PER SURESH CHANDRA, MEMBER

       Aggrieved by the order dated 18.1.1999 passed by the State Consumer Disputes Redressal Commission, New Delhi (tate Commissionfor short) by which the complaint of the respondent company was allowed, the appellant Insurance Co. has filed this appeal challenging the order of the State Commission. While allowing the complaint filed by the respondent/complainant, the State Commission passed the following order:- or the foregoing reasons, the complaint is allowed and the Insurance Co. is directed to pay Rs.6.93 lakhs to the complainant along with 12% interest from two months after the date of loss, i.e., from 1.5.1993 till date of payment. The rate of interest and period is in terms of the judgement of the Supreme Court in United India Insurance Co. vs. M.K.J. Corporation III 1996 CPJ 8 SC, in addition to the costs which are quantified as Rs.15,000/- within four weeks of the receipt of a copy of this order.

2. The complainant was carrying on its business of manufacturing composite containers and paper tubes at 35, Industiral Area, Malanpur, District Bhind, Gwalior (M.P.). Its registered office is at WZ-9, Manohar Park, Rohtak Road, New Delhi. On its taking loan from the State Bank of India, Industrial Estate Branch, Malanpur, the complainant hypothecated stock of paper, adhesive, semi-finished and finished goods lying in the factory godown in favour of the Bank. The Bank obtained an insurance policy in the account of the complainant for Rs. 14 lakhs covering the staid stock of papers, semi-finished and finished goods for the period from 23.4.1992 to 22.4.1993. During this period, on 28.2.1993, the said stock was badly damaged due to heavy hailstorm and inundation. According to the complainant, the estimated loss was to the tune of Rs.6,92,800/-. On intimation about the incident and the loss suffered by the complainant, the appellant Insurance Co. appointed Mr. Ram Mohan Gupta as surveyor to carry out preliminary survey. This surveyor was, however, unable to complete the job. In the meanwhile, the Insurance Co. entrusted the case to M/s V.N. Sarin & Co. Pvt. Ltd., Surveyors. Since the second surveyor also could not complete the work, yet another surveyor M/s A.K. Govil and Associates were deputed. According to the complainant, the manufacturing activity came to standstill and the liabilities of the complainant were mounting. Although the complainant wrote several letters to the Insurance Co. and the surveyors, the insurance claim could not be settled. The complainant, therefore, filed a complaint before the State Commission on 2.2.1994 claiming a compensation of Rs.6,90,800/- besides interest and costs. The Insurance Co. filed their written statement in which it was submitted before the State Commission that the complaint filed by the complainant was premature because the Insurance Co. had not taken any final decision for want of report from the surveyor M/s V.N. Sarin and Co. It was also submitted that the reason why the claim could not be settled was that the complainant failed to cooperate with the surveyors appointed from time to time. According to the version of the Insurance Co., the complainant had failed to take action as advised by Mr. R.M. Gupta, surveyor at the initial stage of the case inasmuch as the complainant had failed to segregate the damaged stock from the remaining stock and also failed to submit quotations for the disposal of the damaged stock. In his rejoinder, the complainant denied the averments of the OP Insurance Co. and submitted that there is no failure on his part in extending his cooperation to the surveyors or furnishing the information from time to time. Affidavits were filed by both the sides in support of their submissions and based on the pleadings of the parties and the evidence adduced before it, the State Commission allowed the complaint by its impugned order which is under challenge through this appeal. During the pendency of this appeal, the respondent/complainant company has gone into liquidation and an official liquidator has been appointed. On our direction, the appellant Co. sought permission from the High Court of Delhi and vide its order dated 07.4.2008, the High Court granted permission to the appellant Insurance Co. to pursue its appeal before this Commission. Notice was accordingly issued to the official liquidator in respect of the present appeal. The official liquidator is represented before this Commission through his counsel, Mr. S.C. Sharma.

3. We have heard counsel representing the appellant Insurance Co., respondent/complainant company in liquidation and the official liquidator. We have also gone through the record of this case placed before us. It is to be noted that the respondent in this case had filed the consumer complaint before the State Commission when the Insurance Co. in spite of the claim for damages having been filed by the insured company on 4.3.1993 and lapse of period of about a year during which the Insurance Co. appointed three surveyors, could not settle the claim of the complainant/respondent. The main ground on which the Insurance Co. has challenged the impugned order of the State Commission is that the respondent did not supply the required information and documents to either the first surveyor Mr. R.M. Gupta or the second surveyor M/s V.N. Sarin & Co. Pvt. Ltd. but the State Commission ignored the material facts and the evidence produced before it in this regard and allowed the complaint. It has been submitted on behalf of the Insurance Co. that under the terms and conditions of the insurance policy, it is the duty of the respondent to furnish all the required information and documents to the surveyor to enable them to assess the loss and since according to the Insurance Co. the respondent failed to furnish the required information and documents to the surveyor, he cannot take any benefit under the policy in respect of the loss in question. The impugned order passed by the State Commission ignoring this vital aspect, therefore, is liable to be set aside. On the other hand, it has been submitted by learned counsel for the respondent that all the documents and information which were required by the surveyor Mr. Ram Mohan Gupta were submitted to him on 27.3.1993. The respondent company has filed copies of the letters addressed to the surveyors by the company in this regard. In spite of all this and several visits of the surveyors, both the Insurance Co. and the surveyors kept on postponing the settlement of the claim on one pretext or the other. The counsel has also reiterated the circumstances in which after the incident of hailstorm and inundation damaging the entire stock belonging to the respondent company, the manufacturing activity of the company came to halt and this also led to several financial problems faced by the respondent company. Regarding the submission of the Insurance Co. that the complainant failed to segregate the damaged stocks from the remaining one and submission of quotations for disposal of the damaged stocks, it has been submitted that the complainant never promised to obtain any quotation for the damaged material and according to him the question of segregation did not arise since the entire stock of the complainant had been damaged badly. However, the complainant repeatedly requested the representative of the surveyor to take charge of the damaged material and stock to avoid further damage and expenses.

4. Having considered the submissions made by the parties and those at bar and perused the record, we find that even though after the incident which took place on 28th February, 1993, a formal intimation in this regard was sent by the complainant to the OP Company on 4.3.1993, the OP Company had been earlier kept informed about the incident soon after the incident by the complainant since it is seen that the surveyor Mr. R.M. Gupta visited the factory of the complainant on the day of incident itself. It is also to be noted that the complainant furnished information in response to the letters of the surveyor. Detailed affidavit in this regard has been filed by the complainant in support of his case. It is also to be seen that the complainant has sent a number of communications to the Insurance Co. keeping them informed about the developments as also the problems being faced by him in regard to the work being done by the surveyors. We, therefore, do not agree with the contention of the appellant Co. that the respondent did not cooperate with the surveyors or the Insurance Co. in respect of the assessment of the damages suffered by him. Be that as it may, even if it is considered that the complainant did not segregate the damaged stock from the stock unaffected by the incident and also failed to get quotations for the disposal of the damaged stock for whatever reasons, the important question which arises is as to whether on the basis of the record which had been duly furnished by the complainant should the surveyors appointed by the Insurance Co. have not quantified the extent of damages suffered by the complainant in terms of the claim put fourth by him? No satisfactory answer has been given to this material aspect by the Insurance Co. either before the State Commission or before us. Since the complainant had been claiming that the entire stock of goods, both finished and unfinished, had been damaged during the incident and the total loss according to him amounted to Rs.6.93 lakhs, it was all the more necessary for the surveyors to have rebutted the claim of the complainant by submitting their own assessment report in this regard quantifying the loss and the extent of damage in their considered opinion. It is also to be noted that the stock in question had been hypothecated with the Bank and it could not be removed from the factory without permission in writing from the MPFC and the Bank concerned and hence the complainant had made a request to the surveyor to prepare the assessment in the presence of the representatives of the parties concerned. Perusal of the letters written by the surveyors, copies of which have been placed on record, clearly indicates that neither the Insurance Co. nor the surveyors were in hurry to settle the matter in spite of passage of time and the difficulties faced by the insured company. In this context, we deem it appropriate to reproduce the following observations made by the State Commission, which appear to aptly describe the situation:-

"A careful perusal of the correspondence, noticed in necessary details above brings to one mind the old saying that ero was fiddling when Rome was burning.The liabilities of the complainant were mounting and instead of discharging their normal duties of framing the assessment of loss the various surveyors appointed from time to time were requiring the complainant to do their job for them. We have given considerable thought to the question whether the duty to obtain quotations with regard to the disposal of the damaged stock was that of the complainant alone to the exclusion of the surveyors. We entertain no doubt that assessment of loss was the duty of the surveyors. It was a secondary question as to what was the value of the salvaged stocks. It was also the duty of the surveyor to have formed a fairly correct assessment as to the percentage of stock which had been rendered unfit because of hailstorm and water and the rest. The surveyor could not pass on the entire burden on the insured saying that they would take further action only after the complainant provided them quotations with regard to disposal of damaged stock. The complainant had furnished whatever registers/records it was maintaining. Assuming for the sake of argument that certain record had not been maintained or had been withheld from the surveyor, nothing stopped the surveyor from framing best judgement assessment in the facts and circumstances of the case. It is entirely unwarranted in these circumstances to say that the complainant failed to cooperate. The case of the complainant from the beginning was that the entire stock as per details furnished as early as 27.3.93 had been damaged and the extent of loss was Rs.6.93. the Insurance Company has withheld even the preliminary survey report admittedly prepared by Mr. R.M. Gupta which was received by the Insurance Company and a copy thereof forwarded to V.N. Sarin & Co. along with the photographs taken by him. The irresistible conclusion is that entire stock had been damaged at least in the sense that it could not be used by the complainant. It was duty of the surveyors and in turn of the Insurance Company to find a customer for the damaged stock to lessen the loss to the extent possible. For these reasons, we find that the complainant has clearly established a case of deficiency in service on the part of the Insurance Company. The claim should have been settled which the Insurance Company has failed to do. They have also failed to effectively controvert the complainant claim that the entire stock had been damaged and the damage was to the tune of Rs.6.93 lacs."

5. In view of the above, we are convinced that there was enough material before the surveyors appointed by the Insurance Co. to assess the damage and the extent of loss but they did not do so. They also failed to, as observed by the State Commission in its impugned order, to effectively controvert the claim put fourth by the respondent to the effect that the entire stock had been damaged and the extent of damage according to him was of the order of Rs.6.93 lakhs. In these circumstances, we do not find any justification to interfere with the well-reasoned order passed by the State Commission accepting the complaint. We, therefore, dismiss the appeal of the appellant Insurance Co. but with no order as to costs.