HON’BLE MR. ASHIS KUMAR BASU, MEMBER
Order No. 17
Date : 25.11.2020
The record is put up for judgment.
1. The dispute in the present case arises out of complaint filed by the Complainant under Consumer Protection Act, 1986 ( hereinafter referred to as the Act ) in relation to deficiency in service and unfair trade practice on the part of the Insurance Co. for granting inadequate insurance claim in respect of complainant’s claim due to damage of fertilizer and pesticide stored in two insured godowns by severe flood .
2. The fact in brief is, Mr. Binay Kumar Sarkar, S/O Panchanan Sarkar, the complainant, residing at Village & P.O. Tinna, P.S. Pandua, Dist. Hooghly, PIN 712149, the proprietor of Sarkar Fertiliser situated at G.T. Road, Tinna, Hooghly, deals with fertilizer, pesticide and seeds. Complainant purchased the Standard Fire & Special Peril Policy bearing no.154101/11/14/3100000811 for Rs. 25 lakh for his first godown covering the risk of stock of fertilizer for the period 11.09.2014 to 10.09.2015 from National Insurance Co. Ltd, Registered Office at 3, Middleton Street, Kol-700011, represented by its Chairman, OP No. 1 and Sr. Branch Manager, P.S Memari , Dist. Burdwan, Pin 712149, OP No. 2. Complainant purchased another insurance policy for Rs. 25 lakh of same category bearing policy no. 154101/48/14/9800000798 covering risk of stock of fertilizers and pesticides stored in the second godwan for the same period from the same branch office of the said Insurance Co . Hence the total insurance cover for the two godowns stands at Rs. 50,00,000/-
3. During the covering period of the policies, between the period 28.07.2015 to midnight of 29.07.2015, the stock of said two godowns amounting to Rs. 46,71,295/-, estimated by the complainant were severely damaged by a sudden devastating flood . Complainant informed this matter to OP No. 2 and Pradhan of local Gram Panchyet . The OP No. 2- Insurance Co. deputed one surveyor, named Sri Asit Sinha for inspection of affected two godowns for estimation of loss. complainant also informed this loss to OP 3 and the BDO of Pandua Block on 04.08.2015 and 05.08.2015 respectively. The surveyor inspected the said two damaged godowns on 01.08.2015. Thereafter, complainant filed an insurance claim along with other related documents on 03.10.2015 to the tune of Rs 46,71,295/- for the loss due to damage of fertiliser and pesticide by sudden flood.
4. After nearly three months, OP No. 2 through a letter dated 13.06.2016 informed the complainant that Rs. 4,71,483/- had been finally settled as compensation against the two insurance policies amounting to Rs.50,00,000/-. On 02.06.2016, the complainant in a letter to OP No. 2 expressed his desire to have the inspection report of the surveyor regarding two affected godowns. But OP No. 2 gave only calculated part of the estimation report. Complainant filed his representation on 20.06.2016 disclosing his dissatisfaction and objection over the settled amount of Rs. 471483/- allowed by the OP 2 against his claim of Rs.4671295/- and requested OP 2 to reconsider the matter. In the said letter complainant categorically stated that the total stock of the two godowns have been incorporated in a single stock- register as the Assist. Director of Agriculture used to sign on single stock- register. OP 2 informed the Complainant through a letter dated 07.12.2016 that they would not reconsider the settled amount of Rs. 471483/- and if the complainant refuses to receive the said amount within seven days from the receipt of this letter the ‘ file will be closed as no claim.’
5. Complainant visited the office of OP No. 2- Insurance Co. several times to have the full report of the surveyor but all in vain. Then complainant filed a petition under ‘ Right to Information Act’ to get a copy of surveyor’s report and ultimately received a copy of the same from OP No.2 on 30.12.16. Complainant claimed that the surveyor’s report was erroneous, baseless, biased and based on faulty observation and wrong calculation of damage suffered by the two godowns. The complainant alleged that the surveyor wrongly estimated the stock of two godowns as Rs. 1,20,53,479/- instead of actual value of stock for Rs. 93,47,100/- on the material period of time, i.e. 28.07.2015 to 29.07.2015. The complainant also alleged that higher purchase price was taken by the surveyor for each item stored in the said godowns for calculation of loss. Moreover, surveyor had also made a mistake by taking the stock of the materials lying at the shop ( retail outlet ) of the complainant amounting to Rs 4.8 lakh for which he had purchased a separate insurance policy. The surveyor also made incorrect measurement of areas of the two godowns taking 407 sq. ft. and 572 sq.ft. for the first and second godowns respectively instead of actual areas 1272 sq.ft. and 2679 sq.ft. For calculation, surveyor considered that 37 to 40 bags/layers of fertilizer and pesticides had been stacked per column in the godowns which was impossible in practice and in fact there were 15-18 bags /layers staked per column. Surveyor also made a mistake by considering damage of two layers bags layers per stack (about 1.5 ft. in height ) instead of 4-5 layers of bags ( 3-4 ft. height) by flood water and taking 12% damage for pesticide were also incorrect. The complainant engaged a Charter Accountant Firm namely Mitra, Ghosh and Roy to quantify the damage of the two godowns and in their calculation the damaged stood at Rs. 4671295/-. As per complaint, surveyor arbitrarily estimated the damage for Rs. 471483/- instead of Rs.46,71,295/- which is unacceptable and illegal and this amounts to deficiency in service and unfair trade practice on the part of OP No.1 & 2. Feeling aggrieved, dissatisfied and finding no other alternative , complainant compelled to file this complaint before this Hon’ble Commission to remove this deficiency in service by enhancing the compensation.
6. The complainant prayed for passing an order by this Commission directing OPs to settle the claim at a) Rs. 46,71,295/- as compensation with interest @12% per annum from cause of action b) paying Rs. 5 lakh as for mental pain , agony and harassment suffered by the complainant because of deficiency in service and unfair trade practice and C ) Rs. 50,000/- as litigation cost.
7. In the written version , OP 1&2 contended that the complainant has no cause of action against the OPs in respective of the instant case . The adjudication of this dispute is beyond the jurisdiction of this Hon’ble Commission as the dispute does not come under the purview of the Act. The complaint filed by the complainant is defective, incomplete, suppressive of material facts, frivolous and not maintainable in law. The complaint is bad for non-joinder for necessary parties and misjoinder for unnecessary parties. Hence it is liable to be dismissed.
8. OP No. 1&2 admitted that complainant purchased two standered fire and perils policies for two godowns amounting to Rs 50 lakh. Complainant also purchased a burglary policy for his shop/ retail outlet which had no connection in this case. OP No. 1&2 also admitted that the fertilizers and pesticides stored in the two godowns were really damaged by the flood. OP No. 1&2 deputed an independent surveyor to assess the loss of damage. The surveyor visited the affected godowns and going through stock register, Sales and Purchase register and other related documents, finally quantified the damage at Rs.4,71,483/-. OP No. 1&2 settled the compensation at Rs. 471483/- but the complainant refused to take that amount and claimed Rs.4671295/- as compensation for total damage suffered by the two insured godowns.
9. OP No.1 &2 contended that the complainant claimed surveyor’s estimate incorrect on the ground that the surveyor measured less areas for the two godowns and took the height of the flood water 1.5 ft instead of 3-4 ft inside the godown to minimize the damage. OP No. 1&2 submitted the surveyor’s report and copy of photographs of flood affected godowns in support of their views. They argued that the complainant submitted stock- register and related books of accounts supported by purchase bills which were not bonafide and all those purchase bills were fake. The licensed surveyor considered the actual market price of fertilizer and pesticide and quantified the correct amount of loss. Hence the complainant did not come before this Hon’ble Commission with clean hands. OP No. 1 &2 also argued that the complainant gave too much importance on the estimation of the Chartered Account Firm which had manipulated the calculation of loss for demanding higher amount of compensation. OP No. 1 & 2 conclude that they are always ready to give compensation as per calculation of the surveyor. Therefore, there is no deficiency in service and unfair trade practice on the part of OP No.1&2- Insurance Co. Hence the complainant is not entitled to have any further cost and compensation as prayed for. OP No. 1&2 pray for dismissal of the instant case and to pay the cost for legal expenses for unnecessary harassment.
10 In the brief notes of arguments, OP No. 1&2 contended that the surveyor had visited the two flood affected godowns and taken stock physically and gone through the stock-register signed by the ADO of the block. He also considered the purchase memos and certificate of the local panchayet and meticulously quantified the stock at Rs. 12053479/- instead of Rs.93,47,100/- as claimed by the complainant. The surveyor taken the size and area of the godowns, space for keeping stocks inside the godowns, the level of water inside the two godowns and soaking of fertilizer and pesticide by flood water for the calculation of stock at the material point of time and finally reached at Rs. 471483/- as amount of damage. The OP No. 1&2 argued that the complainant submitted lesser amount physical stock to avoid the ratio of under insurance proportionate deduction.
OP No.1&2 cited the case of United Insurance Co. Vs. Harichand Rai , where Hon’ble Supreme Court held “that the terms of the policy have to be construed and the Apex court cannot add to or to subtract from something. However liberally one may construe the policy but there is no scope to take liberalism to the extent of substituting the words which are not extended,” AIR 2004 SC 4794. . They also contended that the provision of Indian Contract Act 1872, govern all contracts in India, including Insurance Contract which clearly states that it is obligatory to abide with terms and condition by contracting parties. OP No. 1&2 argued that the complainant had taken the plea that the surveyor took lesser area of godowns to minimize the damage and complainant demanded that the level of height of water in side the godowns was 3 to 4 ft. in place of 1.5 ft. In this case OPs- Insurance Co. properly processed the insurance claim as per terms of the policy. Hence , there is no deficiency in service and unfair trade practice on the part of OPs-insurance co. The instant complaint filed by the complainant is not maintainable as it is not under the purview of Consumer Protection Act and liable to be dismissed accordingly. OPs 1 & 2 also prayed for the direction of this Hon’ble Commission to pay cost due to the harassment .
11. The complainant filed evidence where his contention was that the sudden flood had totally damaged fertilizer and pesticide stored in the two insured godowns and the loss amounted to Rs. 4671295/-. Complainant informed the damage immediately to OP No. 2 along with Pradhan of local Gram Panchayet and B.D.O. of Pandua Block. The surveyor, deputed by OP No.1&2 inspected the affected godowans on 01. 08. 2015 and took the photos of the damaged fertiliser and pestiside inside the godowns. Complainant thereafter filed claim form on 03.10.2015 along with related documents before OPs- Insurance Co. for Rs.4671295/- for compensation. On 13.06.2016 through a letter OP 2 informed the complainant that Rs. 470118/- was the settled amount against his claim. On 20.06.2016, complainant expressed his dissatisfaction against the settled amount of Rs.470118/- and requested OP No. 1&2 to reconsider the matter. Complainant categorically stated that he maintained one stock register to incorporate the entire volume of stock including two said godowns and a retail outlet containing 394 bags fertiliser and pesticide for Rs. 4.8 lacs, as the as the Assistant Director of Agriculture,OP 3 used to sign on one stock register. So the estimation of stock made by the surveyor for the two affected godowns was much higher than actual amount. Moreover, the area of the two godowns are also taken erroneously as 407 and 572 sq.ft by the surveyor against the actual area 1272 and 2679 sq.ft respectively. Height/level of water logging from floor of the godowns also taken erroneously 1.5 ft ( two layers of bags only ) instead of 3-4 ft. Apart from these , considering 12% damage of pesticide stored in the godown is also incorrect. The complainant also disclosed that he has taken financial assistance from Axis Bank , Pandua Branch for running his business of fertilizer and pesticide and it is mandatory for him submit stock statement every month before this branch and Assistant Director of Agriculture. Apart from this, complainant meticulously maintains books of accounts such as ledger, purchase statement, wholesale stock register, fertilizer retail stock register, pesticide stock register, wholesale sales register, fertilizer retail sales register, pesticide sales register. Hence there is no scope for manipulation of stock for the estimation of loss. Complainant hired a chartered account firm who had gone through books of accounts and physical stocks and correctly quantified the loss at Rs. 4671295/-. Hence complainant is entitled to have the said amount along with other reliefs as prayed earlier in the complaint.
ISSUES
1.Is this case maintainable in the present form under Consumer Protection Act 1986 ?
2. Whether OPs are responsible for deficiency in service ?
3. Whether the complainant is entitled to get the decree as prayed for along with other reliefs?
Issue No. 1
Ld. Lawyers , appearing on behalf of the complainant and the OP No 1 & 2 did mot express their views before this commission against the point of maintainability of this case under C. P. Act 86. From records it is revealed that the Complainant purchased two insurance policies for 25 lakhs each for his two godowns storing fertilizer and pesticide, from OP No. 2, Sr Manager, Mameri Branch, National Insurance Co. Ltd at 2nd floor, Pushpanjali Market Complex, G.T. Road, P.S. Mameri, DISTRICT: BUBDWAN, PIN 713146. Complainant is the proprietor of Sarkar Fertilizer and makes his livelihood by selling fertilizer, pesticide and seeds which is not a large commercial establishment . Hence the complainant is a consumer and OP No. 1 & 2 are service providers under the Act. Hence the instant case clearly falls under the ambit of C.P. Act.
In the complaint, the complainant claimed Rs. 4671295/- from OP No. 1 & 2 – Insured Co. for compensation against damage of two insured godowns by sudden flood.
In view of above this commission has pecuniary jurisdiction to take this case. This issue is thus decided in favour of the complainant.
Issue Nos 2&3
These issues are taken conjunctively as they are inter related and for the sake of convenience of discussion. We have heard the arguments advanced by the Ld. Lawyers on behalf of both the parties in detail and peruse all the materials on record. If we relook into the matter, it reveals that there is no dispute between the complainant and OP No. 1 &2 over the loss suffered by the complainant due to damage of two insured godowns containing fertilizer and pesticide by severe flood from the midnight of 28.07.2015 to 29.07.2015 , i.e. within the covering period. There is also no dispute that the complainant is entitled to have compensation against two insurance policies totaling Rs. 50 lakhs. But the dispute arises when complainant claimed Rs. 4671295/- as compensation and OP No. 1&2 finally settled the amount at Rs.471483/- applying the salvage and policy excess clause and surveyor’s report. Now the moot point is what should be the compensation which shall be fair and just. The complainant deserves that amount which has been actually damaged by the flood and that amount must be within the limit of insurance policies i.e. 50 lakh in the instant case. Surprisingly, there is a gulf of difference between the finally settled amount of OP No. 1 & 2 – Insurance Co. and claim of the complainant which are Rs. 471483/- and Rs. 4671295/-respectively.
If we delve into the matter, we find that the OP No. 1 & 2 settled the insurance claim at Rs.471483/- as per serveyor’s report and complainant claimed the loss to the tune of Rs. 4671295/- as per estimation of Charter Account firm hired by him. The surveyor visited the two affected godowns and gone through the books of accounts and estimated the physical stock at Rs.1,20,53,479/-. On the other hand, the Charter Account firm also visited the same spot and gone through the books of accounts, including stock statement submitted before Assist. Director of Agriculture and ultimately quantified the physical stock at the material point of time as Rs.9347100/-. From the work out of surveyor for estimation of loss ( running page no.23 of written version of OP No. 1&2 ), it is evident that higher the amount of stock , less would be the amount of loss as the value of stock is a factor in the denominator in the said calculation. From record, we find that the complainant maintained his books of accounts elaborately and meticulously including stock register and he has to submit the monthly stock statement to Assistant Director of Agriculture, Pandua Block and his financer Axis Bank from which he has taken working capital. Hence there is little scope for manipulation of stock for showing lesser amount on the part of the complainant . Apparently , we find no reason why the complainant will show less stock than actual amount which may affect adversely for getting loan from respective bank.
OP No. 1 & 2 argued that in course of estimation of damage, complainant claimed that height of the flood water inside the godowns was 3 to 4 ft to show maximum damage , but actually it was 1.5 ft and two layers of bags of each stack were affected. In fact it was a devastating flood caused by prolong incessant rain and release of huge water from the barrage. Complainant submitted the photo copy of the report of this severe flood published in the news paper. It is an established fact that when water releases from barrage the water level and its flow increases very rapidly resulting a huge damage. In such deluge, damage of 4 to 5 layers of bags of fertilizer and pesticide in each stack was not a wrong estimation on the part of the complainant. The damage by the flood had been occurred on the midnight of 29.07.2015 and the surveyor inspected the godowns on 01.08.2015. From the several Xerox copies of photos of the affected two godowans ( taken by the surveyor from various positions inside the godown ), submitted by the OP No.1&2,it appears that the bags in the stacks were well under the water even after two days from the material point of time. It is fact that most of the fertilizers and pesticide are highly soluble in water. The bags forming the next upper layers above the water would be also soaked with water causing a considerable amount of damage. It is quite natural when bags in the lower level are washed out ,the same in the upper level will also be badly damaged due to soaking. Moreover the surveyor considers that every stack contains 37 to 40 bags one after another vertically, but in practice it is impossible to stack so many bags in one column. The loading and unloading would be also very difficult if the columns of bags are so high. Complainant claimed that there were 16-18 bags in each stack which apparently conformed with the photos of godowns submitted by the complainant. Surveyor took many photographs of the stacks of bags in the flood water inside the godowns and submitted the same as supporting documents. But those copies of photos show only 14-16 bags per stack which corroborated with complainant’s claim. Hence it is beyond doubt that surveyor’s calculation taking 37 to 40 bags per stack is incorrect. Therefore, he made a gross mistake in calculation of damage. In course of estimation of damage surveyor mentioned that area of the two godowns are 407 sq.ft and 572 sq.ft but could not produce any plan or maps in support of his claim. But in the complaint, the complainant disclosed that the actual areas are 1272 sq.ft. and 2679 sq.ft. for his first and second godown respectively and in this respect , he submitted photo-copy of purchase deed of business place with godowns dated 14.08.1990 along with drawing (side plan) of land and godowns in support of his claim. In our view, it is not possible to accommodate a huge stock amounting to Rs.1,20,53,479/- in such two godowns having area 407 sq.ft and 572 sq.ft. as taken by the surveyor, keeping some space for passage for loading and unloading and movement of persons. So it is another mistake on the part of the surveyor. So the whole conception of comparatively small godowns and stack of 37-40 bags with a small base of the columns to accommodate a huge stock of Rs. 12053479/- and washing away of two layers of bags ( 1.5 ft. from the floor level) by the flood appears to be a wrong estimation made by the surveyor.
In the written version, OPs contended that none of the purchase bills considered by the complainant for evaluation of stock are genuine and all are fake. They have been fabricated purposefully for the gain. On the other hand, surveyor has taken the ‘actual market price’ of the damaged goods to calculate the ‘actual loss’ taking purchase price from whole sale dealers of the above items. From record it is evident that neither OPs nor his deputed surveyor disclose how he got the actual price or what is the source or basis of actual price. OPs did not produce list of whole sale purchase price or any other similar documents in support of his claim. Even the surveyor did not follow any market bulletin or any other authenticate purchase list in support of his claim. In course of estimation of damage of stock, complainant produces several books of accounts showing details of purchase such as Company Reference/ Tax Invoice No. , Challan Nos, quantity, balance amount, mode of payment through Nationalised Banks, fertiliser and pesticide statement of account date wise having details along with confirmation of balance and stock register date wise for fertiliser and pesticide covering material period of time which appears to be more acceptable. Going through above mentioned documents of the complainant , we are of the considered view that the evaluation of stock made by the same appeared to be based on correct purchase price. Hence the allegation of OPs that complainant submitted fake purchase bills to manipulate his stock is illogical and unacceptable. On the other hand , the calculation of loss made by the surveyor taking purchase price of fertilizer and pesticide without any supportive market bulletin / tax invoices is unacceptable. The thrust of any stock verification process is to verify the system followed or the procedure adopted to compile the quantities of stock on a given date and the rate applied for estimation. Hence it can be concluded that the surveyor has incorrect conception in making evaluation of stock. The observation of Apex Court in the case of United Insurance Co. Vs. Harichand Rai, cited by the OPs is not applicable as the said case has no relevancy to the instant case. In this case OPs 1 & 2 have totally followed the surveyors report granting compensation of Rs. 4,71,483/-. As per observation of Apex Court, the surveyor’s report is not sacrosanct. The complainant cited the observation of Hon’ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Pradip Kumar, 209(7)SCC787 that surveyor’s report is not final and binding on the party and only a pre-requisite for settlement of claim. The complainant also cited the observation of NCDRC in the case of Manikant Vs New India Assurance Co. Ltd., 2012(1) CPJ, 88; 2012(2) CLT 620: 2012(1) CPC 412: 2011 RCR(Civil) 61 that in the absence of evidences surveyor’s report has no little evidentiary value.
Going through all pros and cons of the instant case and materials on record , we are of the opinion that there was gross mistake in the evaluation of stock as well as estimation of loss made by the surveyor on which the OPs settled the compensation at Rs.471483/- is too small in comparison to actual loss and consequently the OPs are liable for deficiency in service and unfair trade practice under the Act. After overall consideration of the facts and circumstances of the instant case, we are of the view that complainant is entitled to get much higher amount of compensation. In this view of the matter, we deem it appropriate and proper that the final settlement of compensation be stands at Rs. 1402065/- which is 15% of total valuation of stock evaluated by the complainant. From materials on record , it appears that there is no dispute between the complainant and OP3 and as such OP3 is not liable for deficiency in service and unfair trade practice.
ORDERED
The instant complaint be and the same is allowed on contest without cost.
OP 1 &2 are jointly or severally directed to pay the Complainant Rs.1402065/- for insurance claim with interest @ 8% per annum w.e.f. 07.12.2016, till the compliance within 60 days from the date of passing this order.
OP Nos. 1 & 2 are also directed to pay the complainant Rs. 100000/- jointly or severely for causing mental pain, agony and harassment within 60 days from the date of passing this order apart from litigation cost Rs. 50000/- within the said period.
We make no order as against OP No 3.
We make no order as to cost.
Failure to comply this order shall entitle the complainant to put the decree into execution.
Let a copy of the judgment be supplied to the parties free of cost immediately.
