HELIWAL COLD STORAGE PVT. LTD. vs Oriental Insurance Co. Ltd.

THIS complaint under Section 17 read with Section 12 of the Consumer Protection Act, 1986, has been filed praying that an amount of Rs. 32,72,014/- be directed to be paid by opposite parties to the complainant.

UNDISPUTABLY, the complainant had obtained insurance policies covering the risk of his Plant, Machinery, Building and stock from the opposite parties. The said Insurance Policies No. 152601/11/51/2001 and 348/20 covered the risk for the period from 5.10.2000 to 4.10.2001. It is also not in dispute that the building of cold storage and the stock kept therein, covered by the said policy was damaged in an incident of fire which took place on 9.2.2001. The complainant informed the opposite parties/insurers about the said incident upon which the opposite party/insurer appointed Surveyor Hitesh K. Chitalia, who conducted preliminary spot survey. The opposite parties, thereafter, appointed M/s. A.K. Gupta and Associates, Delhi, for final survey to assess the loss. The complainant averred that his total claim for the loss was for an amount of Rs. 2,49,21,858/- which was submitted by him to the opposite parties. The complainant averred that the Surveyor M/s. A.K. Gupta and Associates assessed the loss at Rs. 99,24,60/-. The opposite parties paid the complainant Rs. 40 lakhs on 17.7.2000 as preliminary payment and thereafter payment of Rs. 15 lakhs was further made on 24.1.2002. Thus, a total amount of Rs. 55 lakhs only was paid to the complainant. The opposite party No. 2 intimated the complainant by letter dated 20.3.2002 that in view of the report of the Hitesh Chitaliya, full and final settlement of the complainants claim is proposed to be made for Rs. 64,38,986/-. The complainant, however, intimated the opposite party No. 2 that he does not agree to the settlement of the claim as above, and requested that his claim be settled at Rs. 99,24,060/- as assessed by Surveyor M/s. A.K. Gupta and Associates. It was averred that Hitesh Chitaliya had only conducted preliminary survey and he did not undertake necessary investigation and inquiry to ascertain the actual loss. Therefore, the assessment of the loss on the basis of his alleged report was not justified. It was further averred that on 9.11.2002, the complainant has accepted Rs. 9,38,986/- under protest which were paid to him by the opposite parties as a settlement of the claim as per alleged report of Hitesh Chitaliya. The complainant, therefore, prayed that the opposite parties be directed to pay him Rs. 32,72,014/-, being the difference of the amount of compensation as assessed by M/s. A.K. Gupta and Associates, after adjusting the amount of Rs. 64,38,986/- paid to him. The opposite parties in their written version resisted the claim of the complainant. It was averred that Hitesh Chitalia was appointed as preliminary Surveyor while M/s. A.K. Gupta and Associates were appointed as final Surveyor. It was further averred that the complainant is claiming an inflated amount and that opposite parties have paid to the complainant the amount of Rs. 64,38,986/- in full and final settlement of his claim, on the basis of the report of Hitesh Chitaliya. It was averred that complainant was not entitled to get any additional amount. It was also averred that complainant had not raised consumer dispute and a consumer Forum has no jurisdiction to decide the complaint.

It may be noticed that the opposite parties have raised the objection regarding jurisdiction and maintainability of the complaint but the said aspects have not been pressed at the time of final hearing. It may also be noticed that complainant has undisputably Insured Building, Plant, Machinery and Stock, etc. with the opposite parties and had paid premium. His complaint is regarding deficiency in service by the opposite parties in not paying the amount due to him under the said policy. The complainant has thus raised a consumer dispute. Therefore, there is hardly any doubt that complaint is maintainable and this Commission has the jurisdiction to consider and decide the same, under the provisions of the Consumer Protection Act, 1986.

SO far as merits of the case are concerned, it may be noticed that undisputably, opposite parties had covered the risk of complainant''s building, stocks, machinery, etc. for the period from 10.5.2000 to 9.5.2001, as would also appear from the copy of the policy issued by them. It is also not disputed that complainant''s cold storage covered by the said policy was gutted in fire and got damaged. The opposite parties insurers, on information given by the complainant, appointed Hitesh Chitalia to conduct preliminary survey. He in his report (Annexure 3) dated 14.2.2001 has stated that he visited the spot on the date of incident, that is on 9.2.2001 itself and found that Chamber No. 4 of the Cold Storage was severely affected by the fire. It appears from the said report that videography was done and photographs were also taken regarding the said incident. Photographs, however, have not been placed on record by the opposite parties. Surveyor Hitesh Chitalia has detailed the damage in his report. The relevant portions of the report (Annexure 3) will now be considered. Surveyor Hitesh K. Chitalia in his report (Annexure 3) observed that on verification of stock, his conclusion was that stock kept in Chamber No. 4 and affected by fire was worth about Rs. 90 lakhs to Rs. 1 crore, as per current local market rate calculated by insurer. It was further observed that the stock of Chamber No. 4 cannot be verified physically as smoke of fire was no intense that one could not enter Chamber No. 4. It was observed by the Surveyor that the stock in Chamber No. 4 was totally burnt and cannot be refused in any way. He further observed that he attended the premises on 3 days, from 9.2.2001 to 11.2.2001 continuously and have taken many photographs from time-to-time and video shooting was also arranged. It was stated in the report that fire fighting operation was continuous and uninterrupted which needed tremendous water which was possible due to considerable efforts by the local administrator and insured. It was also stated in the report (Annexure 3) that there is no mala fide incidents from their conduct and reputation of the insured. Insured fitted all safety devices for tripping of electrical line and power supply automatically cut off in the event of spark. The Surveyor also reported that considerable damage to building and boundary wall was also caused. Various cracks developed and expanded in all four sides due to continuous rise of temperature due to fire.

HITESH K. Chitalia reported nature and extent of loss in the following words: "Complete constructions/structural work of building of chamber No. 4 with its electrical installation and machineries, supply line of ammonia gas, thermocole insulation found badly burnt/heated. Two thermal insulated windows, two thermal insulated doors found badly damaged whereas three sides of wall of chamber No. 4, ceiling/roof and boundary wall broken for approaching inside fire, under fire fighting operation. Complete wooden and bamboo structure for stacking of stock found badly burnt and coverted into ashes along with stock of forest products. Thus insured suffered tremendous loss due to fire and fire fighting operation". About loss assessment, Hitesh K. Chitalia stated in his report (Annexure 3) as below: Loss can be assessed after applying market rate of forest products to available stock and quantum of loss as mentioned above and recorded in list also. All possible efforts made by me to collect necessary preliminary informations regarding assessment of loss within time schedule and as per best of my knowledge. In conclusion, Hitesh Chitalia in his report (Annexure 3) has stated that it is genuine fire loss claim and insured suffered tremendous loss due to damages of stock, contents of building were burnt and damaged completely. Hence complete building structure was badly affected due to the fire.

IN view of the above, it is clear that Surveyor Hitesh K. Chitalia reported damage to the buildings and stock of Chamber No. 4. It may also be noticed that value of stock damaged by fire was reported to the tune of about Rs. one crore. Besides extensive damaged to the building was also reported by him. However, it would appear from the report (Annexure 3) of Hitesh K. Chitalia that he was not in a position to evaluate the actual loss at the time of submission of report. IN fact, from the report, specially the concluding para relating to the loss, damage, etc. quoted as above, it is clear that observations about damage as above were tentative and made immediately after the incident. Plant, building and stock were still under fire which had not been completely extinguished at the time of initial inspection by Hitesh K. Chitalia.

IT is also not in dispute that M/s. A.K. Gupta and Associates was appointed by the respondent/insurer as final Surveyor. The said Surveyor assessed the loss and after detailed examination of accounts and other records, etc. as also the circumstances of the case concluded that the loss amounted to Rs. 99,24,060/-. The details are given in their report. IT was mentioned in the said report that the assessed loss amounted to Rs. 99,24,060/-, as against the claim amount of Rs. 2,49,21,858/-. After deducting part payment already made to the insured, payment of remaining amount was recommended. It also appears from the Regional Manager''s report (Annexure 1) that the above loss under the heads building, machinery, etc. assessed by the final Surveyor, was recommended to be paid by the Divisional Office of the respondent. However, the Regional Manager accepted claim for Rs. 64,38,986/- only, probably on the report dated 14.2.2001 marked as Annexure 2 in which information about loss is allegedly given by Hitesh K. Chitalia on 14.2.2001. It may however be noticed that there is no mention of the said assessment in his report Annexure 3. It may also be noticed that the main report of Hitesh Chitalia dated 14.2.2001 (Annexure 3) is a type-written document, while Annexure 2 is hand-written. There is no mention of assessment of said loss in the main report (Annexure 3) by Hitesh K. Chitalia. In fact, as noticed earlier he has stated in his report (Annexure 3) that the loss will have to be assessed by applying current market rate.

Clearly, therefore, report dated 14.2.2001 (Annexure 2) allegedly the assessment of loss by Hitesh Chitalia was not a part and parcel of his main report (Annexure 3). In view of the above, the assessment of loss at Rs. 64,38,986/- was without any proper basis. In fact, as noticed earlier the main report (Annexure 3) stated that stock kept in Chamber No. 4 and damaged by fire was worth Rs. 1,00,00,000/-. Moreover, the building, etc. and other material also got damaged as per his report (Annexure 3). In view of the above loss assessed by the Regional Manager as per (Annexure 1) at Rs. 64,986/- was clearly unjustified. There is no reason for not accepting the report of final Surveyor assessing the loss to the complainant to the tune of Rs. 99,24,060/-.

CONSEQUENTLY, in our opinion the complainant is entitled to get the compensation of Rs. 99,24,060/- as assessed by M/s. A.K. Gupta and Associates. Since undisputably Rs. 64,38,986/- have already been paid by the opposite party, the complainant is entitled to get the balance of amount of Rs. 32,72,014/-. Accordingly, the complaint is allowed. The opposite party shall pay to the complainant Rs. 32,72,014/- (Rs. thirty-two lacs seventy-two thousand and fourteen) only. The opposite party shall also pay to the complainant interest on the above amount, at the rate of 10% per annum from 9.4.2001, i.e., two months after the incident. The opposite party shall also pay to the complainant the cost of this complaint which is quantified at Rs. 5,000/- (Rupees five thousand) only. Complaint allowed.