Ravjibhai Jethabhai Patel Partner Parul Rice And Pulse Mills vs UNITED INDIA INSURANCE COMPANY Limited

THIS appeal challenges the order dated 07.04.2005 of the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad (in short, "the State Commission") in complaint case number 19 of 2000. By this order, the State Commission dismissed the complaint filed by the complainant (appellant before us) alleging deficiency in service against the United India Insurance Company Ltd (opposite party-OP) because the latter repudiated the complainant''s claim for indemnification of the loss to his insured stock of paddy stored in the insured premises due to fire. For the sake of convenience, we hereafter refer to the parties according to their status before the State Commission.

THE complainant was one of the partners of the firm, Parul Rice and Pulse Mills, which was engaged in milling paddy into rice and its sale. THE goods (paddy and rice) dealt in by the firm were hypothecated with a local branch of the Corporation Bank and also insured with the OP for Rs. 6 lakh against the peril of fire for the period 30.03.1999 to 29.03.2000. On 08.08.1999, there was an accidental fire in the godown where the stock of paddy was stored, resulting in total loss of the stock. THE next morning, the complainant after being informed about the fire lodged a complaint with the Police and summoned the fire brigade, which could extinguish the fire after several hours. THE complainant also informed the OP. THE OP, in turn, appointed a surveyor who reported that the alleged loss being of more than Rs. 5 lakh, the matter was not within his pecuniary jurisdiction to assess. THE OP then appointed a second surveyor who carried out the survey, assessed the loss and submitted his report to the OP. According to the complainant, the OP agreed to settle the claim for Rs. 5, 16,410/- and decided to issue the discharge voucher on 11.10.1999. By its letter dated 12.10.1999, the Corporation Bank also asked OP 1 to send the demand draft. However, since OP did not remit the amount, the complainant enquired into the matter and learnt that because of an anonymous letter, OP had decided not to admit the claim. THE complainant was then constrained to issue a legal notice to the OP to which the latter gave evasive replies. Thus, alleging deficiency on the part of the OP, the complainant filed a complaint before the State Commission seeking a total compensation of Rs.11, 26,410/-, including the loss of paddy stock of Rs. 5, 16,410/-. In contesting the complaint, the OP admitted that based on the second surveyor''s report the claim was in the final stages of consideration. However, before the process could be completed the OP received a signed complaint on 15.10.1999 alleging that the complainant had submitted a false claim by burning husk instead of paddy. The OP then appointed an investigator who enquired into the matter and reported in detail as to how a false claim had been filed. On the advice of the investigator, the OP also appointed a private forensic consultant, who after scientific investigation reported that the alleged fire could not have been caused by an electrical short circuit, as claimed, and that the quantity of paddy alleged to have been damaged by the fire could not have been reduced to such a small quantity of ash as was actually found in the insured godown.

We have heard Mr K.P. Toms, learned counsel for the appellant Mr S.M. Tripathi, learned counsel for the OP and carefully considered the documents on record, including reports of the surveyor, investigator and forensic consultant.

IN the impugned order, the State Commission has discussed the entire evidence in detail. Thus, from the investigator''s report, the State Commission has noticed that the mill had been seized by the Gujarat State Financial Corporation during 07.03.1998 to 14.11.1998. Though the mill was started thereafter, no milling was done till 15.12.1998. The power consumption varied considerably even when there was no milling and when there was milling, the consumption was nil. The complainant''s explanation regarding the build-up of the large stock of paddy in August 1999 was that it had been carried forward from the previous Diwali (October - November 1998). This was against the past practice adopted by the complainant in procuring and milling paddy, as demonstrated by the investigator in his report. IN addition, the statement of the complainant that large purchases of paddy were made after 15.07.1999 was contrary to the first statement/explanation. Regarding the stock statement certified by the Corporation Bank, the State Commission has held that the said certificate could not be relied upon in view of the admission made by the complainant before the State Commission that the stock at the end of July 1999 had been carried over from the previous Diwali. Moreover, the State Commission has taken note of the position reported by the investigator that the complainant''s books of accounts and balance sheet for 1998-99 had not been completed; the stock values of 1998-99 did not match the entries in the stock registers; and the records of payments to farmers for purchase of paddy were all "kaccha", converted to "pakka" invoices at a later, convenient date. The State Commission has also taken notice of the forensic consultant''s report as well as that of the Government Forensic Laboratory and concurred with their scientifically established findings that (a) the electrical wirings and fittings inside the godown showed no signs of an electrical short-circuit and hence the fire could not have originated as claimed by the complainant, (b) in an inadequately ventilated godown as the one insured, the fire could not have been so intense as to reduce the entire stock of paddy to ashes because paddy per se was not a highly combustible commodity, and (c) even if the paddy were so burnt as to be reduced completely to ashes, the quantity of the ashes, corresponding to the quantity of paddy stated to have been burnt, would have been much larger than that observed soon after the fire was extinguished. Further, the State Commission has observed, "It has to be noted here the complainant has failed to meet with the salient features of investigation report which is based essentially on the facts collected from various sources as well as scientific reports." The State Commission has also dealt adequately with the legal objection on behalf of the complainant that after receiving the second surveyor''s report (which was a statutory document required under section 64 UM of the INsurance Act, 1938) the OP could not have appointed an investigator etc. Before us, Mr. Toms has not been able to show how and where the detailed and well-reasoned findings and conclusions of the State Commission could be faulted. On the other hand, Mr. Tripathi has not had much to say except pointing out how the State Commission''s order is based on due and proper appreciation of the evidence on record.

AFTER careful consideration, we agree with Mr. Tripathi that the impugned order is fully justified, based as it is on proper appreciation of facts and evidence and also on settled law in this context. In our opinion, the complainant/appellant should not have ventured with this appeal. Consequently, the appeal fails and is dismissed as such and the impugned order of the State Commission is confirmed. No order as to costs.