Andhra Pradesh

StateCommission

FA/1089/09

VAKATI LAVAKUMAR - Complainant(s)

Versus

THE BRANCH MANAGER - Opp.Party(s)

M/S M.VENKATA NARAYANA

28 Sep 2011

ORDER

 
First Appeal No. FA/1089/09
(Arisen out of Order Dated 17/09/2009 in Case No. CC/126/2007 of District Nellore)
 
1. VAKATI LAVAKUMAR
PROPRIETOR,SANTHI GENERAL STORES,RAJAJI STREET,NELLORE,SPSR NELLORE DIST.
2. VAKATI ANASUYA
R/O D.NO.17/3,RAJAJI STREET,NELLORE,SPSR NELLORE DIST.
...........Appellant(s)
Versus
1. THE BRANCH MANAGER
UNITED INDIA INSURANCE CO.LTD,SUBEDARPET,NELLORE.
...........Respondent(s)
 
BEFORE: 
 HONABLE MRS. M.SHREESHA PRESIDING MEMBER
 HONABLE MR. S. BHUJANGA RAO MEMBER
 
PRESENT:
 
ORDER

 

 

 

 

BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD.

 

FA 1089 of 2009  against C.C. 126/2007, Dist. Forum, Nellore

 

Between:

 

1)  Vakat Lav Kumar

Proprietor, Santhi General Stores

Rajaji Street, Nellore.

 

2)  Vakati Anasuya,

W/o. Vakat Lav Kumar

D.No. 17/3, Rajaji Street

Nellore.                                                       ***                         Appellants/

                                                                                                Complainants

And

The Branch Manager

United India Insurance Company Ltd.

Subedarpet, Nellore.                                   ****                       Respondent/

                                                                                                Opposite Party

                                                                                                 

Counsel for the Appellant:                          M/s.  M. Venkata Narayana

Counsel for the Resp:                                 M/s.  E. Venugopal Reddy

 

                                                                  

CORAM:

                         HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

          &

          SMT. M. SHREESHA, MEMBER

 

WEDNESDAY, THE TWENTY EIGTH DAY OF SEPTEMBER TWO THOUSAND ELEVEN

 

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

 

                                                          ***

 

 

1)                 This is an appeal preferred by   the complainant against inadequacy of compensation granted by the Dist. Forum. 

 

2)                The case of the complainants in brief is that  complainant No. 1 is the proprietor of  Shanthi General Stores, while complainant No. 2  is the owner of premises bearing No.  17/3, Rajaji Street, Nellore.  They insured the building  for Rs. 19 lakhs and the stock in trade for Rs. 20 lakhs covering the period from  4.2.2005 to 3.2.2006.   While so on 4.9.2005  that there was fire accident due to which  out of  the stock  worth Rs. 13,30,475/-, the stock worth Rs. 5,64,227/- was completely destroyed while stock worth Rs. 4,28,935/- was  partly damaged.    Apart from it, computers, printers and scanners worth Rs. 2 lakhs were damaged.   A qualified engineer estimated the damage to the building at Rs. 1,25,000/-    On a report the police registered a case and also by the fire department.    When the insurance company  did not  settle the claim,  they have issued notice for which ,  it agreed to pay Rs. 3,50,000/- which was not acceptable to them.    In fact  damage to the stocks itself was Rs. 5,64,127/-, and the damage to the computers, printers and scanner etc. was Rs. 2 lakhs.    Therefore they sought for Rs. 9,82,162/-  for the stocks damaged , Rs. 1,25,000/- towards building damage, and Rs. 2 lakhs for computers etc. damage in all Rs. 13,17,162/-  with interest @ 12% p.a., from 4.9.2005 till  the date of payment  together with compensation of Rs. 50,000/- and costs of Rs. 10,000/-.

 

3)                 The insurance company resisted the case.  While admitting issuance of policies one for building and another for stock,  it alleged that  when loss was informed  Sri  L. C. Rami Reddy, insurance surveyor and loss assessor  was appointed.  He estimated that out of stock worth Rs. 7,66,347/- stock worth Rs. 4,28,034/- was damaged  and after deducting policy excesses  he assessed the loss at Rs. 4,18,034/- which it has agreed to pay.    It denied the liability of payment of Rs.  2 lakhs towards damage to the computers, printer and scanner etc. they being not covered under the policy.   It had agreed to pay Rs. 50,000/- towards damage to the building vide report of the surveyor dt. 26.7.2006.    The major parts of trading items were preserved  in the rear two rooms which were not at all affected by fire.    The complainant did not file the requisite documents viz., books of accounts, sales tax returns etc.   After considering the various damages they arrived  the net loss at Rs. 3,50,000/- towards full and final settlement which the complainants did not agree, and therefore  it prayed for dismissal of the complaint with costs.

 

4)                 The complainants in proof of their case filed their affidavit evidence and got Exs. A1 to A15 marked while the insurance company filed the affidavit evidence of its Divisional Manager and that of  Sri C. Rami Reddy, Surveyor and got Exs. B1 to B5 marked.

 

 

5)                 The Dist. Forum after considering the evidence placed on record opined that the complainants are entitled to Rs. 4,18,034/- towards loss of stock  and Rs. 1,25,000/- towards damage to the building in all Rs. 5,43,334/-  with interest @ 9% p.a. from 4.9.2005 till the date of payment.

 

6)                 Aggrieved by  the said decision, the complainants preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective.  It ought to have awarded Rs. 2 lakhs towards loss of computers, printers and scanner etc.   Out of stock worth Rs. 13,30,475/- the material worth Rs. 5,64,127/- was totally gutted and stock worth Rs. 4,28,035/- was partly damaged  which itself is un-useful, and thus a sum of Rs. 9,92,162/- ought to have been granted towards loss besides compensation for mental agony and costs.

 

7)                 The points that arise for consideration are :

                               I.      Whether the complainants are entitled to Rs. 9,92,162/- towards loss of stock?

                             II.      Whether the complainants are entitled to any compensation and costs?

                          III.      To what relief?

 

 

8)                At the out set we may state that the complainants preferred the appeal against inadequacy of  amounts granted by the Dist. Forum  basing on the report of the surveyor.  We may also state that the insurance company did not prefer any appeal questioning the order of the Dist. Forum.   Therefore,  as far as the award of the Dist. Forum is concerned  it has become final.   The only question that falls for our consideration is whether the complainants are entitled to the amounts claimed in the appeal.

         

 

 

 

 

 

9)                 It is not in dispute that as against claim of Rs. 9,92,162/- towards  loss of stock in the fire accident  the surveyor assessed the net loss at Rs. 4,18,034/- towards loss of stock.   The complainant is  questioning the estimation of the surveyor  and acceptance of it by the Dist. Forum  a sum of Rs. 1,25,000/- towards damage to the building. 

 

10)               At the outset,  we may state that Rs. 2 lakhs towards loss of computers, printers and scanner etc. claimed by the complainants  was rightly disallowed on the ground that they were  not covered under the terms of the policy.    A perusal of  the policies does not disclose that  the above items were included in the item of stocks  which were mostly fancy items,  and the goods that were displayed in the premises a fancy stores.  When these items were not included in the policies  by no stretch of imagination it can be said that they are described  in the stock. 

 

11)               Un-disputably  the provisions and fancy items  were gutted in the fire.  Books of accounts were also destroyed.   The complainant has been maintaining the accounts evident from report of  Mr. L. C. Rami Reddy first surveyor  for both purchases  and sales and for retail billing.   Admittedly the complainant submitted VAT returns up to 31.08.2005,  which is just four days prior to the fire accident showing the value of stock at  Rs. 9,92,162/- .    He took  the prevailing market value of provisions and fancy items stocks at the time of fire at Rs. 7,66,347/-.   While mentioning the same he further reduced the value, and  assessed net assessment at Rs. 4,28,034/-.  After deducting policy excesses  at Rs. 10,000/- and arrived the net loss at Rs. 4,18,034/-.

 

 

12)                  Mr. M. S. Prasad another investigator was pressed into service despite the fact that earlier  Mr.  L. C. Rami Reddy  had conducted the survey and assessed the damage vide Ex. B3.   The appointment of second surveyor  was without seeking permission from the Insurance Regulatory Authority as provided u/s 64 UM of Insurance Act.   There is no reason why appointment of second surveyor was necessitated.    Obviously  in order to get over the report of the first surveyor.  It is not permissible, and contrary to the Insurance Act.    No doubt  the first surveyor  mentioned the value of stocks both ‘damaged and un-damaged’  at Rs. 7,66,347/-.  Predictably  the second surveyor  further reduced the loss by adopting a curious reasoning by stating “   As per photographs enclosed to the report collected by him, nearly 40% of the items were not damaged.   (as per physical appearance).    It is also pertinent to note that fire loss occurred in first room, the value of which was assessed as Rs. 4,28,035/-.  The remaining stock out of total stock of Rs. 7,66,348/- i.e., Rs. 3,38,313/- was stored  in other rooms 2 & 3  where there was no fire affect.    Though  the loss due to fire damage was assessed as Rs. 4,28,035/- on careful scrutiny, it is assumed around 60% of the value was actually damaged due to fire  and smoke, and the remaining 40% was not affected. 

 

So the actual loss  =  Rs. 4,28,035 x 60%                =                 Rs. 2,56,821/-

Less:  Applicable excess                                         =                 Rs.    10,000/-

                                                                                                -----------------

                                                                   Net loss                 Rs. 2,46,821/-”

                                                                                                ------------------

 

While the first surveyor Mr. L. C. Rami Reddy noted “ The claim does not fall under any of the exclusions of the policy.  Hence the net amount payable  to the insured  is Rs. 4,18,034/- vide page-4 of  Ex. B3.  Conversely  the second surveyor  mentioned in the coloumn ‘Remarks’ :   

“The insurers are advised to take a decision over admissibility of the claim as per policy terms, conditions, exceptions etc. since the claimant  did not possess  purchase bills of stock kept.     The surveyor’s  assessment of fire damage  items was made on physical  appearance of stocks during his visit.  There after, during his  enquiry, the actual loss was derived on available photographs of scene after fire accident, and the inventory recorded by surveyor.”  

 

 

 

 

 

He intends to draw conclusions from the photographs.    The insurance company without  adverting to the above reports  obviously intends to get squared up by settling the claim at  Rs. 3,50,000/- vide Ex. A11.    

 

13)              PW1 deposed that “at the time of said accident, there was stock worth Rs. 13,30,475/- and out of the said stocks, the stock worth Rs. 5,64,227/- was completely destroyed.  The stock worth Rs. 4,28,035/- was partly damaged which cannot be used.    PW2 the auditor confirmed that the surveyor took all the copies of  statements, VAT returns, day-book, and ledger etc.  He also mentioned that stock available as on  3.9.2005  is Rs. 13,30,475/-  The fact remains that  a portion of the premises wherein some stocks were kept was burnt while rear side of the building  where some stocks were kept was un-affected.   The complainant could not prove that the entire stock worth Rs. 13,30,475/- was damaged.    In fact the very complainant had mentioned that  as against stock worth Rs. 13,30, 475/- stock worth Rs. 5,64,127/- was completely destroyed  and the stock worth Rs. 4,28,035/- was partly damaged  which cannot be useful for human consumption.   The total stock that was damaged was Rs. 9,92,162/-.    In Ex. B3 which we have already pointed out the damaged stock mentioned was at Rs. 7,66,347/-.  When the complainant himself alleges that the stock damaged was Rs. 5,64,127/- and was unable to prove that the remaining stock worth Rs. 4,28,035/- was partly damaged  evidenced under Ex. A9  and Ex. A15 we are of the opinion that the complainant was entitled to Rs. 5,64,127/-.  In the light of evidence of PW2 auditor,  amounts cannot be slashed in order to deny just claim.   The deductions were irrational.   We are of the opinion that the complainants are entitled to  Rs.  5,64,127/- instead of Rs. 4,18,035/-.   They did not question the compensation awarded towards building in the grounds of appeal.   Therefore, we are of the opinion that the compensation  now awarded is just and adequate.   The Dist. Forum did not award any compensation towards mental agony with which we are in agreement.  Awarding interest @ 9% is more than adequate.

 

 

14)               In the result the appeal is allowed in part modifying the order of the Dist. Forum  directing the insurance company to pay Rs. 5,64,127/-  instead of Rs. 4,18,034/- together with interest @ 9%  p.a., from the date of complaint viz., 5.9.2007 till the date of payment together with costs of Rs. 5,000/-.   The amount that was already paid be deducted from the above said amount.  Time for compliance four weeks. 

 

 

 

1)       _______________________________

PRESIDENT                 

 

 

 

2)      ________________________________

 MEMBER          

 

28/09/2011

 

*pnr

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UP LOAD – O.K.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
[HONABLE MRS. M.SHREESHA]
PRESIDING MEMBER
 
[HONABLE MR. S. BHUJANGA RAO]
MEMBER

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