STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                                         U.T., CHANDIGARH 

                                            (Additional Bench)

The New India Assurance Company Limited, having its Branch Office at SCO No.75, First Floor, Sector 30-C, Chandigarh through its Branch Head

Now through its Authorized Signatory Vishal Malhotra, Assistant Manager and Power of Attorney holder of the New India Assurance Co. Ltd., Regional office, SCO 36-37, Sector-17-A, Chandigarh.

                                                                                                                        …Appellant

                                         V e r s u s

1.  MBR Trading Company, near Chandigarh Zirakpur Barrier,

             Chandigarh Road, Zirakpur, District SAS Nagar, Mohali, Punjab, through        its  Proprietor Barinder Deep Singh

2.          Barinder Deep Singh, Proprietor, MBR Trading Company, near

             Chandigarh Zirakpur Barrier Chandigarh Road, Zirakpur, District SAS              Nagar, Mohali

Appeal under Section 41 of the Consumer Protection Act, 2019 against order dated 01.04.2024 passed by          District Consumer Disputes Redressal Commission-II, U.T. Chandigarh in Consumer Complaint No.234/2021.

BEFORE:       MRS. PADMA PANDEY, PRESIDING MEMBER

                        MR.PREETINDER SINGH,MEMBER

For the appellant      :      Sh. J.P.Nahar,   Advocate   

For the respondents :      Sh.Sunil Toni,Advocate  

 PER PADMA PANDEY, PRESIDING MEMBER

                       This appeal is directed against the order dated 01.04.2024, rendered by the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (hereinafter to be referred as “the Ld. Lower Commission”), vide which, it allowed partly the complaint bearing No.CC/234/2021 by holding as under ;

 “Taking into consideration the above discussion and findings, we are of the opinion that there is clear deficiency in service on the part of OP in not paying the complete claim of the damaged stock to the complainant falling under sum assured. Therefore, the present complaint is partly allowed with directions to the OP Company to reimburse to the complainant an amount of Rs.42,40,949.56 i.e. the cost of the damaged stock, minus the amount if any already paid, along with interest @9% per annum from the date of loss i.e. 19.9.2020 till the date of its actual payment to the complainant and also to pay a lumpsum amount of Rs.20,000/- towards compensation and litigation expenses.

         This order shall be complied with by the OP within a period of 60 days from the date of receipt of copy of this order.”

  2.     Before the Ld. Lower Commission, it was case of the complainants/respondents that  they have been dealing  in sale & purchase of electronic goods since August, 2018 and  filing returns regularly. They   maintain accounts in regular course of business.  It was averred that the complainants got their electronic goods insured from OP Company for Burglary (single location) and Standard Fire & special Perils Policy effective from 24.9.2019 to 23.09.2020 (C-2 & C-3).  Unfortunately, on 19.9.2020 at about 7.28 PM a fire broke out in the godown/office premises of the complainants while it was closed and the fire was extinguished by the Fire Brigade per Fire Accident Report dated 24.2.2021 (Annexure C-4).  The said fire was also reported to the police whereupon DDR dated 23.9.2020 (Annexure C-5) was recorded by the concerned  Police Station at Zirakpur.  The matter was also reported to the OP insurance Company, who appointed Surveyor and  the surveyor was supplied all the requisite documents including trading account mentioning the stock on the date of incident as Rs.42,40,949.56 duly attested by the Chartered Accountant alongwith  balance sheet, sale and purchase ledger till 19.9.2020 (Annexures C-6 to C-8).  It was alleged that without considering the documents and physical stock inspection done by the surveyor against the total stock damaged in the fire amounting to Rs.42,40,949.56, the  OP company passed claim of Rs.10,92,274/- (Annexure.C-9).  It was further alleged that   the survey report is not based on true appreciation of records and documents provided by the complainants. It was further alleged that the Insurance company treated the report of the surveyor as gospel truth and relying upon the same offered to settle the claim at   Rs.10,92,274/- against the loss suffered by the complainants to the tune of Rs.42,40,949.56. Hence, alleging deficiency in service and unfair trade practice on the part of the Opposite Party, a consumer complaint was filed before the Ld. Lower Commission.

3.                     Pursuant to issuance of notice, Opposite Party appeared before the Ld. Lower Commission and contested the complaint. In its written version, the Opposite Party while admitting the factual matrix of the case, stated that the complainants and surveyor jointly taken inventory of the damaged stock signed by both in which the name & number of items is given but despite reminders the complainants failed to provide the exact amount of loss item-wise. It was stated that   Annexure C-1 (colly) was considered by the Surveyor but from this annexure it could not be ascertained as to what was the amount of loss and which were the items damaged in the said fire incident.  It was further stated  that the complainants submitted the claim bill of Rs.41,81,024/- towards the loss of damaged stock which was based upon closing stock appearing in the Trading Account but there was a huge variation in closing stock figure as per Trading Account and as per physical inventory of the damaged stock & safe stock carried out by the surveyor and the complainants jointly.   It was further stated   that the claim bill and financial statements submitted by the insured firm were not  considered, rather, assessment of loss was carried out on the basis of physical inventory of damaged stock and safe stock.  As mentioned  by the surveyor in its Survey Report dated 1.3.2021 (Annexure OP-3) that the insured was not maintaining proper books of accounts and stock records. It was denied that the actual loss was Rs.42,40,949.56, rather the actual loss was Rs.13,21,980/- and the Surveyor assessed the loss for Rs.13,47,338/- but there was calculation errors to the extent of Rs.25,358.17, so the said  amount was deducted and net amount  arrived at was Rs.13,21,980/-. Out of the said amount of Rs.13,21,980/-, a deduction of 10% i.e.Rs.1,32,198/- was made towards Dead Stock. Further an amount of Rs.40,000/- for salvage was deducted and Rs.57,489/- was deducted towards policy excess clause i.e. 5% of the claim amount. Ultimately the claim   amount  of Rs.10,92,292/-  was assessed  and the net amount of Rs.10,92,274/- was paid after charging Rs.18/- towards the insurance premium for reinstating the sum insured under the policy. It was pleaded  that the Surveyor has rightly assessed  the loss.  It was  further pleaded that the payment of an amount of  Rs.10,92,274/- was made by the OP Company after thorough scrutiny of the survey report and  other documents and obtaining Consent letter dated 25.2.2021  from the complainants. It was pleaded that the Complainant company is not entitled to any other amount.  Denying  all other allegations, a prayer was made for dismissal of the complaint. 

4.                   On appraisal of the complaint, and the evidence adduced on record, Ld. Lower Commission allowed the Complaint of the Respondents/Complainants partly, as noticed in the opening para of this order.   

5.            Aggrieved against the aforesaid order passed by the Ld. Lower Commission, the instant Appeal has been filed by the Appellant/Opposite Party.    

6.                      We have heard Learned Counsel for the parties  and have gone through the evidence and record of the case with utmost care and circumspection.

7.              There is no dispute about the fire incident occurred in the premises of the respondents and loss occasioned to the stock lying in the premises. The    appellant has already paid Rs.10,92,271/- on account of claim of the respondents under the insurance policy. Now the controversy is only with regard to quantum of  loss and the amount of claim payable to the respondents on account of loss/damaged  by fire to the stocks lying in the premises.  It is case of the appellant that the claim of Rs.42,40,949.56  allowed by Ld. District Commission  is contrary to the documents on record as the entire stock was not damaged during the fire.  According to the physical inventory of safe stock as on 22.09.2020 (OP-5) ,signed by the respondents and the appellant,  17 Laptop bags and 45 non-stick crockery items were safe and the value thereof as given by the surveyor worked out to be Rs.31,193/-. It was further mentioned at item No.14.5 of the survey report dated 1.3.2021 that the figures of sale as per GST Returns and as per the Trading Account were not matching with each other and the complainants were asked to clarify the differences vide letter dated 6.1.2021 but the complainants could not clarify the same.  According to the appellant, there was huge variation in closing stock figure as per Trading Account and as per physical inventory of damaged stock and safe stock carried out by the surveyor and the complainants jointly. However, it is admitted case of the appellant that  physical inventory of damaged stock taken from the premises of the respondent on 22.9.2020 was prepared which is OP-4. It was signed by both the parties.  There is list of 47 types of articles  which were damaged in the fire. Number of articles damaged against each type of article is also mentioned therein. However, at the time of valuation of damaged stock, the surveyor disallowed the claim of the articles mentioned at serial No.33, 35, 36, 39, 46 & 47 on the ground that no purchase bills were provided by the insured firm. Except these items, the total value of the damaged articles as mentioned by the surveyor is Rs.16,56,674/-.  Out of the said amount, a deduction of 10% on account of slow moving, obsolete and dead stock has been made.  Further a deduction of 5% is made on account of any possible variation in the rates of damaged goods, whose, only single bill was provided by the insured and the insurer could not compute their average cost price. An amount of Rs.40,000/- has been deducted on account of salvage value. Thus, total claim was assessed at Rs.13,78,457/- with GST component and without GST component, it has been assessed at Rs.11,49,416/-. .

8.              Undisputedly articles mentioned at Sr. Nos. 33, 35, 36, 39, 46 & 47 mentioned in the inventory of damaged articles OP/4 were damaged but their claim has been disallowed only on the ground as their purchase bills were not produced by the insured.  According to the surveyor, as the prices of the electronic appliances like refrigerators, air conditioners, LED TVs etc. and other kitchen appliances keeps on fluctuating,  therefore,  deduction of 10% has been applied which does not appear reasonable as the insured has already paid the amount qua those articles which stood damaged and fluctuation in their prices would not make any difference. Similarly 5% deduction has been applied on account of possible variation in the rates of damaged articles whereas purchase bills were provided by the insured and the loss suffered by the insured is to the extent of purchase of that articles.

9.                 Keeping in view totality of facts of this case, we are of the considered view that as claim of  certain items, as mentioned above, has been disallowed, on account of non-production of purchase bills,  the appellant is liable to pay Rs.16,16,674/- (after deducting Rs.40,000/- as salvage value) in case the insured submits the ITC availed reversal of GST, otherwise appellant is liable to pay Rs.13,48,791/- (after deducting Rs.40,000/-) in case the insured does not submit the ITC availed reversal of GST. The amount of Rs.10,92,974/- already paid shall be deductible from the above amount. The amount of Rs.20,000/- as granted by the Ld. District Commission on account of compensation for harassment as well as litigation expenses shall also be paid. The above amounts shall be paid within 45 days from the date of receipt of copy of this order, failing which, the appellant shall liable to pay interest @ 9% on the due amount from the date of this order, till actual realization. 

10..                For the reasons recorded above, the appeal is partly accepted and the impugned order is modified to the extent as stated in para-9  of this order. 

11.                   Pending interlocutory application(s), if any, also stands disposed of

12.                 Certified copies of this order be sent to the parties free of charge.

13..                 The file be consigned to Record Room, after completion.