BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSIONAT HYDERABAD.
F.A. 1752/2005 against C.D. 577/2003, Dist. Forum-I, Hyderabad
Between:
Sri Jagadamba Pearls Dealers
2-4-26, M.G. Road
Secunderabad
Rep. by its partner
Ravinder Kumar
S/o. Chaturbhuj
Age: 44 years *** Appellant/
Complainant
And
1. The Branch Manager
National Insurance Company Ltd.,
15-1-503/B/28, 2nd Floor
Ashok Market
Feelkhana, Hyderabad-13.
2. The Divisional Manager
National Insurance Co. Ltd.,
Divisional Office-IV
Twin city market complex
Flat No. 54/22, 2nd Floor
Mojamjahi Market
Hyderabad-500 001. *** Respondents/
Opposite Parties
Counsel for the Appellant: Mr. K.L.N. Rao
Counsel for the Resp: Mr. N. Mohana Krishna
QUORUM:
HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT
&
SMT. M. SHREESHA, MEMBER
FRIDAY, THE TWENTY NINETH DAY OF AUGUST TWO THOUSAND EIGHT
Oral Order: (Per Hon’ble Justice D. Appa Rao, President)
*****
This is an appeal preferred by the complainant against inadequacy of compensation granted by the Dist. Forum-I, Hyderabad.
The case of the complainant in brief is that it is a family business concern dealing in pearls, gold, silver and other precious stones in second floor, Maheswari plaza at Secunderabad. It has obtained jewellers insurance policy for a sum of Rs. 15 lakhs from the respondent insurance company valid from 15.10.2001 to 14.10.2002. While so, on 26.5.2002 there was a fire accident due to electric short circuit and the entire articles in the shop were completely burnt. Gold and silver articles were melted and deshaped and they sustained loss of Rs. 7,65,624/-. Immediately it was informed to the insurance company. Sri Anup Kumar, a surveyor was deputed. He visited the shop/spot on 28.5.2002. He was shown burnt ornaments. The surveyor had taken photographs of burnt items including the items lying therein. It has kept the damaged articles till 27.6.2002 for a month hoping for some orders. Since the amount was blocked, it could not allow the damaged articles lying indefinitely. On that he informed the same to the insurance company by phone, and then removed the articles and got them recycled. The damaged pearls were of no commercial value and were thrown out. Belatedly Sri Anup Kumar, Surveyor vide his letter Dt. 31.8.2002 enquired whether any permission was obtained from the insurance company before recycling the articles. They have informed that for one month they kept the damaged articles and they cannot afford to keep the damaged articles. They have also informed that they have kept the samples of pearls, and gold and ready to furnish for any test. It has sent the articles to Jems Testing Laboratory seeking their opinion whether the pearls could be restored to its originality. They in turn informed that they could not be restored to its original position. They have also sent some of the samples to Deccan Institute of Jem and Jewellery. They have also confirmed the very same opinion. The Chartered Accountant had verified the stock records, stock registers etc. and certified that the stock worth Rs. 15,27,727/- was in existence as on the date of
accident. Later they received a notice from the insurance company stating that they would pay Rs. 35,600/- towards full and final settlement of the claim. They did not agree for such partial amount. They gave notice for which insurance company gave reply with false allegations. Therefore, they claimed Rs. 7,65,624/- with interest @ 24% p.a., besides compensation of Rs. 1,00,000/- and costs.
The insurance company filed counter resisting the case. While admitting the issuance of policy was given covering the risk for the value of ornaments etc. and the fact that there was fire accident on 26.5.2002, however, they denied that fire spread to the shop of the complainant. Taking advantage of fire accident, the complainant claimed huge amount. The investigator who was appointed by them investigated into the loss, and opined that only display shelves and show-case shelves, aluminium panels got affected due to heat and the panel surfaces have become rough. The 8 mm glass plates on the shelves and show cases were covered with soot and the glasses were not even broken. Some of the empty display necks in the display showcases were found covered with a layer of soot and they were not melted. He took photographs of the entire building and also the articles. At that time, the investigator advised the complainant to keep the jewellery safe after removal, for further inspection and analysis. The complainant had reportedly re-cycled the material without informing them or to the surveyor. It did not submit the required documents in time. In the last week of August, 2002 the insured for the first time informed that they have recycled the jewellery. When the investigator came to know about the destruction of pearls he immediately issued a letter on 30.8.2002 seeking clarification for their recycling the material without obtaining any written permission from the insurance company for which no reply was even given. The information and photographs were sent
to Sri Satish Govind Shah, a highly qualified Gemmologist and approved valuer for Income Tax Department and running a well equipped Gem testing Lab known as Deccan Institute of Gem and Jewellery Pvt. Ltd., After verification he was of the opinion that no damage could have happened to gold and pearls jewellery and to the precious stones. The fire accident went up to level-2 of Big Bazar premises, while the complainant’s shop is located at level-3. The complainant had intentionally not produced the damaged material. There was no damage to any of the jewellery. By virtue of report of Surveyor and Gemmologist they agreed to pay a sum of Rs. 35,600/- being the damages towards the furniture and fixtures as full and final settlement of the claim and sent voucher while disallowing the claim towards the damages for pearls and gold by giving detailed reasons. There was no deficiency in service on their part. Therefore, they prayed for dismissal of the complaint with costs.
The complainant in proof of their case filed affidavit and Exs. A1 to A22 while the respondents filed its affidavit and Exs. B1 to B8. The Dist. Forum after considering the evidence placed on record opined that the complainant had shifted the entire jewellery without informing the insurance company. In the light of opinion of Sri Satish Govind Shah, Gemmologist the Dist. Forum granted compensation of Rs. 10,000/- besides Rs. 35,600/- towards loss of furniture and fixtures together with costs of Rs. 2,000/-.
Aggrieved by the said decision, the complainant preferred this appeal contending that the Dist. Forum has awarded very low compensation. It ought to have allowed the complaint in toto relying the certificate issued by the Chartered Accountant besides the reports of Director of Gem & Jewellery Pvt. Ltd., Vimta Labs and others.
It is an undisputed fact that the complainant has insured the jewellery and other articles for Rs. 15 lakhs under Ex. A1 policy for the period from 15.10.2001 to 14.10.2002. It is also not in dispute that there was fire accident on 26.5.2002 evidenced under Ex. A4 FIR. The complainant alleges that pearls were completely damaged, silver and gold ornaments were melted beyond retrieval. On the date of accident a stock worth Rs. 15,27,727/- was available as certified by the Charted Accountant vide Ex. A2. However, jewellery worth Rs. 7,65,624/- was destroyed. In fact they have kept some samples of the jewellery and when it was sent to Hyderabad Institute of Gem & Jewellery Pvt. Ltd., & Gem Testing Lab they have opined that they were beyond repair. On the other hand the insurance company alleges that the complainant’s shop is situated in level-3 of the complex and the fire went up to level-2 only. In view of the heat some furniture and fixtures were burnt and there was no loss to any of the jewellery. In fact the loss caused to the furniture and fixtures was estimated by the Surveyor at Rs. 35,600/-. He opined that there is no loss to the jewellery. For the fire accident that took place on 26.5.2002, Sri Anup Kumar, Surveyor of the insurance company visited the spot on 28.5.2002 and took photographs on 29.5.2002. According to him the complainant placed the entire jewellery material in two burglary proof almirahs. On the next day he took out the material and inspected them and took some photographs. He found that none of the jewellery was affected. Since he was not allowed to take any material from its premises, he directed the complainant to keep the jewellery safely for analysis.
Admittedly the complainant did not keep the jewellery nor informed the insurance company to send them for analysis. He moved the articles and jewellery items without informing the insurance company. The complainant justifies this by stating that “ The complainant kept the damaged articles till 27.6.2002 while the accident took place on 25.5.2002. The complainant could not allow the damaged articles – silver, gold and pearls to continue in the same position, as the money invested thereon would be blocked. After giving information to the respondent No. 1 by phone the complainant removed the articles and got them recycled.” (emphasis supplied)
It is not known why the complainant did not issue any notice informing the insurance company that they were removing the articles as they were sustaining loss and their money was being blocked. There is no evidence that the complainant got the entire material, removed after informing the insurance company. It is not known to whom they have informed. It is as vague as vagueness could be. This is deliberate and wanton, more so, when claim is pending.
Curiously, after removal of jewellery it started issuing notice after notice under Exs. A5, A9, A11 and A12 directing the insurance company to settle their claim for an amount of Rs. 7,65,624/- on the ground that jewellery was damaged.
It is not known why the complainant could not take the written authorisation from the insurance company or issued communication to the insurance company, when it removed the jewellery. By this act, the insurance company has lost the valuable right of getting the ornaments tested. According to the complainant it has sent the samples of pearls, jewellery, gold and silver articles to Hyderabad & Secunderabad Pearl Merchants Association
for their professional view regarding the jewellery exposed to the fire accident under Ex. A14. They are of the view that value of the samples sent has no value and the lecture cannot be gained. Regarding the jewellery made of gold 25% could be restored. Gold jewellery other than plain cannot be restored to its original position. It has quoted the scrap value of the gold rate. The Hyderabad Institute of Gem & Jewellery & Gem Testing Lab by its report Dt. 26.3.2003, nearly 10 months after the accident, was of the opinion that the pearl had been injured beyond repair and they cannot be repaired to its original position. It was also sent to Vimta Labs. They have analysed on 25.3.2003. They were of the opinion that the pearls were destroyed and became Greyish black and dull. Deccan Institute of Gem & Jewellery Pvt. Ltd., in its report Dt. 28.3.2003 were of the opinion that the specimens were in highly burnt condition and unfit for processing.
It may be stated herein that the complainant did not issue any notice to the insurance company stating that it has preserved some samples and intend to send them to various laboratories. No notice was issued to the insurance company stating that they have sent the samples to the various laboratories and that they had opined that they were unfit for reprocessing. When the complainant could keep some material as samples, it could have shown it to the Surveyor or some other official of the insurance company. It has sent them on its own accord without informing the insurance company.
Admittedly Sri Anup Kumar, Surveyor had taken set of photographs of the jewellery immediately after the accident evidenced under Ex. B9. It was not disputed by the complainant. Before the complainant has informed that it is removing the jewellery the Surveyor/Assessor sent those photographs to Gemmologist Sri Satish Govind Shah. After perusal of those photographs the
