ELECTROAGE vs UNITED INDIA INSURANCE COMPANY Limited

THE appellant, Mrs. Rupinder Sood is a dealer in electronics and electrical goods and is running a partnership firm under the name and style of M/s. THE Electroage, SCO No. 363, Sector 35-D, Chandigarh. THE entire stock held by the appellant comprising of televisions, refrigerators and washing machines, coolers, air conditioners, geysers and other electronic appliances at the aforesaid godown was covered with the respondent/O.P., M/s. United India Insurance Co. Ltd., Branch Office II, SCO No. 357-358, Sector 35-B, Chandigarh under insurance for a sum of Rs. 35 lacs for a period of one year i.e. from 24.5.1995 to 23.5.1996. As per details given in Annexure C-1, it was Fire Policy which covered the risk of fire, lightening, riot, strike, malicious damages, terrorist acts and other allied happenings. THE insurance cover included the earthquake, and flood perils as well and a sum of Rs. 19,027/- was paid by the appellant towards the premium of aforesaid policy on 24.9.1995 and the same stands duly acknowledged by the respondent/O.P.

ON the intervening night of 30-31st July, 1995 due to incessant rains the godown of the appellant being situated in the basement was inundated with rain water and the water seeped from the walls of the adjoining building. The floor of the godown was covered with 2-3 feet water and the electronic goods submerged in water got damaged. The intimation of the loss to the goods was given on 31st July, 1995 to the respondent/O.P. As per the averments made inter alia by the appellants, the respondent Company asked the appellant to get the damaged goods repaired from the suppliers and manufacturers and submit the bills of actual amount spent on the repairs. However, no such letter/communication has been placed on record by the complainants. The appellant got the items repaired the submitted the bills/claims of Rs. 2,68,121.37. Copies of the bills paid for aforesaid repairs have been placed on record vide Annexures C-6 to C-21. The complainant, however, after asking the appellant to get the damaged items repaired, the respondent/O.P. appointed Mr. Rajan Sharda as Surveyor and Loss-Assessor. The report of the Surveyor placed on record as Annexure R-2 shows that the total loss directly attributable to the flooding of the premises was assessed at Rs. 46,121/- and after taking into account the value of salvage the net loss assessment was put at Rs. 44,321/-. However, the respondent Company actually paid Rs. 21,121/- only. The case of the appellant is that the above amount was received by them under protest and without prejudice to any of their rights while the respondent has averred, inter alia that the above amount was paid by them towards full and final discharge of the claim. The respondent Insurance Company in their reply dated 11.3.1997 had submitted that the case since involves complex questions of law and fact, should have been instituted in a Civil Court and is not a fit case to be decided by summary procedure in the Consumer Redressal Agencies. On merits of the case the main submission of the respondent/O.P. is given as under : "However, as per terms and conditions of the Insurance Policy, the loss payable comes to Rs. 21,121/-, accordingly the same was paid to the complainant who accepted the same after discussions with the Branch Manager and agreed to same. Thereafter, the complainant issued full and final receipt in favour of the answering respondent. There was no deficiency on the part of the answering respondent in settling the claim."

The respondent has further stated that the discharge voucher was signed by a partner of the Firm and not by Mr. Rana, the Branch Manager, as alleged by the appellant.

THE District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter referred to as District Forum-II) after perusal of the record and the arguments has held in its order dated 10.10.2000 that O.P. - Insurance Company was certainly deficient in services provided to the complainant. THE operative part of the order, contained in paras 8 and 9 reads as under : "8. THE final point raised on behalf of the Insurance Company is that the amount of Rs. 21,121/- was received by the complainant towards the full and final discharge of the claim. We have seen the voucher and the important words regarding full and final discharge of the claim are in printed form. THEse are supposed to be there in every such voucher and in case of the complainant/claimant refuses to sign on the dotted lines, he would not be paid even the money offered by the Insurance Company. THE insured and the insurer are not on equal footing as to draw an inference adverse to the complainant in such cases. We hold that the payment of Rs. 21,121/- was not accepted by the complainant towards full and final settlement of the claim. It was under the force of circumstances and then soon thereafter this complaint was filed. 9. Consequently, the complaint succeeds and it is allowed with costs of Rs. 1,100/- and a direction is issued to the O.P. to pay the balance amount of Rs. 23,200/- to the complainant along with interest at the rate of 12% p.a. from 24.5.1996 till payment."

The order of the District Forum-II was appealed against by M/s. The Electroage, the complainant on the ground that the District Forum-II was not justified in disallowing the total claim of Rs. 2,23,800/- and allowing only Rs. 44,321/- as recommended by the Surveyor. The appellants have contended that the occurrence of the floods took place during the validity of the insurance policy and the losses occurred were directly attributable to a peril covered under the policy. Further the District Forum-II has erred in basing its assessment of loss on the Surveyor''s report while the appointment of Surveyor itself was not justified. In these circumstances of the case, the respondent, M/s. United India Insurance Company Ltd. had itself asked the appellant to get the damaged goods repaired and submit the bills of the amount actually spent. The appellant has, thus, prayed for granting the balance claim of Rs. 2,32,800.37. Further the appellant has contended that the Surveyor can only recommend and was not authorized to accept or reject any claim. The case of Nagpal Foodland and Department v. Oriental Insurance Co. Ltd., III (1998) CPJ 34, decided by Hon''ble Haryana State Consumer Disputes Redressal Commission, Chandigarh was also cited in support of their contention.

AFTER going through the entire record of the case and evidence adduced by both the parties in the District Forum-II and perusing the rival contentions of both the parties in the appeal before this Commission, we are of the view that since the losses occurred to the goods of the appellant were squarely covered under the Clauses and validity of the Insurance Policy, the respondent, M/s. United India Insurance Company Limited has been deficient in service by not indemnifying the appellant for the loss as assessed by the Surveyor. After a detailed perusal of the impugned order and the grounds of appeal we concur with the findings of District Forum-II in holding that by not paying the amount of damages as assessed by the Surveyor it is a clear case of deficiency in service on the part of the respondent, M/s. United India Insurance Company Ltd. However the contention of the appellant that District Forum-II had erred in law in the face of facts in holding that the respondent, M/s. United India Insurance Company Ltd. liable for indemnifying only to the extent as given in the Surveyor''s report, cannot be accepted. In fact, there was no other material placed before the District Forum-II except the Surveyor''s report to assess the losses and grant the relief since going into the details of the actual losses on the basis of the detailed evidence is outside the purview of Consumer Disputes Redressal Agencies. Further since no copy of any letter/communication establishing that the respondent had asked the appellant to get the damaged items repaired and thus undertaking to pay the actual costs of such repairs has been placed on record by the appellant. Consequently, there was no other material except the Surveyor''s report before the District Forum-II to grant the relief claimed in support of losses suffered by the appellant. Hence, we are of the considered view that in these circumstances of the case the District Forum-II was justified in granting the damages to the extent as given by the Surveyor and holding the O.P., M/s. United India Insurance Company Ltd. deficient in not granting the loss in full as per the Surveyor''s report. On the ground stated above, the order of the District Forum-II is upheld in toto and the appeal is dismissed. Copies of the order be sent to the parties free of charges. Appeal dismissed.