New India Assurance Co Ltd vs Meena Devi

THE controversy in this case revolves around the dispute pertaining to Policy No. 352400/48/03/34/00001194 whereunder risk of stock in trade i. e. furniture, fixtures, fitting of Manoj Cement Block Works was insured in the sum of Rs. 3,50,000 for the period 3. 3. 2004 to 2. 3. 2005. So far stock in trade, etc. having been damaged as a result of flood on 7. 7. 2004 is concerned, it is not in dispute. When claim was not settled, complaint was filed by the respondent No. 1. Initially complaint was restricted to two policies, one was for plant and machinery only and the other was only about burglary.

STATE Unit of respondent No. 1 was financed by the Bank, it was added as opposite party No. 2 in the proceedings before the District Forum below. As financing bank, amongst other things, it pleaded that there was third policy whereunder stock in trade as above was covered. Details of the insurance policies have been mentioned in the preceding paras. In support of the claim made in the complaint, respondent No. 1 placed material on record wherefrom it is established that the goods of the value of Rs. 9,33,025 were in stock in trade that was lying at the time of flood. In this behalf we may also mention here that immediately after the incident, report was made by respondent No. 1 to the Police, Patwari Halqa as well as to the financier Bank and to other authorities, wherein damage sustained to the stock in trade was in the sum of Rs. 1,25,000 and to the Patwari it was given at Rs. 5,00,000.

By referring to the record, we have not been able to find anything to suggest that what was the extent of actual loss, as such we think it proper to believe the first version given by respondent No. 1 regarding extent of loss suffered i. e. Rs. 1,25,000. On what basis the loss was given to the Patwari suffered by respondent No. 1 of Rs. 5,00,000, there is nothing on record placed by the said respondent. Even today, at the time of hearing, learned Counsel for respondent No. 1 has not been able to point out anything so as to uphold his plea that though his client has suffered substantial loss as well as damage due to flood to its stock in trade, but nothing could be pointed out from the record. In view of the aforesaid facts particularly the stock in trade, etc. was insured to the extent of Rs. 3,50,000 whereas it is stated to be there at the spot of the value of Rs. 9,33,025. It is apparent that this is a clear-cut case of under-insurance, as such the appellant is liable to pay and respondent No. 1 is entitled to get the amount proportionately on account of the insurance.

IN these circumstances, District Forum below vide impugned order has allowed compensation to the tune of Rs. 2,00,000, against the insured stock in trade, etc. to the extent of Rs. 3,50,000, whereas at the spot, according to the appellant, which was almost more than two and half times. In these circumstances, we feel that the stand of the Insurance Company that it is liable to the extent of Rs. 74,150 is upheld and in our opinion the impugned order deserves to be modified accordingly. At this stage Mr. Ratish Sharma pointed out that out of this, a sum of Rs. 9,650 has been deposited by his client with the financier Bank. This position was contested by Mr. Saklani who on instructions received from the husband of his client, the respondent, who is present in the Court and has been identified as such by him, stated that the cheque of this amount was returned by respondent No. 2 to the appellant. No other point was urged.

IN view of the aforesaid discussion, while partly allowing this appeal, the impugned order passed by the District Forum, Mandi, in Complaint No. 90/2005 on 20. 2. 2007, is modified thereby holding that the appellant is liable to pay only Rs. 74,150 along with interest at the rate and from the date as ordered by the District Forum along with cost as assessed by it. Subject to this modification, this appeal stands finally disposed of. All interim orders passed from time-to-time in this appeal shall stand vacated forthwith. Learned Counsel for the parties have undertaken to collect certified copy of this order free of cost as per Rules from the Reader of this Court. Appeal partly allowed.