THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR

Complaint No. 602-12

Date of Institution : 24.8.2012

Date of Decision : 10.2.2015

Sh. Raghav Kapoor partner M/s. United Surgical Industries situated at Bypass Nr.Verka Chowk, Amritsar

...Complainant

Vs.

The National Insurance Co.Limited through its Divisional Manager having Divisional office at D.O.I, Near Hotel Alastonia, Ranjit Avenue, Amritsar

....Opp.parties

Complaint under section 11/12 of the Consumer Protection Act, 1986

Present : For the complainant : Sh. Sunil Nayyar,Adv

For the opposite party : Sh. S.K.Davessar,Adv.

Quorum : Sh. Bhupinder Singh, President,

Ms.Kulwant Kaur Bajwa,Member

Order dictated by :-

Bhupinder Singh, President

1 Present complaint has been filed by Raghav Kapoor partner of M/s. United Surgical Industries under the provisions of the Consumer Protection Act alleging therein that their firm obtained Insurance policy No. 401208/11/11/3100000268 for the period from 26.7.2011 to 25.7.2012 vide which the complainant got insured all its business stock against the payment of requisite premium. According to the complainant on 16.10.2011 when the factory of the complainant was running, all of sudden, there was a short electricity circuit due to some technical defect at about

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6.15 p.m as a result of which fire engulfed the factory premises and most of the stock in the form of finished goods, semi finished goods, raw material, unfinished goods lying or stored or in process of making surgical cotton, was destroyed, the detail of which is given as under :-

The complainant has also informed the fire brigade , who extinguished the fire and the fire brigade of Municipal Corporation Fire Services, Amritsar in their report stated the category of fire as major. The complainant submitted that since the goods stocked were duly insured with the opposite party, so intimation was also given to the opposite party immediately and the claim was also lodged with the opposite party and all the relevant documents including the police report , financial documents, copy of fire brigade report, balance sheet, stock record , purchase and

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sale account, bills etc., were also supplied to the opposite party for reimbursement of the claim. The trading account alongwith financial data of complainant's firm is as under:-

The value of closing stock on the date of fire incident i.e. 16.10.2011 has been shown as 27,45,314/- in trading account , out of which Rs. 10,25,000/- has been deducted as a balance sound stock which has been assessed by first surveyor namely Sumant Sud vide its survey report dated 8.12.2011 . Therefore, the value of damaged/burnt stock comes to the tune of Rs. 17,20,000/- approximately but however the complainant has under estimated the value of damaged burnt stock around Rs. 15,02,260/- but the second surveyor has assessed the loss to the tune of Rs. 4,97,465/- . Complainant has alleged that the extent of loss suffered by the complainant is Rs. 15,02,260/- and as per the terms and conditions of the poliocy the opposite party is udner statutory obligatin to settle the claim of the complainant. But the opposite party refused to pay the said amount of Rs. 15,02,280/- and is ready to pay an amount of Rs. 4,97,465/-. Alleging the same to be deficiency in service complaint was filed seeking directions to the opposite party to pay Rs. 15,02,260/- alongwith interest @ 18% p.a. Compensation of Rs. 2,00,000/- alongwith litigation expenses were also demanded.

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2. On notice opposite party appeared and filed written version in which it was submitted that complainant could not provide the account books at the time of survey and later on documents/information were provided and there could always be difference between physical stocks and stocks appearing in the books. It was submitted that no plausible explanation has been given that is why the requisite account books were not provided at the time of survey . It was submitted that earlier Sh.Sumant Sud Surveyor had conducted preliminary survey of the loss and he has clearly observed that the fire involved stocks can be segregated and quantified while only 10/20% of the stock could be said to be totally burnt to ashes. It is clear that more than 80% stock had physical existence. During final survey in the final survey report the physical counting was made after which it was concluded that 1112 kg of stocks were damaged in godown No.1 as against 5700 kg claimed by the insured and same was the position at other places. The report dated 6.2.2012 which was duly submitted by M/s. Mittal Surveyor Pvt.Ltd in which it was clearly stated that the insured could not provide account books at the time of survey and later on documents/information was provided and as such there could always be difference between the physical stocks and the stocks appearing in the books. It was submitted that physical counting and verifications were conducted in the presence of insured himself and even final surveyor Mr. Mittal of M/s. Mittal Surveyor Pvt.Ltd held discussion with Mr.Sumant Sud Preliminary surveyor and opinion of both the surveyors was the same. It was submitted that whole day was spent by the senior persons/surveyors having experience of about 30 years in survey field and being categorized as 'A' class surveyor by IRDA of India. It was submitted that Sh.Sumant Sud in his report stated that the exact loss has to be quantified by final surveyor and it was specifically stated by Sh.Sumant Sud that preliminary survey report is issued without prejudice subject to policy terms and conditions. However, final surveyor M/s. Mittal Surveyors Pvt.Ltd after conducting

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the survey submitted his final survey report dated 6.2.2012 in which it was observed that the insured has claimed loss of Rs. 9,40,500/- for 190 bales lying in godown No.1, physical counting was made and about 85% stock had physical existence. After counting 350 rolls were counted and average weight of roll was 1.75 kg, therefore, against claim of 5700 kg, 612 kg of the rolls and 500 kgs of other material in godown were found affected. Thus 1112 kgs were damaged in godown No.1 and similarly the insured has claimed loss of Rs. 2,57,400/- against 52 bales i.e 15600 kgs for the bundles of surgical cotton. After physical counting and making consideration of total burnt stock, it was concluded that 750 kg of surgical cotton was affected. The insured claimed loss at the rate of Rs. 165/- per kg and average cost price of the finished goods was worked out and the average cost price was mentioned as Rs. 152/- per kg and assessed net loss payable to the tune of Rs. 4,97,465/- only. While denying and controverting other allegations, dismissal of complaint was prayed.

3. Complainant tendered into evidence his affidavit Ex.C-1, affidavit of Rohit Kumar Mahajan Ex.C-2, affidavit of Bhavesh Kumar Mahajan Ex.C-3 alongwith documents Ex.C-4 to Ex.C-305.

4. Opposite party tendered into evidence affidavit of Sh. R.C. Malhotra, Sr.Divisional Manager Ex.R-1, affidavit of Parmod Mittal Surveyor Ex.R-2, affidavit of Sh., Sumant Sood,Surveyor Ex.R-3 alongwith documents Ex.R-4 to Ex.R-18.

5. We have carefully gone through the pleadings of the parties arguments advanced by the ld.counsels for both the parties and have appreciated the evidence produced on record by both the parties with the valuable assistance of the ld.counsels for both the parties.

6. From the record i.e. pleadings of the parties and the evidence produced on record by both the parties, it is clear that complainant firm obtained Insurance

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policy No. 401208/11/11/3100000268 for the period from 26.7.2011 to 25.7.2012 vide which the complainant got insured all its business stock . The complainant submitted that on 16.10.2011 when the factory of the complainant was running, all of sudden there was a short circuit due to some technical defect at about 6.15 p.m as a result of which fire engulfed the factory premises and most of the stock in the form of finished goods, semi finished goods, raw material, unfinished goods lying or stored or in process of making surgical cotton, was destroyed, details of which have been given in the complaint as stated above and the complainant suffered loss to the tune of Rs. 15,02,280/-. The complainant informed the fire brigade , who extinguished the fire and the fire brigade of Municipal Corporation Fire Services, Amritsar in their report stated the category of fire as major. The complainant submitted that as the goods stocked were duly insured with the opposite party. So intimation was also given to the opposite party immediately and the claim was also lodged with the opposite party and all the relevant documents including the police report , financial documents, copy of fire brigade report, balance sheet, stock record, purchase and sale account, bills etc., were also supplied to the opposite party . The value of closing stock on the date of fire incident i.e. 16.10.2011 has been shown as 27,45,314/- in trading account , out of which Rs. 10,25,000/- has been deducted as a balance sound stock which has been assessed by first surveyor namely Sumant Sud vide its survey report dated 8.12.2011 Ex.C-12. The first surveyor, who gave his primary survey report Ex.C-12 estimated the value of damaged/burnt stock around Rs. 15 lacs. Opposite party appointed another surveyor i.e. Mittal Surveyors Pvt.Ltd, who conducted the survey and assessed the loss to the tune of Rs. 4,97,465/- only vide their report Ex.C-11 dated 6.2.2012. Ld.counsel for the complainant submitted that the report submitted by both the surveyors of the opposite party is contradictory to each other because first surveyor assessed the loss to the tune of Rs. 15 lacs vide his report Ex.C-12, whereas the

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second surveyor vide final survey report submitted by Mittal Surveyors Pvt.Ltd dated 6.2.2012 Ex.C-11, finally approved the net loss payable to the complainant as Rs. 4,97,465/- only. Apart from this he submitted that in his report Ex.C-11 the surveyor himself has stated the rate of cotton as Rs. 152/- per kg, whereas the complainant has submitted that the rate of cotton was Rs. 165/- per kg. Moreover, the complainant has alleged the loss of paper plus polythene plus Hdpe Roll amounting to Rs. 45000/-, whereas the surveyor himself has assessed under this head as Rs. 25000/- only as against Rs. 45000/- as alleged by the complainant. So the final survey report submitted by the surveyor M/s. Mittal Surveyors Pvt.Ltd Ex.C-11 dated 6.2.2012 is not proper. As such the complainant is entitled to the loss assessed by the complainant as Rs. 15,02,280/- as explained in the complaint and not Rs. 4,97,465/- as assessed by the surveyor appointed by the opposite party in their final survey report Ex.c-11. Ld.counsel for the complainant submitted that all this amounts to deficiency of service on the part of the opposite party.

7. Whereas the case of the opposite party is that the complainant has not come to the Forum with clean hands. The complainant did not supply/furnish the documents to the surveyor in time for the reasons best known to him. The surveyor in this respect wrote letter dated 24.10.2011 Ex.R-13 asking the complainant to furnish the documents mentioned in that letter. But the complainant did not furnish those documents. Thereafter, the surveyor gave reminder to the complainant dated 3.12.2011 Ex.R-12 . But inspite of that the complainant did not furnish the documents to the surveyor for the reasons best known to the complainant. Not only this the complainant could not provide the account books and other stock registers as well as other relevant documents to the surveyor at the time of survey and later on the documents were provided and there was difference between physical stocks and stocks appearing in the books. The complainant could not give any plausible explanation as to why the requisite account books were not provided to the

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surveyors at the time of survey. The opposite party further submitted that Sh. Sumant Sud had conducted only preliminary survey of the loss and has clearly observed in his report Ex.C-12 that the fire involved stocks can be segregated and quantified, while only 10/20% of the stock could be said to be totally burnt to ashes. As such 80% stock had physical existence. During final survey conducted by Mittal Surveyors Pvt.Ltd, the physical counting of the loss was made after which it was concluded that 1112 kg of stocks were damaged in godown No.1 as against 5700 kg claimed by the insured and the same was position at other places. It has been clearly mentioned in that report Ex.C-11 that the insured could not provide account books at the time of surveyor and later on documents were provided and as such there could always be difference between the physical stocks and the stocks appearing in the books. The survey and assessment had to be made on the basis of physical verification and not on the basis of books of account on record especially when the insured could not provide the same to the surveyor at the time of survey. The physical counting and the verification of the loss stocks were conducted in the presence of insured himself and even, final surveyor Mr. Mittal of M/s. Mittal Surveyors Pvt.Ltd held discussion with Mr. Sumant Sud the Preliminary surveyor and opinion of both the surveyors was the same. Even the photographs of the site Ex.R-15 to R-17 also prove that the entire stock of the complainant was not burnt or affected by fire. The opposite party further alleged that whole day was spent by the senior persons/surveyors, who have experience of about 30 years in survey field and being categorized as A class surveyor by Insurance Regulatory and Development Authority of India and that too conducted in the presence of the complainant, as such it is not opened to the complainant to raise any contrary plea in respect of their survey. Both the surveyors appointed by the opposite party i.e. Mr. Sumant Sud and Mr. Parmod Mittal have proved their reports through their affidavits Ex.R-3 and R-2 respectively. The complainant did not file any counter

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affidavit nor filed any application for the cross examination of these witnesses nor submitted any interrogatories asking the questions to the surveyors to prove that their reports are not genuine or to point out any defect in the reports submitted by both these surveyors Ex.C-11 and C-12 respectively. Even the documents submitted by the complainant Ex.C-38 to Ex. C-302 which were verified by the manager of the complainant firm, the said Manager has not been examined nor filed any affidavit of such manager to prove the genuineness of these documents. The complainant could not point out any defect in the surveyors reports particularly final surveyor report based on actual loss assessed by the surveyor Ex.C-11. The opposite party was,therefore, justified in assessing the loss suffered by the complainant to the tune of Rs. 4,97,465/-. Ld.counsel for the opposite party submitted that there is no deficiency of service on the part of the opposite party qua the complainant.

8. From the entire above discussion we have come to the conclusion that complainant firm got insurance policy No. 401208/11/11/3100000268 for the period from 26.7.2011 to 25.7.2012 vide which the complainant got insured all its business stock. On 16.10.2011 there was a short electricity circuit in the premises of the factory of the complainant as a result of which, fire engulfed the factory premises. The stock lying in the factory premises of the complainant in the form of finished,semi finished, unfinished goods, raw material, etc., was destroyed, details of which have been given by the complainant in the complaint. As such, the complainant submitted that he has suffered loss to the tune of Rs. 15,02,280/-. The complainant also informed the fire brigade of the Municipal Corporation, Amritsar, who extinguished the fire and in their report stated the fire as major. The opposite party was also informed immediately. Resultantly the opposite party appointed surveyor Sh. Sumant Sud, who immediately visited the factory premises of the complainant, where fire has taken place and he submitted his report Ex.C-12 on the

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basis of site inspection and he submitted that from the inspection it was evident that

most of the fire involved stocks could be segregated and quantified while only 10% to 20% of the stocks is said to be totally burnt to ashes and he ultimately concluded that the estimated loss suffered by the complainant firm amounts to Rs. 15 lacs . However, the exact loss has to be quantified by the final surveyor. The opposite party appointed final surveyor M/s. Mittal Surveyors Pvt.Ltd., who after physical verification of the goods at site on 20.10.2011 , submitted their report dated 6.2.2012 Ex.C-11 assessed the net loss suffered by the complainant firm to the tune of Rs. 4,97,465/- only. Even in the preliminary survey report Ex.C-12 ,surveyor Sh.Sumant Sud has observed that fire involved stocks can be segregated and quantified, while only 10% to 20% of the stock could be said to be totally burnt to ashes. As such 80% stock had physical existence. During final survey conducted by M/s. Mittal Surveyors Pvt.Ltd, physical counting of the loss was made after which it was concluded that 1112 kg of stocks were damaged in godown No.1 as against 5700 kg as alleged by the insured. Similarly the insured has claimed loss of Rs. 2,57,400/- against 52 bales i.e. 15600 kgs for the bundles of surgical cotton. After physical counting and making addition of totally burnt stocks, it was concluded that 750 kgs of surgical cotton was affected.. As regards rate the insured has claimed loss @ Rs.165/- per kg. average . Whereas the cost price of the finished goods has been worked as 152 per kg, as detailed in the report Ex.C-11. It has been clearly mentioned by the final surveyor that the insured could not provide account books at the time of survey. The complainant even did not supply the documents i.e account books, stock registers, etc., to the surveyor despite service of notice in the form of letter dated 24.10.2011 Ex.R-13 served by the surveyor to the complainant asking the complainant to furnish the documents mentioned in that letter . But the complainant did not furnish those documents. Thereafter surveyor gave reminder to the complainant in this regard dated 3.12.2011 Ex.R-12 but inspite of that

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complainant did not furnish the documents to the surveyor for the reasons best known to the complainant. However, later on documents were provided by the complainant but it was found that there was difference between physical stocks and stocks appearing in the books provided by the complainant. The complainant could not give any cogent explanation as to why the requisite account books were not produced to the surveyor at the time of survey. Not only this both the surveys were conducted by the preliminary surveyor Sh.Sumant Sud and final surveyor Mr. Mittal of M/s. Mittal Surveyors Pvt.Ltd, in the presence of the complainant and the complainant did not raise any objection at that time nor he filed any objection or complaint against the surveyors or their reports, to the opposite party Insurance company. From the perusal of the survey reports as well as other record produced by both the parties, it is clear that the entire stock lying in the factory premises of the complainant was not burnt/affected rather during final survey conducted by M/s. Mittal Surveyors Pvt.Ltd, physical counting of the loss was made after which it was concluded that only 1112 kg of stocks were damaged in Godown No.1 as against 5700 kgs claimed by the insured. Similar was the position with regard to other places and other stocks, as detailed in the final survey report submitted by M/s. Mittal Surveyors Pvt.Ltd Ex.C-11. Even the photographs of the site Ex.R-15 to Ex.R-17 also prove that the entire stock of the complainant was not burnt or affected by fire. The opposite party appointed Sr. persons/surveyors having experience of 30 years in survey field, categorized as 'A' class surveyors by Insurance Regulatory and Development Authority of India and the survey was conducted by them in the presence of the complainant. Apart from this both the surveyors Mr. Sumant Sud and Mr. Parmod Mittal have proved their reports through their affidavits Ex.R-3 and Ex.R-2 respectively. The complainant did not file any counter affidavit nor filed any application for the cross examination of these witnesses nor the complainant could produce his own expert to prove that the

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reports submitted by the surveyors Mr. Sumant Sud and Mr. Mittal of M/s. Mittal Surveyors Pvt.Ltd are not genuine. The complainant could not point out any defect in the survey reports particularly final survey report based on actual physical counting and the actual loss assessed by the surveyor Ex.C-11. Even the complainant could not file any affidavit of the manager, who has attested the documents submitted by the complainant Ex.C-13 to Ex.C-302 to prove their genuineness. It has been held by the Hon'ble National Commission in case Hind Auto Center Vs. National Insurance Co.Ltd IV(2014) CPJ 356 (NC) that where the complainant has not led any cogent and convincing evidence to rebut report of surveyor, mere assumption and presumption by way of affidavit of complainant cannot be taken as trustworthy and the District Forum and the Hon'ble State Commission basing the decision on survey report was held to be genuine. Same view has been taken by the Hon'ble National Commission in case Rajendra Singh Yadav Vs. National Insurance Co.Ltd. IV(2014) CPJ 269 (NC) as well as in case Champalal Verma Vs. Oriental Insurance Co.Ltd. III(2008) CPJ 93 (NC). The Hon'ble National Commission in case Chanan Preet Singh Vs. United India Insurance Co.Ltd. & Ors 2012(3) CLT 119(NC) has held that the report of the surveyor is a credible document which must be relied upon unless controverted by credible proof of any infirmity in its findings. Same view has been taken by the Hon'ble National Commission in case New India Assurance Co.Ltd. & Anr. Vs. New Good Luck Retrading Works III(2009) CPJ 262 (NC).

9. Here in this case the complainant could not produce any cogent or convincing evidence to prove any defect in the final survey report submitted by surveyor M/s. Mittal Surveyors Pvt.Ltd Ex.C-11. Opposite party was, therefore, justified in assessing the loss of the complainant suffered by the complainant firm to the tune of Rs. 4,97,465/-.

10. Consequently we hold that there is no merit in the complaint and the same is

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hereby dismissed with no order as to costs. Copies of the orders be furnished to the parties free of costs. File is ordered to be consigned to the record room.

11. Case could not be disposed of within the stipulated period due to heavy

pendency of the cases in this Forum.

10.2.2015 ( Bhupinder Singh )

President

/R/ ( Kulwant Kaur Bajwa)

Member