NATIONAL INSURANCE CO. LTD. & Ors vs M/S. GARG MOTORS

The complainant/respondent, M/s Garg Motors is a firm engaged in the business of electric goods, that is, T.V., refrigerator, air-conditioners, electric items etc. They had obtained two insurance policies from the petitioner, National Insurance Company Ltd.- one for an assured sum of Rs.20 lakhs, covering the goods placed in their godowns, and the other policy for an assured sum of Rs.40 lakhs, covering the goods placed in their showroom. It has been stated in the consumer complaint filed by M/s Garg Motors that on 13.1.2007, during night time, their godown situated at 23, Model Colony, Yamunanagar, caught fire and goods worth Rs.10 lakhs were burnt. A report no.10 dated 14.1.2007 was registered at the Police Post (PP), Rampura to this effect. The surveyor, appointed by the petitioner, insurance company, visited the spot on

15.1.2007 to assess the loss. The queries raised by the surveyor, vide his letter date 10.2.2007, were duly replied to by the complainants and all formalities for the grant of the claim were completed. The insurance company sent a cheque of Rs.5,46,512/- on account of claim to their Bank, that is, Bank of Baroda, Branch Yamunanagar, with whom stocks in question, were hypothecated. The complainant, however, were not satisfied with the amount paid by the insurance company and therefore, they filed the consumer complaint in question, seeking directions to the petitioner, insurance company to make payment of Rs.11,92,595.40, alongwith interest @ 18% p.a. and in addition, a compensation of Rs.5 lakhs on account of mental harassment and Rs.11,000/- as litigation cost.

The complaint was resisted by the petitioner, insurance company by filing a written statement before the District Forum, in which they stated that although the complainant submitted a claim bill of Rs.11,80,826/- to the surveyor, but as per the report of the surveyor, the loss had been assessed as Rs.6,56,125/-, without applying the average under insurance clause. The complainant was not maintaining any stock register and could not co-relate the purchase bills with the affected items. The damaged stocks also included the old stocks, especially the slow moving items. The surveyor also mentioned that the old stock could not be sold at the cost on which it was purchased. The surveyor, while assessing the loss, divided the items into following four groups; i) Fire affected items lying inside big RCC hall

ii) Partially affected/smoke items lying inside RCC hall.

iii) Badly burnt items lying in the -GI Sheet Shed

iv) Items lying in outside small room.

On receipt of the report of the surveyor, the claim was processed by the insurance company and after applying the average under insurane clause, the net loss was assessed at Rs.5,46,512/- and the said amount was credited by the petitioner, insurance company to the bank account of the complainant. The petitioner company contended that the complainant had exaggerated their claim, whereas the assessment made by the insurance company, based on the report of the surveyor, was correct.

The District Forum after considering the averments made by the parties, directed that the complainant was entitled to a sum of Rs.11,80,826/- for the said loss and directed payment of the balance amount of Rs.6,34,314/- alongwith interest @ 12% per annum w.e.f. 1.6.2007 till realization. The District Forum also ordered that interest @ 12% per annum should also be paid on the awarded amount, i.e. Rs.5,46,512/- for the period from 1.6.2007 till the date of payment, i.e. 28.3.2008.

The District Forum concluded that the complainant had got the goods lying in the godown insured at Rs.20 lakhs, whereas the total value of the stocks lying in the said godown was Rs.17,94,013/-. There was no question of applying the average clause in the case, because for the stocks placed in the showroom, there was a separate policy of Rs.40 lakhs.

It was stated during arguments that the assessment of loss made by the surveyor, Duggal Gupta Surveyors Pvt. Ltd. was based on correct position on the spot and hence, the insurance company had rightly relied upon the said report. Unless there were any cogent or convincing

reasons to the contrary, due weightage should be given to the report of the surveyor. The learned counsel for the petitioner further stated that the insurance company was required to indemnify the loss suffered by the complainant and if there were items partially damaged, the insurance company was not required to make full payment for the same.

Per contra, the learned counsel for the complainant/respondent argued that the concurrent findings of both the consumer fora below were in accordance with law and there was no justifiable ground to make any modification in the same in the exercise of the revisional jurisdiction. The present petitioner, therefore, deserved to be dismissed.

I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me. A perusal of the detailed assessment of loss attached with the report of the surveyor, makes it very clear that the complainant had made claim for the value of the stocks damaged in the fire accident as Rs.11,80,826/-. By and large, the surveyor in his assessment, accepted the quantities, as well as the valuation of different items mentioned in the claim. However, the surveyor decided to deduct 60% from the value of old/dead stock items. In respect of other items, the surveyor deducted 5% of the said value, whereas for partially affected items, 50% of the value had been deducted. After taking into account, such deductions in the value and saying that the partially affected articles could be sold as second-hand, after cleaning the same, the surveyor concluded that the net assessment value was Rs.6,56,125/-. The State Commission as well as the District Forum on the other hand, concluded that the complainant had paid full premium for the old stocks as well. It was the duty of the insurance company to pay them the compensation. Moreover, there was no evidence to prove that the value of such articles had diminished by 60%.The State Commission observed that the insurance company was liable to pay the full insured amount and if so decided, could sell those articles to cover up the loss. The District Forum also concluded that since the total value of the stocks lying in the godown was less than Rs.20 lakhs, there was no question of applying the average clause in the case, irrespective of the fact that excess stocks was lying in the in the showroom, for which the policy had been obtained for a sum of Rs.40 lakhs. The reduction in the amounts paid from Rs.6,56,125/- to Rs.5,45,612/- by the insurance company was therefore, not justified. The District Forum had rightly held that when the complainant was able to prove the purchase value of the stocks, it was not justified on the part of the insurance company to refuse its value on the assumption that certain stocks were old and slow moving. Moreover, the surveyor had not taken any valuation report from the market as per the price list and the manufacturer. The purchase value of the stocks as stated in the purchase bills had to be believed in that case. The District Forum had discussed in detail the amounts involved in all categories of loss and concluded that the complainant was entitled to get the total sum of Rs.11,80,826/-, the amount of loss suffered during fire.

Based on the discussion above, I do not find any justification to make any interference in the well-reasoned orders passed by the District Forum and the State Commission in the exercise of the revisional jurisdiction. Moreover, it has been held by the Hon''ble Supreme Court in the case, Mrs. Rubi (Chandra) Dutta vs. United India Insurance Company, 2011 (3) Scale 654 that the concurrent findings of the consumer fora below should be interfered only in the exercise of revisional jurisdiction, when there are sufficient and convincing reasons for doing so. It is held therefore, that the orders passed by the consumer fora below do not suffer from any illegality irregularity or jurisdictional error of any kind. There is no merit in this revision petition and the same is ordered to be dismissed and the orders passed by the consumer fora below upheld. There shall be no order as to costs.