Rajasthan

StateCommission

FA/405/2014

The New India Assurance Company Limited through its Authorised Signatory - Complainant(s)

Versus

Marutinandan Handicrafts Pvt. Ltd. through its Director Ramesh Motani - Opp.Party(s)

Atul Pareek

08 Apr 2015

ORDER

BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1

 

APPEAL NO: 331/2014

 

Marutinandan Handicraft Pvt. Ltd. F-157 Sitapura Industrial Area, Jaipur through Director Ramesh Motani

Vs.

The New India Assurance Co. Ltd. Divisional Office IIIrd Subhash Nagar, Jaipur.

 

APPEAL NO: 405/2014

 

The New India Assurance Co. Ltd. Divisional Office IIIrd Ground Floor 'Jeevan Jyoti' LIC Building Subhash Nagar Shopping Centre, Jaipur.

Vs.

Marutinandan Handicraft Pvt. Ltd. F-157 Sitapura Industrial Area, Jaipur through Director Ramesh Motani

 

Date of Order 8.4.2015

Before:

 

Hon'ble Mr.Vinay Kumar Chawla-Presiding Member

Mr.Kailash Soyal-Member

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Mr. Gopal Shastri counsel for the complainant Marutinandan Handicraft Pvt. Ltd.

Mr.Vizzy Agarwal counsel for the Insurance Company

 

BY THE STATE COMMISSION

 

Both these appeals have been filed against the judgment of learned DCF Jaipur 3^rd dated 28.2.2014 .

 

Appeal No. 405/2014 has been filed by the Insurance Company challanging the judgment of the learned DCF while Appeal No: 331/2014 has been filed by the complainant for increase in the award passed by the learned DCF.

 

Brief facts giving rise to this complaint are that the complainant is a private limited company situated at Sitapura Industrial Area, Jaipur. This company had taken a Standard Fire and Perils Policy No. 331200/11/09/11/00000290 from the appellant company and total sum assured was Rs.20 lakhs for covering building risk, Rs. 8 lakhs towards plant and machinery and Rs. 30 lakhs for stocks. On 29.10.2009 a fire broke out in the oil depot of Indian Oil Corporation situated at Sitapura Industrial Area followed by explosions in the storage tanks

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which caused damage to the adjoining industrial units in the Sitapura Industrial Area. The appellant company was informed of the loss sustained by the complainant unit. It appointed Mr.K.C.Sharma as surveyor for assessing the loss who initially assessed the loss at Rs. 7,76,127.83. The appellant company however, bypassing the survey report assessed the loss at Rs.3,54,573/-. The complainant refused to accept this amount and a consumer complaint was filed. The learned DCF after hearing both the parties ordered the appellant Insurance Company to pay a sum of Rs. 7,76,127.83 as assessed by the surveyor against which the company has preferred this appeal.

 

The learned counsel for the appellant has argued that the complainant has played a fraud on the company by claiming double compensation for the loss sustained by the unit.The learned counsel submits that this industrial shed was originally allotted by RIICO to M/s. Maruti Impex on 26.7.2003 and Rashmi Motani is the proprietor of M/s.Maruti Impex. He further submits that Maruti Impex has let out this shed to the complainant Marutinandan Handicraft Pvt.Ltd. and Rashmi Motani is also one of the Director in this private limited company. The learned counsel further submits that appellant company had issued an Umbrella Public Liability Insurance

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Policy No. 121400/36/09/08/00000076 and under this policy a sum of Rs. 50 crore were released to Indian Oil Corporation for compensating the units who sustained loss by this fire and explosion. He submits that Rashmi Motani claiming herself to be the single owner of Maruti Impex who was original allottee of Plot No. F-157 claimed damages under this policy from RIICO and a sum of Rs. 1,95,711/- were paid by the RIICO to Maruti Impex. He submits that since Maruti Impex has been compensated for the loss sustained to its shed by RIICO, hence it cannot doubally compensated under this policy.

 

The learned counsel for the complainant has refuted this argument on the ground that this compensation has been granted on compassionate grounds by Govt. of Rajasthan and the amount was distributed through RIICO and the appellant company has no right to question the compensation received by Maruti Impex from the government.

 

The next argument of the learned counsel for the appellant company is with regard to report of surveyor Mr.K.C.Sharma. He submits that initially Mr.K.C.Sharma has assessed the loss at Rs. 7,76,127.83 but when the company made certain queries from him, he admitted that he had not reduced profit margin @

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10.05% from the loss of stock which was later on modified by Mr.K.C.Sharma and complainant also agreed to retain the damaged furniture for Rs. 1,21,600/-. Thus, the assessed amount was reduced to Rs. 5,70,650/-. He submits that on scrutinizing the survey report, the company found that net loss sustained by the complainant was only Rs. 3,54,573/- and this amount was offered to the complainant who refused to accept this amount.

 

We have heard the arguments of both the counsels.

 

Dealing with the contention of the appellant insurance company with regard to double compensation, a similar point was decided by us in CC No. 65/2011 (Tirupati Vinyl India Pvt. Ltd. Vs. United India Insurance Company) in which the same argument of unjust enrichment was advanced by the learned counsel for the insurance company. We have rejected the argument on the ground that following the explosion in the Indian Oil Corporation storage depot, several units sustained extensive damages. Some lives were also lost and it took couple of days to control the fire. Indian Oil Corporation on the insistence of Ministry of Petroleum,Govt. Of India ,released an amount of Rs. 50 crores to be distributed to the effected units through RIICO (Rajasthan Industrial Development and

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Investment Corporation). RIICO evolved a formula of distribution and effected units were asked to submit the loss report of an expert. In this matter assessment report was prepared by Protocol Surveyors and Engineers Pvt. Ltd. who assessed the loss at Rs.1,00,870/- on reinstatement value basis. There is little confusion with regard to the amount paid by RIICO to Rashmi Motani as the appellant company says that Rashmi Motani received Rs. 1,95,711/- from RIICO while the report of the surveyor says that a sum of Rs. 4,79,000/- were paid by RIICO to the claimant, however, we are no concern with this amount. The question whether it is a case of fraud or double compensation is not subject matter of this complaint. It was for the RIICO to consider whether the amount of compensation was to be paid to the owner of the shed or occupant tenant of the shed ( while in the present case virtually both are same ). This payment was made to the effected units under Public Liability on humanitarian and compassionate grounds. We feel that this immediate help was given to the victims for the hardship, mental agony, loss of livlihood, loss of business etc. We are of the view that company cannot escape its contractual liability under the policy taken by the complainant. There is no policy condition that company before settling the claim would investigate whether the complainant has been

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compensated from any other source. The insurance company is bound under the contract of insurance to indemnify the loss sustained by the complainant unit in the fire. Hence, we cannot appreciate the arguments advanced by the learned counsel for the insurance company.

 

The next question is with regard to the quantum of compensation to be paid to the complainant. Mr.K.C.Sharma, surveyor initially assessed the loss at Rs. 7,76,127.83 and later on he reduced the loss to Rs. 5,70,650/- when he reduced the profit margin @ 10.05% from the loss of stock, and the complainant has also agreed to retain the damaged furniture for Rs.1,21,600/-. The company did not accept the amended report of Mr.K.C.Sharma and assessed the loss at Rs. 3,54,573/- which the complainant refused to accept it. We are of the view that if the company had disagreed with the loss assessed by the surveyor and if any deficiencies were found in the report, the company could have obtained the second opinion from an expert. The company officials on its own reduced the loss to Rs. 3,54,573/- without stating any reasons or explaination from the surveyor or for that matter from the complainant, was not right. The surveyor's report should be given due importance and normally it is accepted unless any of the parties submits

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objections against the report which are found true. Thus, the complainant was entitled to receive Rs. 5,70,650/- as finally assessed by the surveyor.

 

The learned DCF has passed an award of Rs. 7,76,127.83 when the surveyor himself had reduced the loss to Rs.5,70,650/-. The learned DCF was not right in awarding loss beyond the surveyor report, nor the company was justified in reducing the loss below the loss assessed by the surveyor.

 

The learned counsel for the complainant has argued that Mr.K.C.Sharma had initially assessed the loss at Rs.10,92,351.21 and he has deducted a sum of Rs. 1,30,682/- as average clause since he found that building was under insured as the market value of the building was Rs. 25 lakhs at that time. He has questioned the deduction of average clause but we find that assessment of the market value of the building was submitted by the complainant and the surveyor Mr.K.C.Sharma accepted this assessment and on that basis he had deducted Rs. 1,30,682.66 as average clause and the amount of depreciation, salvage and policy clause was also adjusted by surveyor which is totally justified under the policy terms and conditions. It is also found that the complainant agreed to retain the damaged furniture at

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Rs. 1,21,600/-, thus the revised estimate of Mr.K.C.Sharma came to Rs. 5,70,650/-. Thus, the complainant is only entitled for the amount after appreciation of salvage, depreciation, policy clause and profit margin on loss of stock. The learned DCF was not right in passing the award of Rs. 7,76,127.83.

 

In view of the above, we partially accept the appeal no. 405/2014 of the Insurance Co. and modify the order of the learned DCF that the complainant is entitled to receive Rs. 5,70,650/- alongwith interest @ 12% p.a. From 10.03.2010.

 

The appeal no. 331/2014 filed by the complainant is dismissed. Rest of the order of the learned DCF is maintained with regard to mental agony. Order be complied within one month.

 

 

(Kailash Soyal) (Vinay Kumar Chawla)

Member Presiding Member

 

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