New India Assurance Co Ltd vs R N Pandey

THESE two revision petitions (R.P. Nos. 1994/2007 and 2114/2007) are cross-petitions filed against the order of the State Consumer Disputes Redressal Commission, Uttar Pradesh (hereinafter referred to as the ''State Commission'') in Appeal No. 1121/2005 wherein the New India Assurance Co. Ltd. (hereinafter referred to as the ''Petitioner'') was the appellant and Mr. R.N. Pandey (hereinafter referred to as the ''Respondent'') was the opposite party.

SINCE the facts and parties involved are common in both cases, we propose to dispose of these revision petitions through a single order by taking into consideration the facts of Revision Petition No. 1994 of 2007.

THE facts of the case according to the Respondent who was the original complainant before the District Forum, are that he had taken an insurance policy initially for Rs. 15 lakh in respect of his cloth shop and later by paying an additional amount against the said insurance policy increased the insurance coverage to Rs. 20 lakh with a validity period from 1.10.2003 to 9.9.2004. On 19.1.2004 (during the validity of the insurance coverage), a fire broke out in his shop due to short-circuit resulting in his entire stocks and a large part of his shop getting burnt causing a loss of about Rs. 20 lakh. The Fire Brigade which extinguished the fire, in fact, assessed the loss at Rs. 24 lakh. The Respondent immediately gave intimation of the fire and losses suffered by him to the Petitioner the next day i.e. 20.1.2004 and also requested for settling the claim. Petitioner appointed a Surveyor but the Report of the Surveyor was not shared with him Instead Petitioner sent a plain voucher form to the Respondent requesting him to sign it, which the Respondent did in good faith. Thereafter, Respondent received a cheque for Rs. 5,48,939 as settlement of his claim. On receipt of the cheque, Respondent sent a letter to the Petitioner/Company requesting it to disclose under what circumstances only such a small amount was being paid to him in respect of the claim of Rs. 20 lakh. Petitioner did not respond and the Respondent, therefore, had no option but to file a complaint before the District Forum requesting that the Petitioner be directed to pay the Respondent balance amount of claim of Rs 14,51,000. Rs. 50,000 as compensation and Rs. 3,000as litigation costs.

PETITIONER has denied the above contentions and stated that on the basis of a detailed Survey Report of its Surveyor, the net damage was assessed at Rs. 5,48,939 and in fact the Respondent had signed the settlement voucher to his entire satisfaction and had acknowledged this as full and final settlement of his claim. Therefore, there was no deficiency of service on the part of the Petitioner/Company and the complaint which is an afterthought, deserves to be dismissed.

THE District Forum after hearing both parties and considering the evidence on record partly allowed the complaint after taking into account the various documents produced by the Respondent including the duplicate bill/vouchers, copies of account books, the stock position as communicated to the State Bank of India from where Respondent had taken a loan as well as the information supplied to the Income-tax Department. Based on this, the District Forum concluded that the Surveyor had underestimated the loss which according to the District Forum amounted to Rs. 14 lakh for the damage to the stocks, Rs. 49,000 towards loss of furnitures, fixtures and fitting etc. and Rs. 1,000 as costs along with interest @ 9% from the date of order till the date of actual payment

AGGRIEVED by this order, Petitioner filed an appeal before the State Commission which partly allowed the appeal by observing that the Surveyor had rightly assessed the ioss at Rs. 8.07.163 but had wrongly deducted 25% from this amount, inter alia, by noting that the losses could not be fully corroborated with the books of accounts/other documents and that the Respondent was claiming a higher market value for the goods that were purchased. Further, the shop being an old establishment, the possibility of old and outdated stocks being in the shop could not be ruled out. The State Commission did not agree with the reasoning of the Surveyor in deducting an additional 25% amount from the total loss of Rs. 8,07,163 and concluded that a 10% deduction would be reasonable. The relevant part of the order of the State Commission reads as under: "We are of the opinion that only a deduction to the tune of 10% in total loss of stocks will be proper considering the circumstances of this case. Again we also find that the argument advanced by the complainant''s learned Counsel has got force that the valuation of the stocks in the three racks which were at the back side of the shop and which were completely gutted into fire, considering their size and the valuable stock the addition of 10% is a less then proper addition. Hence considerable portion of the shop occupied by three racks due to their size and also considering the valuable stock in it an increase of 20% in the total loss of stocks from the other portion of shop will be justified. In the circumstances of the case when the loss is complete and that may be the reason that burnt, half burnt cloths were not received by the opposite party/appellant the deduction of Rs. 10,000 is not justified. Hence, we make computation as under: Total loss of stock of category A, B and C as mentioned by the Surveyor in his report Rs. 7,33,785 Addition of 20% in place of Surveyor''s recommendation of 10% for three racks Rs 1,46,757 at the back side Rs. 8,80,542 Deduction of 10% Rs. 73,379 Payable Rs. 8,07,163 So far as the Forum''s decision regarding the loss caused to the furnitures, fixtures and fittings etc. to the tune of Rs. 49,000 is concerned, it has been made according to the assessment made by the Surveyor and we accept it, hence the total loss is assessed to be Rs. 8,56,163."

THE State Commission further indicted the Petitioner/Company for misleading the Respondent into signing the paper which stated that the Respondent was fully satisfied with the settlement of the claim without explaining all the facts to him. This amounted to a breach on the part of the Petitioner/Company of the agreement between the insuree and insurer which is based on trust and fairness. The State Commission directed the Petitioner/Company to pay the Respondent Rs. 8,56,163. Since, Rs. 5,48,939 had already been oaid. the remaining amount of Rs. 3,07,224 along with interest @ 6% from the date of Surveyor''s report and cost of Rs. 1,000 within two months from the receipt of the copy of judgment failing which interest @ 12% would have to be paid by the Petitioner to the Respondent.

BOTH parties being aggrieved with this order, have filed the two cross revision petitions.

LEARNED Counsel for both parties made oral submissions. Learned Counsel for Petitioner stated that while the State Commission rightly agreed with the assessment of the Surveyor that based on the documentary evidence and on-the-spot inquiries, the loss suffered on account of the fire was Rs. 8,07,163, it erred in not accepting that the Surveyors recommendation to deduct 25% from this amount for convincing and acceptable reasons which he had clearly spelt out in the Summary Report and which included the strong possibility of inflated market price for the products that had been destroyed as also outdated stocks. It also needs to be noted that the Respondent had failed to produce even the duplicates of all documents required to support his case. Therefore, in order to plug any possibility of higher assessment, the Surveyor''s recommendation of deducting 25% from the assessed loss was reasonable.

COUNSEL for Respondent on the other hand stated that the District Forum being a first Court of fact had on the basis of the same documents and related evidence assessed a more realistic estimate of the loss suffered by the Respondent. Petitioner had not disputed that a major fire had taken place which had caused extensive damage to his shop and these facts were also recorded by the Surveyor. Under these circumstances, it was not understood as to how the Surveyor without fully taking into account the documents produced and recording the statements of only some of the shopkeepers, based on conjecture, assessed the loss at a very much lesser amount of Rs. 8,07,163. Although the State Commission had not accepted the 25% deduction but even then it had erred giving a vastly undervalued estimate of the loss by relying on the Surveyor''s report.

WE have heard learned Counsel for both parties and have carefully gone through the evidence on record including the detailed Report of the Surveyor.

THE cause and extent of the fire is not in dispute. Regarding the quantum of loss suffered by the Respondent, it may be noted that both the District Forum and the State Commission had on the basis of documents and evidence produced before them including the detailed Report of the Surveyor concluded that the loss suffered in the fire was less than the claim of Rs. 20 lakh filed by the Respondent. The State Commission as a first Court of appeal and also a Court of fact had after considering the order of the District Forum and based on the other records including the Surveyors Report concluded that the total loss of stocks was Rs. 8,07.163 which was almost the same as the loss assessed by the Surveyor in his report in respect of the stocks. The State Commission also accepted the findings of the Surveyor that the loss on account of furnitures, fixtures and fittings was Rs. 49,000, thus assessing the total loss to be Rs. 8.56.163. In view of the detailed reasoning of the State Commission in reaching this conclusion, we in our revisional jurisdiction see no reason to disagree with the same being based on facts produced before it. We also note that the State Commission has not accepted the 25% deduction and has concluded that a deduction of 10% would be more realistic taking into account the circumstances of the case. After going through the evidence on record including the Surveyor''s Report, we agree with the State Commission that 25% deduction recommended by the Surveyor which is based on presumptions and conjectures of the Surveyor and not on any documentary or conclusive evidence is not reasonable or acceptable. For example, it cannot be presumed by the Surveyor that outdated stocks were stored in the shop nor can it be said with any certainty without examining the quality of stocks that inflated market prices had been quoted by the Respondent for them. Under the circumstances, we agree with the State Commission that a deduction of 10% is more acceptable in the present case.

KEEPING in view the above facts, we uphold the order of the State Commission directing the Petitioner/Company to settle the Respondent''s insurance claim by paying Rs. 8,56,163. Since Rs. 5,48,939 has already been paid to the Respondent, Petitioner/Company should now pay the Respondent the remaining amount of Rs. 3,07,224 along with interest @ 6% from the date of the Surveyor''s report till payment of this amount and costs of Rs. 1,000, within two months from the receipt of the copy of this order failing which interest @ 12% will have to be paid by the Petitioner on the above amounts.

BOTH revision petitions stand disposed of on the above terms. Revision Petitions disposed of.