A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION
AT HYDERABAD.
F.A. 413/2008 against C.D. 41/2007, Dist. Forum, Adilabad.
Between:
K. Gangaram, S/o. Gangaram
Age: 68 years, Contractor
R/o. Nirmal, Adilabad Dist. *** Appellant/
Complainant
And
United India Insurance Company Ltd.
Podduturi Complex, N.H. No. 7,
Opp. RTC Bus Depot, Nirmal-504 106
Adilabad, Rep. by its Branch Manager. *** Respondent/ Opposite Party.
Counsel for the Appellant: M/s. V.G.S. Rao
Counsel for the Respondent: M/s. E. Venugopal Reddy
CORAM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
WEDNESDAY, THE TWENTY NINETH DAY OF DECEMBER TWO THOUSAND TEN
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
1) This is an appeal preferred by the complainant against inadequacy of the amount granted by the Dist. Forum by its order dt. 30.1.2008.
2) The case of the complainant in brief is that he is a contractor obtained ‘Contractors all risk policy from the respondent insurance company for Rs. 60,59,088/- covering the period from 28.7.2006 to 30.10.2006 for the proposed works in Dehegaon village of Bhainsa Mandal in Adilabad District. He completed his work. However, in view of rains between 2.8.2006 and 8.8.2006 the work done by him was damaged. When he made claim the insurance company deputed a surveyor who inspected the work, and assessed the loss at Rs. 2,04,941/- The insurance company has purposefully reduced the amount, and in fact he was entitled to Rs. 15 lakhs with interest @ 24% p.a., besides compensation of Rs. 2 lakhs towards mental agony and costs.
3) The insurance company resisted the case. While admitting the issuance of policy it alleged that as against estimated work of Rs. 60,59,088/- the complainant offered to take up at Rs. 46,84,280.93 by quoting 22.69% less, and the same was executed. Since the complainant could not complete the work within the stipulated period second policy was issued covering the period from 28.7.2006 to 30.10.2006. He had to take all reasonable precautions to prevent loss, damage or liability. He was not entitled to the amount of loss shown as excess in the schedule viz., Rs. 6 lakhs. He had to bear the excess which is not related to the policy. He did not complete the work in accordance with specifications and it was sub-standard. It also denied that there was heavy rain fall during the period from 2.8.2006 to 8.8.2006. As the work was not completed, new formation silt arresting tank across local stream has over flooded due to which North East corner of embankment bund was breached. On intimation a surveyor was appointed who inspected the site. On the basis of measurements, he found that the damage or loss of breach of bund was Rs. 8,04,941/- less policy excess of Rs. 6 lakhs and arrived at Rs. 2,04,941/-. The allegation that he had sustained loss of Rs. 15 lakhs is false and the same is excessive, exorbitant and baseless. He was not entitled to any interest. Therefore it prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A3 marked, while the insurance company filed the affidavit evidence of its Divisional Manager and filed Exs. B1 to B4.
5) The Dist. Forum after considering the evidence placed on record accepted the report of the surveyor, and accordingly directed the insurance company to pay Rs. 2,84,941.84 ps with interest @ 9% p.a., from the date of complaint till the date of realization but without costs.
6) Aggrieved by the said decision, the complainant preferred the appeal contending that the Dist. Forum did not appreciate the facts in correct perspective. It did not consider the report of Sri S. Mohan, Surveyor who assessed the loss at Rs. 8,04,941/- vide Ex. B2. It ought not to have deducted the policy excess of Rs. 6 lakhs. The complainant did not opt for higher amount on deductible excess. Therefore he prayed that the complaint be allowed as claimed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the opposite party insurance company has issued ‘Contractors all risk policy for Rs. 60,59,088/- covering the period from 23.7.2004 to 23.7.2008 and later extended from 28.7.2006 to 30.10.2006 vide policy Ex. A1 pertaining to the works in Dehegaon village of Bhainsa Mandal in Adilabad District. The complainant alleges that there were heavy rains between 2.8.2006 and 8.8.2006 due to which new formation silt arresting tank across local stream has over flooded due to which North East corner of embankment bund was breached. The complainant had estimated the damage at Rs. 15 lakhs under Ex. A2. In fact the Executive Engineer, Construction Sub-Division, Bhainsa also estimated the loss at Rs. 15 lakhs vide his letter Ex. A3 enclosing the details of estimate. Admittedly for the original estimated contract of Rs. 60,59,088/- he offered 22.69% less viz., at Rs. 46,84,280.93 vide Ex. B1. On receipt of claim the insurance company appointed Sri S. Mohan, Surveyor & Loss Assessor who after inspecting the site on 9.8.2006 and subsequent dates found the damage portion of the embankment bund was in post damaged condition as visible in photographs. He found the measurements taken by the insured’s representative were on very high side, and therefore he had taken actual measurement, and also made local enquiries with regard to the work done by the complainant and cause and nature of loss. In fact he himself states that during his first and second visit to the site, the water level was not receded and the stream was in flow. Hence it was not possible for him to take the measurements of the damaged portion. In the meantime the insured’s representative Sri Parmjit Singh has submitted an estimate of loss for Rs. 39,41,359/- which according to her was on very high side. Hence, he has taken the measurements of the damaged portion physically and assessed the loss. The enquiries made with nearby villagers have confirmed that there was rain fall and the local stream silt arresting the tank was submerged, flooded, inundated and the North Eastern side of embankment bund was breached and damaged.
9) The schedule of work given to the complainant was originally estimated at Rs. 60,59,088/- wherein the complainant offered to take up at Rs. 46,84,280.93 by quoting 22.69% less. He found that the insured had estimated the loss at Rs. 39,41,359/- towards rectification of damage/loss under various heads. He differed from the said estimate and assessed the net amount at Rs. 8,04,941/- and deducted policy excess at Rs. 6 lakhs and arrived at Rs. 2,04,941/-. The insurance company did not file the affidavit of the surveyor in order to state that the estimate made by the Executive Engineer under Ex. A3 was in a way incorrect. The complainant got the estimate prepared through Mr. Mirza Nazeer Ali Baig, Consulting Engineer & Valuor under Ex. A2. He noted each item of the work in detail, assessed the amounts and arrived at Rs. 15 lakhs confirmed by the Executive Engineer under Ex. A3. It is not as though the said report was not furnished to the surveyor appointed by the insurance company. Except stating that it was on high side he could not point out where exactly he estimated on high side. If that were to be so, equally it could be said that the surveyor appointed by the insurance company has estimated the loss at a very lower side. He could not give any basis for his estimation.
10) The learned counsel for the insurance company contended that by virtue of terms of the exclusion clause, the insurance company was not liable for the first amount of loss on each and every occurrence shown as excess.
11) At the outset, we may state that Ex. B4 in the proposal form dt. 28.7.2006 the complainant had estimated the contract work at Rs. 60,59,088/- and without any demur the insurance company has accepted and agreed to cover the risk for the said amount. In fact there was also escalation of amount and therefore the period of insurance policy was also extended. The total escalation was Rs. 15,14,772/- and the total work was for Rs. 75,73,860/-. vide report of the very surveyor appointed by the insurance company at para-2. Therefore it cannot be said that there was policy excess of Rs. 6 lakhs. Assuming without admitting that there was policy excess of Rs. 6 lakhs there is no reason why the estimate prepared by the consultant under Ex. A2 confirmed by the Executive Engineer under Ex. A3 could not be accepted. The surveyor had the advantage of perusing Ex. A2 report. He could not point out where the surveyor appointed by the complainant went wrong. It is not as though he could assess on his own method and drastically reduce the claim from Rs. 15 lakhs to Rs. 2 lakhs. He should have given work memo detailing each of the work mentioning the estimate made by him. Had the same been made, this Commission would have been in a position to verify with the estimate prepared under Ex. A2. The Executive Engineer who is a public servant would not have certified that the loss was at Rs. 15 lakhs. It is not as though it was issued without any basis. It was conformed by estimate prepared under Ex. A2.
The insurance surveyor himself admits in his report that the embankment bund was damaged. Except stating that the estimate made by the complainant was on higher side, he could not point out where he went wrong. In the light of the fact that the complainant has claimed Rs. 15 lakhs and in view of policy excess an amount of Rs. 6 lakhs could be deducted. Therefore, we are of the opinion that an amount of Rs. 9 lakhs could be awarded towards the claim.
12) In the result the appeal is allowed in part and the order of the Dist. Forum is modified directing the insurance company to pay Rs. 9 lakhs together with interest @ 9% p.a., from the date of complaint till the date of realization together with costs of Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 29. 12. 2010.
*pnr
“UP LOAD – O.K.”
