BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSIONAT 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/-
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Net loss Rs. 2,46,821/-”
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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.