IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated, the 28th day of December, 2023
Present: Sri. Manulal V.S. President
Sri. K.M. Anto, Member
C C No. 77/2023 (Filed on 16/03/2023)
Complainant : St. Joseph’s Wood Industries,
Represented by its Proprietrix,
Lizy Mathew,
St. Joseph’s Wood Industries,
S.H Mount P.O,
Kottayam – 686 006.
(By Adv: Thomas Stephen)
Vs.
Opposite party : United India Insurance Company Limited,
Bank of Baroda Building,
Palace Road,
Kochi – 682 002.
(By Adv: T.J. Lakshmanan)
O R D E R
Sri. Manulal V.S. President
The complaint is filed under Section 35 of the Consumer Protection Act 2019.
The case of the complainant is as follows:
The complainant had insured her factory with the opposite party for the period 21-06-2019 to 20-06-2020. The insured building and its contents were hypothecated to State Bank of India, Nagambadam branch. Due to flood that occurred on 11-08-2019 and its after effects for more than a week the factory and its contents sustained heavy damage. The complainant reported the same to the opposite party and the loss was assessed by Surveyor and Loss Assessor appointed by the opposite party. Thereafter based on the assessment the opposite party had credited an amount of Rs.18,66,750/- unilaterally to the account of the complainant. The complainant had requested the opposite party to provide a copy of survey report in order to understand the method and logics of the settlement. But the opposite party refrained from furnishing the copy. However after repeated requests the same was shared in the last week of March 2021. On cross verification of the survey report it was seen that the loss assessment was literally biased seemingly a disaster relief settlement rather than a proper indemnification of the insured. The complainant had a similar loss experience in the year 2018 due to the heavy flood and the same surveyor had assessed the loss and took 3.76 % only towards the salvage value of the net assessed amount. The surveyor appointed by the opposite party assessed the salvage value as 12% of its original value. The above mentioned disparity on arriving the salvage value in the same cause of loss is arbitrary and denial of natural justice by the opposite party. The fact that all the contents are made of mica, plywood and wood absorption of water causes irreversible damage and cannot be recovered. The salvage materials have no resale value. The deduction of salvage value is not at all reasonable. The act of the Insurance Surveyor leads to make it beneficial to the insurance company and amounts to deficiency in service and unfair trade practice. Hence this complaint is filed by the complainant praying for an order to direct the opposite party to reassess the loss and make good the loss fairly and reasonably and to pay an amount of Rs.1,84,054/- to the complainant.
Upon notice from this Commission the opposite party appeared before the Commission and filed version contending as follows:
The complaint is not maintainable as the complaint is barred by Res Judicata. The complainant filed a case before the Insurance Ombudsman and the same was dismissed by the Insurance Ombudsman after taking the evidence adduced by the parties.
The opposite party had issued a Standard Fire and Special Perils policy to the complainant for the period from 21-06-2019 to 20-06-2020. The opposite party has granted the policy subject to terms and conditions of the policy. The complainant had lodged a claim with respect to the damage sustained due to flood and on receipt of the claim the opposite party had engaged an Insurance Surveyor to assess the loss sustained by the insured. On receipt of the survey report the opposite party relying on the policy conditions and relying on the survey report had settled the claim of the insured as full and final settlement to the tune of Rs.18,66,750/- and the complainant accepted the said full and final settlement amount without any protest or objection. The complainant approached the Hon’ble Insurance Ombudsman challenging the action of the opposite party in settling the claim and prayed for more amount from the opposite party. The Insurance Ombudsman after considering the evidence adduced and after considering all the relevant facts, dismissed the complaint filed by the complainant herein.
Though the complainant challenging the loss assessment and settlement arrived by the opposite party but she has not adduced any cogent and reliable evidence to prove that she is entitled for the reliefs as prayed in the complaint. It is submitted in the version that after accepting the full and final settlement amount without any protest now filing the case for more amount is not maintainable either in law or on facts. The complainant had never repeatedly requested for the survey report as alleged in the complaint. The opposite party had provided the survey report to the complainant at that juncture when the same was requested by the complainant and to the knowledge of the opposite party the survey report was provided to the complainant at the time of settlement by the opposite party. The averments in paragraph 4 and 5 of the complaint is not within the knowledge of the opposite party. It is submitted in the version that the complainant had accepted the full and final settlement amount of Rs.18,66,750/- from the opposite party without any protest and if the complainant is not satisfied by the full and final settlement amount she ought to have refunded the said amount to the opposite party. There is no deficiency in service on the part of the opposite party. The complainant is not entitled for any relief as prayed in the complaint.
Complainant filed proof affidavit in lieu of chief examination and marked Exhibits A1 to A5. Priya A. M, who is the Senior Branch Manager of the opposite party filed proof affidavit in lieu of chief examination and marked Exhibit B1 from the side of the opposite party.
On evaluation of complaint, version and evidence on record we would like to consider the following points :
- Complaint is maintainable or not?
- Whether the complainant had succeeded to prove deficiency in service on the part of the opposite party?
- If so, what are the reliefs and cost?
POINT No. 1 :-
There is no dispute on the fact that the opposite party had issued a Standard Fire and Special Perils policy to the complainant for the period from 21-06-2019 to 26-06-2020. On going through the Exhibit A1 policy we can see that the complainant is the insured and the risk covered for the building is Rs.30,00,000/- and the stock and content is Rs.87,00,000/-. The opposite party contended that before approaching this Commission the complainant had preferred a complaint before the Insurance Ombudsman for the relief as she prayed in this case. The subject matter involved in this complaint, which was filed before the Insurance Ombudsman and the dispute in this case is identical and the same. The Insurance Ombudsman after considering the evidence adduced before him and after considering all the relevant facts dismissed the complaint filed by the complainant herein. Hence according to the opposite party the complaint is not maintainable as the principles of Res Judicata is clearly applicable in this case.
As far as the first point is concerned, we hold that under Section 100 of Consumer Protection Act, 2019 the remedy provided under the Act is in addition to the provisions of any other law for the time being in force and the provisions of the Act give the consumer an additional right apart from the benefits available under any other law. Further Insurance Ombudsman has a limited role to play and his role is to find out whether there is any misuse of the administrative powers by the public body and to give direction to the public bodies to act in accordance with law.
Res-judicata means “a thing decided” in Latin. It is a common law doctrine meant to bar re-litigation of cases between the same parties in Court. Once a final judgment has been handed down in a lawsuit, subsequent judges, who are confronted with a suit that is identical to or substantially the same as the earlier one will apply Res-judicata to preserve the effect of the first judgment.
Merely because the complainant agitated her case before the Insurance Ombudsman earlier, in our considered opinion, that cannot be a cogent ground to invoke the doctrine of Res-judicata. Neither the Insurance Ombudsman is a court, nor the dispute referred to before it is suit, nor its order can be considered as judgment. Therefore, the dismissal of the complaint of the petitioner by the Ombudsman would not operate as Res-judicata against the complaint. Accordingly, we answer the first point against the respondent.
POINTS 2 & 3 :-
It is admitted that the opposite party had issued a Standard Fire and Special Perils policy vide Exhibit A1 from the period 21-06-2019 to 20-06-2020. According to the complainant a flood occurred on 11-08-2019 and due to the flood, the factory premises and its contents submersed in flood for more than one week which resulted in heavy loss to the complainant. Upon receipt of a claim lodged by the complainant the opposite party had engaged an Insurance Surveyor to assess the loss sustained by the complainant. K.J Phillip, who is the Surveyor had submitted Exhibit A2 report to the opposite party. In Exhibit A2 the expert surveyor has accessed the loss to the stock of goods as Rs.12,27,940/-, loss to the plant and machinery as to the tune of Rs.7,50,590/-, for electrification he had assessed the loss to the tune of Rs.1,24,170/- and for building he had assessed the loss to the tune of Rs.1,30,315/-. Thus, the surveyor assessed the total loss for an amount of Rs.22,33,015/-. On Perusal of Exhibit A2 we can see that the surveyor deducted the salvage value to the tune of Rs.2,68,015/-. After deducting the above salvage value and policy excess of Rs.98,250/- the surveyor arrived at a conclusion that the total loss to the tune of Rs.18, 66,750/-. The complainant contented that the salvage value for his previous claim was 3.76 % while 12% has been deducted for this claim by the same surveyor.
In Exhibit A2 the surveyor reported that the entire stock of semi-finished and finished goods were lying in the flood water for about 4 days and this damaged the entire stock. When wooden pieces kept for furnishing are kept in water for few days, the same will absorb water and thickness will increase and if the same is used for furnishing as per the contract taken by the insured with a different flat and residential construction contractors, the same will get deformed and de-shaped after few days of furnishing. Hence the stocks of the unit cannot be reused or sold. The entire stock of the units has to be considered as lost due to flood. He further reported under the Head of Salvage that the insured informed that the salvage will not fetch any value. Many salvage buyers were contacted most of them did not respond. The maximum amount quoted was Rs.20,000/-. But in his opinion the salvage will fetch around 20 % of its value. It is pertinent to note that though the surveyor reported that the salvage will fetch around 20 % of its value he did not adduce any evidence or reason for the same.
The opposite party resisted the complaint contending that the complainant had accepted the full and final settlement amount of Rs.18,66,750/- without any protest.
In National Insurance Company Ltd. Vs. M/s. Hareshwar Enterprises (P) Ltd. & Ors.[Civil Appeal No. 7033 of 2009 Dated: 18.08.2021] Hon’ble Supreme Court observed that, it is no doubt that though the assessment of loss by an approved surveyor is a prerequisite for payment or settlement of the claim, the surveyor report is not the last and final word. It is not that sacrosanct that it cannot be departed from and it is not conclusive. The approved surveyor’s report may be the basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured.
Herein case on hand, as we discussed earlier the surveyor deducted the salvage value of the stock at the rate of 20 % without any basis or reason stating for the same. Exhibit A4 is the survey report prepared by the same surveyor for the claim which was lodged in the year 2018 by the complainant with another insurance company for the damage sustained by her due to flood. On going through Exhibit A4 we can see that the same surveyor has assessed the salvage value to the tune of 3.76% to the net assessed loss amount. He assessed the salvage value at the rate of 3.76 % in total for the stock of raw materials, semi-finished and finished products which are made of wood, mica and plywood materials.
We cannot believe that the damaged items like modular kitchen cabinets, wardrobe made from pre-laminated MDF, crockery shelves, laminated marine plywood would have a resale value if they immersed in water for few days. Even though the water immersed items are not damaged completely and the quality got deteriorated by getting immersed in water these will not fetch a good salvage value.
On going through the evidence adduced by the parties and relying upon the decision above discussed we are of the opinion that deducting 12% of the assessed loss amount as the salvage value without any cogent and relevant reason amounts to deficiency in service on the part of the opposite party. We are of the opinion that the opposite party ought to have considered the reasonable percentage of the assessed loss amount as the salvage value.
Keeping in mind the statutory principle of Consumer Protection Act 2019 which is a benevolent act to protect the interest of the consumers from the deceitful act of the service provider, we are of the opinion that taking the salvage value at the rate of 3.76 % of the assessed total loss amount will meet the ends of justice. Therefore we are of the opinion that the opposite party is only entitled to deduct Rs.83,738/- as the salvage value from the total loss amount of Rs.22,33,015/-. As discussed earlier the opposite party has deducted Rs.2,68,015/- as the salvage value without any cogent reason. Therefore we allow this complaint and pass the following order.
We hereby direct the opposite party to pay Rs.1,84,277/- (Rs.2,68,015/- - Rs.83,738/-). within 30 days from the date of receipt of copy of this order failing which the awarded amount shall carry 9% interest per annum from the date of this order till the date of realisation. Considering the nature and circumstances of the case there is no order of cost and compensation.
Pronounced in the Open Commission on this the 28th day of December, 2023
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
APPENDIX :
Exhibits from the side of the Complainant :
A1 - Copy of Standard Fire & Perils Policy issued by the
opposite party
A2 - Copy of Final Survey Report dated 03/03/2020 prepared
by K.J. Philip, Surveyor & Loss Assessor
A3 - Copy of complainant’s complaint dated 08/12/2021
addressed to the Grievance Cell of the opposite party
A4 - Copy of Final Survey Report dated 01/12/2018 prepared
by K.J. Philip, Surveyor & Loss Assessor in the year 2018
A5 - Copy of Award No.IO/KOC/A/G1/0047/2022-2023
dated 31/10/2022 of Insurance Ombudsman
Exhibits from the side of Opposite party :
B1 - Copy of Settlement/Intimation Voucher dated 28/04/2020
for Rs.18,62,176/- received by the complainant
By Order,
Sd/-
Assistant Registrar
