absence of any positive evidence we are not in a position to hold whether the damage to cloth materials was partial or full. In these circumstances, the amount of Rs.1,46,000/- awarded by the District Forum is on the excessive side which we reduce to Rs.25,000/-. We accordingly hold that the complainant is entitled to receive Rs.13,000/- for the loss of cloth due to burglary and Rs.25,000/- for the damage caused to the cloth materials and Rs.12,000/- for interest, compensation and cost. "

Aggrieved by this order, Petitioner has filed the present revision. Learned Counsel for both parties made oral submissions. Counsel for Petitioner stated that the State Commission erred in not awarding the compensation granted by the District Forum especially since Police as well as the Surveyor had confirmed theft of cloth material worth Rs.13,000/- and also the damage caused to the materials/cloths due to the cyclonic rain and winds. Learned Counsel for Petitioner therefore, prayed that Petitioner be fully compensated for not only the theft of the materials but also for the losses suffered by him in the cyclone.

COUNSEL for Respondent on the hand stated that the report of the police which merely states on hearsay that the loss suffered was Rs.1,46,000/- has little evidentiary value and no other specific evidence has been filed by the Petitioner in support of his losses. The Surveyor in his report does not state that there was any loss caused to the stocks. On the other hand, he has specifically stated that most of the stocks were found in good condition at the residence of the Petitioner and only some of the cloths in the premises "bore water marks and some cloths were giving a filthy smell ". The Surveyor also stated that the insuree could not provide the Surveyor with properly maintained books of account (apart from some purchase bills) to prove his case. Therefore, the loss caused to the insured was only Rs.13,000/- as result of the theft.

WE have heard learned Counsel for both parties and have carefully considered the evidence on record. The facts pertaining to the cyclone having damaged the shop and theft of materials worth Rs.13,000/- having been committed are not in dispute. Regarding the loss suffered as a result of the cyclonic rain and winds it is a fact that neither the Surveyor not the Petitioner has been able to provide concrete and credible evidence to confirm the actual loss suffered. The report of the police that the loss was Rs.1,46,000/- has little evidentiary value and is perhaps based on the statement of the Petitioner without any concrete proof of the same. It is because of these facts that the State Commission had reduced the compensation amount and had broadly assessed the loss to be Rs.50,000/- by applying the principle of rule of thumb and assessing the loss to be around Rs.50,000/- by taking into account the observations of the Surveyor that some of the cloth materials had been lying under water for quite some time. We have gone through the report of the Surveyor and note that the Surveyor has recorded in his report that some of the cloths stocked in the shop bore water marks and were giving a filthy smell which implied that the "stock had been kept at wet conditions for several days ". Undoubtedly, such cloth materials which have been submerged in water for several days would not be fit for sale and therefore, there is no doubt that apart from the loss which occurred as a result of theft, the Petitioner also suffered other losses of his goods in the cyclonic rain and storm. As mentioned above, the State Commission using the principle of the rule of thumb had assessed this loss to be Rs.50,000/- including interest. Although, there is no concrete evidence before us to enable us to assess the actual loss, we are of the view that since some of the cloth and materials had got submerged in water and had thus lost any saleable value, the loss assessed by the State Commission was somewhat conservative. Therefore, also applying the principle of the rule of thumb in this case, we enhance the amount of Rs.50,000/- to Rs.1,00,000/- which would include loss of Rs.13,000/- due to theft as also other costs including interest. Respondent/Insurance Company is, therefore, directed to pay the Petitioner, Rs.1 lakh within 6 weeks from the date of receipt of this order failing which the operative part of the order of the District Forum shall be restored. The revision petition is disposed of on the above terms.