SAWHNEY BROTHERS vs NEW INDIA ASSURANCE CO. LTD.

THE complainant is engaged in export of readymade garments and allied products. THE complainant had taken coverage of all types of risks including fire vide Insurance Policy Nos.1131090302945 & 1131090302989. According to the complainant, the insurance coverage is being taken from the OP/Insurance Co. for more than 2 decades and every year insurance premium of more than 5,00,000/- was paid, but not a single insurance claim relating to any loss pertaining to fire loss of goods in transit was claimed except that in the year 1984, the entire property of Group of Companies was looted and burnt in respect of which claim has been filed.

ON 17.5.1998, fire broke down in the factory and the fire information was conveyed to the Insurance Company on 18.5.1998. The Opposite party-Insurance Company had initially appointed surveyor " M/s. J.D. Gulshan & Company, New Delhi, but subsequently the Insurance Company had deputed surveyor, M/s. V.N. Sarin & Company. According to the complainant, the entire loss was to the tune of Rs.91,99,844/-. The complainant wrote numerous letters to the Insurance Company for early settlement of the claim on account of financial hardship. The complainant insisted that the claim should be settled on gross loss basis and without deducting the salvage value, as the complainant was not interested in retaining the salvage. The surveyor after discussion with Mr. D.S. Sahni, Partner of the firm prevailed upon him and made him agreeable for retaining the salvage at Rs.6,15,000/-. The surveyor had promised that if the proposed salvage value of Rs.6,15,000/- was accepted, the claim would be settled within fortnight. Under this compelling circumstances, Mr. D.S. Sahni, Partner of the firm reluctantly agreed and accepted amount of Rs.6,15,000/- towards the salvage value. It is further contended by the complainant that the complainant was forced to accept assessed loss by Surveyor at Rs.67,13,000/- and give in writing by letter dated 12.10.1998 to Insurance Company. The complainant was asked to preserve the salvage till there is intimation to the contrary from the Opposite party-Insurance Company. The surveyor submitted final surveyors report dated 17.10.1998 for Rs.67,13,000/-. The complainant exchanged numerous correspondences with the Insurance Company requesting for disbursement of claim assessed by the surveyor who had assured that the assessed claim would be definitely paid by the Insurance Company within 15 days from the date of acceptance. Subsequently, the surveyor of the Insurance Company was forced to re-assess and submit revised assessment report after deducting additional salvage valued at Rs.3,02,019/- vide letter dated 11.5.1995 and the assessed loss was reduced to Rs.64,10,981/-, which was paid and received by the complainant under protest in May, 1999. According to the complainant, the Insurance Company did not permit the complainant to dispose of the salvage and asked him to preserve the same on account of which, the complainant had to suffer loss and ultimately, the salvage could be sold only for a paltry sum of Rs.25,000/-.

In the complaint filed by the complainant, the assessment of loss has been disputed and the complainant has given his calculation of loss in paragraph 21 of the complaint. In accordance with the said assessment, the complainant claims that a balance amount of Rs.26,23,932/- is payable with 24% interest after 45 days from the date of loss i.e. to say from 1.7.98 to 10.6.99 for which, a sum of Rs.5,94,757/- is claimed. Besides this, the complainant also claims a sum of Rs.6,82,222/- as compensation for mental torture, harassment and loss of business on account of blockage of funds for one year. Consequently, the complainant claims a sum of Rs.37,25,984/- with 18% interest.

THE opposite party-Insurance Company has stated that the insurance claim had been settled at Rs.64,10,984/- in full and final settlement of the claim with the complainant which was accepted by him by signing discharge voucher and as such, no amount is payable to the complainant. THE opposite party has denied allegations that the surveyor gave any promise or assurance that if the salvage value of Rs.6,15,000/- is accepted then the claim would be settled within a fortnight. It is also denied that the complainant was forced to give in writing assessment of loss at Rs.67,13,000/- vide letter dated 12.10.1998. On the contrary, the Insurance Company has stated that the said letter was voluntarily written by the complainant to the Insurance Company as he was satisfied with the assessment of loss made by the surveyor. It is further submitted that the surveyor had further assessed the value of Salvage at Rs.9,17,019/-after giving adjustment of the salvage value. THE entire insurance claim of Rs.64,10,981/- was paid to the complainant in full and final settlement of insurance claim. In rejoinder, it was reiterated by the complainant that the complainant was forced by the surveyor to accept the value of the salvage at Rs.6,15,000/- with assurance and promise that the assessed amount would be definitely paid by the respondent within 15 days from the date of filing final survey and assessment report, but the complainant was given reduced assessed amount in May,1999 and that too after giving second assessment report from the surveyor.

THE parties have filed written submissions and we have heard Shri T.S. Sawhney on behalf of the complainant and Ld. Counsel Shri P.K. Seth on behalf of the OP. On behalf of the complainant it has been urged that the final survey and assessment report was submitted on 17.10.1998 assessing the total claim at Rs.67,13,000/-, but, subsequently after reassessment, revised estimate report was submitted on 11.5.1999 reducing the amounts from Rs.67,13,000/- to Rs.64,10,981/- and the complainant was forced to accept the said amount under duress and coercion on 10.6.1999. It is further urged that the complainant had on the discharge voucher recorded that the payment was received under protest. It was further submitted that the OP had charged 50% loading of additional premium for reinstating of the insured goods in the same position after peril and as such, the complainant is entitled to reimburse of the loss assessed by the surveyor in its report dated 17.10.1998 without deduction and reduction of any amount towards dead stock or average claim either on stock or building. As per calculation given in the written submissions, the complainant is entitled to a sum of Rs.17,01,750/- with 24% interest thereon after 45 days from the date of loss till payment as also compensation towards mental agony, harassment and loss of business. In this connection, reliance has been placed on behalf of the complainant in Oriental Insurance Company Ltd. Vs. Sumangala Steel Ltd. " III (1999) CPJ 4 (NC). On the other hand, Ld. Counsel for the OP urged before us that the survey report dated 17.10.1998 was accepted by the complainant vide letter dated 12.10.1998; that the complainant in letter dated 8.11.1999, which is at page 58 of the record did not report any protest or that the report was accepted under duress and coercion and that the complainant did not even had any grievance to the reduction of claim pursuant to reassessment done by the surveyor. It is also pointed out that the Insurance Company had agreed to release the salvage and the salvage value was taken as Rs.6,15,000/-. According to the Ld. Counsel for the OP, the claim was settled as full and final settlement and there being no deficiency in service, the complaint is liable to be dismissed.

WE have gone through the record. There is no dispute that the complainant had insurance coverage and there was fire in the factory on 17.5.1998. The OP had appointed surveyor who had vide report dated 17.10.1998 assessed the loss under the policy at Rs.67,13,000/-. The survey report shows that the insured had agreed for retaining the salvage and the salvage value was taken as Rs.6,15,000/-, which was deducted out of the total claim payable to the complainant. The complainant, in fact, vide letter dated 12.10.1998 had written a letter to the OP agreeing to the assessment of loss on Rs.67,13,000/- as assessed by the surveyor and had undertaken to preserve the available salvage. WE may mention here that this letter was written even before the report was submitted by the said surveyor. Subsequently, the surveyor had finally assessed the value of the salvage at Rs.9,17,019/- and after adjustment of the said salvage value, the balance amount of Rs.64,10,981/- was paid to the complainant in full and final settlement of the insurance claim. According to the complainant, the said amount was received by the complainant on 10.6.1999 under protest, as the complainant was forced to accept the same under duress and coercion. On behalf of the complainant it has been urged that on the discharge voucher the complainant had recorded that the payment was received under protest. However, neither the duplicate discharge voucher was produced by the complainant, nor directions were sought for production of the same by the Insurance Company. The case of the Insurance Company is that the said payment was accepted by the complainant pursuant to the letter dated 12.10.1998, which was voluntarily written by the complainant to the OP. At this stage, we would like to point out that the surveyor in his report at page 12 under the sub-heading "STOCKS" under heading "STATEMENT OF LOSS" has been mentioned that the surveyors after hectic and protected discussion, could manage to make the insured agreeable on retaining the salvage at Rs.6,15,000/- and the insured very reluctantly and in the interest of early settlement of claim had agreed to the same. This would go to show that the complainant had reluctantly and on assurance of earlier settlement of the claim had agreed to retain the salvage valued at Rs.6,15,000/- It is pertinent to note that the surveyors have further stated that the insured being an export house, straightway refused to retain the salvage and were pressing hard that the Company should take over the same and the claim should be settled on the gross loss basis without deducting the salvage value. In view of this, the surveyor talked to various buyers and some of them very reluctantly agreed to take over the salvage, but did not offer more than Rs.2,40,000/- for entire damaged stock. From this, it is clear that the complainant had agreed for retaining the salvage in the hope of early settlement of the claim, but the claim was paid only on 10.6.1999 and that too after further deduction on account of the reassessment of the salvage at Rs.9,17,019/- In the circumstances, there was absolutely no justification for reassessment of the value of the salvage and for further deduction on account of the same. Moreover, in view of the observations made by the surveyor relating to the salvage, we find that the salvage could not be sold for more than Rs.2,40,000/- for which, some of the buyers had agreed to take over the same. Therefore, the complainant would be entitled to the difference of the salvage value to the extent of Rs.3,75,000/- (Rs.6,15,000/- minus Rs.2,40,000/-). This amount of Rs. 3,75,000/- will have to be added to the assessment of loss by the surveyors at Rs.67,13,000/-. The total amount to which the complainant would be entitled comes to Rs.70,88,000/-. The complainant was paid a sum of Rs.64,10,981/-. Therefore, the complainant would be entitled to a balance amount of Rs.6,77,019/-. Besides this, the complainant had accepted the assessment of the surveyors at Rs.67,13,000/-, in the light of the earlier settlement of the claim to which, reference has been made in the report of the surveyor. However, even after the report of the surveyor dated 17.10.1998, the Insurance Company settled the claim only on 10.6.1999 that is to say after about 8 months of the report. Therefore, the complainant would be entitled to interest on the amount of the claim from 2 months after the submission of the surveyor report that is to say from 16.12.1998 till the claim was paid. In other words, the complainant would be entitled to 9% interest on Rs.67,13,000/- from 16.12.1998 till 10.6.1999 and from 11.6.1999 the claimant would be entitled to a sum of Rs.6,77,019/- with 9% interest thereon till the said amount is actually paid by the Insurance Company to the complainant.

FOR the aforesaid reasons, the complaint is partly allowed to the aforesaid extent only inasmuch as we find that the complainant has not made out any case for grant of compensation, as claimed by him in the complaint or as stated in the written submissions filed by the complainant. In the facts and circumstances, we direct that the cost of Rs.25,000/- shall be paid by the OP to the complainant.