UNITED INDIA INSURANCE CO. LTD. vs Krishan Kumar Mahajan

FIRST Appeal No. 106 of 2008 is filed by United India Insurance Co. Ltd., against the decision of the H.P. State Consumer Disputes Redressal Commission in Consumer Complaint No. 6 of 2003. Complainant/Krishan Kumar Mahajan passed away during the course of proceedings before the State Commission and was represented by his legal heirs i.e. wife, son and daughter. The late Krishan Kumar Mahajan had been awarded a contract for construction of bridge over Pathankote -Jemon Road by the Himachal Pradesh PWD. In this connection, he had taken an insurance policy from the appellant/Insurance Company, which covered damage to construction equipment and materials to the extent of Rs. 184.62 lakh. During the currency of the insurance policy, on 17.2.2003 the construction material got washed away due to heavy rain and resultant flooding of the constructions site. As per the complaint petition, the loss suffered was of the order of Rs. 38,24,018. The Surveyor appointed by the Insurance Company visited the site on 20.2.2003 for assessment of the loss. Allegedly, the documents demanded in the letter of 1.3.2003 had already been supplied to him on 21.2.2003. The Complainant was again asked for the documents, which had been supplied with his letter of 30.7.2003. Despite a legal notice of 19.8.2003, the claim of the Complainant was not settled. It was in this background that a consumer complaint was filed before the State Commission in November, 2003.

PER contra, the case of the appellant/OP before the State Commission was that the claim could not be settled due to the non -cooperative attitude of the Complainants/insured. However, the OP did not dispute the fact that the Complainant was the Contractor for the construction of this road bridge, that he had taken an insurance policy for Rs. 184.62 lakh to cover the materials required for this construction, that the construction site was hit by a flash flood, that the bridge was damaged and that the material stocked on the site had got washed away. The State Commission took the view that the dispute between the two sides lay in a very narrow compass. The core issue was whether the OPs had failed to settle the claim within a reasonable time and whether the inordinate delay in submission of the Surveyor''s report and failure to settle the claim amounted to deficiency in service and unfair trade practices on the part of the OPs. It was held that the record showed that all necessary documents, which were in possession of the Complainant, had been supplied to the Surveyor. The Surveyor had also examined the measurement books of the construction work available with the PWD authorities. Documents supplied by the Complainant were neither considered nor rejected by the Surveyor on the ground that they were not signed by the Complainant. The State Commission has observed that nothing prevented the OPs from getting them signed by the Complainant, if not already done.

THE Surveyor''s report dated 8.4.2004 assessed the total loss at Rs. 6,98,224.31 and after making deductions under the policy recommended payment of a net sum of Rs. 1,97,224.31. The State Commission rejected the report of the Surveyor in totality and allowed the entire claim of Rs. 38,71,928 with 6% interest from the date of filing of the complaint i.e. 28.11.2003. It also awarded compensation of Rs. 25,000 and costs of Rs. 5,000.

APPEAL against the above order, has been filed with delay of 25 days, which considering the explanation, has been condoned. Mr. Ravi Bakshi, Advocate has been heard on behalf of United India Insurance Company Ltd. and Mr. Shakti Chand Sharma, Advocate on behalf of the Complainants/Respondents. We have also carefully perused the records as submitted by the two sides. The main ground of appeal against the impugned order is that the State Commission has not passed a detailed speaking order in justification of the huge amount allowed by it. The order does not even mention the reasons and grounds for awarding the entire amount as claimed by the Complainants. Nor, has it given any detailed reasons for rejecting the Surveyor report. In view of the huge difference, between the loss claimed by the Complainants and the loss assessed by the Surveyor, the evidence and record should have been examined more deeply and thoroughly. As per memorandum of appeal the quantum of compensation awarded is not based on any evidence.

AT the outset, it needs to be observed that in the twenty page report of the Surveyor, appointed by the OPs, the first thing that strikes the reader is that he visited the site on 22.2.2003 and submitted his report nearly fourteen months later on 8.4.2004. Yet, the report carries no explanation of this inordinately long delay. Further, there is nothing in this report to support the plea put forth by the appellant/OPs, before the State Commission, that the Complainant''s non -cooperative attitude and delay in submission of necessary documents were the cause for delay in Surveyor''s report and for failure of the Insurance Company to decide the claim. On the contrary, his report shows that the Surveyor had made joint visits to the site with the Complainant and fully considered the documents submitted by him.

THE report of the Surveyor has listed 18 items in which total loss of Rs. 38,71,928 was claimed by the respondent/complainant. However, his own assessment is given only in 9 items i.e. just half. The remaining items are disallowed by the Surveyor but with a cryptic ''NA'' and no explanation. Thus, the loss in these cases has not even been assessed by the Surveyor. Therefore, we are unable to accept the plea of the appellant/United India Insurance for acceptance of the Surveyor''s assessment in totality. At the same time, we find that the State Commission has swung to the other extreme when it observed that - - "The documents of the complainant were neither considered nor rejected by the Surveyor. We may point out that Surveyor is a person appointed by Govt. of India for assessment of loss/damages. He is an expert in the line of loss assessment. His opinion is of an expert as such in order to sustain the same here has to be something by way of reasoning may be very briefly to be explained in his report. We find from the report of Surveyor Annexure R -24 that most of items were not considered either by depicting against such items as NA and disallowed. Against the claim estimated damage of Rs. 38,71,928 it is assessed at Rs. 6,98,224.31. In our opinion in case the Surveyor thought that certain amounts were not payable or they were liable to be reduced, he was duty bound to give reasons howsoever brief these were, as such no reliance can be placed on such report. Estimated loss having been assessed by Surveyor without providing any data about value of each item, in his report is arbitrary. Since the complainant suffered extensive loss/damage, version of the complainant deserves to be upheld. Surveyor has brought down the loss wrongly and arbitrarily for the reasons best known to him without assigning any reasons. We, therefore, hold that the report of the Surveyor is thus not acceptable. Ordered accordingly".

IT is clear from the above that the State Commission has overlooked the fact that at least in half of the items the Surveyor has gone into the claim and made specific assessment of the extent of loss. There is nothing on record to show that evidence to the contrary was produced before and considered by the State Commission. In this background, we deem it necessary, in the interest of justice and equity, to accept the figures of specific assessment of loss where they emanate from the report of the Surveyor. For the same reason, on the other half items of the claim, for want of any meaningful assessment by the Surveyor, the loss as estimated by the Complainant remains acceptable. Item -wise details are computed on this basis in the statement below. Consequently, we deem it appropriate to award a sum of Rs. 28,05,409.21. The award of Rs. 38,71,928.90 by the State Commission and Surveyor''s assessment of Rs. 6,98,224.31 are both rejected.

THE State Commission has also awarded compensation of Rs. 25,000 for harassment caused to the Complainant. We agree with the State Commission that harassment here had resulted from the long delay in assessment of loss by the Surveyor. While the case of the appellant/respondent is that it was caused by non -submission of necessary documents by the Complainant, the report of the Surveyor is evidence in itself that he had received requisite documents, had several follow up meetings with the Complainant and had also made visits to the site with him. Therefore, we do not accept the period of nearly 14 months as reasonable for assessment of loss by a professional Surveyor appointed by the Insurance Company. Equally, we find no explanation why even after the Surveyor submitted his report on 8.4.2004, the appellant/Insurance Company was not able to decide the claim, one way or the other, till 28.11.2003, when the consumer complaint was filed. For the reasons detailed above the First Appeal No. 106 of 2008, filed by M/s. United India Insurance Company Ltd., is partially allowed. The amount awarded in para 9(1) of the impugned order is reduced to Rs. 28,05,409.21. The rest of the impugned order remains unchanged.