UNITED INDIA INSURANCE CO.LTD vs Baba Electricals And Electronics, Dhar

THIS revision petition has been filed by United India Insurance Company Ltd. (hereinafter referred to as the ''Petitioner'') against the order of the State Consumer Disputes Redressal Commission, Madhya Pradesh (hereinafter referred to as the ''State Commission'') wherein M/s Baba Electricals & Electronics, Dhar (hereinafter referred to as the ''Respondent'').

IN his complaint before the District Forum, Respondent had contended that he had a shop at M.G.Road, Dhar under the name and style of M/s Baba Electricals & Electronics which he had got insured from the Petitioner/INsurance Company from 17.02.2005 to 16.02.2006 for a sum of Rs.3 lakhs. On 22.02.2005, some anti -social elements had set fire to the shop adjoining the Respondent''s shop as a result of which the Respondent''s shop also caught fire resulting in loss of stocks in his shop including televisions, fridge, VCD Players etc. and also resulting in the collapse of the roof. The Respondent thus incurred a loss of Rs.4,50,000/ -. A complaint was registered with the Police who inspected the place and confirmed the total loss due to the fire. Respondent also submitted his claimed for loss of Rs.4,50,000/ - to the Petitioner/INsurance Company who appointed a Surveyor. The Surveyor assessed the loss to be Rs.30,240/ - and after applying under insurance and excess clause concluded that the loss was only Rs.11,500/ -. The Petitioner/INsurance Company sent a cheque for this amount which was refused by the Respondent and being aggrieved he filed a complaint before the District Forum on grounds of deficiency in service and requested that the Petitioner/INsurance Company be directed to pay him for the actual losses insured i.e. Rs.4.50 lakhs along with interest @ 12% from the date of filing of the complaint, Rs.25,000/ - for mental agony and also the litigation costs.

THE above contentions were denied by the Petitioner/Insurance Company who stated that in the first place, Respondent had got his shop insured for a total sum of Rs.3 lakhs so the question of indemnifying claim for loss of Rs.4,50,000/ - does not arise. THE Respondent had also not submitted any stock register etc. in support of his contention regarding value of the articles lost in the fire. On the other hand, the Surveyor appointed after due inspection, assessed the net loss at Rs.11,500/ - for which a cheque was promptly sent to the Respondent, hence, there was no deficiency in service.

THE District Forum after hearing both parties and considering the evidence on record allowed the complaint. THE District Forum did not place reliance on the report of the Surveyor prepared 10 -12 days after the date of the incident that the loss was correctly assessed since most of the goods had been shifted by the Respondent by putting it in the mezzanine floor of another shop. THE District Forum directed the Petitioner/Insurance Company to pay the Respondent, Rs.3 lakhs i.e. the insured amount along with interest @ 7% per annum from the date of filing of the complaint till realization, Rs.500/ - for mental agony and Rs.500/ - as litigation cost.

AGGRIEVED by this order, Petitioner/Insurance Company filed an appeal before the State Commission which dismissed the same by observing as follows: "As per Surveyor''s report the total stock as per accounts book of the respondent at the time of fire was of Rs.3,82,480/ - while on the date of inspection the value of the goods found safe after fire was assessed at Rs.1,66,044/ -. There is nothing in the report as to what happened to the remaining stock. If we go item wise assessment of loss made by the Surveyor, it will be thus seen that the every item has been undervalued and there has been attempt on the part of the Surveyor to under estimate the loss. The goods which were saved after fire were shifted in another part of the shop and as per Surveyor''s report the value of that saved stock was of Rs.1,66,044/ -. There can be thus no manner of doubt that the remaining stock worth Rs.2,16,436/ - was damaged in the said fire. This is borne out further from the inspection report prepared by the police and Municipal Council, Dhar after the incident and prior to the survey made by the appellant''s surveyor. In both these report total loss including loss to the shop was estimated at Rs.4,50,000/ -. The assessment of loss made by the surveyor at Rs.30,240/ - was clearly wrong and has been rightly rejected by the District forum. Since the total stock before the fire was Rs.3,82,480/ - and the value of the stock found safe after incident was Rs.1,66,044/ -, it can safely be inferred that loss caused to the respondent''s stock was to the tune of Rs.2,16,436/ -. The respondent was thus entitled to get the loss reimbursed by the appellant but subject to clauses relating to under insurance and excess. After applying under insurance clause the liability of the insurance company thus comes to: Loss x Sum Assured . 216436 X 300000 = 169762/ - Total value of stock . 382480 Thus the amount payable comes to Rs.1,69,762/ -. This amount is required to be reduced further by excess clause for Rs.10,000/ -. Thus the net liability of the respondent insurance company to Rs.1,59,762/ -."

Hence, the present revision petition.

COUNSEL for both parties made oral submissions. COUNSEL for Petitioner stated that while it is a fact that the Surveyor had assessed that goods worth Rs.3,82,480/ - were stocked at the time of the fire and goods worth Rs.1,66,044/ - were not damaged, the State Commission erred in concluding that the entire goods worth Rs.3,82,480/ - were also lost in the fire. In fact most of these goods had been removed prior to the fire incident and had, therefore not been destroyed in it. This fact has been specifically mentioned in the report of the Surveyor. Further, according to the COUNSEL for Petitioner, the balance sheet of the Respondent clearly states that the loss of goods in the fire was only Rs.57,550/ -. The State Commission, therefore, clearly erred in concluding that the Respondent was entitled to payment of Rs.1,59,762/ - by the Petitioner after deducting the excess charges/amounts due to over insurance.

COUNSEL for Respondent stated that the Surveyor of the Petitioner in his report had himself concluded that goods/articles worth Rs.3,82,480/ - were stocked in the premises and out of these goods only goods worth Rs.1,66,044/ - had been saved. From this, it is obvious that after deducting this amount (i.e. 1,66,044/ -) from the total stock value of Rs.3,82,480/ -, goods worth Rs.169762/ - had been damaged. There is no evidence produced by the Surveyor in support of his statement that Respondent had removed these goods to some safe place, except for a single line statement in his report to this effect. Further, the balance -sheet referred to by the COUNSEL for Petitioner also does not reflect the actual loss suffered by the Respondent.

WE have heard learned Counsel for both parties and have gone through the evidence on record. The facts pertaining to the insurance cover taken by the Respondent from the Petitioner/Insurance Company and the incident of fire are not in dispute. It is also not in dispute that the Surveyor in his report has clearly stated that the loss in the fire as per the inspection carried out by him and the books produced by the insured confirmed that the value of the stocks in the shop at the time of the fire was Rs.3,82,480/ -. The report of the Surveyor (which is an important document and is to be relied unless proved otherwise) also clearly states that after inspection, the loss suffered in the fire was Rs.1,66,044/ -. From these two statements, it is clear that goods worth Rs.2,16,236/ - were lost in the fire. WE are unable to accept the Surveyor''s contention that the goods lost were worth only Rs.11,500/ - and not Rs.2,16,236/ - because rest of the goods had been shifted to some safe place and were therefore, not damaged or lost in the fire since there is no evidence to this effect. Except for a single line statement to this effect in the Surveyor''s report, the Petitioner on whom the onus was to prove that some of the goods have been removed to the safe place by the Respondent, has not been able to produce any evidence to support this contention. WE, therefore, agree with the reasoning of the State Commission that the amount payable was Rs.1,69,762/ - after application of the under insurance clause. WE further agree that the Petitioner would be justified in reducing this amount by Rs.10,000/ - in view of the excess clause and therefore, the net liability of the Petitioner/Insurance Company is Rs.1,59,762/ -.

IN view of these facts, while upholding the order of the State Commission, we dismiss the present revision petition. The Petitioner/INsurance Company is directed to pay the Respondent, Rs.1,59,762/ - along with interest @ 7% per annum from the date of filing the complaint i.e. 10.03.2006 till realization, Rs.500/ - for mental agony and Rs.500/ - towards litigation cost.