United India Insurance Company Limited vs SINDHI SWEETS

IT is an appeal against the order dated March 11, 1999 of the District Consumer Disputes Redressal Forum, Ludhiana (hereinafter called the "District Forum").

THE facts as stated by the respondent-complainants (hereinafter called the "complainants") in the complaint are that Iqbal Singh, son of complainant Nos. 2 and 3, had taken the insurance policy from the appellant-respondents (hereinafter called the "OPs") covering the risk against the loss caused by fire and other allied perils of the stocks and machinery lying and stored in Premises No. 4769, Ram Gali, Shiva Ji Nagar, Ludhiana, for a sum of Rs. 3,50,000/-. THE risk was covered for the period commencing from 20.1.1995 to 19.1.1996. THE said concern had obtained a cash credit limit to the tune of Rs. 1,00,000/- against hypothecation of stocks and had further obtained a facility of term loan to the tune of Rs. 1,00,000/- against machinery from State Bank of Patiala, Saban Bazar, Ludhiana and as required under the terms of advancement of loan, the said concern through its proprietor Iqbal Singh had been regularly maintaining the stock registers and the same were duly supplied to the bankers by him. THE stock statement as on 30.9.1995 was also submitted to the Bank by Iqbal Singh and the said stock statement was duly entered into the D.P. Register maintained by the State Bank of Patiala, Saban Bazar Branch, Ludhiana. On the night intervening 14/15.10.1995 at 2.30 a.m., a fire took place in the premises of M/s. Sindhi Sweets, 4769, Ram Gali, Shiva Ji Nagar, Ludhiana, and in spite of massive attempt to control the fire, the same could not be controlled by the proprietor of the firm as well as complainant No. 2 and one Charanjit, Smt. Ranjit Kaur and Miss Gurpreet Kaur including persons living in the neighbourhood. Some of the persons including Iqbal Singh who made an attempt to control the fire sustained serious burn injuries. Iqbal Singh died in Christian Medical College and Hospital, Ludhiana due to burn injuries sustained by him. In the said fire, two scooters, i.e. one LML Vespa make which was new one and did not have any registration number as yet and another scooter of Bajaj Chetak make bearing registration No. PBN-3722 along with T.V., refrigerator and other household articles were fully destroyed. The complainant had suffered a loss of Rs. 6,01,863.95, but as the risk covered with the OPs was to the tune of Rs. 3,50,000/-, the complainants sought compensation of Rs. 3,50,000/- only. It was then stated in the complaint that the OPs had appointed their Surveyor, namely, Kiran Kapoor, Chartered Accountant of M/s. Kapoor and Associates, Surveyor and Loss Assessor. After considering all the aspects and details of loss, said Kiran Kapoor had assessed the loss of Rs. 2,86,764/- and, in order to amicably settle the matter, the complainants were ready to accept the same, but the OPs had appointed another Surveyor, namely, M/s. P. Kumar Garg and Associates and the said Surveyor had reduced the amount of compensation payable to the complainants to a great extent and the same was not acceptable to the complainants in any case. The said Surveyor had miserably failed to give opportunity to the complainants to prove their loss and had recommended a sum of Rs. 93,600/- as compensation, which was without any basis and was on much lower side. It was then stated in the complaint that as per law, after one survey report is taken by the Insurance Company from its own side and if final report is given by the said Surveyor, the OPs were barred to ask for any fresh report regarding assessment of loss. The claim had not been properly assessed by the second Surveyor and the records of the Bank which clearly proved the value of the stocks with the complainants had been ignored by the second Surveyor for the reasons best known to them and they had gone to the extent of disbelieving every version of the complainants in spite of the fact that the loss sustained by them was much more than the one which was being accepted by the complainants as assessed by the first Surveyor. The complainants had reported the matter to the police of Police Station Division No. 6, Ludhiana, vide D.D.R. No. 27, dated 15.10.1995, regarding taking place of devastating fire and the OPs were liable to pay the insurance amount of Rs. 3,50,000/- to the complainants as compensation for the loss sustained by them. Ultimately, the complainants claimed Rs. 3,50,000/- on account of damages to movable and immovable assets of M/s. Sindhi Sweets, Shivaji Nagar, Ram Gali, Ludhiana, along with interest @ 18% per annum on the assessed amount from the date of 14/15.10.1995 till the date of payment.

On notice, the OPs filed their written statement taking the stand that there was no deficiency or negligence on their part. The OPs had approved the claim in the sum of Rs. 93,600/- for payment to the claimants on the basis of the report of the Surveyor M/s. P. Kumar Garg and Associates of Rohtak dated 31.1.1997 and asked the complainants to execute disbursement voucher so that the cheque of the claimed amount be issued in their favour, but the latter refused to accept the same and that the complainants were not a "consumer" under the Act. It was further stated that the matter involved in the complaint was of complicated nature, which required evidence and the District Forum had no jurisdiction to entertain and decide the complaint. It was then stated in the written statement that the statements of stocks filed in the months of July and September, 1995 were actually filed after the occurrence of fire which were being filed with ulterior and mala fide intention to get inflated claim, which was an after-thought. It was further stated that the OPs had appointed M/s. Kapoor and Associates, Surveyor and Loss Assessor, to survey the damaged goods lying in the insured premises and to assess the actual loss suffered by the insured and the surveyor submitted their report showing the loss to the tune of Rs. 2,86,764/- vide their report dated 18.11.1996. On scrutiny made by the officials of the OPs with regard to the contents of the report of the said Surveyor the report was found devoid of reasoning, proof, evidence and based on surmises and conjectures. The said Surveyor could not satisfy the officials of the OPs with regard to their survey report and as a result the survey report was found unwarranted. That is why they appointed another Surveyor, namely, M/s. P. Kumar Garg and Associates, who assessed the loss to the tune of Rs. 93,600/- vide their report dated 31.1.1997.

SO, the deficiency or negligence on the part of the OPs was denied and it was prayed that the complaint be dismissed with costs. The OPs had also filed their respective documents and affidavits. Replication to the written statement was filed by the complainants. They had also filed the affidavits of Sarvshri Pritam Singh, Mohan Lal, Tirath Ram and Baldev Dass Garg and had also filed other documents to support the allegations made in the complaint.

AFTER perusal of the documents on the record and after having heard the Counsel for the parties, the District Forum allowed the complaint by holding that the OPs had appointed another Surveyor without any reason, who assessed the loss at Rs. 93,600/-, which was much on lower side and no reasons had been assigned by the OPs for appointment of the second Surveyor. It was further held by the District Forum that it was established that the first Surveyor had given his report and assessed the loss after going through the record submitted by the complainants. In this appeal, the learned Counsel for the appellants has stated that the second Surveyor, after going through the relevant record, had rightly assessed the loss at Rs. 93,600/- and, thus, the District Forum went wrong in accepting the report of the first Surveyor and not placing reliance on the report of the second Surveyor. On the other hand, learned Counsel for the complainants has submitted that there was nothing wrong with the report of the first Surveyor, who had assessed the loss after taking into consideration all the relevant record and, according to him, the appointment of the second Surveyor was illegal and, thus, the order of the District Forum, relying upon the report of the first Surveyor, was legal and valid. He thus states that the appeal may be dismissed with heavy costs.

WE have heard learned Counsel for the parties and have gone through the record. The OPs had appointed their own Surveyor, namely, Kiran Kapoor, Chartered Accountant of M/s. Kapoor and Associates who, after considering the details of the loss and taking all the relevant facts into consideration, had assessed the loss at Rs. 2,86,764/-. A detailed survey report, Ex. P-3, at page 58 of the paper book of the District Forum had been submitted by the first Surveyor. This Surveyor had taken into consideration all the relevant factual position before giving his report. It had been stated in its assessment by the first Surveyor as under : "The insured claimed the loss of stores caused by fire amounting to Rs. 2,98,295.00. From the circumstances of the case and facts produced and collected, the claim of insured that the total stores lying in the building under fire seems to be genuine. From the evidence produced and collected by us, it is revealed that insured is using costs method for valuing closing stocks of raw materials and selling price for valuing finished products. WE have verified the rates of raw material with the rates in Economic Times as on 15.10.1995. The valuation of stores in hand before the occurrence of fire as verified and calculated by us amounts to Rs. 2,86,764.00."

WE do not find any reason for appointment of second Surveyor by the OPs. No cogent evidence has been brought on record which necessitated the appointment of a second Surveyor by the OPs. Simply by stating that scrutiny made by the officials of the OPs with regard to the contents of the report of the first Surveyor, it was found devoid of reasoning, proof, evidence and was based on surmises and conjectures was not enough. No reason, much less cogent one, had been advanced by the learned Counsel for the OPs for appointment of a second Surveyor for the assessment of the loss occurred due to the fire. It has been adversely commented by the National Commission that the practice of appointing one after the other Surveyor has to be deprecated. WE would like to refer to an order of this Commission in Universal Processors v. Oriental Insurance Co. Ltd. & Anr., II (1998) CPJ 217, in this regard. The relevant portion of the order in Universal Processors case reads as under : "It has been held by the National Commission in several cases that the Insurance Companies should settle the claims within 3-4 months of the claim filed. No valid reasons have been put forth about the necessity of appointing the Investigator after the first Surveyor had assessed the loss suffered by the complainant as mentioned above. It has been adversely commented by the National Commission that the practice of appointing one after the other Surveyor has to be deprecated. Furthermore, a second Surveyor could not be appointed without the permission of the Inspector of Insurance."

In view of our discussion made above, we do not find any merit in this appeal, which is dismissed with costs which are quantified as Rs. 2,000/-. Appeal dismissed with costs.