JUSTICE V.K.JAIN (ORAL)

The complainants/respondents who are the joint owners of a three storeyed building obtained  two insurance policies from the appellant, one being the Standard Fire and Special Perils Policy and the other being Household Package Insurance Policy. The building was insured to the extent of Rs.15 lakhs, whereas the households were insured to the extent of Rs.4,50,000/-. Initially, the policies were taken for the period from 13.9.2010 to 12.9.2011 and the same were later renewed for the period from 13.9.2011 to 12.9.2012. A fire broke out in the building as a result of which, not only the building got severely damaged even the household articles were damaged/destroyed. Separate claims were lodged by the complainants with the appellant for reimbursement in terms of the insurance policies taken by them. A surveyor was appointed by the insurer to inspect the building and assess the loss to the complainants. The surveyor assessed the loss in respect of the building at Rs.640079/- and at Rs.199642/- in respect of the household goods. The said amount,  when offered to the complainants, was refused by them on the ground that they were entitled to the claim amount lodged by them, the same being the entire sum insured by the appellant.

2.      Vide impugned order dated 27.10.2014, the State Commission directed as under:-

“As a result of the above stated position, we allow the complaint and direct the opposite parties to pay a sum of Rs.18,95,000/- (Rs.14,90,000/- on account of the claim for building plus Rs.4,05,000/- on account of claim for household goods to the complainants, with interest at the rate of 9% per annum, from the date of filing of the complaint to the date of payment of the aforesaid amount of money, and also to pay Rs.50,000/- on account for compensation for mental tension & harassment and Rs.10,000/- on account of litigation expenses.” 

3.      Being aggrieved from the order passed by the State Commission, the insurer is before this Commission by way of this appeal.

4.      As far as the household goods are concerned, the complainant had claimed a sum of Rs.4,67,000/-.  The surveyor made a deduction of 10% for possible variation, applied depreciation of 50% and then deducted salvage value of 5% thereby coming to assessed amount of Rs.199642/-. The complainants on the other hand did not produce any valuer to prove the value of those articles at the time they were destroyed in fire. No document evidencing purchase of any of those articles was produced. Even if the original invoices of purchase were destroyed in the fire, the complainants could  have obtained the duplicate invoices at least in respect of some of the articles destroyed in the fire. That, however, was not done. Considering all the facts and circumstances, a deduction of 25%  towards depreciation and 5% towards salvage, in my opinion, would be  fair. After applying the said depreciation and salvage value, the balance amount equivalent to 70% of Rs.4,67,000/- would be payable to the complainants towards compensation for the household articles destroyed in the fire. It is ordered accordingly. Since the appellant has already made payment as per the assessment made by the surveyor, the said amount shall be adjusted out of the amount already received by the complainants.

5.      Coming to the damage to the building, it is an admitted position that the building was insured for a sum of Rs.15 lakhs not only in the year in which the fire broke out but also in the previous year. The surveyor was of the view that the current cost of re-erection would be about Rs.2185191/-. Applying depreciation of 2/3^rd and deducting 2.5% towards salvage value, he assessed the net loss at Rs.673717/-, the surveyor who estimated the loss on account of damage to the building was not a Civil Engineer or an Architect  as would be evident from his report, he being only a Chartered Accountant. The complainants produced an estimate prepared by one Mr. Omesh Thakur, Civil Engineer. The submission of the learned counsel for the complainants is that Mr. Omesh Thakur had made the  assessment on the directions given by the concerned Sub-Divisional Magistrate. However, there is no indication in the report that it was prepared on the instructions of the concerned Sub-Divisional Magistrate. No order of the learned SDM has been filed. Even in the complaint, there is no averment that it was the SDM who had directed Mr. Omesh Thakur to make assessment of the loss to the complainants on  account of damage to the building. Mr. Omesh Thakur was not produced as a witness nor was his affidavit filed by the complainants. As a result, neither the report  was proved in accordance with law nor did the appellant get an opportunity to cross-examine the author of the report.

6.      In my opinion, it would be necessary in order to have a fair assessment of the loss to the complainants on account of damage to the building, that they are given an opportunity to file the affidavit of Mr. Omesh Thakur and the appellant is given an opportunity to cross-examine him. It would also be fair and reasonable to give an opportunity to the complainants to cross-examine the surveyor whose affidavit has already been filed before this Commission.

7.      For the reasons stated hereinabove, the impugned order is set aside and the matter is remitted back to the State Commission to decide the complaint afresh only to the extent it relates to the loss to the complainants on account of damage to the building, after taking evidence in terms of the directions given hereinabove. As far as the compensation on account of loss of /damage to the household articles are concerned, the State Commission will not examine the matter since the appellants have already been directed to pay 70% of the amount of Rs.4,67,000/- as compensation to the complainants for loss of those articles. The complainants shall also be entitled  to interest @ 9% p.a. on the amount awarded to them by this Commission on account of loss of/damage to the household articles. The parties shall appear before the State Commission on 19.8.2019.

8.      The State Commission shall decide the complaint afresh in terms of this order within three months of the parties appearing before it. The complainants shall also be entitled to interest @ 9% p.a. from the date of institution of the complaint on the compensation awarded by the State Commission to the complainants  for the loss suffered on account of damage to the building.  The State Commission shall also be entitled to award a fair and reasonable amount to the complainants towards litigation expenses.