DR. SADHNA SHANKER, MEMBER 1. This appeal has been filed under section 19 of the Consumer Protection Act, 1986 in challenge to the Order dated 25.10.2013 of the State Commission in complaint no. 54 of 2010, whereby the complaint of the complainant was partially allowed and the opposite party insurance company was directed to pay the amount of Rs. 35,49,412/- along with 9% interest from 18.10.2008 till relealisation and Rs. 50,000/- towards compensation and Rs. 25,000/- towards cost of litigation. 2. We have heard the learned counsel for the appellant (hereinafter referred to as the ‘insurance company’ and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and perused the record including the State Commission’s impugned Order dated 25.10.2013 and the memorandum of appeal. 3. The brief facts of the case are that the complainant, through its proprietor, is the wholesale distributor of medicines, surgical items and drugs, and had taken a godown on rent situated at 2/24-25, Martui Estate on Halol - Baroda Highway near Golden Chokdi. The complainant had obtained the insurance policy, namely, Standard Fire & Special Perils Insurance Pollicy, for the material kept for a sum insured of Rs. 40 lakh. The policy was valid from 12.10.2007 to 11.12.2008. During the subsistence of the insurance policy, on 14.04.2008 a fire broke out in the godown and the medicines kept in the godown had become useless for human and animal consumption and the complainant had suffered a huge loss. The complainant informed the insurance company about the incident. The insurance company appointed a surveyor. The surveyor visited the godown on 17.04.2008 but had not assessed the loss. Several requests were made by the proprietor of the complainant. When the surveyor appointed by the insurance company had not assessed the loss, the complainant had appointed stock assessment surveyor approved by his C.A. and the total stock was shown at Rs. 35,49,412.17p. It is concluded that stock worth of Rs. 20,03,292.41p. was not in the physical condition to be counted and the damaged stock of Rs. 11,70,186.29p was physically counted. The complainant made application to Assistant Commissioner, Food and Drug Controller Administration, Vadodara for assessing the stock not fit for human consumption and to destroy the same. After the stock assessment, the drug inspector destroyed the stock in the presence of the surveyor and had issued a certificate to that effect to the complainant on 10.02.2010. After a period of two years, the insurance company had approved Rs. 15,56,271/- on 20.04.2010 and had asked the complainant to accept the said amount as full and final settlement against the claim of Rs. 42,14,162/- towards the amount of total damage. It is contended by the complainant that the calculation of the stock which was completely burnt and damaged was not assessed on the basis of pro-rata basis but on the basis of calculation of area. The surveyor had opined to pay the compensation to the complainant approving the same without considering the C.A. approved stock statement. The complainant submitted an application under RTI Act, 2005 and through the reply it came to the knowledge of the complainant that the surveyor has submitted its report on 16.03.2010 i.e. after almost two years of the incident and that the surveyor in his report has accepted all the purchase bills as genuine except bills of Bhivandi. It is the say of the complainant that the surveyor has not considered the certificate issued by the Assistant Commissioner food & Drug Control Administration, Vadodara despite the fact that the surveyor was present when the Drug Inspector was inspecting the damaged stock and destroyed the same. 4. The complainant filed a complaint before the State Commission. 5. The complaint was contested by the insurance company stating that the complainant has not cooperated in assessing the claim which caused delay in the report. The complainant was asked to calculate on the spot the stock which was worth Rs. 20,03,292/- and kept in the godown and to segregate the stock which was destroyed and damaged but he did not do so. The stock worth Rs. 11,70,186 lying in the godown was calculated as per the instructions of the surveyor but the rest of the instructions of the surveyor were not complied with. It was observed that the stock worth Rs. 11,70,186/- was lying in 80% space of the godown, therefore, the surveyor had not accepted that the stock worth Rs. 20,03,292/- was lying in 20% area of the godown and therefore, the report of the surveyor is genuine. It is also stated by the insurance company that they received a letter alleging that the complainant kept the expired medicines in his godown and his claim was not bonafide and it needed to be inquired into. Thus, the insurance company cancelled the voucher of settlement and had appointed Ms. Investigation Bureau, Vadodara as investigator. In the investigation report, after interview with police and other people it was concluded that Mr. Sanjay Patel alleged partner of the complainant was caught by the police for selling expired medicines and he used to remove the original print of the medicines and replace the expired date with new print date and sell the medicine. In this regard, FIR was also lodged. The complainant had breached the fundamental rules of bonafide claims. The State Commission vide impugned Order dated 22.02.2018 partially allowed the complaint and the insurance company was directed to pay the amount of Rs. 35,49,412/- along with interest at the rate of 9% per annum form 18.10.2008 till realization. Compensation of Rs. 50,000/- and litigation cost of Rs. 25,000/- were also awarded. 6. Aggrieved by the said Order of the State Commission, the insurance company filed the instant appeal before this Commission. 7. Learned counsel for the insurance company has relied on the surveyor’s report and submitted that repeatedly the surveyor had asked the complainant to segregate and prepare the lists of all the affected stock quality-wise and quantity-wise to enable him to assess the loss but the complainant evaded to do so on one pretext or the other. Finally, the surveyor had calculated the loss on the basis of the area of the godown and on that basis he had assessed the loss at Rs. 15,63,000/-. The complainant did not accept the amount thus offered. In the meantime, the insurance company received an anonymous letter stating that expired medicines were stored in the godown, therefore, the insurance company appointed an investigator in the matter and on receipt of his report, cancelled the voucher for Rs. 15,57,926/-, which was issued earlier. 8. Another contention of the learned counsel for the insurance company is that the State Commission has no cogent reason for discarding the surveyor’s report and in support of this contention, he relied on the decision rendered in the case of United India Insurance Co. Ltd. & Ors. Vs. Roshan Lal Oil Mills Ltd. & Ors. (2000) 10 SC 19. It is further contended that the complainant was at best entitled to the amount of Rs. 15,56,271/- as determined by the surveyor. 9. In rebuttal, learned counsel for the complainant has argued that from initial communications of the surveyor, for his convenience, he had asked the complainant to segregate the stock to facilitate the physical counting of the said stock and upon such segregation of stock the surveyor from the very beginning knew that the stock in the rear corner of the godown was totally burnt or gutted because of use of huge water by fire brigade to douse the fire and physical verification of the stock was not feasible. Learned counsel for the complainant draw kind attention to the letter dated 23.06.2008 of the surveyor which clearly stated in para 2 that “Further note that you have to retain all the salvage in as it is condition without disturbing their position in the godown however for the stock which is gutted and not possible to count physically may be included in your separate claim bill supported by stock book, purchase bills etc.” and has argued that the complainant acted upon the instructions of the surveyor and submitted the closing stock, provisional balance sheet certified by C.A., last 12 months bank stock statement and the separate list of items for which physical counting was not possible as per his records and upon submission of said list the surveyor vide its letter dated 29th September 2008 mentions that “Please note that during all our meetings you have reported to us that physical counting of the stock itemwise is not possible but since we have received segregated amount of claim bill we believe that now you must have physically segregated the stock.” but thereafter he became adamant on physical counting of the burnt stock in all his subsequent correspondence for the reason best known to him. The complainant had clearly mentioned in his letter dated 16.11.2008, 15.12.2008, 22.12.2008 and 24.12.2008 that he is not in a position to arrange the physical counting of the stock burnt into ashes. 10. He further submitted that all the purchase bills have been verified by the surveyor. Further the certificate issued by the Assistant Commissioner, Food and Drugs Control Administration, Vadodara that the “stock of such drug in mostly / completely burnt condition which was not in physical condition to be verified and hence could not be quantitatively verify was destroyed in presence of drug inspector” had confirmed that the stock was not in the physical condition to be verified physically. It is furthermore argued that despite confirming the genuineness of the purchase bills and submission of CA certified stock statement and evidence like certificate of Assistant Commissioner, Food and Drugs Control Administration, Vadodara, the surveyor’s method and manner of arriving at the loss by using the basis of area was based on assumptions and no justification had been provided for the same. In support of this contention, he placed reliance on the decision rendered in the case of New India Assurance Co. Ltd. Vs. M/s Protection Manufacturer Pvt. Ltd. Reported in 2010 (o) GLHEL-SC 48749 wherein the Hon’ble Supreme Court has held that the loss suffered on account of fire has to be calculated on the basis of the amounts mentioned by the respondent company and the computer data available in support thereof and also on the cross-checking with the accounts of suppliers and vendors of the raw materials to the respondent company. He further submitted that as regards complaint of expired medicines, the insurance company has failed to produce a single piece of evidence regarding storage and sale of expiry medicines. He also relied on the decision of the Hon’ble Supreme Court in the case of Shobika Attire vs. New India Assurance Co. Ltd. reported in 2006(O) GLHEL-SC 37771. 11. The question which falls for our consideration is whether non-payment by the insurance company in this case of any amount is correct or not. 12. After hearing the learned counsel for the parties and considering the evidence of the parties, we are of the view that the insurance company has not produced any documentary evidence that the complainant has not cooperated with the surveyor. As regards the issue of segregation of stock, which is physically countable and the stock which is not physically countable, the insured has repeatedly informed the insurance company that such bifurcation is not possible. The certificate of the Assistant Commissioner, Food and Drugs Control Administration, Vadodara also clearly talks about unverifiable stock on account of being burnt. The surveyor rejected the stock statement of C.A. despite the fact that the purchase bills in this case stood verified, barring a few. In such circumstances, the surveyor’s method and manner of arriving at the loss by using the basis of area was based on assumption and no justification had been provided for the same. 13. It is settled law that the survey report is not the last and final word and can be departed if there is sufficient reasons to rebut the same. The Hon'ble Supreme Court in the case of New India Assurance Co. Ltd. v. Pradeep Kumar 2009 (7) SCC 787 held as under: "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." The complainant has produced the evidence to question the surveyor’s assessment of loss and therefore, relying on the judgment in the case of New India Assurance Co. Ltd. v. Pradeep Kumar 2009 (7) SCC 787, we are of the view that there is no illegality or infirmity in the Order dated 25.10.2013 passed by the State Commission and the same is upheld. 14. The appeal being devoid of merit is dismissed. |
