A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

HYDERABAD.

F.A.  940/2009  against C.C. 75/2008, Dist. Forum, Vijayawada

Between:

1)  N. Siva Rama Krishna Prasad

S/o. Late  Durga Nagendrulu

2)  Smt. N. Ratna Kumari

W/o.  N. Siva Rama Krishna Prasad

Both R/o.  15-3-5-37, Nehrunagar

Guntur Road, Macherla

Guntur.                                                      ***                         Appellants/

                                                                                                Complainants

                                                                   And

The United  India  Insurance Company Ltd.

Rep. by its Branch Manager

Divisional Office-II, Upstairs

Andhra Bank, Patamata

Vijayawada-10, Krishna Dist.                      ***                         Respondent/

                                                                                                O.P

Counsel for the Appellant:                          M/s. S. Nagesh Reddy

Counsel for the Resp:                                  M/s. A. Ramakrishna Reddy

F.A.  1303/2008  against C.C. 75/2008, Dist. Forum, Vijayawada

Between:

The United  India  Insurance Company Ltd.

Rep. by its Branch Manager

Divisional Office-II, Upstairs

Andhra Bank, Patamata

Vijayawada-10, Krishna Dist.                    ***                         Appellants/

                                                                                                O.P

                                                                   And

1)  N. Siva Rama Krishna Prasad

S/o. Late  Durga Nagendrulu

2)  Smt. N. Ratna Kumari

W/o.  N. Siva Rama Krishna Prasad

Both R/o.  15-3-5-37, Nehrunagar

Guntur Road, Macherla

Guntur.                                                      ***                         Respondent/

                                                                                                Complainants

Counsel for the Appellant:                          M/s. A. Ramakrishna Reddy

Counsel for the Resp:                                  M/s. S. Nagesh Reddy

CORAM:

HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT

&

                 SMT. M. SHREESHA, MEMBER

MONDAY, THIS THE TWENTY FIRST DAY OF FEBRUARY TWO THOUSAND ELEVEN

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

1)                These cross-appeals F.A. 940/2009   preferred by the  complainant  against  inadequacy of the amount granted,  while the insurance company filed F.A. 1303/2008  against the very order of granting the amount covered under the policy.  

2)                Since both these appeals arise out of the same order the parties are described as arrayed in the complaint for felicity of expression and to avoid confusion. 

3)                 The case of the complainants  in brief is that   they had taken an  insurance policy for Rs.  25 lakhs  covering the period from  8.1.2007 to 7.1.2008.  While so there was heavy rain fall from 21.6.2007 to 23.6.2007  due to which  the building was totally damaged.   Though the loss was more than  Rs. 10 lakhs they  had   restricted  their claim to Rs. 6,40,000/-.    They had spent about Rs. 7 lakhs  approximately and got the repairs effected.   Despite their intimation  followed by notice the insurance company  sent a voucher for Rs.  39,981/- towards full and final settlement which was not to their satisfaction and therefore they did not agree.   They filed the complaint  claiming Rs. 7 lakhs  with interest  @ 18%  p.a., together with compensation of Rs. 10,000/-  and costs.

4)                The insurance company resisted the case.    While admitting issuance of policy  it denied that the complainants  had spent  Rs. 7 lakhs to get their building repaired which was damaged due to heavy rainfall.   On receipt of claim  it had appointed  Sri Cherukuri Srinivas, surveyor and loss assessor  who conducted survey, took photographs  and assessed the  net loss at Rs. 40,000/-.    Opinion of the surveyor is final.  Revised estimate  came at Rs. 50,000/-.  They settled the claim at Rs. 50,000/- but the complainants did not agree for the said estimate.  Private estimate made by the complainants through   Sri Suresh Babu at Rs. 6,40,000/-  is on higher side and therefore prayed for dismissal of the complaint with costs.

5)                The complainants in proof of their case filed their affidavit evidence and  that   of B. Suresh Babu, Architect and got Exs. A1 to A9 marked while the insurance company filed the affidavit evidence of its  Deputy Manager and got Ex. B1 to B5 marked.

6)                The Dist. Forum after considering the evidence placed on record opined that  PW3  architect had  estimated the damage at Rs. 6,40,000/-  and in the light of his report, the report of  RW2 surveyor of  insurance company  was held unsatisfactory and  his estimation is too low  directed the insurance company to pay Rs. 6 lakhs with interest @ 9% p.a., together with costs of Rs. 2,000/-.

7)                Aggrieved by the said order the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either the facts or law in correct perspective.    It ought to have relied  on the  survey and  estimate  made by the insurance surveyor  who is  an independent and technical person appointed by  the Ministry of Finance having valid license.    The  estimate made  by PW3  at Rs. 6,40,000/- is on higher side.  Therefore  it prayed that the order of the Dist. Forum be set-aside. 

8)                Equally aggrieved the complainants preferred  cross appeal  contending that the Dist. Forum ought to have awarded Rs. 6,40,000/- the amount claimed by them in their claim application submitted  restricting it to the estimate made by PW3.    Rejection of  claim of Rs. 40,000/- and interest @ 18% p.a.,  and awarding costs at Rs. 2,000/-  are too low.    Therefore they prayed  that the complaint be allowed  in toto as claimed by them.  

9)                The point that arises for consideration is whether the order of the Dist. Forum  is vitiated by mis-appreciation of fact or law?

10)              It is an undisputed fact that the complainants had taken Ex. A1 policy for Rs. 25 lakhs  covering their building for the period from 8.1.2007 to 7.1.2008.    It is also not in dispute that due to heavy rain fall  from 21.6.2007 to 23.6.2007  the building along with furniture, fixtures etc. were damaged.   On receipt of claim for  Rs. 6,40,000/-  under Ex. A2  as estimated by PW3 architect along with photographs  the insurance company has appointed  RW2 Ch. Srinivas who after  visiting the place  while accepting the fact  that the building was damaged  he assessed the  loss as under :

          Total loss assessed                                       Rs. 52,891.25

Less:  Salvage value                                     Rs.   2,891.25

                                                                   -----------------

                                                                   Rs.  50,000/-

Less: Policy excess                                                 Rs.  10,000/-                  

                                                                   ------------------

Net loss  assessed                                                   Rs.   40,000/-

                                                                             ============

Contrarily  PW3 an architect who was appointed by the complainant assessed the damage   at Rs. 6,40,000/- as under :  

Estimation cost of the wood work, polish, repair work of civil and electrification  of  Sri  Nimmagadda  Siva Rama Krishna  Prasad at Macherla, Guntur Dist.

11)               It is important to bear in mind  that the complainants  while forwarding their claim  appended the estimate made by PW3 Sri Suresh Babu under Ex. A2.  The insurance company ought to have furnished a copy of the estimate to its  surveyor  since by the time of his survey  report of PW3  was available.    He ought to have  verified  as to why the report of  PW3  could not be accepted.    No doubt the report of the surveyor  shall be given credence.   His report shall be scrutinized with care and caution.    When PW3  was examined no cross-examination  was made nor confronted  the  estimate of insurance surveyor.    PW3 had made a very detailed  estimate.   The complainants in fact filed  the bills Exs. A9   to show that they had incurred  an amount  Rs. 8,07,431/-.   

12)              In cases of this nature  it is important for the insurance company to scrutinize the claim  of the complainant along with  documents furnished by them lest he would un-necessarily suffer.    The complainants had taken insurance policy for Rs. 25 lakhs for the building.  When the surveyor has estimated  the damage caused to the building  evidenced under photographs and even found that furniture, fixtures, TV, refrigerator etc. were damaged besides flooring and other structures it ought to have scrutinized the claim carefully.    It is not  a case where  the complainants  under the guise of  the claim got repaired  by spending un-necessary  amounts.    All of them are covered by bills.    If really the insurance company  intends to prove that  those repairs are un-necessary it ought to have  pointed out  as to where  the complainants had un-necessarily  mulcted the amounts on them.

13)       The report of  RW2 insurance surveyor  doest not depict the true state of things.    He had estimated the damages  peripherally  without any basis.    We may state  that the surveyor  could not show as to  how he assessed the damage by referring to  prices of those structures that were damaged.    On the other hand the complainants  by examining   PW3   and filing  bills  could  prove  that they had affected repairs.    The insurance company  having covered the building  by issuing policy and when admittedly  the building had  suffered damage PW3 immediately  assessed the loss at Rs. 6,40,000/- which the complainants spent  for getting it repaired evidenced under  bills Ex. A9.    Necessarily the claim of the complainants for Rs. 6,40,000/-  has to be up-held.    The complainants could not prove  as to how  they were claiming Rs. 7 lakhs  when their initial claim was Rs. 6,40,000/-.    It is unfortunate that  surveyor of the insurance company  estimated the loss at a very low value obviously to please the insurance company which  it appointed him.    He could not show any basis  except mentioning  some amounts.     We do not give any credence  to the report of RW2.  We do not see any merits in the appeal preferred by the insurance company.    The complainants have claimed interest @ 18%, however the Dist. Forum has granted  interest @ 9% which  we feel reasonable  and modest.

14)               In the result  the appeal preferred by the complainants F.A.  940/2009 is allowed in part  directing the insurance company to pay Rs. 6,40,000/- as against Rs. 6 lakhs   together with interest  and costs awarded by the Dist. Forum.   Rest of the claim is disallowed.    Consequently the appeal preferred by the insurance company F.A.  1303/2008 is dismissed with costs computed at Rs. 2,000/- in the appeal.  Time for compliance four weeks.

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER           

                                                                               Dt.  21. 02.  2011.

*pnr

“UP LOAD – O.K.”