GEETANJALI SILK HOUSE vs NEW INDIA ASSURANCE CO. LTD.

THIS is a complaint filed by M/s. Geetanjali Silk House (hereinafter called the complainant) through its Proprietor Shri Awadesh Kishore Prasad against New India Assurance Company & Others (hereinafter called the opposite party No. 1 and the State Bank of India SSthe opposite-party No. 2). It has been contended in the complaint petition that the complainant took Insurance Policy for his shop for Rs. 2.5 lakhs against fire and other risks on 9.5.89 vide Policy No. 4852020300875 for a period of one year against fire and other risks. A fire broke down in the shop of the complainant on 25.3.90 causing a loss of Rs. 2,36,000/- and on the claim filed by the complainant, opposite party No. 1 paid a sum of Rs. 50,472/- only to the bankers of the complainant the State Bank of India (opposite party No. 2) who had advanced the loan to the complainant. It has been contended that while the Surveyors of opposite party No. 1 assessed the loss to the complainant on account of fire to be of the order of Rs. 1,10,812/- they determined the value of salvaged stock at Rs. 41,445.50/- and deducted the sum in calculating the net losses. Opposite party No. 1, however, did not allow the complainant to make use of the salvaged stock nor did they pay the price of the salvaged goods to the complainant with the result that the complainant had suffered loss on account of the opposite party No. 1 not having discharged their liabilites within the terms of insurance taken by the complainant. Hence the complaint against opposite party 1.

THE case of the complainant against opposite party No. 2 is that they accepted the payment of Rs. 50,472/- only from opposite party No. 1 for the losses sustained by the complainant on account of fire having broken out in his shop premises. It has been averred that on account of opposite party No. 2 having accepted a lesser amount the claim of the complainant against opposite party No. 1 was jeopardised. In the written statement filed by the opposite party No. 1 it has been contended that the complainant agreed for settlement of his claim at Rs. 50,472/- and the sellement amount accepted by his bankers who duly signed the discharged vouchers. It was contended therefore that there was no liability whatsoever against the O.Ps.

In reply to this written statement it has been averred by the complainant that the Surveyor had assessed the loss at Rs. 69,362/- and had assessed the value of the salvaged stock for Rs. 41,450/- and deducted this from the total loss calculated by them to be of the order of Rs. 1,10,812/-. As regards the agreement preferred to by the O.Ps in their written statement it has been averred that the Surveyor appointed by the Insurance Company impressed upon the applicant to take up the salvaged goods which were partly burnt up cloth or discloured clothes and the value of which he had assessed at Rs. 41,450/-and to agree for settlement of his claim at Rs. 50,472/- over and above taking up of the salvaged goods in order that a quick settlement could be made regarding his claim. It has been further contended that this agreement between him and the Surveyor was not honoured by the opposite party No. 1 itself because they indicated that the salvaged goods are to detained in "as it is condition" because the matter could be re-examined by the other Surveyor or Investigator. Due to the inordinate delay the salvaged goods got completely valueless. The complainant therefore requested opposite party No. 1 to take away these goods and pay its price on account of the inordinate delay made by the opposite party with regard to the salvaged stock. Getting no redressal of his grievances from opposite party No. 1 he has filed the complaint.

IN the written statement filed on behalf of the opposite party No. 2 it has been contended that the complainant took a loan of Rs. 24,000/- from them and against claim of Rs. 2,22,000/-filed by the complainant with opposite party No. 1 a sum of Rs. 50,472/- was received from opposite party No. 1 on 8.4.91. It has been averred that immediately after receipt of Rs. 50,472/-, opposite party No. 2 immediately wrote to opposite party No. 1 for the effect that the claim "does not present full and final settlement of claim". This letter was again succeeded by the another letter from them to opposite party No. 2 dated 3.5.91 requesting opposite party No. 1 to look into the matter of the complainant''s claim again. Opposite party No. 2 has further pointed out in their written statement that after adjusting the outstanding dues against the complainant the balance of Rs. 28,829/- out of Rs. 50,472/- received from the opposite party No. 1 on the complainants account was remitted to the complainant by Bankers'' cheque on 11.5.91. It has been averred further that the opposite party No. 2 is within their rights to receive the amount recoverable by the complainant and utilise it for liquidation of the loan amount standing against the complainant and since it had already written to the O.Ps. that the amount received from them on behalf of the complainant did not represent the final settlement and had requested the opposite party to look into the matter again, the complainant had no case against the opposite party No. 2. We have perused the affidavit filed by the contending parties. We have also perused the copy of the survey report submitted on 23.10.90 by M/s. S.N. Prasad and A.K. Rungta and we have further perused the report dated 20.2.91 of the investigator Mr. Nalini Kant Mishra. We have heard the learned Counsels for the complainant and the O.Ps. We find that the fact of the fire and filing of claim by the complainant on 28.4.90 have not been challenged at all. We also find from the joint survey report of Mr. S.N. Prasad and Mr. Rungta that they had assessed the loss on account of fire at Rs. 1,10,812.75. They calculated this assessment of loss of stocks after calculating the value of stocks prior to the incident at Rs. 1,29,998.00 on the basis of its original cost price and deducted from the same the value of stock in good condition i.e., Rs. 19,186/-. They adopted this method of calculating loss of the complainant in the absence of account books which were said to have been burnt in fire. From the loss calculated at Rs. 1,10,812/- they deducted a sum of Rs. 41,450/- as the salvaged value of partly damaged stock leaving a balance of net loss at Rs. 69,362/-. They further deducted from this a sum of Rs. 5,000/- as excess value of sarees and finally arrived at a figure of Rs. 64,352/- for the loss of stocks on account of fire after deducting the value of salvaged goods. They have added to this figure a sum of Rs. 1200/- for furnitures and fixtures and a sum of Rs. 1,000/- for plate glass thereby arriving at a figure of Rs. 66,562/- as loss to the complainant on account of fire over and above the salvaged value of the stock etc. which the complainant was advised to collect. The report of the Surveyor was also endorsed by the investigator who also expressed the opinion that "assessment of the loss and the liability of the insurer as stated by the Surveyor in their report was the minimum".

IN this background of facts how the INsurance Company could come to the figure of Rs. 50,472/- to be paid to the complainant is not understood. It has only been averred that the complainant had agreed to this lesser amount against payment of his claim. But it is clear in this context that whatever the complainant agreed, it was on the basis that he would collect the goods salvaged which were valued by the Surveyor at Rs. 41,449/-. We also find from Annexure 5 dated 26.3.91 to the complainant that the complainant had written to the opposite party No. 1 to the effect that he had kept the salvaged goods and had requested many a times that he be not permitted to deposit the same with opposite party No. 1 and he was keeping the salvaged goods with them only because it was so desired by opposite party No. 1 and therefore the opposite party No. 1 should pay the complainant to the full amount of the salvaged stock which had been rendered completely baseless on account of delay. He had also written to the bankers on 27.8.91 that he was not agreeable for a payment of Rs. 50,472/- only against their claim which the bankers had accepted. At the argument stage one more point was raised by the learned Advocate for opposite party No. 1 that the insured against the policy was State Bank of India and since they had discharged the voucher the complainant had no case. A perusal of the Policy, however, shows that the name of the policy insured is S.B.I Main Branch, Patna Account Shri Awadesh Kumar Prasad, Near Old Bus Stand, A/134, Kankar-bagh Colony, Patna-20 ''Cloth Shop''. It is common knowledge that when a loan is advanced by the banker to any business concern and the persons get their stocks insured the name of the bankers is given to ensure that any payment made by an Insurance Company passes through the bank so that the bank loan is safeguarded to the extent possible. This does not make the banker, the insured party. In this case also while the name of the bank has been given as the person insured the address is of the business concern and not of the bankers. Moreover, the premium was paid by the complainant. We do not therefore see any merit in this contention made on behalf of the opposite party No. 1. Consequently we would hold that the complainant should be compensated for the losses incurred by him on account of fire which were duly insured by the opposite party No. 1 and which was assessed by the Surveyors of opposite party No. 1 themselves at Rs. 66,562.00 + 41,449.00 - the value of salvaged goods i.e., a total Rs. 1,08,011.00. This loss occurred to the complainant on account of the delay in the settlement of claim and that also at a lesser amount than assessed by the Surveyors. There was therefore a deficiency of service by opposite party No. 1. Against this the O.Ps. have paid only a sum of Rs. 50,472/- which would be deducted from Rs. 1,08,011/- and the net amount payable to the complainant, as compensation for the loss incurred by him will be Rs. 57,549/-. This amount will carry interest @ 18% from 8.4.91 on which date the payment of Rs. 50,472/- was made by opposite party No. 1 to the Bankers. Over and above this amount we would also award a compensation of Rs. 10,000/- to the complainant for the harassment caused to him on account of the delay in settlement of the claim of the complainant which deprived him of the use of the money for business or other purposes. We should further award a sum of Rs. 500/- payable by the opposite party No. 1 to the complainant as cost of litigation. On facts of the case opposite party No. 2 are exonerated from any liability. Complaint allowed.