NCDRC

NCDRC

CC/498/2019

M/S. VENKATESHWARA BANANA RIPENING UNIT - Complainant(s)

Versus

M/S. SBI GENERAL INSURANCE CO. LTD. & ANR. - Opp.Party(s)

MR. PANCHAM SURANA,MR. SHWETANK SAILAKWAL & VIBHOR VERDHAN

29 Oct 2024

ORDER

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
 
CONSUMER CASE NO. 498 OF 2019
1. M/S. VENKATESHWARA BANANA RIPENING UNIT
...........Complainant(s)
Versus 
1. M/S. SBI GENERAL INSURANCE CO. LTD. & ANR.
3RD FLOOR,GOOD SHEPARD SQUARE,NO.82,KODAMBAKKAM HIGH ROAD,NUNGAMBAKKAM,CHENNAI-600034
2. M/S SBI GENERAL INSURANCE CO. LTD.
GROUD AND 1ST FLOOR,RUKMINI TOWERS,3/1,PLATFORM ROAD/RAILWAY APPROACH ROAD,SHESHADRIPURAM,;BENGALURE-560020
...........Opp.Party(s)

BEFORE: 
 HON'BLE MR. JUSTICE SUDIP AHLUWALIA,PRESIDING MEMBER

FOR THE COMPLAINANT :
MR. PANCHAM SURANA, ADVOCATE.
FOR THE OPP. PARTY :
MR. SURYAKANT VYAS, ADVOCATE THROUGH
V.C.

Dated : 29 October 2024
ORDER
JUSTICE SUDIP AHLUWALIA, MEMBER
This Consumer Complaint has been filed under Section 21(a)(i) of the Consumer Protection Act, 1986 alleging deficiency in service on the part of the Opposite Party, and seeking payment of the claimed insurance amounts along with ancillary reliefs.
2. The factual background, in brief, is that the Complainant began a trading business in fruits and vegetables and established a banana procurement and ripening chamber. To finance this venture, he secured cash credit loans of Rs. 42,00,000/- and a term loan of Rs. 96,00,000/- from the State Bank of Mysore, P.C. Extension Branch, Kolar. These loans were released after all necessary formalities were completed and secured by the Complainant's immovable property, stock, receivables, plant, and machinery. Additionally, the Complainant obtained further loans of Rs. 16,00,000/- and Rs. 25,00,000/- for working capital, bringing the total loan amount to Rs. 1,79,00,000/-. He also invested Rs. 1,50,00,000/- of his own funds to complete the project for Sri Venkateshwara Banana Ripening Unit. The Opposite Party insured the Complainant's stocks and ripening unit against fire, allied perils, and burglary under two policies: Policy No. 5100581 for Rs. 50,00,000/- (effective from 14.07.2016 to 13.07.2017) and Policy No. 4803584 for Rs. 2,18,00,000/- (effective from 17.08.2016 to 16.08.2017). On 10.07.2017, a fire caused by a short circuit occurred, damaging the insured stocks and property. The fire, which broke out at midnight, resulted in the complete destruction of the building, plant, machinery, and stock. The Fire Station Officer from Tamka, Kolar inspected the site on 12.07.2017 and reported that the building, machinery, and stock were extensively damaged, with significant cracks in the building walls. On 09.08.2017, the Complainant filed two claims: one for Rs. 41,00,000/- (Claim No. 395861 for loss of stock) and another for Rs. 2,09,14,512/- (Claim No. 394244, covering Rs. 74,22,780/- for the building, Rs. 1,13,41,732/- for loss of the plant and machinery, Rs. 20,000/- for stock, and Rs. 1,50,00,000/- for other losses). The Opposite Party's official team inspected the property thrice, collecting data and photographs of the damage. On 19.12.2017, the Complainant Emailed his ledger account extracts to the Respondents, highlighting the delay in claim settlement, which was affecting loan repayments. On 24.01.2018, he provided details of sales and purchases for April and May 2017, certified by an auditor, noting that the bills for June and July were destroyed in the fire and provided details collected from farmers and customers. The Complainant also filed a report with the Kolar Rural Police Station and informed his banker about the damage. The Electrical Inspector inspected the damage and reported to the Additional Chief Secretary, Government of Karnataka, on 31.01.2018. On 07.03.2018, “FRESH FOR HEALTH” confirmed that the Complainant's receivables were Rs. 37,02,200/- as of 31.03.2017, and the total costs for building and others were Rs. 1,89,14,512/-. Despite multiple requests, the Opposite Party delayed the claim settlement, prompting the Complainant to send an email on 07.06.2018 expressing his displeasure over the 11-month delay, which impacted the loan repayments. On 18.06.2018, the Complainant requested the Opposite Party to settle the claim, clarifying that there were no duplicate claims, and enclosing the farmers’ bills. The Opposite Party continued to raise baseless allegations, delaying the settlement. On 26.06.2018, the Complainant sent another email requesting claim settlement. On 02.07.2018, the Opposite Party partially settled the claims, disallowing Rs. 19,86,938/- from Claim 1 (settling only Rs. 21,13,062/-) and Rs. 1,40,77,526/- from Claim 2 (settling only Rs. 68,36,986/-). On 24.08.2018, the Complainant requested payment of the disallowed amounts of Rs. 19,86,938/- (Claim 1) and Rs. 1,40,77,526/- (Claim 2). The Opposite Party did not pay the remaining amounts, leading the Complainant to issue two legal notices on 15.10.2018, demanding the unpaid amounts within two weeks.  Aggrieved with the deficiency in service on the part of the Opposite Party, the present complaint was filed seeking the following reliefs - 
“a. Pass appropriate orders thereby directing the Respondent Insurance Company i.e. M/s SBI General Insurance Co. Ltd. to pay the total unpaid claim amount of Rs. 1,60,64,464/- to the Complainant herein along with an interest calculated @ 18% per annum from the date of the claim i.e. 18.10.2016 till the date of realization of the balance claim amount;
 
b. Pass appropriate orders thereby directing the Respondents Insurance Company i.e. M/s SBI General Insurance Co. Ltd. to compensate the Complainant herein fully and finally in accordance with the terms and conditions of the Insurance Policy No. 4803584 dated 17.08.2016 and Policy No. 5100581 dated 18.10.2016 and to further adhere to the contents of the Insurance Policy Agreements executed with the Complainant herein;
 
c. Pass appropriate orders thereby directing the Respondent Insurance Company i.e. M/s SBI General Insurance Co. Ltd. to pay compensation to the Complainant on account of causing mental harassment, pain and agony inflicted upon the Complainant of Rs. 10,00,000/- (Rupees Ten Lakhs only) due to the deficiency in service committed by the Respondent Insurance Company by failing to pay the total unpaid claim amount to the tune of Rs. 1,60,64,464/-; 
 
d. Pass appropriate orders thereby directing the Respondent Insurance Company i.e. M/s SBI General Insurance Co. Ltd. to pay compensation to the Complainant on account of unfair trade practices adopted by the Respondents herein of Rs. 15,00,000/- (Rupees Fifteen Lakhs only) due to illegal, unlawful and innocuous repudiation of the insurance claim raised by the Complainant herein and for illegal settlement of the claim raised by the Complainant herein with a shortfall of Rs. 1,60,64,464/-;”
 
3. The Opposite Party filed its Reply and resisted the Complaint by contending, inter alia, that regarding the Claim No. 394244/Policy No. 4803584, various records were perused and the loss was assessed based on documents furnished by the insured. Quantities were restricted as per actual damage and based on the Surveyors' findings. Rates considered were based on quotes. Since the insured did not initiate repairs, the surveyors assessed the loss on an indemnity basis after adjusting the depreciation based on the age and life of the building and machinery. The insured neither executed repairs to the building nor reinstated the chambers; That regarding Claim No. 395861/Policy No. 5100581, the insured procures apples from ‘Fresh for Health, Mumbai’, and verification of transactions revealed that the ledger account of ‘Fresh for Health’ was inconsistent and the balances were not matching. Consequently, the Surveyors sought clarifications and independently inquired with the vendor. The insured’s accounts for FY 16-17 were completed post-loss and therefore could not be treated as authentic. To verify the insured’s book of accounts, the Surveyors engaged the services of CA Deepak Padmanabhan & Co. Based on the documents furnished and the report of the CAs, the Surveyors assessed the loss on stocks at Rs. 27,19,400/- against the insured’s claim of Rs. 61 lakhs. Further, an amount of Rs. 4,95,000/- was adjusted from this value towards stocks held in trust, which the policy does not cover; That the Surveyors are appointed under statutory provisions and act as a link between the insurer and the insured when settling loss or damage claims. It is not disputed that the Surveyors are appointed by the insurance company under the provisions of the Insurance Act, and their reports should be given due importance, requiring sufficient grounds for not agreeing with their assessments. If the insurer does not accept the Surveyors' report, they must provide valid reasons for doing so. There is no prohibition in the Insurance Act against appointing a second Surveyor, but the Insurance Company must give satisfactory reasons for not accepting the first Surveyor’s report and justify the need for a second Surveyor. Thus, the Surveyor being a third-party assessor, has legal sanctity; That the grounds on which the Complainant is asking for the full amount are claimed to be baseless and computed without applying the necessary formulae and principles required to compute the claim. The reason for the fire was properly investigated by the Surveyor, and without significant reason, the Insurance Company cannot grant the entire amount claimed by the Complainant. The claim lodged by the Complainant was not found to be completely genuine after due survey and investigation. The Opposite Party had come to a valid conclusion that the entire Claim was not admissible as per the terms and conditions of the policies, and therefore, there is no deficiency in service or unfair trade practice on the part of the Opposite Party.
4. Evidence by way of Affidavit has been filed on behalf of Complainant by Mr. Subramani V., Proprietor for Sri Venkateshwara Traders; Evidence by way of Affdiavit has been filed on behalf of Opposite Party by Mr. Chynicka Modie, Manager-Legal of SBI General Insurance Co. Ltd.
5. Ld. Counsel for Complainant has argued that the contention of the Opposite Party that this Commission does not have jurisdiction to try the present complaint because the factory premises is located in Bangalore is incorrect. This Commission has original jurisdiction to adjudicate on matters that fall within its pecuniary jurisdiction as notified by the Central Government in December 2021. According to this notification, this Commission has pecuniary jurisdiction to adjudicate on matters exceeding Rs. 2 crore. However, the present complaint was filed in 2019 and, until 2019, this Commission had jurisdiction to adjudicate on matters exceeding Rs. 1 crore. This Commission, in “Narinder Chorpa v. M/s Jaiprakash Associates Ltd., CC/3258/2017” has held that the new notification does not have any retrospective effect; That the Surveyor appointed by the Opposite Party assessed the losses incurred by the Complainant contrary to the report prepared by the Fire Officer, Tamka, Kolar, who had stated that the building, including the cold storage and godown in which the fruits were kept, was completely damaged due to fire. However, according to the Surveyor’s Report, the outdoor units of five ripening chambers were not affected by the fire incident. The Surveyor failed to provide sufficient reasons for his calculations and submitted an assessment without proper consideration of the documents submitted by the Complainant for a true evaluation of the claim. The Surveyor arbitrarily submitted his report without proper consideration; That the Hon’ble Apex Court in “Kandimalla Raghaviah and Co. v. National Insurance Co. and Anr., (2009) 7 SCC 768” has held that the Surveyor’s Report is not sacrosanct and can be departed from. It is not conclusive and may be the basis for the settlement of a claim by the insurer in respect of the loss suffered by the insured, but such a report is neither binding upon the insurer nor on the insured; That the Opposite Party allowed only a partial claim of Rs. 89,50,048/- out of the total claimed amount of Rs. 2,50,14,512/-, as communicated in a letter dated 02.07.2018 (page 223). The Complainant responded by requesting payment of the difference of Rs. 1,60,64,464/- in a letter dated 24.08.2018 (page 225). The Opposite Party appointed a third-party Surveyor, who further sub-delegated his responsibility and appointed a Chartered Accountant (CA) named Deepak Padmanabhan & Co. to verify, analyze, and certify the details of the claim submitted by the Complainant. The CA issued a report and certificate on 18.04.2018, which was never placed on record by the Opposite Party. Based on this CA's assessment and report, the Surveyor gave its report, but neither the certificate nor the analysis by the CA was ever furnished or supplied by the Opposite Party or placed on record before this Commission; That the basis of the Complainant's claim is documented on pages 130 to 139, 177, 178, 181 to 192, and the farmers' purchase bills on pages 140 to 176. The Complainant provided complete details of the sales and purchases made between 01.04.2017 and 31.05.2017, duly certified by the Auditor. The Opposite Party's representatives visited the Complainant's premises thrice, collected evidence, and took photographs of the actual damage caused by the fire. However, the Complainant was never provided with the Survey Report or its addendum Survey Report by the Opposite Party or the Surveyor; That the Opposite Party has admitted that the Complainant's unit is built on an area of 8517 square feet and contains five cold storage room chambers with a capacity of 145 metric tons. These chambers, along with all equipment including air conditioners, compressors, and evaporators, were damaged in the fire. Even the Puff panels of the cold rooms were twisted and buckled, and the building opposite the Complainant's premises was also damaged due to the massive fire; That the Surveyor's report, which states that the outdoor units of the five ripening chambers were not affected by the fire, contradicts the report prepared by the Fire officer on 12.07.2017, which categorically stated that the entire building, including the cold storage and godown, was completely damaged by the fire. The Opposite Party assessed the cost of constructing one chamber at Rs. 30,000 and accordingly agreed to pay Rs. 1,50,000 for the five chambers. This assessment is unjustified, as the chambers were cold storage rooms equipped with heavy equipment. The quotation provided by the Respondent for the construction is outdated, reflecting CST at 2% instead of the current GST at 18%. The quotation taken by the Opposite Party, as reflected in the survey report, has not been placed on record; That the Complainant repeatedly provided all required documents to the Respondent and the surveyor via email and registered post, notably on 14.08.2017 and 25.09.2017. The stock statements were verified by the bank from time to time, and the Complainant's balance sheet, profit and loss account, and trading account are duly certified by the Chartered Accountant. The Surveyor assessed the loss on stocks at Rs. 27,19,400/- as per the CA's certificate, which was never furnished or placed on record, against the Complainant's total stock claim of Rs. 61 lakhs.
6. Ld. Counsel for the Opposite Party has argued that they are a well-known insurance company engaged in the business of selling insurance policies. The Opposite Party issued two insurance policies to the Complainant upon full payment of the premium amount, and intended to pay the complete amount in case of genuine loss. Mr. Sai Prakash, a third-party Surveyor and Assessor appointed by the Opposite Party, produced an exhaustive report. The Survey Report No. BLR-04817B dated 22.06.2018 and Addendum Survey Report No. BLR-04817B1 dated 26.06.2018 for Claim No. 394244 stated that the outdoor units of five ripening chambers were not affected by the fire accident. The value of the outdoor units of each chamber was estimated at Rs. 30,000/-, making the total value for the five chambers Rs. 1,50,000/-; That various records were reviewed, and the loss was assessed based on the documents furnished by the insured. Quantities were restricted according to actual damage and the Surveyor’s findings. Rates considered were based on quotes. As the insured did not initiate repairs, Surveyors assessed the loss on an indemnity basis after adjusting depreciation based on the age and life of the building and machinery. The insured neither executed repairs to the building nor reinstated the chambers; That regarding the apples procured from ‘Fresh for Health, Mumbai’, verification of transactions revealed inconsistencies in the ledger account of Fresh for Health, with balances not matching. Hence, the Surveyors sought clarifications and independently enquired with the vendor. The insured’s accounts for FY 16-17, completed post-loss, could not be treated as authentic. To verify the insured’s book of accounts, the Surveyors engaged the services of CA Deepak Padmanabhan & Co. Based on documents furnished and the report of CAs, the Surveyors assessed the loss on stocks at Rs. 27,19,400/- against the insured’s claim of Rs. 61 lakhs. Additionally, an amount of Rs. 4,95,000/- was adjusted from this value towards stocks held in trust, as the policy does not cover stocks held in trust; 
7. This Commission has heard both the Ld. Counsel for Complainant and the Opposite Party, and perused the material available on record.
8. As already noted earlier, the Complaint is for realisation of what the Complainant claims to be the balance of the Insurance Claims which according to him wrongfully disallowed by the Opposite Party, and that it had been delivered payments of only Rs. 21,13,062/- and Rs. 68,36,986/- for his Claim Nos. 1 & 2 respectively.  In fine therefore, this is not a case of outright repudiation of the Insurance Claim, but the controversy is limited to the quantum of compensation as claimed by the Complainant, and the alleged shortfall in meeting up to the same by the Insurer/Opposite Party.  It was in the light of such nature of controversy that this Commission in its Order dated 28.2.2024 had directed both the parties to render assistance on the following two aspects –
“1. From the side of the Complainants- As to how the amounts under various heads in the Insurance Claim Forms are justified/ substantiated? 
2. For the Opposite parties- In what manner the valuations claimed by the Complainants were dealt with individually, and finally assessed by the Surveyor.”
 
9. Both the sides subsequently filed their short synopsis in addition to the Written Submissions already filed by them in the year 2022.  The Complainant claims that it has been wrongly deprived of its legitimate Insurance Claim and the matter was settled by the Opposite Party after making huge cuts in both the Claims. The Complainant side has also assailed the assessment of the Surveyor appointed in the case.  The Complainant is especially aggrieved that the Surveyor from its side had sub-delegated the matter for assessment of damages to Chartered Accountants Firm by the name “Deepak Padmanabhan & Co.”.  This according to the Complainant, was not only improper since the Surveyor had no authority to delegate the matter to any other person or entity, but also because the Loss Assessor in any particular case, according to the Rules, must have to be licensed by the IRDAI, and there is nothing on record to show whether the CA Firm “Deepak Padmanabhan & Co.” was licensed by the IRDAI for this purpose or not.
10. Regrettably, it may be observed that both sides have exhibited a rather lackadaisical attitude in providing the specific details which could have enabled this Commission to make an objective assessment of the actual losses suffered by the Complainant. Be that as it may, it would be appropriate to first see how the Complainant from its side has sought to satisfy this Commission about the extent/quantum of losses suffered by it, through its Evidence.
11. In this regard, the relevant statements made by the CW- Mr. Subramani, Proprietor of the Complainant Firm, in his Affidavit in Evidence are set out as below –
“10. I say that the concerned officer of the Fire Station, Tamka, Kolar inspected the property including the stock and prepared a report on 12.07.2017.  In the said report, the Fire Station Officer had categorially found that the building including Cold Storage, Go-down in which the fruits such as mango, guava, apple, papaya and orange were kept was completely damaged by fire.  Further, the machinery such as AC, Coolers, Fans, Office Chambers, Records kept therein, Computers, Electrical Instruments, Zinc sheets, wires and glasses were burnt down and the walls of the building had developed very big cracks therein.  The entire damage that was caused due to the fire was noted in the said report.
11. I say that on the basis of the losses incurred by the complainant due to fire, the complainant lodged two claims on 09.08.2017 on the basis of the aforesaid insurance policies claiming a compensation of Rs. 41,00,000/- (claim No. 395861) for loss of stock and of Rs. 2,09,14,512/- (claim No. 394244) covering Rs. 74,22,780/- for loss of building Rs. 1,13,41,732/- for loss of plant and machinery, Rs. 1,50,00,000/- (Rs. One Crore Fifty Lakhs) (and not Rs. 20,000/- and by typographical mistake while filing of the petition was wrongly typed for Rs. 20,000/- instead of Rs. 1,50,00,000/- for loss of plant and machinery and stock for other losses) respectively.  Copy of claim No. 395861 dated 09.08.2017 made by the complainant to the respondent insurance company is annexed herewith the marked as Ex.CW5 copy of claim No. 394244 dated 09.08.2017 made by the complainant to the respondent insurance company is annexed herewith and marked as Ex.CW-6.”
 
12. It is, thus, seen that in his aforesaid statements and especially in Para 11 reproduced above, the witness who happens to be the Proprietor of the Complainant Firm has only given a gross total of the losses allegedly suffered by him, but has not drawn attention to any specific material on record from which the correctness of the aforesaid totals could be got verified.  Of course, alongwith his Evidence, he had filed certain documents which may be referred to for making some assessment of his alleged losses.  But in this regard, it is to be again noted that those documents are only three in number which were filed under the nomenclature of Ex. CW-7 to Ex. CW-9, and even the pagination of some of these documents does not tally with that depicted in the Index filed alongwith the Affidavit in Evidence.  Rest of the 13 Exhibits filed alongwith the Complainant’s Evidence do not have even an indirect concern with the actual valuation of the Complainant’s stocks or other assets in the form of Plant, Machinery, Ripening Chambers, Buildings, etc. Ex.CW-1 and CW-2 are only copies of the Sanction Letters issued by the State Bank of Mysore, pertaining to the cash credit limit of the Complainant’s business units, while Ex.CW-3 to CW-4 are merely copies of the relevant Insurance Policies, and EX.CW-5 and CW-6 are similarly only copies of the Claims submitted by the Complainant to the Respondent/Insurance Company.  Similarly, Ex.CW-10 to CW-12 are copies of the Emails issued by the Complainant to the Opposite Party on 7.6.2018, 18.6.2018 and 26.6.2018 which hardly contain any details of the quantitative break-up of the alleged losses suffered by the Complainant, although copies of various sale bills issued by the Complainant itself in favour of its various purchasers were attachments to the Ex. CW-11, without in any manner specifying either the total of those bills or the specific period to which those pertained. Ex. CW-13 is only a copy of the letter dated 2.7.2018 vide which the Insurance Company had offered the admissible claim as assessed by it to the Complainant, while Ex. CW-14 is the Complainant’s response to the Ex. CW-13.  The last two documents i.e. Ex. CW-15 & 16 are only copies of the Legal Notices dated 15.10.2018 sent on behalf of the Complainant to the Insurance Company in respect of its two Insurance Claims. So, only the three documents being Ex. CW-7 to CW-9 can be regarded as the material on the basis of which the Complainant’s losses could be assessed. These three documents which have been described in the Complainant’s Evidence are being considered in the following paragraphs.
 
 
13. Ex. CW-7 happens to be the “Copy of the Email dated 19.12.2017 alongwith the full set of ledger account extract furnished by the Complainant to the Respondents Insurance Company”.  This actually contains all the entries pertaining to the Complainant’s financial transctions with M/s. “Fresh for Health” for the period between 28.10.2016 to 19.8.2017 running into as many as 18 pages from Page No. 98 to 105 of the Complainant’s Evidence.  Thereafter Pages 106 and 107 which are also part of Ex. CW-7 are the purported total purchases made by the Complainant and of the sales made from its side. Both these documents have been issued by the Complainant itself on 18.12.2017 which was long after the fire had taken place in the month of July, and none of the purchase and sale details indicate the period to which those are applicable.  The same are also not shown to be authenticated by any Auditor. 
14. Ex. CW-8 happens to be collectively “Copy of the details of sale and purchase for the period between 01.04.2017 to 31.05.2017 certified by the Auditor Furnished by the Complainant by way of Email dated 24.01.2018”.  The document runs into 35 pages being Pages 108 to 148 of the Complainant’s Evidence.  The document starts with the Email issued by the Complainant to pcextn@sbi.co.in, and suresh.A@sbigeneal.in dated 1.2.2018 in which the Complainant from its side has sought to provide details regarding its stocks held by it at the relevant time.   These contain details of the total purchases made by the Complainant in the months of April, May and June, 2017, and for the period upto 9.7.2017, which was just a day before the fire broke out.  The total of purchases made by the Complainant according to these extracts from the Purchase Register for the months of April to June, 2017 shows as Rs. 11,82,210/-, Rs. 25,84,311/- and Rs.44,87,088/- respectively.  The corresponding figures of sales during the aforesaid months as extracted from the “Sales Register” are shown to be Rs. 20,78,582/-, Rs. 27,31,000/- and Rs. 25,81,153/- respectively.  Thereafter, for the brief period in the month of July till 9.7.2017, the details of purchases have been shown to be Rs. 27,90,600/-, while the details of the sales made during the same period is shown to be Rs.16,13,960/-.  These sale and purchase summarises have been issued under the seal and signature of “V. Raghunatha & Co.” claiming to be Auditors and Tax Consultants.  Thereafter, pages 119 to 142 of the Complainant’s Evidence are merely copies of the various gate passes issued by it on various dates specially in the months of July, and June 2017, which are however not arranged in any chronological order and no total of the quantities or amounts covered under these documents/gate passes which has been compiled.
15. Ex. CW-9 happens to be “Copy of the Letter dated 07.03.2018 issued by FRESH FOR HEALTH addressed to the Complainant”. Its perusal goes to show that it is a document in the nature of a balance confirmation Certificate indicating that the total amount receivable by the Enterprise “Fresh for Health” as on 31.3.2017 was Rs. 37,02,200/-.  Rest of the pages which are stated to be part of Ex. CW-9,  being Pages 144 to 158 of the Complainant’s Evidence however have no connection with the concerned Enterprise “Fresh for Health” and are actually mere copies of certain quotations obtained by the Complainant from different Enterprises such as “Essae..for Excellence”, “Climate Changers”, “Nilkamal” etc., but  no  tangible details of the value sought to be conveyed in these documents has been revealed by the Complainant by way of indicating the details of quotations obtained individually from the various Enterprises, although on Page 144 of the Complainant’s Evidence, it is seen that the total of  ‘Estimates for Building, Building roof, Quotation for chambers, Weighing scale, Quotation for crates, Quotation for pallets, Office furniture, computer, etc. is shown as Rs. 1,89,14,512/-.
16. In view of the aforesaid nature of Evidence led from the Complainant’s side, it cannot be held that it has been able to satisfactorily establish either the actual quantity of the stocks lost by it in the fire, or the extent of actual damage suffered, since only quotations or estimates for recreating its establishment after the fire have been placed on record.  The approach of the Opposite Party in not accepting the Complainant’s Claim in its entirety, in the given facts and consideration can therefore not be outrightly faulted. 
17. From its side however, the Complainant is also aggrieved that the estimates made by the Surveyor “Sai Prakash K.” are neither fair nor objective, and have been prepared in a tailor-made fashion to minimise the compensation payable to the Insured/Complainant.  In fine, the Complainant has clearly sought to assert that the assessment of the Surveyor is not just grossly under-valued, but has been done in such manner in order to provide an unfair advantage to the Insurer.
18. As already noted in the earlier Para No. 10, both sides have shown a rather lackadaisical approach in presenting their respective cases, on the basis of which this Commission could have come to a more objective assessment of the actual loss suffered by the Complainant. The Complainant has claimed that the fire had resulted in the complete destruction of its building, plant, machinery and stock.  It was also averred that the Fire Station Officer from Tamka, Kolar, had inspected the site on 12th July, 2017 and reported that the building, machinery and stock were extensively damaged with significant cracks in the building walls.  Even the Surveyor in his final report had referred to such report of the Fire Station Officer. However, the said report has not been placed on record by either side, although in the given facts and circumstances, the same could have been regarded as being much more credible, having been prepared by a neutral government officer, in the discharge of his official duties.  This is so because, otherwise, the Complainant from its side has sought to seriously impeach the credibility of the Surveyor’s Report on the basis of which its claim was settled by the Insurance Company.  To support its contention, the Complainant’s side has relied upon certain decisions of this Commission, and of the Hon’ble Supreme Court, in which it has been held that while the Surveyor’s Report in an insurance claim is valuable, yet it cannot be regarded as the gospel truth, or the final word, for settlement of the claim.
19. In “New India Assurance Company Ltd.  Vs. Pradeep Kumar, (2009) 7 SCC 78”; the Hon’ble Supreme Court had dismissed the Appeal filed by the Insurance Company by holding that the Surveyor’s report is not the last and final word, and not that sacrosanct that it cannot be departed from.  The relevant extracts of the aforesaid Appeal are set out as below –
“22.   In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.
24. The appeal is devoid of any substance. The insurance company would have been well advised in not spending public money unnecessarily on avoidable and wholly frivolous litigation such as this.  The appeal has no merit and is liable to be dismissed and is dismissed with costs which we quantify at Rs.15,000/-.“
(Emphasis added)
20. Relying upon the aforesaid decision of the Hon’ble Supreme Court, this Commission in “Bajaj Allianz General Insurance Co. Ltd.  Vs. Dr. Kumar Bhandaari, 2022 SCC OnLine NCDRC 632”; had dismissed the Appeal filed by the Insurance Co. by upholding the observations of the State Commission regarding the Surveyor’s observations, in which it was noted inter alia –
“….We cannot help but get the feeling that the opinion/observation has been made at the behest of the Respondents/OPs as a device to avoid their liability. In any case, the observation obviously has no nexus with the circumstances under which the building in question was damaged, its cause and the necessity of adopting a newer technology now available for its repairs discussed above. 
30. The discussions and observations made above, answer the sole question for determination agreed upon by the parties. The apart, it also displaces the other objections raised in the written objection but not pressed seriously during the arguments. 
31. For these reasons the claim is allowed.”
 
21. Again relying upon  the decision of the Hon’ble Supreme Court in “New India Assurance Co. Ltd. Vs. Pradeep Kumar” (supra), this Commission had allowed the Complaint by observing inter alia –
“…… 17. For the reasons stated hereinabove and respectfully following the principles laid down by the Hon’ble Supreme Court in Judgments quoted above, I am of the considered view that deficiency in service on the part of the Opposite Party Insurance Company is writ large while rejecting the rightful claim of the Complainant. Consequently, the present Consumer Complaint is partly allowed and the Opposite Party Insurance Company is directed to settle the claim of the Complainant Company by paying a sum of ₹3,50,98,046/- (Rupees Three Crore Fifty Lakh Ninety Eight Thousand Forty Six Only) alongwith interest @9% p.a. from the date of lodging of the claim till realisation within 8 weeks from today, failing which the interest will increase from 9% p.a. to 12% p.a. The Opposite Party Insurance Company is also directed to pay ₹50,000/- towards cost of litigation to the Complainant.”
 
22. Likewise, in “Sumit Chemicals Pvt. Ltd.  Vs. National Insurance Co. Ltd., 2023 SCC OnLine NCDRC 814”; the Complaint was allowed after holding that the Surveyor’s Report submitted in the case was not acceptable.  The relevant extracts from the Order passed in this Complaint Case are set out as below –
“17. As to the question of compensation, from the record it is apparent that the surveyor has not allowed various items of claim. In a catena of judgments the Hon’ble Supreme Court and this Commission have held that despite the essentiality of surveyor’s report under section 64 UM of the Insurance Act, 1938, the surveyor’s report is not the last and the final word if it is arbitrary or unjustified. In the instant case, the report notes that no purchase transaction was found that was not confirmed by the representative of the suppliers. However, it has excluded the stocks of Rs.34,23,107/- as being doubtful. Similarly, it had disregarded the opening balance of Rs. 26,70,490/- for the plant and machinery on the grounds that no ledger account was available and instead assessed the loss on plant and machinery on the basis of 10 year life and 10% deprecation based upon their experience for chemical plants. It has also considered the compensation on market value basis and not reinstatement basis (as per the policy terms) stating that it was at the request of the complainant. 
23. Now, in the present case, the approach adopted by the Surveyor in assessing the losses suffered by the Complainant would appear to be peculiar not merely because the Surveyor had delegated calculation of the loss in stocks  to “M/s. Deepak Padmanabhan & Co.”, a Chartered Accountants Firm, but also from the way huge cuts were made from the amounts claimed by the Complainant under various heads, by holding that the losses as claimed had not been actually suffered, or that the actual losses were much less, without giving any details or providing any material to support the above mentioned observations. Here, it would also be appropriate to note that the Surveyor first submitted his assessment of the loss/claimed amount at Rs. 69,55,674/-, which can be seen from the following extracts of his report –

 

 

“ADJUSTMENT OF LOSS :

 

Loss has been assessed as shown above totally @ Rs. 69,88,739/-.  Building repairs including roof is assessed/allowed at Rs. 21,11,737/- & for contents it is assessed/allowed at Rs. 66,09,405/-.  Insured’s unit was started in the year 2015.  Insured has been using the unit round the clock. The unit is in operation for 2 /2 years as on date of loss.  So we have considered depreciation of 5% for building and 18% for contents.  The adjustment of loss now for usage, salvage value and policy excess is as under :

Gross loss assessed for building as in Annexure is                   Rs. 21,11,737

 

Less:  Depreciation for usage @ 5% is                                         Rs.  1,05,587

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

Subtotal                                                                                             Rs.20,06,150 - A

 

Gross assessed loss for contents as un Annexure is                 Rs. 66,09,405

 

Less:  Estimated cost of electrical installation from

            where it is suspected fire originated to be

            disallowed as per policy conditions.                                             Rs.      5,000

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

Subtotal                                                                                             Rs. 66,04,405

 

Less: Depreciation for @ 18% is                                                   Rs. 11,88,793

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

Subtotal                                                                                             Rs. 54,15,612- B

 

Total adjusted loss amount (A+B) is                                             Rs.  74,21,762

 

Less: Estimated scrap salvage value is                                       Rs.   1,00,000

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

Amount after salvage value deductions is                                   Rs. 73,21,762

 

Less:  Policy excess @ 5% of claim amount is                           Rs.   3,66,088

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

Net adjusted claim amount is                                                        Rs. 69,55,674

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

           

Net adjusted claim/ loss amount recommended is Rs. 69,55,674/-“

 
24. Thereafter, the Surveyor issued Addendum Surveyor Report in which the recommended claim/loss amount was reduced to Rs. 68,38,824/- with the following explanation –
“Addendum Survey Report- Claim No. 394244
This is further to our Survey Report No. BLR-04817 B dated 22/06/2018 pertaining to captioned claim.  The outdoor units of five ripening chambers were not affected in the fire accident. The outdoor units of each chamber are estimated at Rs. 30,000/- in as is condition.  So for five chambers the value as it is Rs. 1,50,000/-.  The adjustment of this cost was inadvertently missed out in our earlier submitted survey report.  The revised adjustment of loss considering the cost of the outdoor unit is as under.
REVISED ADJUSTMENT OF LOSS:
Loss has been assessed as shown above totally @ Rs. 69,88,739/-.  Building repairs including roof is assessed/allowed at Rs. 21,11,737/- & for contents it is assessed/allowed at Rs. 66,09,405/-.  Insured’s unit was started in the year 2015.  Insured has been using the unit round the clock. The unit is in operation for 2 ½ years as on date of loss. So we have considered depreciation of 5% for building and 18% for contents.  The adjustment of loss now for usage, salvage value and policy excess is as under.

 

Gross loss assessed for building as in Annexure is       Rs. 21,11,737

Less: Depreciation for usage @ 5% is                              Rs.   1,05,587

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

Sub Total                                                                               Rs. 20,06,150   - A  

 

Gross assessed loss for contents as in Annexure is      Rs. 66,09,405

Less : Estimated cost of electrical installation

             from where it is suspected fire originated

             to be disallowed as per policy conditions.                       Rs.        5,000

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

Sub Total                                                                               Rs. 66,04,405

 

Less : Estimated cost of undamaged outdoor

            Units                                                                                       Rs.   1,50,000

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

Sub Total                                                                               Rs. 64,54,405

Less: Depreciation for usage @18% is                            Rs. 11,61,793

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

Sub Total                                                                               Rs. 52,92,612     - B

 

Total adjusted loss amount (A+B) is                                 Rs. 72,98,762

Less: Estimated scrap salvage value is                           Rs.   1,00,000

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

Amount after  salvage value deduction is                        Rs. 71,98,762

 

Less: Policy excess @ 5% of claim amount is                Rs.   3,59,938

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

Net adjusted claim amount is                                            Rs. 68,38,824

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

Net adjusted claim/loss amount recommended is Rs. 68,38,824/-“                                                                                                                                  

                                                                                                                                               

25.    In his detailed report, the Surveyor had quantified the total losses at Rs. 87,21,142/- with the following detailed explanation –

          “SALVAGE :

 

The salvage value is realisable from the steel scrap removed from the damaged ripening chambers and some portion of the truss and roof affected due to heat.  Aluminium frames affected can also fetch scrap value.  Fire was contained inside the shed.  So outdoor units of the cold rooms were not unaffected.  Other than this salvage value is not realisable from the building debris.  Insured has not offered any salvage value for the scrap items. The salvage value is estimated to fetch Rs. 1,00,000/- on lump sum basis as it is scrap metallic items only.  This salvage value realisable in our opinion is fair and reasonable.

ASSESSMENT OF LOSS :

Insured vide claim form dated 09/08/2017 have said the loss amount is Rs. 2,09,14,512/-.  Insured furnished claim summary sheet and quotations from vendors.  Claim amount in the quotations found highly inflated and not commensurate with the actual loss which has occurred due to the captioned incident.  It has to be noted that the policy issued to insured is attached with RIV clause attached.  So without prejudice we had advised insured to immediately proceed with repairs and reinstate the damages which had occurred and provide the actual final bills for the expenses incurred.  But insured mind set is for not to repair the damages.  This is evident from the fact that insured has kept the unit as it is after clearing the debris of ripening chambers.  It is implied by the long silence of insured and not undertaking the repairs till the date of this survey report that he intends for a settlement on indemnity basis.  Insured has furnished only repair estimates which is highly inflated and portraying as if the damages to building is very extensive and needs demolition and reconstruction from foundation level.  It is also observed insured has not obtained comparative & competitive offers for the repairs from other vendors.

 

It is a fact that only ripening chambers inside the shed is totally damaged and the roof area over the ripening chambers needs cropping and repairs.  Office area needs repairs. Outer walls and RCC framed structures are not affected and do not warrant demolishing and reconstruction. Aluminium windows were affected at places and needs replacement.  Electrical installation is gutted and needs replacement.  Insured has submitted a quotation for the ripening chambers replacement at Rs. 90,97,210/- from Climate Changers, Bangalore.  In this regard we had perused through the project report and found the offer in 2015 for construction of 4+1 chambers cost is only Rs. 56,68,94/- all inclusive from supplier Genesis Cooling Systems, Chennai. The offer price was subject to negotiation. Whereas now we find in the current offer submitted by insured there is a huge disparity.  So we were constrained to contact the original suppliers Genesis Cooling Systems, Chennai and confirmed from them that they had only supplied the original ripening chambers to insured.  We enquired why they have not given quotation now.  We were informed that  insured has outstanding amount to be paid to them from the earlier supply.  This is not cleared and now after the fire accident insured approached Genesis Cooling Systems, Chennai and wanted them to give an inflated quotation for damaged five chambers.  Genesis Cooling Systems, Chennai refused understand to give a unrealistic quotations as desired by insured.

 

So insured has obtained quotation to suit his convenience for the claim and obtained the same from Climate Changers, Bangalore. We then requested Genesis Cooling Systems, Chennai to give us realistic offer for constructing the ripening chambers of similar capacity that which were existing in insured’s premise. Offer was given and we find from the offer received that the total cost is 54,86,851/- all inclusive for five chambers.  When this was compared with the offer submitted by insured, to our surprise we found the estimate submitted by insured is inflated almost by 66% higher. From the above shared information, it is clearly establishes insured’s mind set for an unrealistic claim vis-à-vis the actual damages.

 

On scrutiny of other quotations submitted for the repair/replacement of building damages, roof damages, crates and pallets it is also found highly inflated.  We are of the views that insured has obtained quotations for building and roof rectification considering it as a total loss and on very much higher side.  The fact is building and roof has not suffered damages which warrant extensive reconstruction activities as in the quotation submitted by insured.  We have explained this point and brought to the knowledge of insured the above anomalies in respect of his claim preferred by them on insurers.

 

So we have restricted and assessed the claim of insured to the extent of the actual loss/damage which has occurred and cost that is fair and reasonable to come back to pre-accident condition.  The assessment of the loss without prejudice to admissibility of liability of underwriters is shown in Annexure attached to this report.  The summary of the loss is given below.

 

Cost of building & roof repairs as shown in Annexure is           Rs. 21,11,737

Cost of P & M replacement excluding outdoor units

& other items Weighing Scale, Crates & Pallets as

Shown in Annexure is                                                                     Rs. 66,09,405

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

 

Loss amount allowed/assessed is                                                Rs. 87,21,142

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

 

Gross loss amount assessed/allowed is Rs. 87,21,142/”

 

 

 

26.    In his report, the Surveyor had also attached two Tables of the amounts claimed by the Complainant under various heads, and the amounts actually allowed by him.  In order to consider whether the approach of the Surveyor in this regard was objective, it would be appropriate to glance over the aforesaid Tables as submitted by the Surveyor which are re-produced below –

 

 

        Claim of Venkateswara Banana Ripening Unit, Vadagur – DOL: June 10 2017 * Claim No. 394244

Sr. No.

Details

Claimed Amount

Allowed Amount

Remarks

 

 

Rs.

Rs.

 

1

Cost of burnt brick masonary works as described in the estimate

819,421

122,913

Fire has not affected all the walls. Considered reasonable cost for damaged portion of walls.

2

Cost of concrete works as described in the estimate

448,672

-

Fire has not affected the lintel, roof, beams. Does not warrant recasting. Hence disallowed.

3

Cost of aluminium door works as described in the estimate

194,222

29,133

Fire has not affected all the doors. So reasonable cost allowed.

4

Cost of aluminium windows works as described in the estimate

314,413

47,162

Fire has not affected all the windows. Reasonable cost allowed

 

5

Cost of concrete works as described in the estimate

4,056

-

Not damaged. Hence disallowed.

6

Cost of flooring works as described in the estimate

1,122,531

449,012

Allowed to the extent of the fire damaged portion PCC flooring.

7

Cost of plastering works as described in the estimate

224,034

178,456

Allowed to the extent of the fire damaged portion in the building.

8

Cost of plastering works for ceiling as described in the estimate

109,088

-

Ceiling is GI sheet. Hence not allowed.

9

Cost of painting works as described in the estimate

125,649

125,649

Cost is reasonable

 

 

 

 

 

 

 

 

It is thus seen that the claim of the Complainant towards the damage to its building under various heads, was Rs. 33,62,086/- in total, while the Surveyor allowed it at Rs. 9,52,325/- only.

27.    The second Table submitted by the Surveyors which pertains to the loss suffered by the Complainant towards its ripening unit, damaged weighing scale, burnt crates, burnt palates and office furniture, etc. is re-produced below –

 

          Claim of Venkateswara Banana Ripening Unit, Vadagur – DOL: June 10 2017 * Claim No. 394244

Sr. No.

Details

Claimed Amount

Allowed Amount

Remarks

 

 

Rs.

Rs.

 

1

Cost of ripening & cold room redoing

9,097,210

5,486,851

Cost Allowed as per the quotation obtained from Genesis Cooling System, Chennai

 

 

 

 

 

2

Cost of damaged weighing scale

124,522

87,554

Reasonable cost allowed

 

 

 

 

 

3

Cost of burnt crates

1,750,000

960,000

Cost considered for 3200 crates @ Rs. 300/- per crate

 

 

 

 

 

4

Cost of burnt pallets

370,000

75,000

Cost considered for 50 pallets @ 1500/- per pallet

 

 

 

 

 

5

Cost of office furnitures

150,000

 

Not insured in the policy. Hence claimed amount not allowed

 

 

 

 

 

 

Gross loss amount allowed/assessed is

11,491,732

6,609,405

 

 

 

 

 

 

 

28.    Regarding the claim of the Complainant towards loss of its stocks/fruits, the Surveyor had relied upon the assessment of the Chartered Accountants “Deepak Padmanabhan & Co.” who had come to its own conclusions in a rather circuitous manner by holding that there was a preponderance of “Apples” as compared to the other fruits being mangoes, papayas, etc., on account of which the Chartered Accountant opined that the total value of fruits belonging to the Complainant on the date of fire was Rs. 27,19,400/-.  The approach adopted by the Chartered Accountants in coming to such conclusion as mentioned in its report, is re-produced as follows –

We also have on hand the Closing Stock as on 31/03/2017 (i.e) Opening Stock of Fruits as on 01/04/2017. The issue arises as to what is the breakup of Apple and other fruits in the said stock. Towards arriving at the same, we take the help of the Certified Ledger of M/s Fresh For Health, the major Apple Supplier for Sri V Subramani.

 

As per the said lodger, Mr. V Subramani, during Financial Year 2016-17, purchased an amount of Rs. 3,82,79,325/- worth of fruits, majority being Apples. Due to absence of Stock Records, and giving the benefit of doubt to Sri V Subramani, I am considering the entire purchases as Apple Purchases.

 

Having said that, as per the Audited Financials of FY 2016-17, the total Purchases of Fruits during the year stood at Rs.4,38,08,527/-. This means that, out of a total Purchase of Rs.4,38,08,527/-, a sum of Rs. 3,82,79,325/- were Apple Purchases. This means that Apple Purchases during 2016-17 worked out 87.37% of the Total Purchases.

 

I would be applying the same percentage to bifurcate the Opening stock of Fruits. This means that, out of opening stock of Rs.44,21,670/- [As per Audited Financials of FY 2016-17], a value of Rs.38,63,213/- were apples and the remaining value of 5,58,457/- were other fruits.

 

We now have the purchase register and sales register for the period from 01/04/2017 till the date of fire. Working out the stock of goods after bifurcating the same and applying the Gross Profit arrived in Table 3, we can arrive at Table 4, which will show the closing stock of Apples as on the date of Fire.

 

Towards calculating the value of Apples as on the date of Fire, we have adopted the Gross Profit Ratio of 11.83%. Further, we have for sure with documentary evidences that the purchases of Apples from M/s Fresh For Health. Due to absence of any other documentary evidences of Purchase of Apples from other vendors, it is considered that Apples have been purchased only from M/s Fresh For Health.

 

As per the ledger of M/s Fresh for Health, Apples valuing Rs.47,24,200/- have been purchased between 01/April/2017 till the date of Fire by Sri V. Subramani.

 

During the said period of 01/April/2017 till the date of Fire, the sales effected by Sri V. Subramani of all the fruits, including Apples, was Rs.91,02,764/-. Applying the percentage of 87.37% arrived above towards estimating the sales of apples from the total sales during the period from 01/April/2017 till the date of fire, we can safely assume that a value of Rs.79,53,085/- out of the said sales was towards sale of apples.

 

In the Table 4 given below, we have estimated the closing stock of Apples as on the date of Fire by applying 11.83% in Table 3 for calculating the Cost of Sales.

 

 

Table 4                                                                                                                (Rs.)

 

Apples

 

 

 

 

Month/Year

Opn Stock

Purchases

Sales

Cost of Sales

Closing Stock

 

38,63,213

 

 

 

 

April, 2017

 

0

18,14,310

16,22,382

22,40,831

May, 2017

 

10,07,250

23,86,127

21,33,709

11,14,372

June, 2017

 

25,11,400

23,42,523

20,94,718

15,31,054

July, 2017

 

12,05,550

14,10,125

12,60,954

14,75,650

 

 

 

 

 

 

 

 

47,24,200

79,53,085

71,11,763

 

 

 

It is evident from the above calculation that, as on the date of Fire, Apples Valuing Rs.14,75,650/- was present in the Unit. Now that, we have the Value of Apples as on the date of Fire, we can apply the same to Table 2 and calculate the total value of Fruits as on the date of Fire.

 

Redrafting Table 2 as Table 5, we have the following as the Value of Fruits as on the date of Fire

 

 

Table 5

                             (Rs.)          

Particulars

Value of Fruits

 

 

Mango

6,75,000

Papaya

5,68,750

Apple

14,75,650

 

 

Total

27,19,400

 

Hence, we can safely assume that the total Value of Fruits belonging to Sri V Subramani as on the date of Fire was Rs.27,19,400/-.”
 
29. It is thus seen that the Chartered Accountant’s contention was that Apples were nearly 75% of the Complainant’s stock in the preceding year(s), which was therefore factored in for assessing the actual quantum of stocks of the various fruits.  Such approach would not appear to be unjustified in the given facts and circumstances, since the value of the opening stock of the apples at the beginning of the financial year i.e. w.e.f. 1.4.2017, as stated by the Complainant was accepted, and the purchase prices paid by it during the following months till date of fire, as gathered from the ledger Account of the Supplier- M/s. Fresh for Health was also accepted, and after deducting the sale price from the aggregate of the price of the opening stock as well as that procured in the interregnum, the figure of Rs. 14,75,650/- towards the value of the apples was arrived at. The valuation of mangoes and papayas as stated by the Complainant was also accepted.  The total value of the stock comprising these three fruits at the relevant time therefore came to Rs. 27,19,400/-.  From this amount, the value of Rs. 4,95,000/- for the stocks belonging to the Complainant which were kept outside the heat chambers and returned to it was subtracted by the Surveyor.  Consequently, the actual loss after such subtraction came to Rs. 22,24,400/-only, from which the Policy excess @ 5% of the claim amount was then deducted thereby fixing the net entitlement towards loss of stocks at Rs. 21,13,180/-.
30. More controversial, however, is the amount allowed by the Surveyor towards the damage to the building vis-a-vis the claim of the Complainant.  As seen from the Chart re-produced in Para 26 earlier, the total claim of the Complainant towards the nine (9) heads mentioned therein was to the tune of Rs. 33,62,086/- in all, whereas the total amount allowed by the Surveyor came to Rs. 9,52,325/- only.  It is noteworthy that no claim whatsoever was allowed towards the cost of concrete works as mentioned in the estimate supplied by the Complainant at Sl. No. 2 & 5 in the said Chart as, according to the Surveyor, the fire had not effected the lintel, roof, or beams of the building which therefore did not warrant any recasting, and there was no such damage as to allow for cost for any concrete works.  Similarly, the cost of plastering work in the ceiling as mentioned at Sl. No. 8 in the Chart was totally disallowed by the Surveyor, who noted that the “Ceiling is G.I. sheet”.  Towards the other heads for expenditure as noted in Sl. No. 1,2,3,4, 6& 7 of the Chart, the Surveyor had allowed substantially lesser amounts by noting that the fire had not effected all the walls or all the doors and windows, and that there was damage to the PCC flooring to some extent, apart from damage to a portion of the building. But the Surveyor did not note anywhere what was the extent of damage and basis of such figures, as assessed by him, on account of which his assessment in respect of these expenses cannot be accepted at its face value, since the Opposite Parties from their side have not placed even one of the 44 photographs supposedly taken by the Surveyor which were a part of his report, and perusal of which could have enabled this Commission to arrive at a more objective assessment of the losses sustained by the Complainant.  In the totality of these circumstances, therefore, this Commission is inclined to award an amount equivalent to 50% of the entire claim of Rs. 33,62,086/- as claimed by the Complainants, which therefore comes to Rs. 16,81,043/-.  After subtracting the amount of Rs. 9,52,325/- already allowed by the Surveyor, the Complainant would therefore appear to be entitled to an additional amount of Rs. 7,28,718/- towards the damage to his building.
31. Regarding the damage to the ripening unit equipment, as seen in the Chart reproduced in Para 27 earlier, it transpires that the total claim of the Complainant towards the 5 heads listed in the Chart was to the tune of Rs. 1,14,91,732/- whereas the amount allowed by the Surveyor was Rs. 66,09,405/- only.  The most controversial item in this regard happens to be the cost of ripening unit and cold room redoing noted at Sl. No. 1 in the said Chart.  Claim of the Complainant was for an amount of Rs. 90,97,210/-, whereas the amount allowed was only Rs. 54,86,851/-.  This figure was quoted by the Surveyor on the basis of the quotation obtained by him from “Genesis Cooling Systems, Chennai”, who was the earlier supplier for the Complainant. The total amount quoted by the aforesaid Supplier as seen from the Surveyor’s report was Rs. 52,88,160/-, to which the Surveyor himself added an amount of Rs.1,98,691/- either towards the anticipated taxes on the quotation, or otherwise towards redoing of the cold room, although he did not clarify why such additional amount of Rs.1,98,691/- was added to the quotation.  However, a closer reading of the aforesaid quotation, supplied to the Surveyor by “Genesis Cooling Systems” under its letter dated 18.5.2018 goes to show that apart from the Price Schedule amounting to Rs. 52,88,160/-, an additional expense by way of GST @ 28% would have to be paid by the purchaser on account of which the total cost would come to Rs. 67,68,844.80, which is therefore rounded off to Rs. 67,68,854/-.  Consequently, an additional amount of Rs. 14,80,685/- also ought to have been allowed in favour of the Complainant. Regarding cost of the damaged weighing scale, the Surveyor allowed only Rs. 87,554/- against a claim of Rs. 1,24,522/- as “reasonable cost allowed”, but again without explaining what was the basis of such assessment of cost.  In this regard, non-production of the photographs forming part of the Surveyor’s report is again not helpful to the Opposite Parties. Regarding item Nos. 3,4 & 5 in the Chart, this Commission finds no grounds to interfere with the amounts allowed by the Surveyor towards the cost of burnt crates and pallets, and disallowed towards the cost of the office furniture, which according to him were not insured in the Policy.  Consequently, in respect of damaged equipment including the ripening unit chambers, it is seen that an amount of Rs. 14,80,685/- towards item No. 1 in the Chart, and Rs. 36,968/- towards additional cost of the damaged weighing scale therefore totalling Rs. 15,17,653/- is found to be the additional legitimate entitlement of the Complainant. 
32. Besides, in making all the deductions towards depreciating @ 18% in the assessment for damage to the building, the Surveyor did not explain how he assessed the same at 5% for usage and an additional 18% separately in his final report on “ADJUSTMENT OF LOSS” and the “Addendum Survey Report- Claim No. 394244” already reproduced earlier. The total depreciation thus deducted by the Surveyor in his “REVISED ADJUSTMENT OF LOSS” comes to Rs. 1,05,587/- plus Rs. 11,61,793/- which therefore comes to Rs. 12,67,380/- which in the given facts and circumstances would appear to be an exorbitant cut from the Insurance Claim.  In the totality of the circumstances, and considering that the Surveyor had also deducted an additional amount of Rs. 1.00 lakh as estimated scrap salvage value, this Commission is of the opinion that no more than an amount of Rs. 7.00 lakhs ought to have been deducted from the claim towards depreciation as well as scrap salvage value on account of which an additional amount of Rs. 6,67,380/- is found due towards the Insured/Complainant. 
33. Consequently, the Complainant is now found entitled to an additional entitlement of Rs. 7,28,718/- towards the damage to its building. In addition, an amount of Rs. 14,80,685/- is also found payable to it by the Insurance Company on account of the shortfall in the actual delivery price of the ripening unit and heat chambers, which had to be re-installed.  It is also entitled to an amount of Rs. 36,968/- as the additional entitlement towards installation of the damaged weighing scale.  Lastly, an amount of Rs. 6,67,380/- is liable to be paid to the Complainant on account of the visibly excessive depreciation and scrap salvage value as assessed by the Surveyor. The total of all these amounts comes to Rs. 29,13,751/-.
34. The Complaint is, therefore, allowed in part to the extent that the Complainant is found entitled to an additional amount of Rs. 29,13,751/- which shall be paid to it by the Opposite Parties alongwith interest @ 7% p.a. from the date of filing of the Complaint.  In addition, litigation costs assessed at Rs. 1.00 lakh are also awarded in favour of the Complainant.
Such payment must be made by the Opposite Parties to the Complainant within 02 months from the date of this Order.  In the event of non-compliance of this Order within the time specified, any outstanding amount(s) to be paid shall attract an interest @ 9% p.a. till the time of final realization. 
35. Pending application(s), if any, also stand disposed off as having been rendered infructuous. 
 
......................................J
SUDIP AHLUWALIA
PRESIDING MEMBER

Consumer Court Lawyer

Best Law Firm for all your Consumer Court related cases.

Bhanu Pratap

Featured Recomended
Highly recommended!
5.0 (615)

Bhanu Pratap

Featured Recomended
Highly recommended!

Experties

Consumer Court | Cheque Bounce | Civil Cases | Criminal Cases | Matrimonial Disputes

Phone Number

7982270319

Dedicated team of best lawyers for all your legal queries. Our lawyers can help you for you Consumer Court related cases at very affordable fee.