Date of filing: 5.1.2013.
Date of disposal: 18.6.2014.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - II:
VIJAYAWADA, KRISHNA DISTRICT
Present: Sri A. M. L. Narasimha Rao, B.Sc., B. L., President
Smt N. Tripura Sundari, B. Com., B. L., Member
Wednesday, the 18th day of June, 2014
C.C.No.85 of 2013
Between:
M/s Sonovision Enterprises, Rep: by its Proprietor Potluri Bhaskara Murthy, S/o Janardhana Murthy, Hindu, Aged about 50 years, D.No.28-1-44, Eluru Road, Vijayawada, Krishna District.
…..Complainant.
And
The National Insurance Company Ltd., Rep: by its Branch Manager, Branch Office – 1, P.B.No.425, Gudavalli Vari Street, Governorpet, Vijayawada – 2.
.. … Opposite party.
This complaint coming on before the Forum for final hearing on 3.6.2014, in the presence Sri G. Narasimha Rao, advocate for complainant; Sri V.V.S. Saibabu, advocate for opposite party and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President Sri A. M. L. Narasimha Rao)
1. This complaint is filed under Section 12 of Consumer Protection Act, 1986 for a direction to the opposite party to pay a sum of Rs.17,44,740/- towards insurance amount along with interest, to pay Rs.1,00,000/- towards compensation and to pay costs.
2. The averments of the complaint in brief are as follows:
The complainant is carrying on business in television sets on various brands except Videocon and Philips. Its place of business is Dr.No.28-1-44, Eluru Road, Vijayawada. The complainant show room is located in the ground and 1st floor of the building. It is using the 2nd and 3rd floors as godowns. M/s Sonovision Electronics and M/s Vijaya Enterprises the sister concerns of the complainant firm are also carrying on business in the ground and 1st floor of the same building. Sonovision Electronics deals in Philips TV and Videocon TV sets, refrigerators other than Videocon brand, air coolers, washing machines etc. Vijaya Enterprises is doing business in Videocon refrigerator, Videocon washing machine and Videocon block and white TV sets. The complainant had obtained Fire and Special Perils Policy from the opposite party. It was being renewed every year. Similarly there is policy for the period from 5.2.2002 to 4.2.2003 for an assured sum of Rs.1,20,00,000/- covering the complainant’s stock in the entire building. The risk covered by the goods kept in 1st and ground floor is for Rs.40,00,000/-. On 10.3.2002 the complainant firm opened a new showroom in M.G. Road and shifted stock worth Rs.30,00,000/- from the 2nd and 3rd floors of the building. It was informed to the opposite party through letter dated 8.4.2002. A massive fire accident took place in the building of the complainant’s business on 25.4.2002 at about 6AM. On coming to know the managing partner reached the building. The fire department people also reached that place. After the shutters of the building were open the fire was extinguished by the department people spraying water. The accident was informed to the police and also the opposite party at 10.30 AM. Entire stock in the ground and 1st floor of the building was burnt. Stocks kept in 2nd and 3rd floors of the building was not affected. The manger and development officer of the opposite party visited the building on the same day. A surveyor appointed by the opposite party visited the building on 26.4.2003. The surveyor had taken photographs. They show that 221 color TVs, 30 block and white, several refrigerators, AC sets were burnt and totally damaged. Some of the items were damaged due to high pressure spraying of water. The complainant made a claim with the opposite party for a sum of Rs.23,17,740/-. The surveyor appointed by the opposite party addressed a letter asking for 13 types of documents including final report of the police. The complainant replied that all the document except the final report of the police were available. Subsequently on the letter dated 30.9.2002 sent by the opposite party to submit available documents, the complainant submitted all the 12 documents to the opposite party on 22.10.2002. In the month of December, 2002 the surveyor asked the complainant to get report from the complainant’s auditor. The complainant submitted all the details of the brand wise, model wise stock in the firm. The complainant also submitted the details relating to sale and purchase of TV models and also the closed stock as on 25.4.2002. Subsequently on 5.1.2003 the copy of final report of the police was submitted to the opposite party. The managing partner of the complainant’s firm made several visits to the office of the opposite party. There was no proper response. The complainant also addressed letters on 3.1.2004 and 24.1.2004. On 3.2.2004 the surveyor sent a letter to the complainant asking clarification with regard to stock register and proposed plan of the showroom building. The complainant’s firm gave a reply informing that the complainant maintained stock registers for TV sets, one for refrigerators and washing machines and one for mixer grinders and small appliances and they note down the godown and display stocks in the same register but separately. Example was also given that if entry related to LG 20” CTV it will be noted as 2+1 means 2 CTVs are in the godown and one CTV is in the display area. The building was constructed in the year, 1969. The building plan and other documents were destroyed on 26.12.1988 during the riots after the death of then MLA Vangaveeti Mohan Ranga. The complainant had submitted the plan of the showroom building issued by government approved planner. As there was no response the complainant addressed a letter dated 8.7.2004 to the opposite party. The opposite party received the letter but did not give a reply. The complainant was asked to submit modified claim form. The complainant did not submit it. The complainant asked the opposite party to pay an amount of Rs.23,17,740/- being the actual amount due. On 2.8.2004 the opposite parties sent a letter to the complainant’s office stating that they would pay an amount of Rs.5,73,000/- as per the assessment of the surveyor. The opposite party did not furnish copy of surveyors report initially. The surveyor had assessed loss of stock at Rs.9,27,000/- against total loss of Rs.24,77,000/-. Even according to the case diary of police 146 color TVs of the complainant worth Rs.23,70,000/- were damaged in the fire accident. The auditor’s report also confirms that there was 170 color TVs worth Rs.24,68,309/- in the showroom. There is deficiency in service on the part of the opposite party. The complainant and other complainants of other matters initially filed a common consumer dispute in C.D.45/2004 it was allowed on 31.3.2007. On appeal to the National Commission they have disposed of the appeal with a direction to the complainants to file separate complaints before the District Forum. Accordingly the complainant filed present complaint and the other complaints filed CC.84 of 2013 and 90 of 2013. The opposite party paid a sum of Rs.5,73,000/- to the complainant’s firm on 3.8.2012. That amount was received under protest. After adjustment of the said amount the opposite party is still due to the complainants firm in a sum of Rs.17,44,740/-. Therefore the present complaint is filed.
3. The opposite party filed counter admitting the factum of taking insurance policy, denying the liability and further stating as follows:
The complainant concern is running business in the ground and 1st floor of the building and using the 2nd and 3rd floors for godown. The complainant sister concerns namely Sonovision Electronics and Vijaya Enterprises are also running business in the ground and 1st floors of that building. Three business concerns are taking three policies. The complainant’s firm had taken policy for the stocks in the ground and 1st floors for insured sum of Rs.40,00,000/-. The stocks in the 2nd and 3rd floors were insured for Rs.80,00,000/-. On 8.4.2002 the complainant sent a letter to the opposite party informing that stocks worth Rs.30,00,000/- was shifted from 1st floor of Sonovision building to their new showroom. The opposite party had issued an endorsement effecting transfer of stocks and handed over the endorsement to the complainant on 19.4.2002. The cover available to the stocks in the ground and 1st floor of the premises has become reduced to Rs.10,00,000/- as on the date of accident. A fire accident took place at about 6 AM on 25.4.2002 in the building of the complainant’s firm and the accident was informed to the opposite party. The manager of the opposite party and Development Officer visited the effected building on the same day. The surveyor appointed by the opposite party visited the building on 26.4.2002 and 29.4.2002. The surveyor addressed a letter dated 13.6.2002 asking the complainant to submit some documents. The opposite party also addressed letter on 5.9.2002 to the complainant asking him to furnish documents required by the surveyor. The complainant’s information does not contain the details regarding transactions made with various firms. The complainant did not give information regarding sales and purchase of stocks. The surveyor asked for audit report from the accountant of the complainant. As there was no compliance the surveyor availed the services of one Ch. Veera Babu a chartered accountant with the consent of the complainant. The surveyor had discussed with the chartered accountant and assessed the loss at Rs.14,84,374/-. Taking average the net loss is assessed at Rs.5,73,699/- after deduction of policy excess. The amount was sent through cheque and the complainant received it under protest. The complainant is not entitled to the amount as claimed and has not placed material in support of that claim. The complainant is also not entitled to interest as claimed. There is an Arbitration clause in the contract and the matter has to be referred to Arbitrator under the provisions of Arbitration and Conciliation Act. Therefore this Forum has no jurisdiction. The opposite party paid the amount as per the loss assessed by the at surveyor and there is no deficiency in service on the part of the opposite party.
4. The managing partner of the complainant filed affidavit as deposition of PW.1. The Deputy Manager of the opposite party filed affidavit as deposition of DW.1. The affidavit of a surveyor K. Rama Rao is filed as deposition of DW.2. Exs.A1 to A23 are marked on behalf of the complainant and Exs.B1 to B10 are marked on behalf of the opposite party.
5. The points for determination are:
- Whether the opposite party had properly assessed the loss in settlement of the claim and if there is deficiency in service on the part of the opposite party?
- Whether the complainant is entitled to the amounts claimed?
Point No.1:
6. The complainant’s stock kept in the shop and showroom in the ground and 1st floor of the building was insured for Rs.40,00,000/- and the complainant’s stock kept in the godown located in the 2nd and 3rd floors of the building was insured for Rs.80,00,000/-. A fire accident took place on 25.4.2002 and stocks of the complainant in the ground and 1st floor of the building were damaged along with stocks of two other sister concerns in the same floors. The opposite party had agreed in their counter that stock position as on the date of accident at the shop of the complainant’s building was of value Rs.24,06,848/-. The complainant had raised a claim for a sum of Rs.23,17,740/- in respect of the complainant’s firm and asked for interest from 5.1.2003. The complainant did not agree with the statement of the opposite party that there was sound stock of value Rs.9,22,474/- in the ground and 1st floors of the building. The complainant had stated in the complaint that they valued the scrap at Rs.79,500/- and it was shown in the claim form. This amount is mentioned as salvage value by the opposite party. The opposite party had reduced the insurance coverage to Rs.10,00,000/- on the premise that stocks worth Rs.30,00,000/- was removed from the ground and 1st floor of the complainant’s building to another showroom on 10.3.2002 and therefore the insurance cover had became reduced from Rs.40,00,000/- to Rs.10,00,000/-. So the dispute between the parties relates to two major items, firstly whether the stock worth Rs.30,00,000/- received from ground and 1st floor of the building as contended by the opposite party or from the 2nd and 3rd floors of the building as pleaded by the complainants and secondly whether there remained sound stock worth Rs.9,22,474/- in the ground and 1st floors of the building.
7. The stock verification statement given by Ch. Veera Babu a chartreed accountant to the surveyor is the basis for the surveyor to arrive at the figurers noted in his report Ex.B7. The chartered accountant has mentioned the total stock in the shop of the complainant’s Sonovision building i.e., in the ground and 1st floors as Rs.24,06,848/-. The surveyor had taken this amount as the value of the stock available on the date of accident. The damage caused is noted by the surveyor in page.6 on this report. According to him the damaged items are Akai TV sets – 8 Nos, BPL TV sets – 9 Nos, LG TV sets – 14 Nos, Rangs TV sets – 3 Nos, Sansui TV sets – 5 Nos, Panasonic TV sets – 9 Nos, Sony TV sets – 2 Nos, Sharp TV sets – 8 Nos, Samsung TV sets – 13 Nos, Thoshiba TV sets – 3 Nos, Thomson TV sets – 3 Nos. When the number of TVs of different brands listed out by the auditor in Ex.B8 are verified with the above statement of the surveyor, there appears to be some items left out. They could be 5 Akai TV sets, 14 BPL TV sets, 2 Crown TV sets, 3 Onida TV sets, 2 LG TV sets, 3 Rangs TV sets, 5 Sansui TV sets, 1 Panasonic TV set, 2 Sharp TV sets, 1 Samsung TV sets, 7 Salora TV sets, 2 TCL TV sets, 7 Thoshiba TV sets, 9 Thomson TV sets and 30 Videocon TV sets. It is further to be observed that the surveyor has not mentioned anything about the TV sets damaged due to drenching in water during fire extinguishing operation by the fire office personnel. The TV sets completely wet with water cannot be sold as new items. If we go to showroom and if the dealer tells us that he has a very good TV sets but once it was drenched into water we would decline to purchase such item. If they are in good condition almost they could be sold on high discounts. Neither party has come forward with any statement as to sale of such damaged items. It is also not known if they are not covered by the salvage amount mentioned by the surveyor. In Ex.B8 it is mentioned that the chartered accountant had verified the books of account of the insured and arrived at the closing stock on 24.4.2002. So the list of items he mentioned is not on physical verification but on verification of the books account of Sonovision Enterprises. It is not mentioned in Ex.B8 that it includes the stocks pertaining to Sonovision Electronics and Vijaya Enterprises the other two concerns also keeping stock in the same building. According to Ex.B8 there were 170 TV sets of different brands as closing stock in the shop of Sonovision building as on 24.4.2002. The surveyor had given the number of damaged items in page.6 of his report Ex.B7. The total items damaged according to him were 77 TV sets. The nature of damage he mentioned as damage caused by fire and formation of soot. If this figure is taken to be correct there must be 93 TV sets not affected by the fire accident. Sonovision Enterprises was not dealing in Videocon TV sets but they were also included in the list given by chartered accountant in Ex.B8. Patently, the amount arrived at by the surveyor as regards sound stock must be incorrect. The surveyor has not given the details of the sound stock said to be available after the fire accident. Though he refer to annexure, no such annexure is available in Ex.B7. It is to be noted that fire was extinguished by firemen spraying water. The water jet coming with force would extinguish the fire and also damage the unburnt electronic items kept in the ground and 1st floor of the building. The surveyor though had taken long time for preparing the report was unable to give the details of the sound stock and details of inventory. Therefore we are not ready to accept that there remained items worth the value mentioned by the surveyor in Ex.B7. Then the loss occasioned must be the total value of the stock i.e., Rs.24,06,848/-. It is to be noted that the surveyor had received chartered accountant’s report on 9.3.2004 and had given his report on 6.7.2004 and if there was sound stock remained, he could have certainly taken the sales particulars subsequent to the date of accident to know the real position. Therefore we do not agree with the contention of the opposite parties that there was sound stock worth Rs.9,22,474/- remained in the shop and showroom of the complainant after the fire accident.
8. The complainant had shifted some stock from Sonovision building to its new showroom on 10.3.2002. It was duly intimated to the opposite party. The complainant filed a copy of intimation dated 8.4.2012 under Ex.A3. By this letter the complainant informed the opposite party that they have opened a new branch namely Digital Vision in M.G. Road and stocks worth Rs.30,00,000/- were shifted from the building bearing Dr.No.28-1-44, Eluru Road, stocks worth Rs.15,00,000/- diverted from Sonovision building and stock worth Rs.5,00,000/- was shifted from another building. It is the contention of the opposite party that the stock worth Rs.30,00,000/- was shifted from 1st floor of Sonovision building where the showroom and shop of the complainant is located. The complainant denies it and states that the stock was shifted from godown and not from the showroom. Since the stocks in the godown as well as the showroom were insured the complainant must inform the insurance company about the shifting of stock either from the godown or from the showroom. The reference made in Ex.A3 is to the building bearing No.28-1-44, Eluru Road and not specific to 1st or ground floor of the building. That door number was assigned to entire building called Sonovision building consisting of ground and three floors. Therefore from Ex.A3 it cannot be assumed that the complainant had shifted the stock from the showroom in the 1st floor and not from the 2nd and 3rd floors of the building. It is commonsense that the complainant having heavy stock in the godown in the 2nd and 3rd floors would shift stock from the godown to new showroom Digital Vision instead of initially shifting some stock from the showroom and later recouping it from the 2nd and 3rd floors involving double labour expenses and high risk in handling more items. The expected stock in the ground and 1st floor of the building is of value of Rs.40,00,000/- vide policy. Then shifting stock worth Rs.30,00,000/- from the place results in desert look of the shop and showroom. A businessman would not do it particularly in the month of March.
9. The opposite party pressed into service Ex.B3 a copy of Ex.A3 but there is some writing against the 1st item denoting that stock worth Rs.30,00,000/- was shifted from 1st floor. This writing is not available in Ex.A3. The words ‘1st floor’ do not appear to be in the hand writing of the same person who wrote the letter Ex.A3. The original letter addressed to the opposite party is not available. In Ex.B4 copy of the document of the opposite party there is a note in print/type writing. In that note the word 1st floor are noted in manuscript after the words 28-1-44, Eluru Road. This writing appears to be similar to the writing of word ‘1st floor’ in Ex.B3. So we have no hesitation to hold that the words ‘1st floor’ were not written by the complainant but they were written by the officers of the opposite party. As observed above shifting stock to the new showroom from the showroom of the complainant instead of shifting from the godown looks absurd. Therefore we agree with the contention of the complainant that stocks worth Rs.30,00,000/- was shifted from the godown of complainant located in the 2nd and 3rd floors of the building and not from the 1st floor of the building. Then the stocks remained in the showroom as on the date of the accident must be taken as having a value of Rs.24,06,848/- as noted by the auditor in the report Ex.B8. No deduction can be made from this amount except the usual policy excess of Rs.10,000/- and salvage amount of Rs.79,500/-. Then the loss has to be assessed at Rs.23,17,348/-. The complainant was entitled to this amount. But the opposite party has paid only Rs.5,73,000/-. Therefore there is deficiency in service on the part of the opposite party which had deliberately made wrong calculation with a view to avoid liability.
Point No.2:
10. In view of the answer on point no.1 the complainant was entitled to further amount of Rs.17,44,348/- and interest thereon. The fire accident took place on 25.4.2002 and the claim was made immediately. The surveyor had commenced work on 26.4.2003. The surveyor had taken a very long time and somehow throws blame on the complainant that the complainant did not produce the documents required. Even if reasonable time is liberally calculated, the insurance company could have completed the settlement within one year from the date of accident. Therefore we feel that the complainant is entitled to interest from 1.5.2003 at a reasonable rate of 9% p.a. The complainant is also entitled to costs assessed at Rs.6,000/-.
11. In the result this complaint is allowed in part and the opposite party is directed to pay a sum of Rs.17,44,348/- (Rupees seventeen lakhs forty four thousand three hundred and forty eight only) to the complainant with interest there on at the rate of 9% p.a., from 1.5.2003 till the date of realization and to pay costs of Rs.6,000/- to the complainant. The amounts shall be paid within one month from the date of receiving copy of this order. Complaint for rest of the reliefs is dismissed.
Dictated to steno, N. Hazarathaiah, transcribed by him, corrected by me and pronounced by us in the open Forum, this the 18th day of June, 2014.
PRESIDENT MEMBER
Appendix of evidence
Witnesses examined
For the complainant: For the opposite party:
Managing Partner of Complainant – PW.1 Deputy Manager of OP
(by affidavit) DW – 1,(by affidavit).
Documents marked
On behalf of the complainant:
Ex.A1 Copy of partnership deed.
Ex.A2 Photocopy of policy.
Ex.A3 08.04.2002 Photocopy of letter issued by complainant to OP.
Ex.A4 Photocopy of FIR.
Ex.A5 25.04.2002 Photocopy of case diary.
Ex.A6 13.06.2022 Photocopy of letter issued by surveyor to complainant.
Ex.A7 05.09.2002 Photocopy of letter issued by OP to Sonovision Enterprises.
Ex.A8 07.09.2002 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A9 20.09.2002 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A10 25.04.2002 Photocopy of fire claim form.
Ex.A11 03.01.2004 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A12 24.01.2004 Photocopy of letter issued by Sonovision Enterprises to OP.
Ex.A13 03.02.2004 Copy of letter issued by surveyor to complainant.
Ex.A14 04.02.2004 Photocopy of letter issued by complainant to surveyor.
Ex.A15 08.07.2004 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A16 16.07.2004 Photocopy of survey report.
Ex.A17 02.09.2004 Photocopy of letter issued by OP to complainant.
Ex.A18 Photocopy of complaint copy of CD.45 of 2004
Ex.A19 31.03.2007 Photocopy of orders in CD.45 of 2004 issued by State Commission.
Ex.A20 Photocopy of First Appeal No.465 of 2007 before National Commission.
Ex.A21 06.11.2012 Photocopy of order in First Appeal No.465 of 2007.
Ex.A22 Photocopy of SARAL form for the year, 2002-03.
Ex.A23 30.10.2001 Photocopy of audit report.
On behalf of the opposite party:
Ex.B1 Photocopy of policy.
Ex.B2 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.B3 08.04.2002 Photocopy of letter issued by complainant to OP.
Ex.B4 19.04.2002 Photocopy of policy endorsement.
Ex.B5 05.08.2002 Photocopy of fire service attendance certificate.
Ex.B6 Photocopy of fire claim form.
Ex.B7 16.07.2004 Photocopy of survey report.
Ex.B8 Photocopy of letter issued by Chartered Accountant to Surveyor.
Ex.B9 30.09.2002 Photocopy of letter issued by OP to complainant.
Ex.B10 02.09.2004 Photocopy of letter issued by OP to complainant.
PRESIDENT
