SEEMA DEVI vs PUNJAB NATIONAL BANK

BEING aggrieved and dissatisfied by the judgment and order dated 30th January, 2003 passed by the State Consumer Disputes Redressal Commission, Bihar, Patna, in Complaint Case No. 72 of 2000, the complainant has preferred this appeal.

IT is the contention of the complainant that she had taken loan from Punjab National Bank, Patna City, and started her shop in the name and style of K.K. Enterprises. Thereafter, she had taken a shopkeepers insurance policy from the United India Insurance Company, Patna City Branch, for a sum of Rs. 6 lakhs and premium for a period of one year was paid on 7th March, 2000. On 28th June, 2000, at about 9.15 a.m., fire broke out in the shop. Immediately it was reported to local Fire Brigade office and to the Police Station. The Insurance Company was also informed. A Surveyor was appointed by the Insurance Company who submitted his report. It is alleged that on the basis of the Surveyors report the Insurance Company paid a sum of Rs. 76,500/ - to Punjab National Bank from whom the complainant has taken the loan. The complainant was aggrieved by the said assessment of the loss and, therefore, preferred a complaint before the State Commission contending that she had suffered a loss of Rs. 4.75 lakhs. That claim was not accepted by the State Commission on the ground that, (a) the complainant has failed to produce necessary documents to establish the loss suffered by her, and (b) the amount offered by the Insurance Company was accepted without any protest. Hence, the complaint was dismissed. Against that order, the complainant has preferred this appeal. Learned Counsel for the appellant submitted that the order passed by the State Commission is erroneous because the State Commission has not considered the fact that the appellant has written a letter to the Punjab National Bank not to accept the amount which may be offered by the Insurance Company. He also submitted that the State Commission has ignored the letter written by the complainant to the Branch Manager, United India Insurance Company, Patna City, on 17th August, 2000 wherein it was specifically mentioned that the Surveyor was demanding Rs. 1.60 lakhs to Rs. 2 lakhs for giving a favourable report. He submitted that there was no justifiable reason for the Surveyor not to accept the stock statements submitted to the bank from where the loan was taken.

IN our view, the submissions made by the learned Counsel for the appellant requires to be accepted. The report submitted by the Surveyor discloses total bias. This can be seen from the report itself. We would quote, for this purpose, the relevant part of the report: ''SURVEY As stated earlier, we have visited the affected godown on 28.6.2000 to survey and assess the loss. We have taken few photographs of the godown and burnt goods. The husband of proprietor Shri Paras Kumar was in nervous condition and pain of loss caused to him due to fire was clearly visible on his face. After taking photographs we have discussed about the incident, the case and the amount of loss. We have asked for books of account and other papers required for assessment of loss which insured shown his inability to produce. We have given a list of papers and documents required. Insured has submitted various papers of 24.7.2000. Insured has submitted following papers, which can be made the basis of assessment of loss. 1. Copy of Bank statement from 1.4.1999 to 31.3.2000 2. Purchase bills from 1.4.1999 to 31.3.2000. 3. Stock statement submitted to Bank from April 1999 to May 2000. We have carefully examined the stock statement submitted to bank by the firm from April 1999 to May 2000. Insured has shown following stocks in the statement. Months Amount (Rs.) (1) (2) April 1999 14,15,500.00 May 1999 13,48,250.00 June 1999 12,09,300.00 July 1999 11,62,600.00 Aug. 1999 11,95,025.00 Sept. 1999 12,35,400.00 Oct. 1999 12,30,675.00 (1) (2) Nov. 1999 12,65,800.00 Dec. 1999 12,47,000.00 Jan. 2000 11,69,875.00 Feb. 2000 10,61,630.00 Mar. 2000 10,11,865.00 Apr. 2000 10,59,450.00 May 2000 10,92,995.00 Total stock of last 14 months 1,67,05,365.00 Monthly average Stock comes to 14 = 11,93,240.36

We have decided not to follow this method since stock statements are generally prepared to satisfy the needs of the banks cash credit loan. It is prepared as per convenience and for keeping drawing limit intact. Besides, in absence of item -wise detail of stock of different brand and stock register, the accuracy of these statements cannot be cross -verified. Further, these statements are not certified by Bank.''

THIS report clearly indicates that as per the statement submitted to the bank, complainant was maintaining stock worth more than Rs. 10 lakhs every month. She has produced the purchase bills from 1st April, 1999 to 31st March, 2000. There was no justifiable reason for the Surveyor not to take into consideration the purchase bills or bank statements or the stock statement submitted to the bank by the complainant. It is also apparent that Surveyor arrived at the conclusion that complainant was maintaining an average stock worth Rs. 11,93,000/ - per month. Despite this fact, it appears that he adopted unreasonable method of assessing the loss on the basis of the remaining stock after fire. The Surveyor assessed the loss as under: ''As discussed earlier, we have decided to assess the loss on the basis of Physical Stock Taking carried just after fire. Now, loss is assessed as under : Amount Amount (Rs.) (Rs.) Stock Just after Fire Stock in good condition 62,195.00 Stock in partly damaged condition 41,955.00 Stock in fully damaged condition 78,985.00 1,83,135.00 Add : 10% for fully burnt items not seen by us 18,313,50 Stock just before fire 2,01,448.50 Loss : Goods stock as per Annexure 62,195.00 Gross Loss Assessed 1,39,253.50 Loss : Salvage Value 50% of partly damaged goods i.e., 50% of Rs. 20,977.50 41,955.00 20% of partly damaged goods i.e., 20% of Rs. 78,985.00 15,797.00 36,774.50 Net loss Assessed 1,02,479.00 Net loss assessed is Rs. 1,02,479.00 (Rupees one lac two thousand four hundred seventy nine only). Insurer may consider claim as non -standard in view of non -maintainance of books of accounts. This report is issued without prejudice and subject to terms and conditions of the policy under which claim has been made.''

IN our view, on the basis of stock which was just left after fire, loss cannot be assessed. This unusual manner was adopted by the Surveyor for the reasons best known to him. May be there is substance in the allegations made by the complainant in her letter dated 17th August, 2000 written to the Branch Manager of the Insurance Company before submission of Survey Report.

IN the said letter she has specifically written to the Branch Manager of the Insurance Company that Shri Kaushal Kishore of the Surveyors firm, had informed her that work would be done, but for that she would be required to spend money and demanded that it would cost around Rs. 1.60 lakhs or Rs. 2 lakhs. As she was not in a position to pay the said amount, she wrote the letter and informed the Branch Manager that in such a situation shopkeepers would loose faith in Government organisations. In our view, the unusual method adopted by the Surveyor in assessing the loss gives credence to the allegation made in the letter. Further, the State Commission ignored the material fact that the complainant wrote a letter of 15th September, 2000 to the Branch Manager, Punjab National Bank, Patna City, that the Insurance Company has not correctly assessed the loss caused due to fire and, therefore, the bank was requested not to accept the cheque which may be tendered by the Insurance Company. This would clearly reveal that the complainant was not prepared to accept the paltry amount for the loss suffered by her. Despite this, if the Bank has accepted the same the complainant cannot be estopped from filing the complaint for receving compensation for the amount of loss suffered by her.

IT is to be stated that in response to the notice of the appeal the Senior Manager, Punjab National Bank, S.O. Chowk, Patna City, has submitted a letter dated 20th August, 2004, addressed to this Commission, wherein it is stated that neither the United India Insurance Co. Ltd. nor its Surveyors approached them for any information. It is, also, stated that stocks as per the hypothecation agreement remained in physical possession of the borrowing firm, M/s. K.K. Enterprises. Stock statement of the relevant year was also annexed to the said submission. The stocks mentioned in the said statement as on 31st May, 2000, were curtain cloth, coir mattress, foam mattress, moulded chair, PVC carpet, jute carpet, pillows, bed -sheets, pillow covers, etc. worth Rs. 10,59,450/ -. The bank has produced similar statement for the months of April, March and February, 2000. Apart from this, before the Surveyor the complainant has produced purchase bills from 1st April, 1999 to 31st March, 2000. The Surveyor has not given any reason why those were not taken into consideration.

IN the FIR which was lodged on 28th June, 2000 the damage reported was also for a sum of Rs. 4,75,000/ -. It is mentioned that after the fire, the remaining curtain cloths and other articles were damaged because of pouring of water extinguishing the fire. In our view, there is no other evidence to establish that the claim of the complainant is in any way exaggerated. Admittedly, the insurance policy is for a sum of Rs. 6 lakhs. The stock statement revealed that the complainant was maintaining stocks worth Rs. 10 lakhs. As stated above, the Surveyor has found the stock, just after the fire, as under: Amount Amount (Rs.) (Rs.) Stock just after fire Stock in good condition 62,195.00 Stock in partly damaged condition 41,955.00 Stock in fully damaged condition 78,985.00 1,83,135.00

TO this, the Surveyor has added 10% of the stock as if it was burnt and not seen by them. There was no reason to say that it was 10% and not more.

AS there is no other evidence and because of the delay and sufferings by the complainant and the stock statements submitted by the Bank stating that the stock was approximately of Rs. 10 lakhs, we, on ad hoc basis, estimate that fully burnt stock would be at least approximately of Rs. 2 lakhs instead of Rs. 18,313.50 estimated by the Surveyor. Adopting the formula of assessing the loss as has been done by the Surveyor and also taking into account the finding of the Surveyor that some stock was partly damaged, we can safely arrive at the following conclusion: (a) Stock after fire Rs. 1,83,135.00 (b) Add : Instead of 10% for fully brunt items not seen by the Surveyor Rs. Rs. 2,00,000.00 2,00,000/ -. Rs. 3,83,135.00 ( -) Less : Stock in good condition Rs. 62,195.00 Rs. 3,20,940.00 ( -) Less : 50% of partly damaged goods i.e., 50% of Rs. 41,955.00 Rs. 20,977.50 Rs. 2,99,962.50 ( -) Less : 10% of partly damaged goods i.e., 20% of Rs. 78,985.00 Rs. 15,797.00 2,84,165.50

THE loss assessed comes to Rs. 2,84,165.50. The Insurance Company is directed to pay to the complainant the said amount after deducting the amount of Rs. 76,500/ - which has already been paid to the Punjab National Bank. Hence, we direct the Insurance Company to pay to the complainant a sum of Rs. 2,07,665.50 (i.e., Rs. 2,84,165.50 minus Rs. 76,500/ -). This amount shall also carry interest at the rate of 9% p.a. As far as the date from which the interest shall be paid, we are to state that fire took place on 28.6.2000. The Surveyor submitted his report on 7.8.2000 and the Insurance Company paid to the Bank the sum of Rs. 76,500/ - on 22.9.2000. Hence, we direct that the interest shall run on this amount of Rs. 2,07,665/ - from 22.9.2000 till the date of payment. The Insurance Company is also directed to pay Rs. 10,000/ - by way of costs to the complainant. The appeal is allowed accordingly. Appeal allowed.