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.84 of 2013
Between:
M/s Vijaya Enterprises, Rep: by its Proprietor Potluri Vijaya Lakshmi, W/o Janardhana Murthy, Hindu, Aged about 70 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.2,12,920/- 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 retail business in B/W television sets, refrigerators, and washing machine of Videocon. 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 Sonovision 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. Sonovision Enterprises is doing business in TV sets Videocon brand. 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.15,00,000/- covering the complainant’s stocks in the entire building. The risk covered by the goods kept in 1st and ground floor is for Rs.5,00,000/-. On 10.3.2002 the complainant’s sister concern Sonovision Enterprises opened a new showroom in M.G. Road and the complainant shifted stock worth Rs.3,00,000/- from the godown in 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 of Sonovision Enterprises 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 were not affected. The manager 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 black 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.2,12,920/-. 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 approved 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, entry 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 reply. The complainant was asked to submit modified claim form. The complainant refused to submit it. The complainant asked the opposite party to pay an amount of Rs.2,12,920/- 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.1,10,000/- 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.1,10,000/- against total loss of Rs.2,12,920/-. Inspite of explanations the auditor and surveyor had included stock work Rs.1,50,000/- from godown was shown as display stock and applied the rule of under-insurance. There is deficiency in service on the part of the opposite party. The complainant and the 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 complainants filed CC.85 of 2013 and 90 of 2013.
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 Sonovision 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.5,00,000/-. The stocks in the 2nd and 3rd floors were insured for Rs.10,00,000/-. On 8.4.2002 the complainant sent a letter to the opposite party informing that stocks worth Rs.3,00,000/- 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.2,00,000/- 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 affected 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.1,75,024/-. Taking average, the net loss is assessed at Rs.1,10,160/- after deduction of policy excess. Discharge voucher was sent to the complainant for signature and return. But the complainant did not send it. So claim cheque could not be released. The complainant is not entitled to the amount claimed and 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. 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 A24 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.5,00,000/- and the complainant’s stock kept in the godown located in the 2nd and 3rd floors of the building was insured for Rs.10,00,000/-. 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.2,79,868/-. The complainant had raised a claim for a sum of Rs.2,12,920/- 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.1,04,644/- in the ground and 1st floors of the building. The opposite party had reduced the insurance coverage to Rs.2,00,000/- on the premise that stocks worth Rs.3,00,000/- were removed from the ground and 1st floor of the complainant’s building to another showroom on 8.4.2002 and therefore the insurance cover had became reduced from Rs.5,00,000/- to Rs.2,00,000/-. So the dispute between the parties relates to two major items firstly whether the stock worth Rs.3,00,000/- was removed 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.1,04,644/- 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 a surveyor to arrive at the figurers noted in his report Ex.B7. The chartered accountant’s report is not filed. The damage caused is noted by the surveyor in page.6 on this report. According to him the damaged items are 5 Videocon refrigerators, 6 washing machines and 9 B/w television sets, totally 20 items. The surveyor has given the details of the sound stock said to be available after the fire accident in annexure 1 of 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 goods kept in the ground and 1st floor of the building. The surveyor had not given the details of items so spoiled due to watering. 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 Rs.2,12,920/- the total value of the stock noted in the claim form. 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.3,00,000/- were shifted from the building bearing Dr.No.28-1-44, Eluru Road and stocks worth Rs.3,00,000/- diverted from Panavision building. It is the contention of the opposite party that the stock worth Rs.3,00,000/- 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 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.5,00,000/-. Then shifting stock worth Rs.3,00,000/- from that place would give desert look to 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.3,00,000/- 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 words ‘1st floor’ are noted in manuscript after the printed matter. 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 stock worth Rs.3,00,000/- 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.2,79,668/- as noted by the auditor and taken for the surveyor report Ex.B7. The complainant has valued the damaged stock at Rs.2,12,920/-. He must have left out the undamaged stock from the claim as is evident from the above given figures. The complainant was entitled to this amount. But the opposite party has offered only Rs.1,10,160/-. Therefore there is deficiency in service on the part of the opposite party as it 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 the amount of Rs.2,12,920/- 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 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 interest from 1.5.2003 at a reasonable rate of 9% p.a. The complainant is also entitled to costs assessed at Rs.2,000/-.
11. In the result this complaint is allowed in part and the opposite party is directed to pay a sum of Rs.2,12,920/- (Rupees two lakhs twelve thousand nine hundred and twenty 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.2,000/-. 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. The amount of Rs.1,10,000/- said to have been deposited in State Commission shall be given credit to, along with interest if any accrued after issue of cheque in favour of the complainant.
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 vat registration certificate.
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 05.01.2003 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A12 03.01.2004 Photocopy of letter issued by complainant to OP.
Ex.A13 24.01.2004 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A14 03.02.2004 Copy of letter issued by surveyor to complainant.
Ex.A15 04.02.2004 Photocopy of letter issued by complainant to surveyor.
Ex.A16 08.07.2004 Photocopy of letter issued by Sonovision Enterprises to OP
Ex.A17 30.03.2004 Photocopy of survey report.
Ex.A18 02.09.2004 Photocopy of letter issued by OP to complainant.
Ex.A19 Photocopy of complaint copy of CD.45 of 2004
Ex.A20 31.03.2007 Photocopy of orders in CD.45 of 2004 issued by State Commissioin.
Ex.A21 Photocopy of First Appeal No.465 of 2007 before National Commission.
Ex.A22 06.11.2012 Photocopy of order in First Appeal No.465 of 2007.
Ex.A23 Photocopy of SARAL form for the year, 2002-03.
Ex.A24 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 claim form.
Ex.B7 30.03.2004 Photocopy of survey report.
Ex.B8 Photocopy of case diary.
Ex.B9 Photocopy of cheque for Rs.45,000/-
Ex.B10 10.10.2007 Photocopy of letter issued by OP to the HRO, Hyderabad.
PRESIDENT
