LUXMI RICE MILLS vs National Insurance Company Ltd.

M/s. Luxmi Rice Mills have invoked the original jurisdiction of this Commission by filing the present complaint alleging deficiency in service against National Insurance Company in settling their claim on account of loss of insured goods of Rs. 13,21,498/- with interest at the rate of 18% with effect from 1st June, 1996.

COMPLAINANT is a partnership firm registered with the Registrar of Firms, Haryana and is dealing in the business of purchase and sale of paddy and have got their paddy stocks insured with the National Insurance Company with a special stipulation of insurance i.e. "All stocks of all kinds of rice and paddy". During the period of validity of the insurance policy from 24th January, 1996 to 23rd January, 1997 fire broke out in the intervening night of 1st and 2nd June of 1996 in the premises of the complainant''s firm. Due to the fire which was the result of electric short circuit total stocks of paddy lying in the premises of the complainantfirm alongwith Bardana got destroyed. Report to the police and the Insurance Company sent immediately on 2nd June, 1996 itself. According to the complainant the loss suffered was : (i)2230 quintal paddy @ Rs. 1300/- per quintal i.e. prevailing market rate of paddy as certified by the Market Committee, Tarawari Rs.8,99,000/- (ii)Loss to the building as estimated by M/s.Solkhe & Associates. Rs.104,000/- (iii)Loss on account of replacement of burning electrical fittings and wirings. Rs. 46,600/- (iv)Loss on account of Bardana Rs. 18,575/- Rs. 30,68,1757 However despite repeated requests and reminders made by the complainant, the Insurance Company did not release the necessary amount and insisted on that the complainant- firm should discharge full and final payment by accepting a cheque of Rs. 20,60,000/-. According to the complainants though it was unfair on the part of the National Insurance Company to coerce the complainant to accept the less amount by way of compensation even though they were entitled to much more than that. The complainant accepted the cheque for a sum of Rs. 20,54,391/- and for the balance they filed the present complaint for recovering Rs. 10,13,784/- by way of loss of goods, Rs. 2,00,000/- by way of interest on account of delayed settlement and Rs. 1,07,714/- by way of interest @ 15% on the aforesaid amount of Rs. 10,13,784/-, totalling a sum of Rs. 13,21,498/-. The Insurance Company in their reply pleaded that once the complainant had accepted the amount already paid by the Insurance Company by way of full and final settlement of their claim, the present complaint was not maintainable for recovering the balance amount as claimed by the complainants.

In their evidence the complainants have filed the affidavit of Mr. Bhagwat Parkash Gupta, partner of the complainant''s firm and have also produced the documentary evidence by way of correspondence exchanged between the complainant''s firm and the Insurance Company to substantiate their claim that the amount claimed in the complaint was in fact payable to the complainants being the actual loss suffered by them. Copies of the stock register of rice and paddy for 1st June, 1996 and 2nd June, 1996 were also produced.

AFTER hearing the learned Counsel for the parties and having gone through the record we are of the considered view, that once the complainant shave successfully established on record that the insured amount was much more than the loss suffered and the fire broke out during the currency of period of insurance during which the policy was valid and the amount claimed was covered by the insured amount, coupled with the fact that the amount actually paid by the Insurance Company was short by Rs. 10,13,784/-, the mere fact that the Insurance Company coerced the complainants to accept the cheque for less amount could not debarred the complainants from claiming the balance amount by invoking jurisdiction under the Consumer Protection Act. Consequently, there is a merit in the complaint and it deserves to be allowed as acceptance of less amount cannot be operated as estoppel against the complainants. Accordingly, we allow the complaint and direct the Insurance Company to release to the complainants the amount claimed by them within two months from the date of the receipt of the order. The complainants are also entitled to the costs of this complaint, which are quantified as Rs. 1,000/-. Complaint allowed.