State Consumer Disputes Redressal Commission
Shri Dharam Pal Verma vs M/S. Bajaj Allianz General Insurance ... on 21 March, 2013
BEFORE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SOLAN, H
H.P.
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA.
Consumer Complaint No.13/2011
Date
of Presentation: 20.09.2011
Date of Decision: 21.03.2013
..
Shri Dharam Pal Verma,
Sole Proprietor,
M/s. Verma Traders, Kot Hill,
Circular Road, Near Lakkar
Bazaar,
Bus Stand, Shimla-171 001.
.. Complainant
Versus
1. M/s.
Bajaj Allianz General Insurance Company Ltd.,
Dipta Niwas, Kasumpti,
Shimla-171 009,
Through its Branch Manager.
2. Punjab
& Sind Bank,
Sanjauli,
Shimla-171 006,
Through its Branch Manager.
Opposite Parties.
Coram
Honble Mr. Justice (Retd.) Surjit Singh, President
Honble Mr. Chander Shekhar Sharma, Member
Honble Mrs. Prem Chauhan, Member
Whether approved for reporting?[1]
Yes.
For the Complainant: Mr.
Ratish Sharma, Advocate
For the Opposite
Party No.1: Mr. Suryadeep Singh Thakur, Adv., vice
Mr.
Chandan Goel, Advocate
For the
Opposite Party No.2: None
O R D E R:
Justice (Retd.) Surjit Singh, President (Oral) This complaint, under Section 17 of the Consumer Protection Act, 1986, has been filed by Dharam Pal Verma against M/s. Bajaj Allianz General Insurance Company Limited, opposite party No.1 and Punjab & Sind Bank, opposite party No.2, alleging as follows. There had been a building in Lakkar Bazaar, abutting on the Cart Road, in which complainant used to run the business of electrical goods, manufactured by Havells, in the capacity of Havells Stockist. Below that building, there used to be a timber store.
2. Complainant had insured the electrical goods of Havells make, with opposite party No.1, for a sum of `20.00 lacs, inter alia against the loss caused due to fire. Policy was effective from 28.09.2010 to 27.09.2011.
3. On the night intervening 5th/6th December, 2010, a fire broke out in the timber store, just below the business premises of the complainant, as a result of which, not only the entire timber store, which was owned by the father of the complainant, but also the structure in which the complainant had his business were completely gutted. The entire stock of electrical goods, which the complainant had insured with opposite party No.1, got completely destroyed.
4. Intimation of the loss was given to opposite party No.1. It deputed a surveyor, who assessed the loss at `6,41,069/-. According to the complainant, the loss sustained by him was not less than `20.00 lacs, the sum in which the stock was insured.
5. Opposite party No.1 started pressurizing the complainant to accept the aforesaid amount of `6,41,069/- assessed by its surveyor, in full and final satisfaction of this claim, to which he did not agree. He then filed the present complaint, seeking issuance of a direction to opposite party No.1 to pay `20.00 lacs, by way of insurance money, with interest at the rate of 18% per annum and also to pay `50,000/- as compensation and `21,000/- as litigation expenses.
6. Opposite party No.2 was impleaded, because the complainant had been availing cash credit limit facility from it, in connection with his business. Electrical goods and other goods had been insured with opposite party No.1, at the insistence of opposite party No.2.
7. Opposite party No.1 contested the complaint and pleaded that its surveyor had rightly assessed the loss at `6,41,069/- and that the complainant was not entitled even to a penny, in excess of the aforesaid amount of money.
8. Parties have adduced evidence. Opposite party No.1 mainly relies upon surveyors report. Complainant relies upon the statements of accounts, submitted to the bank.
According to the complainant, the record pertaining to the electrical goods was gutted in the fire alongwith the goods.
9. We have heard learned counsel for the parties and gone through the record.
10. On 1st December, 2010, or say 4-5 days prior to the occurrence of fire, complainant had submitted statement of account to opposite party No.1, i.e. the bank (opposite party No.2), with which the stock was pledged as security for availing cash credit facility. In that statement, which is Annexure C-3, value of the stock in hand was shown to be of `19,30,475/-.
11. Surveyor, in his report, Annexure R-1, has noticed that from the date of submission of the aforesaid statement of stock to the bank by the complainant to the date of fire, goods worth `34,181/- had been sold.
Now, if this figure of `34,181/- is subtracted from the aforesaid figure of `19,30,475/-, the value of stock as on the date of incident of fire comes down to `18,96,294/-.
12. A reading of surveyors report, Annexure R-1, shows that, as per trading account maintained by the complainant, the value of goods as on the date of fire was `19,65,938/- and by reducing this figure at the rate of 10%, on account of possible variation, he has assumed the value of stock to be `17,69,344/-. Reference may be made to para 7.5.3 of the surveyors report, Annexure R-1.
13. Having worked out the figure of the value of stock at `17,69,344/-, surveyor has observed that despite average monthly sale being higher than the figure of average monthly purchases, the value of stock had been increasing, which indicated that old and obsolete stock had been piling up and the said old and obsolete stock was not worth more than 20% of the value shown in the trading stock account, as also the statement submitted to the bank by the complainant. He has assumed the value of fresh stock to be `3,84,000/-, which is equal to the average monthly purchase value of the stock and the rest of the stock worth `13,85,344/- has been treated as old and obsolete and its value is reduced by 80%.
It is on account of this reduction in the value at the rate of 80% that the figure of loss has been worked out at `6,51,069/- and reducing this figure by `10,000/-, on account of excess clause, payment of `6,41,069/- has been recommended.
14. Surveyors observation that the stock worth `13,85,344/- was old and obsolete is not based on any material available with him, but as claimed by him, on his past experience, as also some calculations with regard to the figures of average monthly purchases and average monthly sales worked out by him. Reference to those figures appears in para 7.5.5 of the report of surveyor, Annexure R-1. As per these figures, average monthly purchases were of the lower order in monetary terms, compared to the figures of average monthly sales and despite that the value of closing stock had been increasing. It is on the basis of these figures that the surveyor has assumed the stock in excess of the sum total of two months average sales as old and obsolete and reduced it by 80%.
15. Surveyor has lost sight of the fact, while making the aforesaid assumption, that figures of sale include the profit of dealer/distributor, as also the establishment expenses and other expenses borne by him.
Therefore, simply for the reason that the figures of sale are higher than the figures of purchase but still the stock value had been going up, it could not have been assumed that old stock had been piling up. Also, the surveyor has not taken into consideration, the fact that the stock consisted of electrical goods, mostly in the form of wires and cables, MCB, DP, fans, switches etc. and their value keeps on increasing due to inflation and increase in raw material and cost of production. Therefore, there was nothing unusual in the increase of the value of closing stock every year, despite the figures of purchase being lower than the figure of sale, worked out on average monthly basis.
16. Complainant has placed on record a certificate issued by Havells, who used to supply the stock of electrical goods to the complainant. As per this certificate, the entire stock supplied to the complainant was covered under various schemes and guarantees and was not of perishable nature. Also, it is made out from the report of surveyor himself that some stock used to be returned by the complainant to Havells and the value of such stock was adjusted in the running account.
This shows that the complainant had the option to return the stock, which might have become obsolete or which he found it difficult to sell.
17. In view of what has been discussed hereinabove, we are of the considered view that surveyor was not justified in reducing the value of the stock with the observation that most of the stock had become old and obsolete. As already noticed, hereinabove, surveyor himself has observed that the value of stock was `17,69,344/-. Out of this stock goods worth `34,181/- had been sold between 1st December, 2010 and 5th December, 2010. The value of stock on the date of fire incident, thus, comes to `17,35,163/-. Out of this amount, a sum of `10,000/- is required to be deducted, on account of excess clause and another sum of `10,000/-, on account of salvage value.
This salvage value has been reported by the surveyor himself. After subtraction of these two amounts, net amount of money payable to the complainant, on account of insurance money, works out to `17,15,163/-.
18. As a result of the above discussion, we allow the complaint and direct opposite party No.1 to pay the aforesaid amount of `17,15,163/- to the complainant, with interest at the rate of 9% per annum from the date of filing of the complaint, i.e. 20.09.2011 to the date of payment of the aforesaid amount of money, and also to pay `20,000/- as compensation and `10,000/- as costs of the complaint.
19. One copy of this order be sent to each of the parties, free of cost, as per Rules.
(Justice Surjit Singh) President (Chander Shekhar Sharma) Member (Prem Chauhan) Member March 21, 2013.
*dinesh* [1] Whether Reporters of the local papers may be allowed to see the order?