KRISHI SEWA KENDRA vs NEW INDIA ASSURANCE CO LTD

-THESE three connected appeals are directed against the order dated 12. 5. 2006 passed by the District Consumer Forum, Haridwar in Consumer Complaint No. 159 of 2003, M/s. Krishi Sewa Kendra v. The New India Assurance Co. Ltd. and Another. Vide the impugned order, the District Forum has directed the insurer to pay a sum of Rs. 1,00,000 to the complainant together with interest @12% p. a. from 8. 7. 2003 till the date of actual payment and also to pay a sum of Rs. 2,000 as cost.

THE facts of the case in brief are that the complainant-M/s. Krishi Sewa Kendra is a dealer and deals in insecticides, pesticides, spraying machines and chemical fertilizers. He had started the business in the year 1982 in the city of Roorkee and later on, shifted it to Haddipur in May, 1994 for better business prospects. He took a loan of Rs. 4,75,000 in the year 2000 from Union Bank of India, Civil Lines, Roorkee, District Haridwar and, as per rules, got the shop insured with The New India Assurance Co. Ltd. for a risk of Rs. 5,00,000 against fire and allied perils. On 24. 2. 2003, the shop in question caught fire due to electric short circuit causing loss of the stock kept in the shop and some damage to the shop. Since the insurance policy was effective for the period from 1. 6. 2002 to 31. 5. 2003, the complainant lodged the claim with the insurer. However, on the basis of the Surveyor''s report that the shop was not in a running condition and the claim was fabricated, manipulated and not genuine, the insurer repudiated the claim. Upon this, the complainant filed a consumer complaint before the District Consumer Forum, Haridwar on 6. 8. 2003, which was decided by the District Forum on 12. 5. 2006 directing the insurer to pay the amount as stated above. Aggrieved by the said order, all the three parties arrayed in the consumer complaint have filed these three appeals. Since the facts and circumstances of all the appeals are same, these appeals are being decided by a common judgment. The complainant has stated in the consumer complaint that there was a stock of Rs. 9,03,441 in the shop at the time of the fire incident. The impugned order has been challenged by the complainant on the ground that the compensation and other expenses, as awarded by the District Forum are not just and reasonable and the District Forum failed to appreciate the facts of the case in proper prospective. In his complaint, the complainant has prayed for a compensation of Rs. 6,41,020 towards loss of goods, Rs. 50,000 towards financial loss, Rs. 5,000 for litigation expenses and interest @12%p. a.

The insurer has also challenged the impugned order on the ground that the decision of the District Forum is contrary to the findings recorded by the Surveyor in his survey report. The Surveyor, appointed by the insurer, after conducting the inspection of the shop in question on the very next day of the fire incident, has given his findings and recommendations as follows: "based on the factual position as explained above, I am of the opinion that the shop in question was not in its proper running condition, apart from this, the stock stated to have burnt due to this fire mishap, had actually not been kept in the shop (this is based on the circumstantial evidences which have been explained above ). The proprietor of the shop, in order to get claim from the Insurance Company as well as to clear his Bank loan, utilized his own resources with mala fide intention by manipulating the loss in his shop due to this fire incident. Therefore, this claim is fabricated, manipulated and not genuine. Thus, I hereby recommend that this claim may be treated as NO CLAIM. "

THE financier bank has challenged the impugned order on the ground that the amount awarded by the District Forum is not just in the light of the terms of agreement for loan, according to which the complainant is entitled for the payment of the whole claim amount to the extent due under the loan account with interest till payment. We have heard the learned Counsel for the parties and also perused the material on record.

LEARNED Counsel for the complainant pointed out to the Fire Brigade''s Report dated 25. 2. 2003, wherein it is stated that: " (1) the fire had caused due to electric short circuit; (2) total value of the property under risk was Rs. 10,0000 (3) value of the property burnt in fire was Rs. 4,50,000; (4) value of the property saved from fire was Rs. 5,50,000. "

After perusing the Fire Brigade''s Report, we find that no inventory of goods burnt in fire has been prepared by the Fire Brigade official. However, lists of such goods have been prepared by the complainant himself on 1. 3. 2003. According to these lists, goods worth Rs. 6,41,020 had burnt in fire, which include ''furniture, machinery and damage caused to shop''s construction and electrical fittings. A statement of stock position dated 3. 2. 2003 is also available on record, in which the complainant has declared a stock of Rs. 5,01,380, which is pledged/hypothecated with the financier bank. The stock is kept in godown No. 2. It is pertinent to mention here that the complainant had purchased these goods from a dealer of Muzaffarnagar on 29. 1. 2003 against two invoices issued by the selling dealer. These purchases are supported by the Trade Department''s Declaration Form No. 371970.

WE feel that the Surveyor''s report can neither be ignored, nor can be totally relied upon. While, there is no dispute that a fire had broken out in the shop, the conclusion derived by the Surveyor that there was no loss of the stock, is not acceptable in the light of the findings recorded by him in his survey report. On inspection, he had found that the fire had blackened the walls of the shop and the roof had developed cracks. This is a circumstantial evidence that the fire was of such a magnitude that it could damage the roof. Such a fire can break out if there was stock of pesticides, which are highly inflammable. However, another finding of the Surveyor has relevance in assessing the actual loss. On inspection, the Surveyor also found that there were no remains of burnt material contained in Tin/aluminium Containers and, in furniture, one stool and a chair was found in burnt condition. No traces of burning of items like furniture, racks, fans, etc. were found. With these findings of the Surveyor, if we look at the total situation, we are unable to believe that the goods worth Rs. 6,41,020 had burnt in fire. Goods like insecticides andpesticides, which are highly inflammable, of the value of more than Rs. 6,00,000, if caught under fire, will cause such a devastating fire, which shall engulf not only the shop in question but other adjacent shops on both the sides. It is noteworthy that as per the report of the Surveyor, there are rows of shops on both the sides of the shop in question.

IF we look at the circumstances of the incident, we find that the fire had broken out at 9:30 p. m. , the fire brigade received the information at 9. 35 p. m. and reached the spot at 10. 10 p. m. This duration of 35 minutes is quite sufficient for a fire, which had broken out in a pesticide shop, to turn everything into ashes and to engulf the adjacent shops in its flames. While, as per the report of the Surveyor, the fire had blackened the walls of the shop and had caused some damage to the roof. So, it cannot be said to be a devastating fire. Therefore, no body can believe that the pesticides worth more than Rs. 6,00,000 had burnt in the fire. It cannot be denied that a fire had broken out in complainant''s shop, which caused loss of goods and damage to shop, but the circumstantial evidences lead us to believe that the stock kept in the shop was ''much less than the stock as stated by the complainant in his complaint. Moreover, the complainant could not prove that there were burnt remains of tin and aluminium containers. The burnt remains of a stool, a chair and some plastic canes show that stock kept in the shop was much less than the stock as was declared by the complainant.

Learned Counsel for the financier bank has referred a decision of Hon''ble National Commission in the matter of M/s. Vasalakshmi Enterprise v. United India Insurance Co. Ltd. and Anr. , IV (2004) CPJ 51 (NC)=2005 CLR 218. In the said case, the Surveyor had estimated the loss of Rs. 14,13,455 on 29. 10. 1996. On 25. 2. 1997, the Branch Manager recommended the claim for a sum of Rs. 14,00,000. However, on 18. 8. 1997, the Insurance Company offered a sum of Rs. 6,90,918 towards full and final settlement. Hon''ble National Commission after considering the facts that the Surveyor had estimated the loss at Rs. 14,13,455, value of risk was Rs. 38,21,978. 46 and sum assured was Rs. 33,90,000, awarded a compensation of Rs. 12,51,199. 20. In our opinion, the methodology adopted by the Hon''ble National Commission in the reported decision, is not applicable in the instant case because in the instant case, the Surveyor has not assessed the loss and has treated the claim as "no CLAIM".

ON the basis of the above discussion, we are of the view that the loss assessed by the District Forum is reasonable and just and, therefore, the impugned order does not call for any interference. In the result, all the three appeals are dismissed. No order as to cost.

LET the copy of the judgment be kept on the record of First Appeal Nos. 108/2006 and 177/2006. Appeals dismissed.