PER JUSTICE R.C. JAIN, PRESIDING MEMBER (ORAL) The above named complainant, a partnership firm engaged in the wholesale business of spices etc., has filed this complaint seeking a compensation of Rs. 28,14,500/- towards loss suffered by the complainant alongwith interest @ 18% per annum with effect from 10.04.2001 till its payment besides a sum of Rs. 10,00,000/- as compensation for mental agony, loss of business goodwill and harassment to the complainant alleging deficiency in service on the part of the Opposite Party/Insurance Company to settle an insurance claim to the satisfaction of the complainant. 2. In nut shell, the case of the complainant is that it is engaged in the wholesale business of spices and for that purpose he used to store the stock of different spices at his wholesale shop premises and four godowns situated at different locations. To safeguard his interest in the stocks stored at various places, the complainant had taken four insurance policies. One such godown was situated at Kalapahar (Guwahati) where the complainant had stored bags of different spices. The stocks of spices in the said godown were covered under the insurance policy No. 3212001/4/11/2000/160 (c) in the sum of Rs. 30,00,000/-. During the currency of the said policy at about 9.30 A.M. on 17.10.2000 a devastating fire broke out in the above mentioned godown thereby destroying and damaging the stocks of spices worth Rs. 32,00,000/- stored in the said godown. Intimation about the peril having been passed to the insurance company, the latter appointed Mr. P. Purkayastha & Associates and Mr. Kanak Choudhury & Associates as the joint surveyors who visited the site and made assessment of loss and assessed the net adjusted loss to the stocks of the complainant at Rs. 28,14,500/-. It appears that the insurance company entertained certain doubts about the finding and assessment made by the joint surveyor and therefore, appointed a Chartered Accountant Mr. B.R. Poddar to examine the question and reassess the loss by taking into consideration the report of the joint surveyors as also other relevant material. Mr. Poddar, Chartered Accountant vide his report dated 20th September, 2001 however, assessed the net loss at Rs. 12,37,997/- as against the net loss of Rs. 28,14,500/- assessed by the joint surveyors. Pursuant to the assessment made by the C.A., the Insurance Company offered a sum of Rs. 12,07,997/- to the complainant, which was not acceptable to the complainant, hence this complaint. 3. On being noticed the O.P./Insurance Company resisted the complaint by filing reply raising preliminary objections about the maintainability of the present complaint on the ground that the complainant was offered the amount of Rs. 12,07,997/- pursuant to the report of the C.A., but he refused to accept and rather approached the Insurance Ombudsman at Guwahati. On merits the issuance of the policy to cover the risk of fire and other allied risks of the stocks lying in the above referred godown as also the appointment of the joint surveyors and the assessment of loss made by them at Rs. 28,14,500/- is not disputed. However, it is sought to be explained that the insurance company going by the provisions of Section-64-UM of the Insurance Act, 1939 had appointed the Chartered Accountant, who assessed the net loss at Rs. 12,07,997/- and a sum of Rs. 12,07,997/- was offered to the complainant. It is stated that O.P. has not committed any act of deficiency and if the amount is not acceptable to the complainant it can approach the Civil Court for redressal of his grievance. 4. In the rejoinder the complainant has controverted the objections and pleas raised in the written version and has generally reiterated the averments and allegations made in the complaint. In order to substantiate their respective pleas, parties have generally relied upon the documentary evidence i.e. two survey reports, one of the joint surveyors and the other given by Mr. B.R. Poddar, Chartered Accountant besides the correspondence exchanged between the parties, supporting affidavits have also been filed by the parties. 5. We have heard Mr. Manish Goswami, Advocate for the complainant and Mr. S.M. Suri, learned counsel for the Opposite Party/Insurance Company and have considered their submissions. 6. In this case, the factum of insurance and the peril being not in dispute, the only controversy which remains is about the extent and quantum of loss suffered by the complainant due to the fire incident at their godown at Kalapahar (Guwahati) on 17.10.2000 in which the stock of spices were damaged. In other words, the question is as to whether the complainant is entitled to an insurance claim of Rs. 28,14,500/- as assessed by the joint surveyors in their report or a sum of Rs. 12,07,997/- , which was offered by the opposite party in full and final settlement of the claim of the complainant or any other amount. This controversy can be settled by answering the question what was the value of the stocks of spices which were damaged due to fire. Learned counsel for the complainant has submitted that the assessment of the loss made by the joint surveyors is more systematic and scientific than as made by the Chartered Accountant and therefore the complainant is entitled to the settlement of its claim as per the report of the joint surveyor. On the other hand Mr. Suri contends that the assessment of loss made by Mr. Poddar is quite just and reasonable and the complainant is not entitled to anything more than what was offered and rather later paid to the complainant. 7. It is pertinent to note here that although the complainant had taken four different policies in respect of the stock of spices stored in four godowns in four different locations, the complainant was not maintaining any separate stock registers in respect of the stock of spices stored in each godown individually. The complainant of course was maintaining a joint kind of accounts for all the stock of spices, which were held by them in their wholesale shop and four godowns. It appears that this situation made the task of the joint surveyors a bit difficult so as to ascertain the quantity of the stocks of spices, which was actually stored in godown No.1, Kalapahar, Guwahati on the date of the peril. 8. The joint surveyors Mr. P. Purkayastha & Associates and Mr. Kanak Choudhury & Associates after a physical inspection and verification of the spot as also giving due consideration to the documents and material produced by the complainant in support of its claim came to the conclusion that the value of the stocks of spices stored in the godown No. 1 at Kalapahar, Guwahati as on 16.10.2000 was
Rs. 52,10,954/- by observing as under: “We have to find out the closing stock of the gutted godown arrive at value at risk. There are two nos. method for the same: Proportionate sum insured method i.e. Closing stock of the gutted godown (Closing stock as at 16.10.2K of the firm – stock at warehouse and shop) x sum Insured of the gutted godown / Sum Insured of the entire firm. Physical Inventory Method: Closing stock of the gutted godown as at 16.10.2000 Closing stock of the firm as at 16.10.2000 – physical inventory stock of the other godowns and shop of the firm (except the gutted) as on the date of physical inventory (23.10.2K) (Annexure-A,B,C,D)- sales proceed since the date of incident to date of physical inventory (Anx.F) + gross profit over sales from the date of incident to the date of physical inventory + purchase amount from the date of incident to the date of physical inventory – stock at warehouse. However, we have ascertained the closing stock of the gutted godown through both the methods available to us and accepted the mini- one out of the two to ascertain he value at risk of the gutted godown. Proportionate Sum Insured Method: Sum Insured for the gutted godown situated near priya market, Guwahati – 18 (Ref. Policy No. 321200/1/4/11/2000/160 (c ) … Rs. 30,00,000/- Sum Insured for godown situated at Lokhra Road, Battalion gate, Ghy.18 (Ref. Policy No. 321200/1/7/11/2000/30 (c) Sum Insured for godown situated at A Road, Guwahati – 1……… … Rs. 10,00,000/- Ref. Policy No. 321200/1/4//11/2000…. 8(c) …Rs. 15,00,000/- Sum Insured for godown situated at N.S. Road, Fatasil, Guwahati – 9.. (Ref. Policy No. 321200/1/4/11/2000/161 …Rs.10,00,000/- TOTAL = Rs.65,00,000/- Therefore, closing stock of the gutted godown = [Rs. 13860900.00 – (Rs. 1727000.00 + Rs. 249264.00)] x Rs. 300000.00 / Rs. 6500000.00 = Rs. 54,85,216.60 = Rs. 54,85,217.00 Closing stock of the gutted godown as per physical inventory method: = Rs. 1386990.00 – (Rs. 249264.00 + Rs. 1427662.00 + Rs. 1183016.00 + Rs. 1715080.00) – Rs. 281672.00 + Rs. 17097.00 + Rs. 99025.00 – Rs. 1727000.00 (Annexure – E) = Rs. 7393328.00 The minimum closing stock of the gutted godown as at 16.10.2000 Rs.5485217.00 is accepted for arriving at the value at risk as the ..is total. The value at risk has been ascertained deducting 5% for stock as under: Closing stock of the gutted godown as at 16.10.2000 = Rs. 5488217.00 Deduct 5% dead stock = Rs. 274260.85 Therefore, value at risk on stock of the gutted godown = Rs. 5210956.15 Say = Rs. 5210956.00” Based on the said value at risk on stock lying in the gutted godown at the time of peril and taking into account the sum insured i.e. Rs. 30,00,000.00, the net adjusted loss was assessed at Rs. 28,14,500/-. 9. However, the Chartered Accountant Mr. B.R. Poddar had worked out the value of the stocks of spices at the gutted godown at Rs. 70,23,662/- by observing as under: “Value at Risk 1) The Insured is subject to compulsory audit under Income-Tax Act 1961. His accounts are found to have been regularly audited by Chartered Accountants. 2) The Insured has forwarded the copies of Audited Accounts for the year ending 31.3.1998, 31.3.1999 and 31.3.2000. These accounts are found to have been submitted to the Income-Tax Department along with their Income-Tax Returns of respective year. 3) The Insured has also forwarded the Trading, Profit / Loss Account and Balance Sheet for the period 01.4.2000 to 16.10.2000 (i.e. upto the date of fire) From the scrutiny of the above account it is observed that the insured maintains composite account for their entire business and the total closing stock of the establishment as a whole was calculated at Rs. 1,38,60,00/-. They do not maintain separate stock Register for individual transactions. Under the circumstances, the stock-holding of individual godown as on 16.10.2000 cannot be bifurcated. The final Surveyors have very rightly resorted to the course of finding the stock-holding of individual locations by taking the physical inventory of stocks of all the unaffected godowns, warehouse and shop and then by balancing method arrived at the stock-holding of the affected godown. The stock holding of the fire-affected godown as on the date of fire is worked out as under: Total value of stocks on 16.10.2000 As per Memorandum Trading A/C ..Rs.1,38,60,900/- Stocks as per Physical Inventory by Final Surveyors taken as on 24.10.2000 Vide Annexure | Place | Value of stocks (Rs.) | A | Shop Out-let | 2,49,264/- | B | Lokhra Godown | 14,27,662/- | C | Fatasil Godown | 11,83,016/- | D | Kumarpara Godown | 17,15,080/- | E | Warehouse | 17,27,000/- | | | 63,02,022/- |
Less : Purchases after the incident i.e. from 17th to 23rd October, 2000 (details not available in the file) 99,025/- ___________ C/o 202,997/- B/d Rs. 1,38,60,900/- B/d. Rs. 62,02,997/- Add: Sales for the above period Rs. 2,81,672/- Less: G.P…. Rs. 17,097/- Rs. 64,575/- Rs. 64,67,572/- Stock at fire affected godown as on 17.10.2000 Rs. 73,93,328/- (As per Balancing Method which is fully acceptable) Less : Dead Stock @ 5% Rs. 3,69,666/- Quantified amount which constitute the value At risk of the affected Godown Rs.70,23,662/- The final surveyors have also calculated the value at risk at Rs. 54,85,217/- on proportionate sum insured method. In my opinion this method will not reflect the exact value of stocks of the gutted godown. In the instant case, the total stock holding figure as on the date of fire is available as per audited accounts, physical inventory of stock for all the unaffected units is available as per annexures to final Survey Report. Therefore, it is possible to calculate the value at risk of the gutted godown by balancing both the figures. Final Surveyor should have taken the same as the basis but he appears to have not done so even after calculating the value at risk by this method which is more logical and acceptable in this case. Hence the stock holding of Kahiliapara worked – out on the balancing method as above stands at Rs. 70,23,662/- which is accepted for the purpose of assessment of loss.” “Reassessment of payable loss: In the light of my foregoing submissions the net loss payable is worked-out as under: Gross Loss assessed as per Survey Report .. Rs.30,00,000/- (Limited to sum Insured) Less: Proportionate salvage: Sum Insured .. 30,00,000/- Value at risk .. 70,23,662/- Salvage value .. 1,83,000/- 3000000/- 183,000 x 70,23,662/- = Rs. 78,164/- Net Loss suffered by the Insured Rs. 29,21,836/- Adjusted loss after application of Average Clause:____________ 30,00,000/- 29,21,836/- x 70,23,662/- = Rs. 12,47,997/- Net Loss payable after application of Excess Clause: Net Adjusted Loss .. Rs. 12,47,997/- Less : Excess .. Rs. 10,000/- Net Loss Payable .. Rs. 12,37,997/-“ Accordingly, going by the said value, Mr. B.R. Poddar has quantified the damage net adjusted loss after application of average clause at Rs. 12,37,997/-: 10. Learned counsel for the complainant has assailed the reassessment made by Mr. B.R. Poddar, Chartered Account on a variety of grounds. In the first instance it was pleaded that there are several anomalies in the final report inasmuch as the Chartered Accountant had overlooked very important aspect that the value of the stocks amounting to Rs. 25,02,000/- has been included in arriving at the value of Rs. 70,23,662/- without omitting the value of the stock to the extent of Rs. 25,500/- sent to commission agents in different States. Value at risk assessed by the Chartered Accountant had the effect of reducing the net adjusted loss payable to the complainant. There appears to be force in this contention. In our view the assessment of the value of the stocks at risk as calculated by the joint surveyors was more scientific and proper rather than as assessed by the Chartered Accountant. We are prepared to accept the said value as the value at risk. If we take the value of the stock at risk at the affected godown No. 1, the net assessed loss would come as under: 3000000/- 183,000 x 70,23,662/- = Rs. 78,164/- Net Loss suffered by the Insured Rs. 29,21,836/- Net adjusted loss after application of Average Clause under Insurance: 30,00,000/- 29,21,836/- x 52,10,956/- = Rs. 16,82,130/- 11. Having considered the matter in its entirety, we are of the clear view that the Insurance Company should have settled the claim of the complainant at Rs. 16,82,130/-. During the pendency of the present complaint and on a prayer being made by the complainant, this Commission vide order dated 13.10.2003 directed the Opposite Party/Insurance Company to pay atleast a sum of
Rs. 12,07,997/- as an interim measure earlier. We are informed that the said amount was paid to the complainant. Therefore the Insurance Company is liable to pay the balance amount of Rs. 4,74,133/- to the complainant towards the settlement of claim. Since the claim was not settled expeditiously or within a reasonable time, we must compensate the complainant further by awarding interest @ 9% per annum with effect from 01.5.2001 (that is after about six months of the date of peril) till payment of the amount. 12. In the result, the complaint is partly allowed. We direct the Insurance Company to settle the insurance claim of the complainant under policy in question at Rs. 16,82,130/-. As a sum of Rs. 12,07,997/- stands already paid to the complainant during the pendency of the complaint, we direct the Opposite Party/Insurance Company to pay the balance amount of Rs. 4,74,133/- to the complainant as principal besides interest @ 9% per annum on the amount of Rs. 16,82,130/- with effect from 01.05.2001 (i.e. about six months after the date of peril) uptil the date of payment of Rs. 12,07,997/- and thereafter to pay the interest at the same rate on the amount of Rs. 4,74,133/- till the date of its payment. The payment of the awarded amount shall be made within six weeks from the date of this order, failing which the rate of interest shall stand enhanced to 12% per annum with effect from the date of default. No order as to costs. Dasti to Mr. S.M. Suri, counsel for the Opposite Party/Insurance Company for compliance. | 
