JUSTICE V.K.JAIN (ORAL)

            The learned counsel for R-1 had last appeared in this matter on 19.09.2018. Thereafter no one appeared for R-1 on 23.10.2018, 13.083.2019 and 29.08.2019.  A letter was circulated by the learned counsel for R-1 on 29.08.2019 seeking adjournment and the matter was adjourned to 31.01.2020.  In the meanwhile this matter was also listed before the Circuit Bench at Mumbai on 12.12.2019 after notice to the parties but no one was present for the respondents even before the Circuit Bench.  As far as R-2 is concerned it has never appeared in this matter despite service upon it.  This is an old appeal having been instituted in the year 2013.  Therefore, I see no justification for adjourning the matter when neither anyone is present for the respondents nor have they made any request seeking adjournment.  I have, therefore, heard learned counsel for the appellant. 

2.       The complainant/appellant company was running a sugar factory and had obtained an insurance policy which covered the risk of plant and machinery as well as the stock of sugar kept in the factory. The policy was taken for the period from 29.11.2007 to 29.11.2008. On 25.04.2008 during subsistence of the insurance policy, a truck  was taken inside the godown number 2 of the complainant for loading the sugar bags in the said truck. When the truck was inside the godown and sugar bags were loaded on it there was a sudden spark from the exhaust silencer of the truck. The said spark having fallen on the sugar bags, the said bags caught fire. Efforts were made to douse the fire and fire brigade was called. Water was sprayed by the fire brigade in order to extinguish the fire. The case of the complainant is that it has suffered huge loss on account of  loss and damage of sugar, the total loss suffered by the complainant being Rs.45,95,794/-. Claim for reimbursement in terms of the insurance policy was lodged by the appellant/complainant with the insurer. A surveyor was appointed by the insurer to inspect the godown, to verify the claim and assess the loss. The surveyor, vide his report dated 21.03.2010, assessed the loss to the complainant at Rs.7,60,000/- but did not recommend any reimbursement to the complainant. The surveyor gave the following reasons for denying reimbursement to the complainant:-

“1)       The loss or damage or liability has arisen due to Gross negligence of insured since the truck was driven inside the godown and the sparks from the silencer of the truck has resulted in fire which could be avoided.

2)         Hence considering the cause of fire which in our opinion is due to negligence or carelessness on the part of insured, payment of the subject claim is left to the discretion of the insurers.”

3.      The claim was repudiated by the insurance company vide letter dated 10.08.2010 which to the extent it is relevant reads as under

“With reference to the above-mentioned letters it is hereby informed you that, Mr. R. Sangam was came to be appointed as surveyor in respect of claim of insurance towards loss occurred to you. After inspection the surveyor has submitted his report dated 21.3.2011 bearing no. 104/GIF/Fire/2010-11.

It is certified by the surveyor that the loss occurred due to negligence of the insured, hence recommended that claim cannot be settled under the policy.  Hence you are requested to note that, your claim is rejected.”

4.      Being aggrieved from the repudiation of the claim, the complainant/appellant approached the concerned State Commission by way of a consumer complaint.

5.      The claim was resisted by the insurer on the ground that the incident of fire had taken place on account of the negligence of the insured and therefore the insurer was not liable to reimburse the insured.

6.      The State Commission having this dismissed the consumer complaint the complainant/appellant is before this Commission.

7.      The first question which arises for consideration in this case is as to whether the incident of fire happened on account of negligence of the complainant or not. The surveyor imputed negligence to the complainant solely on the ground that the complainant had taken the truck inside the godown where sugar bags had been stored. In my opinion mere taking the truck inside the godown for the purpose of loading the sugar bags cannot be said to be an act of negligence. The godown in which the sugar was stored was a large godown as is evident from the quantity of sugar which had been stored therein. It would be impracticable to expect the complainant to park the truck outside the godown and then  arrange physical loading of all the bags containing sugar from stacks of bags inside the godown up to the place where the  truck may be parked outside godown. While taking the truck inside the godown the complainant could not have anticipated that there will be a sudden spark from the silencer of the truck. There is no evidence or even allegation that there was some defect in the silencer of the truck which had resulted in a spark being generated from the silencer and the said defect was in the knowledge of the complainant at the time truck was taken inside the godown. This is also not the case of the insurer that this was for the first time that a truck was taken inside the godown for the purpose of loading the bags containing sugar. In the ordinary course of business a sugar factory would take a truck inside the large godown, load the bag containing sugar on the truck and then take the truck out of the godwn to its destination. Therefore I am unable to accept the plea of negligence attributed by the insurer to the complainant.

8.      Coming to the quantum of compensation a perusal of the survey report would show that as against the quantity of 350 quintals of burnt sugar the surveyor has assessed the said quantity as 250 quintals. As regards damaged sugar the quantity claimed by the complainant was 10815 quintals whereas the quantity assessed by the surveyor was 4500 quintals. The surveyor having made assessment of the quantity of the burnt sugar and damaged sugar on inspection of the godown, there is no reason to reject the assessment made by him unless evidence is led to prove that assessment made by him was incorrect.

 It is pointed out by the learned Counsel for the complainant that the surveyor noted that the insured had not segregated the damaged stock from the heap of the bags of sugar for verification and, therefore, physical loss verified by them alone was considered for assessment and the quantity was accordingly reduced in the assessment. He has submitted that since the fire took place on 25.04.2008 and the surveyor visited the godown on the very next day it was not possible for them to segregate the damaged stock by the time the surveyor had inspected the godown on 26.04.2008. He has drawn my attention to a letter dated 26.04.2008 sent to the insurer wherein it was informed that as per the instructions of the surveyor the work of the segregation of the burnt and damaged sugar bags was in progress. The submission of the Counsel is that even after said work was completed the surveyor  did not inspect the godown for almost one year, the second inspection having been done by him on 02.05.2009.

It is thus an admitted position that when the surveyor visited the godown on 26.04.2008 segregation of burnt and damaged sugar bags had not been completed. There is no evidence of the complainant having intimated the surveyor at any point of time that the segregation had been completed and therefore he should come and carry out the inspection of burnt and drenched sugar bags. In the absence of such an intimation from the complainant the surveyor could not be expected to know when the said segregation had been completed and therefore had no occasion to visit the ground for the purpose of inspecting the segregated stock.

9.      The surveyor has assessed the reprocessing cost at Rs.160/- per quintal as against Rs 400/- claimed by the complainant for burnt sugar and Rs.300/- claimed by it for the damaged sugar. There is no evidence led by the complainant to prove that actual cost of reprocessing was higher than the cost assessed by the surveyor.  The reprocessing would have been carried out by none other than the complainant itself. Therefore if the cost incurred by it on reprocessing was higher than the cost assessed by the surveyor the complainant ought to have produced evidence to prove the actual cost incurred by it in reprocessing the  the burnt sugar and damaged sugar. In the absence of any such evidence that assessment made by the surveyor needs to be accepted.

10.    For the reason stated hereinabove the impugned order is set aside and respondent No. 1 is directed to pay a sum of Rs.7,60,000/- to the complainant/appellant along with compensation in the form of simple interest on that amount @ 9% p.a. with effect from 6 months from the date of submission of the claim till the date of payment. The payment in terms of this order shall be made within 2 months from today. The appeal stands disposed of accordingly.