BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD.
F.A. 1571/2008 against C.C. 26/2006, Dist. Forum, Rajahmundry
Between:
1) M/s. Oriental Insurance Company Ltd.
Regd. & Head Office, Oriental House
A-25/27, Asaf Ali Road,
New Delhi-110 002.
2) M/s. Oriental Insurance Company Ltd.
Branch Office, H.No. 1-234
Canal Road, Anaparthy-533 342
East Godavari Dist.
Rep. by Branch Manager *** Appellants/
Ops.
And
1. Malladi Savitri, W/o. Saibaba Reddy
2. Mallidi Siababa Reddy
S/o. Subbi Reddy, Age: 42 years
Both R/o. Alamuru Road,
Upstairs of Navatha Transport
Mandapeta, East Godavari Dist. *** Respondents/
Complainants
Counsel for the Appellant: M/s. R. Briz Mohan Singh
Counsel for the Respondent: M/s. P. Ramesh Babu.
CORAM:
HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT.
&
SMT. M. SHREESHA, MEMBER.
MONDAY, THIS THE TWENTY FIFTH DAY OF OCTOBER TWO THOUSAND TEN
ORAL ORDER: (Per Hon’ble Sri Justice D.Appa Rao, President.)
***
1) This is an appeal preferred by the insurance company opposite parties against the majority decision of the Dist. Forum awarding Rs. 7,70,500/- with interest @ 7% p.a., together with costs of Rs. 1,000/-.
2) The case of the complainants in brief is that a harvester was purchased by them for eking out their livelihood by self-employment. They got it insured with appellant insurance company for Rs. 9 lakhs covering the period from 4.2.2005 to 3.2.2006. The machine was being used seasonally as it would be employed during the crop cutting season and during un-season
it would be overhauled and kept ready in good running condition for the next crop cutting season. After first crop season of 2005-2006 the machine was overhauled and covered with polythene cover in their own premises adjacent to Sri Laxmi Narayna Rice Mill, Ramavaram. They have been residing at Mandapeta. While so on 19.1.2006 at about 9.00 a.m. they received a message from the owner of the rice mill that the machine along with thatched shed was gutted. Immediately he went there and found that the entire machine was burnt. He informed to the fire station at Anaparthy and also to the police and claimed the amount from the appellant to settle the claim on total loss basis. On that the insurance company appointed Sri B. Narendranath a surveyor who conducted survey on spot. They have submitted the documents to him. When they insisted for settlement of claim the said surveyor informed that another surveyor would come and finalize the claim directed them to supply another set. When they were waiting for arrival of the second surveyor they received letter Dt. 22. 2. 2006 from the appellant that there was no claim due to non-submission of claim form, estimation, FIR, fire report etc. This was unjust. However, on 27.2.2006 contrarily they have appointed second surveyor by name Sri D. S. Prasad Babu to whom they have submitted the documents. The said surveyor concluded that insurance became null and void. Meanwhile yet another surveyor by name Sri G. V. Sudhakar Rao was appointed. Since the insurance company was not settling the claim they filed the complaint to declare that appointment of consecutive surveyors was bad under law and direct the appellant to pay Rs. 9 lakhs with interest @ 18% p.a., from the date of damage and reimburse wages of Rs. 5,320/- paid to watchman from 3.4.2006 to 30.4.2006 and also Rs. 190/- from 1.5.2006 till the date of accident with interest @ 18% p.a., besides compensation of Rs. 25,000/- towards mental agony and costs.
3) The insurance company resisted the case. While admitting issuance of policy in favour of complainant No. 1 for declared value of Rs. 9 lakhs it alleged that second complainant was not a necessary party he being not a party to the contract. It denied that on 19.1.2006 the machine was destroyed in the fire accident. Immediately on intimation it had appointed a spot surveyor and later an investigator to find out the loss of machine. They opined that the said incident is not true. Neither intimation was made to fire officials nor to the police. The fire officer had visited the premises long after the incident only to issue certificate. The surveyors appointed were independent officers' licensed by IRDA. The complainant did not co-operate with Sri B. Narendranath, spot surveyor. Based on his report it had appointed Sri . G. V. Sudhakar Rao for final survey. It had also appointed Sri D. S. Prasad Babu to investigate the genuineness of the claim. During the course of investigation the investigator sent letters to submit documents but the complainant did not supply. The allegation that they kept two watchman was incorrect. Since the incident was not true it had repudiated the claim. At any rate, since voluminous oral and documentary evidence has to be adduced and complicated questions of fact and law are involved the Dist. Forum has no jurisdiction. Therefore it prayed for dismissal of the complaint with costs.
4) The complainants in proof of their case filed the affidavit evidence of first complainant and got Exs. A1 to A36 marked while the appellant insurance company filed Exs. B1 to B23.
5) Dist. Forum after considering the evidence placed on record while Smt. H. Venkata Ramana, Senior Member and Sri A. Madhusudhan Rao, Member had agreed that harvester which was insured was gutted in fire accident, however Smt. H. Venkata Ramana assessed the loss at Rs. 4,73,125/- and directed the same be paid with interest @ 7% p.a., from the date of filing till the date of realization with costs of Rs. 1,000/- while Sri M. Madhusudhan Rao, Member assessed the loss at Rs. 7,70,500/- and the same was directed to be paid with interest @ 7% p.a., from the date of complaint till the date of realization together with costs of Rs. 1,000/-. In the light of divergence of opinion it was referred to the President who by his order Dt. 9.1.2008 concurred with the finding of the Male Member and directed the insurance company to pay Rs. 7,70,500/- together with interest and costs.
6) Aggrieved by the said decision the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It had not considered Exs. B8 & B21 reports of the surveyors and investigators. The allegation that rats destroyed the wire of battery resulting short-circuiting of the entire heavy metal harvester and burnt was untenable. There was neither FIR nor fire brigade was called and therefore the entire incident was brought up in order to take benefit under the policy. They did not take proper steps to safeguard the vehicle, and therefore prayed that complaint be dismissed.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the harvester was insured with appellant insurance company for Rs. 9 lakhs covering the period from 4.2.2005 to 3.2.2006. When the harvester was kept in a thatched hut in the premises adjacent to a rice mill, it caught fire on the intervening night of 18/19.1.2006 and the entire machine was burnt. Admittedly when this fact was intimated to the insurance company it had appointed in the first instance, one Mr. B. Narendranath who conducted spot survey on the very next day viz., on 20.1.2006 and opined that the harvester was burnt. He noted “On keen observation of the ashes around the machine shows that there is no disturbance of burnt out ashes. The scene of occurrence is found to be undisturbed till my visit. By observing the location and situation of incident the real cause of accident may be investigated as we cannot rule out the other possibility. The fire brigade was not informed and there is any physical witness of the loss.” Though he mentioned as “Final Survey Report” the word ‘final’ was scored off words ‘spot’ was replaced instead.
9) Obviously in the light of his report the insurance company had appointed Sri D. S. Prasad Babu, Surveyor/Loss Assessor to investigate and report. He visited the place on 27.2.2006 after one month and 7 days. He found some more discrepancies which the first surveyor could not find and obtained joint samples of burnt wire of the machine, thatched ash which is available around the machine and sent it to analysis. He noted in his report Ex. B8 that the laboratory report made clear that the samples did not leave any clue for establishing the presence of additives. He himself stated that he collected the samples after 40 days of reported fire accident and this would have facilitated all the volatiles to evaporate and smell to be dispersed. However, he confirmed that In-charge Station Fire Officer had given certificate about the accident. Evidently the machine was kept in a thatched shed adjacent to a rice mill and obviously he did not put any watchman. The neighbours informed about the fire accident and on which the complainant gave a report. Nobody could have been an witness as it occurred in the midnight. When he kept it in a closed premises that itself would ensure safety. He also stated that he kept a watchman and paid Rs. 320/- towards wages. Of course this he could not prove. This would not constitute violation of condition No. 5 of the policy. What all the condition says was that the insured shall take all reasonable steps to safeguard the vehicle insured from loss or damage. The complainant himself has stated that after getting it overhauled it was secured in a premises covered by polythene cover etc. which are in conformity with the condition mentioned above. In the very survey report the surveyor has noted “It is informed by the insured’s representative Sri Sai Baba Reddy (husband) that the combine harvester was cleaned and covered with PVC tarpaulin and tied with ropes and was kept/parked in the thatched shed for coming harvesting season which starts in last week of January or first week of February. The thatched shed was situated near a rice mill.” The investigator except on the ground that there was no eye witness suspected the incident but could not prove that the complainant got it set fire. It is uncharitable for the surveyors by presuming that the said fire was caused in order to claim the amount covered under the policy without any proof. Evidently a complaint was also issued to the police was confirmed by the surveyor. He stated that “In my opinion, to issue their station certificate, normally they register the case based on the information issued by the complainant and allots FIR number, indicating some sections of IPC. After completion of their investigations, they issue detailed investigation report or General Clause Diary-I and submit to court also.” However, according to him he could not obtain any reply from the police station. He himself justified by stating that “ The police station might have thought being an independent surveyor they have not given reply to me.” The fact remains that the district editions of Andhra Jyothi and Vartha news papers have also published in their news papers that the insured’s equipment which was kept in thatched shed was involved in fire accident and due to off season, the equipment was kept in the thatched shed at their vacant site at Ramavaram village.”
10) At 0.4 of his conclusions he mentioned “ The undersigned is having high regard to police, fire departments, however, in my considered opinion having studied the case in depth, the certificates issued by Anaparthi Police Station, Fire Station need not be taken into cognizance by the underwriters for the consideration of the insured’s claim.” We may state that they are all public officials maintained record in discharge of their official duties and all the weight should be given and it is not for the surveyor to brush it off by his own perverse conclusions. Finally he opined that the complainants intentionally might have burnt the machine. This is without any semblance of evidence contrary to the police record.
11) The insurance companies despite the fact that Supreme Court as well as National Commission time and again cautioned the insurance companies not to appoint surveyor after surveyor contrary to Rule 64 UM of the Insurance Act, it had appointed surveyor after surveyor. In New India Assurance Company vs. Shree Shyam Cotspin Ltd reported in I (2009) CPJ 110 (NC) the National Commission held that insurance company cannot appoint another surveyor.
“We also like to observe that under Section 64 UM of the Insurance Act, if the insurance company is not satisfied with the assessment of loss made by the an approved surveyor then they can request the IRDA for appointment of another surveyor whose report would have been processed by the ‘Authority’ and then direction was to be given by them to insurer to pay a given amount. This was not done at all.”
12) Evidently the insurance company did not seek permission from the authority for appointment of third surveyor. Obviously knowing full well this report cannot have any evidentiary value in the light of uncontroverted evidence from fire officer and police, still appointed yet another surveyor by name Sri G. V. Sudhakar Rao, Loss Assessor. He submitted his report Ex. B21 dt. 12.5.2006 four months after the accident. He almost extracted earlier reports. However he assessed the loss on repair loss basis as under
1. Repair loss basis: Rs. 17,27,495/-
Less: 35% depreciation on
Item Nos. 1 to 70 5,19,241/-
Less: 50% depreciation on
Item Nos. 71 to 130 1,21,973/-
-------------------- 10,86,280/-
Less : Labour 20,000/-
Add: Towing Charges 2,500/-
Less: Policy excess 4,500/-
Less: Expected salvage value 80,000/-
-----------------
Net assessed loss on repair loss basis 10,24,280/-
------------------
Not satisfied with that he assed under the head constructive total loss basis by noting the cost of new machine similar to the insured machine would be at Rs. 12,65,000/-. The sum assured is Rs. 9 lakhs. Resalable value of the salvage in as is where is condition would be Rs. 1,25,000/- and deducted policy excess at Rs. 4,500/- and arrived at Rs. 7,70,500/-.
13) We may state that when the entire machine was damaged, we are unable to appreciate as to how there could be salvage value. However, this estimate is accepted by the Dist. Forum by extracting the excerpts from Ex. B21 and explanation in Section 1(4) in Ex. B1 under the head IDV. The complainant did not prefer any cross appeal against this finding.
14) When the insurance company could not give any reason as to why this estimate could not be upheld except stating that very claim itself is false and therefore the complainant was not entitled to nay amount. We are satisfied from the various circumstances viz., keeping the harvester in a thatched shed covered by polythene cover tied with ropes etc being an un-seasonal period and when neither the police nor the fire station authorities established foul play, the surveyors without any evidence whatsoever could not have presumed that it was set fire by the complainant in order to claim compensation. Evidently they themselves had insured the machine for Rs. 9 lakhs, obviously after considering its value. They cannot turn round and say that it could not have been the real value, and sufficient depreciation should be given. In fact the insurance company ought not to have appointed one surveyor after another under the garb that earlier reports were not in their favour contrary to Section 64UM of Insurance Act.
15) We are in agreement with the majority opinion expressed by the Dist. Forum in this regard and up- hold awarding of Rs. 7,70,500/- with interest @ 7% p.a., from the date of filing of the complaint till realization together with costs of Rs. 1,000/-. We do not see any merits in the appeal.
16) In the result the appeal is dismissed with costs computed at Rs. 5,000/- Time for compliance four weeks.
1) _______________________________
PRESIDENT
2) ________________________________
MEMBER
Dt. 25. 10. 2010.
*pnr
“UP LOAD – O.K.”
