ORIENTAL INSURANCE CO. vs MOOLCHAND JAIN

THIS appeal, under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 12.2.2002 in Complaint No. 343/2001 by District Consumer Disputes Redressal Forum, Raipur (hereinafter called the ''District Forum'' for short) directing the appellant/insurer to pay to the complainant/respondent compensation of Rs. 3,00,000.

INDISPUTABLY the complainant/respondent is the proprietor of Motor and Auto Parts shop and carries on his business under the name and style of ''Jainco Sales Enterprises.'' The said shop is located at shop No. B-25, New Bombay Market, Raipur. The complainant/respondent obtained a fire policy from the appellant/insurer covering the risk from 1.9.1999 to 31.8.2000. It is further not in dispute that there was an incident of fire in the intervening night of 12th and 13th April, 2000 in the said shop. On receiving information early in the morning about the incident the complainant/respondent reached the spot and reported the matter to Police Station, Maudhapara, Raipur on 13.4.2000. Fire Brigade was also called to extinguish the fire. It was alleged that the complainant suffered a total loss of Rs. 4,72,111 in the said fire. The first Surveyor appointed by the appellant/insurer was T.S. Tuteja. Thereafter S.K. Kansal of Indore was appointed. A Chartered Accountant Pukhraj Jain was also appointed by the appellant/insurer to assess the stock position of the complainant/respondent, who in his report dated 5.3.2001 stated that the stock in the complainant''s shop on 13.4.2000 was worth Rs. 12,21,921. It appears that the complainant was however offered much lesser amount of Rs. 31,615 by the appellant/insurer, towards settlement of his claim. The amount offered as above by the insurer was not acceptable to the complainant; hence he approached the District Forum and filed the complaint. He claimed total compensation to the tune of about Rs. 4,75,000 with interest, etc.

The complaint was resisted by the appellant/insurer. It was alleged that the complainant had obtained fire policy for a sum of Rs. 4,00,000. The stock position of the complainant as reported by the Chartered Accountant on the date of incident was to the extent of Rs. 12,21,921. Accordingly, the proportionate amount payable without salvage, as estimated at Rs. 28,853, for the damage to the motor parts, etc. kept in the shop and Rs. 2,762 towards Fire Brigade charges, thus totalling Rs. 31,655. If however the complainant returned the salvage, his claim could be settled for a sum of Rs. 87,623. However, since the complainant was not agreeable to the settlement of claim as above by the appellant/insurer, the amount could not be paid to him.

THE District Forum in the impugned order held that the stock position assessed by T.S. Tuteja was Rs. 4,00,000 due to damage to the motor parts while his claim was settled very low at Rs. 28,853 without salvage. It was also held that the claim was not settled by the insurer within reasonable time which itself amounts to deficiency in service by the appellant/insurer. Accordingly relying upon the report of T.S. Tuteja it was held that the loss was to the tune of Rs. 4,00,000. Salvage value of 25% was deducted therefrom and thus compensation of Rs. 3,00,000 as loss to the material as well as charge of Fire Brigade Rs. 2,762 were awarded with interest @ 12% per annum on the said amount. The learned Counsel for the appellant submitted that the District Forum erred in accepting the version of T.S. Tuteja regarding the stock position. It was submitted that the T.S. Tuteja did not complete the survey and submitted his incomplete report. It was submitted that as T.S. Tuteja had left the survey halfway; Surveyor S.K. Kansal was appointed by the appellant who assessed the stock at Rs. 12,00,000. Similar was the assessment of stock position of complainant, by C.A., Pukhraj Jain who assessed the stock at Rs. 12,00,000. It was submitted that the complainant was only entitled to proportionate loss in view of the fact that the risk covered under the policy obtained by the complainant/respondent was only for Rs. 4,00,000. It was submitted that the appellant was justified in settling the claim in view of the report of Surveyor S.K. Kansal as also Chartered Accountant Pukhraj Jain and offering proportionate amount to the complainant respondent, in settlement of his claim.

LEARNED Counsel for the complainant/respondent however submitted that T.S. Tuteja was the first Surveyor who sent a letter to the appellant''s Surveyor S.K. Kansal intimating that the stock in the shop was only worth of Rs. 4,00,000 and that the whole of his stock was damaged. Hence the award of the District Forum is justified. In view of the rival contentions as above, it has to be considered what was the stock position in the shop of the complainant at the time of incident and as to whether the award in favour of the complainant respondent by the District Forum was justified? Indisputably the appellant insurer appointed initially T.S. Tuteja as Surveyor, however, the said Surveyor though conducted the spot survey and has also taken some photographs of loss and prepared a list of articles found in the shop of the complainant/respondent but his report dated 15.6.2000 captioned as ''Survey and Assessment Report'' does not appear to be complete. He has prepared and enclosed the inventory of the articles found in the shop of the complainant. It also appears that photographs were also taken by T.S. Tuteja, copies of which are also placed on record.

HOWEVER, as the said report was not complete, S.K. Kansal was appointed as Surveyor who has prepared a detailed inventory and has submitted his report dated 8.1.2001. It was stated in the said report of S.K. Kansal that preliminary survey was conducted by Mr. T.S. Tuteja, who has submitted a list of stock lying in the shop. HOWEVER, there is no mention about the extent of damage to individual parts. It was further stated by S.K. Kansal that on his request, T.S. Tuteja on 6.11.2000 communicated to him stating that the list prepared by him comprised entire stock at the premises on the date of incident and all the parts mentioned therein were affected on account of fire/smoke/water. Surveyor S.K. Kansal opined in his report that above reply of T.S. Tuteja does not provide any information about the extent of damage to the affected motor parts. It was further stated that the bank statement of the insured is carrying stock in the region of Rs. 4.5-5 lacs. HOWEVER, it was remarked by S.K. Kansal in his report that since the bank statements are submitted on approximation basis, hence the same cannot be considered as a proof of actual stock. He has also mentioned in his report that he repeatedly requested the complainant respondent to submit the old balance sheets so that the pattern of stocking, sales and purchase could be studied, however, the complainant did not heed to his request. Surveyor S.K. Kansal stated in the report that under the above circumstances he could not comment on adequacy of the sum insured and that it will be advisable to appoint a Chartered Accountant to ascertain the actual value of stock that was at risk on the date of the incident. It was further stated by S.K. Kansal in Page-10 of the report that total amount of loss is worked out at Rs. 90,904.86 without salvage while with salvage the loss to insured would be worked out to Rs. 2,00,921. It was pointed out by S.K. Kansal that the above assessments was subject to under insurance as may be worked out by the Chartered Accountant.

IN letter dated 13.3.2001 the Surveyor S.K. Kansal intimated the Divisional Manager of appellant/insurer that though he has tried his best to obtain from the complainant all the relevant information/documents, audited account papers, purchase bills, sales records and other related papers so that the total value at risk at the time of fire may be assessed; however, due to indifferent attitude of the complainant/insured it cannot be done. He, therefore, requested the appellant insurer to appoint a Chartered Accountant so that the matter could be thoroughly investigated and factual position is brought on record. He has also opined that the stock of the complainant could not be less than Rs. 12,00,000. It further appears that in view of above, Chartered Accountant, Pukhraj Jain was appointed to evaluate the stock position of the complainant. Pukhraj Jain in his report dated 5.3.2001 stated that the stock as on 13.4.2000 was of Rs. 12,91,921. The evaluation was based on the information and explanations provided to the said Chartered Accountant as has been stated in the said report.

The material as above, would indicate that the report of T.S. Tuteja initially appointed by the appellant insurer was incomplete. The Surveyor S.K. Kansal was of the tentative opinion that the stock of the complainant was not less than Rs. 12.00 lacs and suggested appointment of Chartered Accountant to correctly assess the stock position. It also appears that the complainant/respondent did not cooperate with the said Surveyor S.K. Kansal, subsequently, Chartered Accountant Pukhraj Jain on the strength of material and documents placed before him evaluated the stock of the complainant respondent at the time of incident on 13.4.2001 at Rs. 12,21,921. In the circumstances, we will accept the report of the Chartered Accountant as well as Surveyor S.K. Kansal according to whom the stock position of the complainant was Rs. 12,00,000 (approximately) at the time of incident.

IT is not in dispute that fire policy was obtained by the complainant, covering the risk of Rs. 4,00,000. Therefore, as per terms of insurance only proportionate amount to the loss could be granted by the appellant. The Surveyor S.K. Kansal reported the total loss to the part by his report dated 8.1.2001 at Rs. 2,09,902 including Fire Brigade charges. Though he has recommended deduction of salvage value at 35% for the metal parts amounting to Rs. 59,238 while for the other parts the cost was worked out to Rs. 21,914. Moreover, Rs. 2,762 was admittedly spent by the complainant in calling the Fire Brigade. IT was thus assessed by the Surveyor S.K. Kansal that the total loss without salvage would work out to Rs. 2,00,902. IT would appear that the complainant had obtained fire policy for Rs. 4,00,000 and the stock was worth Rs. 12,00,000. Hence the complainant is entitled to 1/3rd of the value of damaged stock, which works out to Rs. 67,000. Since salvage is not given by the appellant to the complainant, we will deduct 20% towards that. Therefore, the complainant is entitled to compensation of Rs. 53,600. In view of the above the award of Rs. 3,00,000 awarded by the impugned order does not appear to be justified. The complainant is entitled to compensation of Rs. 53,600. The appeal is accordingly partly allowed. The appellant shall pay to the complainant Rs. 53,600 with interest @ 9% per annum thereon from 1.7.2000 i.e., after 2 months after the claim was laid before the appellant by the complainant respondent. The complainant if so advised would be at liberty to seek other legal remedy as may be available to him for his remaining claim. Appeal partly allowed.