State Consumer Disputes Redressal Commission
M/S. Uniworth Ltd. vs The United India Insurance Co. Ltd. on 20 January, 2026
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AT NEW DELHI
NC/FA/128/2010
(Against the order dated 04.02.2010 in Complaint No. 8/2006 of the
Chhattisgarh State Consumer Disputes Redressal Commission)
WITH
NC/IA/1235/2025 (WAIVER OF COST)
M/s. Uniworth Ltd. ... Appellant
Versus
The United India Insurance Co. Ltd. ... Respondent
BEFORE:
HON'BLE MR. JUSTICE A.P. SAHI, PRESIDENT
HON'BLE MR. BHARATKUMAR PANDYA, MEMBER
Appeared at the time of arguments:
For Appellant : Ms. Anisha Jain, Advocate
Ms. Shambhavi Singh, Advocate
For Respondent : Mr. A. K. De, Advocate
Ms. Ananya De, Advocate
Ms. Chandni Sharma, Advocate
Pronounced on: 20th January 2026
ORDER
JUSTICE A. P. SAHI, PRESIDENT
1. The Appeal questions the order of the State Consumer Disputes Redressal Commission, Chhattisgarh dated 04.02.2010 in CC No. 8 of 2006 whereby the claim of the appellant, for indemnifying the loss caused to a diesel generating set in a fire, to the extent claimed beyond the amount awarded by the Insurance Company has been dismissed. The generating set was admittedly insured along with two other generators under a Standard Fire and Special Perils Policy for the duration dated 01.02.2002 to 31.01.2003. The NC/FA/128/2010 Page | 1 incident of fire took place during this period on 08.06.2002 on account of which one of the diesel generating sets was partly damaged.
2. The generating set was manufactured by M/s. Wartsila of Finland which had its marketing set up in India in the name of M/s. M/s. Wartsila India Ltd. The generating set has been supplied by the said company and the sum insured for all the three generating sets was Rs. 3,72,20,991/-.
3. The damage was intimated promptly to the manufacturers as well as to the Insurance Company and surveys were conducted. A spot survey was conducted by M/s. Gulab Aggarwal that was followed by a regular and final survey by Mr. Rajiv Dausage. It is evident from the survey report that Mr. Gulab, the spot surveyor was incidently present in the premises on the date of the incident. He was on a visit to the unit in respect of some other loss, but he again went on 09.06.2002 and had a meeting with the Engineers of M/s. Wartsila, who had arrived from Nagpur.
4. On 10.06.2002, the final surveyor Mr. Rajiv Dausage was appointed by the Insurance Company and he accordingly conducted the survey.
5. Prior to the tendering of his report, communications ensued between the representatives of the complainants, the manufacturer as well as the surveyor. The manufacturers had provided intimation as desired with regard to the damage assessment on 08.06.2022. The preliminary assessment report of the manufacturer is extracted hereinunder:
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6. The damage assessment that was tendered by the complainant also countersigned by the manufacturers is extracted hereinunder:
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7. The manufacturers informed the complainant that all the spare parts were not available in its entirety and further time was requested for by them.
8. The intimation sent by the manufacturer on 21.06.2002 is extracted hereinunder:
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9. It appears from the record that with these documents and the intimation received from the manufacturer further negotiations seem to have been taken place. A meeting was held on 23.07.2003 at the Nagpur plant of the complainant in which the representatives of the complainant company, the representatives of the manufacturers and the final surveyor Mr. Dausage accompanied by Mr. K. K. Panda, Dr. B. R. Singh and Mr. Anil Kumar Pathak of the Insurance Company attended the said meeting. After discussions in the said meeting on 23.07.2003, the minutes that were drawn up and duly signed by all the participants is extracted hereinunder:
NC/FA/128/2010 Page | 13 NC/FA/128/2010 Page | 14 10. The complainants thereafter also submitted the quotations of
procurement received from the manufacturers as well as another firm and on 17.09.2003, a request was made to the Insurance Company to release the NC/FA/128/2010 Page | 15 amount of loss clamed "on account payment basis" to the extent of 75%. The said letter dated 17.09.2003 is extracted hereinunder:
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11. After these negotiations, the Surveyor tendered his report on 21.10.2003 which is extracted hereinunder:
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12. According to the complainant, the report was not appropriate and incorrect deductions including that of under insurance were made and the average formula was applied by the Surveyor to the tune of Rs. 15,41,959/- only. However, since the calculations were incorrect, the Surveyor revised the same on 12.01.2004 enhancing the amount admissible to the tune of Rs. 22,94,071.68 paise only.
13. The case of the complainant is that the Insurance Company instead dispatched vouchers for payment, but incorrectly mentioned it to be as a full and final settlement. The settlement intimation note against which the payments were offered and received by the complainant is extracted hereinunder:
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14. However, the claim disbursement vouchers signed by the complainant endorsed a receipt of the payments stating on account basis. The payments were made through three cheques and therefore there are three claim disbursement vouchers for the amount of Rs. 10 lakhs followed by another receipt of Rs. 10 lakhs and finally the balance of the amount Rs. 2,67,576/-. The three vouchers that are on record as Annexures- 11, 12 and 13 filed along with the reply of the OP are extracted hereinunder:
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15. The contention of the complainant appellant is that all these payments were received under protest only "on account basis" and were partial payments and therefore the offer made of full and final settlement through the settlement intimation note does not amount to accepting the payments by the complainant on full and final payment basis. Thus, all payments were made on 21.04.2004 according to the Insurance Company which were stated as partial NC/FA/128/2010 Page | 44 and received only on account basis by the complainant as endorsed and therefore the complainant has come up with a case that immediately thereafter on 26.04.2004 the claim for the balance of the amount was made objecting to the deductions of under insurance with a request to make the payments good as the partial settlement was unjustified and illegal. The said letter of protest dated 26.04.2004 is extracted hereinunder:
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16. It is urged by the learned counsel for the appellant that the said aspect has been erroneously dealt with by the State Commission, in as much as, the payment was never received as a full and final payment.
17. Even on merits, it is urged that the State Commission erroneously regarded the quantum to be adequate on the ground that the assessment has been made by a qualified Surveyor and there is no reason to disagree with the same.
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18. The State Commission further went on to hold that the claim had not been preferred within 12 calendar months of having received the amount as a complaint before the State Commission. Learned counsel submits that this finding is also erroneous, in as much as, a limitation for filing a complaint is two years and therefore the time for filing a complaint before the State Commission cannot be governed by a period of 12 calendar months.
19. At the outset, we may deal with those issues on which we do not agree with the findings recorded by the State Commission. The last observation made with regard to the period of limitation for presenting a complaint has been erroneously computed to be 12 months by borrowing the terminology of clause 6(ii) of the Insurance policy. The same applies only in respect of the claim before the Insurance Company and not for filing a complaint under the Consumer Protection Act, 1986. The complaint therefore could not have been held to be not maintainable, in as much as, the period of limitation under Section 24A of the Consumer Protection Act, 1986 for filing a complaint within two years of the date of cause of action is clearly stipulated. We therefore do not find the conclusion drawn by the State Commission on that count to be correct. The State Commission has also observed that the full and final settlement has been made on 21.04.2004 and the complaint was filed on 01.05.2006. In our opinion, the State Commission overlooked the fact that the complainant had not surrendered his right for any further claim, as, through the letter dated 26.04.2004, he had raised his protest also informing that he had accepted the amounts as partial settlement "on account basis". This was NC/FA/128/2010 Page | 47 therefore a continuing cause and even otherwise the complaint having been filed on 01.05.2006 was only 9 days beyond two years. We therefore do not agree with the findings of the State Commission that the complaint was barred by time. Even otherwise the appellant has contested the date of filing by categorically stating that the complaint had been filed before the State Commission on 18.04.2006. We therefore find that the State Commission has taken an erroneous view of the complaint being filed beyond time.
20. However, the State Commission proceeded to deal with the matter on merits as well and the first issue which we may advert to is the conclusion of the State Commission about the claim having been finally settled in terms of the final payment on 21.04.2004. It is correct that the intimation for settlement as quoted above was for full and final settlement, but the actual discharge voucher duly signed by the representative of the appellant endorses the phrase "on account basis". This endorsement is in tune with the letter dated 17.09.2001 addressed to the final Surveyor by the complainant requesting for advising the Insurance Company to release payment on account basis on 75% of the amount claimed. This fact has been categorically mentioned by the Surveyor in paragraph 11 under the heading "assessment of the Surveyor report dated 21.10.2003" where the said claim of payment on account basis has been referred to. We therefore find no material to conclude that the complainant had by signing the claim disbursement voucher accepted the payment as full and final settlement. On the peculiar facts as aforesaid of this case, the complainant does not seem to have surrendered his right to claim NC/FA/128/2010 Page | 48 full payment as the endorsement as discussed above appears to be for accepting partial payments only. The objection dated 26.04.2004 is within five days of the signing of the voucher categorically indicating that the amount accepted was only for a partial claim and therefore the claim should be settled for the total amount of loss assessed without deductions.
21. We are therefore of the view that the present case is clearly distinguishable on facts as against those cases decided by the Apex Court as well as by this Commission holding that once the discharge voucher has been signed without any protest or any evidence to demonstrate exercise of duress and distress by the Insurance Company, the same shall be treated to be final. Reference be had to the judgments in the case of Ajmer Singh Cotton & General Mills & Ors. Vs. United India Insurance (199) 6 SCC 400. The next decision is in the case of National Insurance Company Ltd. Vs. M/s. Boghara Polyfab Private Limited, AIR 2009 SC 170 (2009) Vol. 1 SCC Page 267. The latest decision is in the case of Oriental Insurance Co. Ltd. & Anr. Vs. Dicitex Furnishing Ltd. (2020) 4 SCC 621. The Hon'ble Delhi High Court also in the decision of Worldfa Exports Pvt. Ltd. Vs. United India Insurance Co. Ltd. 2015 SCC OnLine Del 13951, has particularly referring to the Circular issued by the Insurance Regulatory Development Authority (IRDA), called upon the Insurance companies not to withhold claim amounts observing that execution of Discharge Vouchers do not foreclose the rights of the policy holders to seek higher compensation. This Commission in the case of M/s. Centex Fabrics - Export Unit & Anr. Vs. M/s. National Insurance NC/FA/128/2010 Page | 49 Company Ltd. & Anr. CC/9/2014, decided on 13.04.2023, has also followed the same principles and it has been affirmed with the dismissal of the Civil Appeal against the same by the Apex Court in Civil Appeal No.8064 of 2023 decided on 11.12.2023.
22. The remedy therefore, in certain circumstances has been found to be available under the Consumer Protection Act even after signing of the Discharge Voucher, as held by a Larger Bench of this Commission in the case of Neo Built Infrastructure Pvt. Ltd. & Anr. Vs. Tapas Kumar Pal & Anr., vide Order dated 02.11.2023 in RP/55/2020, para-7, which is extracted herein under:-
"7. Under the Consumer Protection Act, a consumer is authorized to make a complaint, in respect of an unfair contract or unfair trade practice, restrictive trade practice, defect in goods, deficiency in service, excess price taken, sale of hazardous good or providing hazardous service and product liability. Various remedies available under the Act can be availed after purchase of goods or availing services. The question arises as to what is the stage for examining as to whether, the option to execute a discharge voucher as full and final satisfaction or possession and sale was voluntary with a free will and choice or it was due to undue influence, misrepresentation or fraud or the product sold of services availed was free from any defect/deficiency. If a consumer complaint is dismissed at the threshold, relying upon such discharge voucher or possession and sale, holding that it is not maintainable, then if these issues are raised, will remain un- adjudicated. Execution of discharge voucher as full and final satisfaction or possession and sale being voluntary out of free will and choice may be a ground for defense, but on its basis it cannot be said that the consumer complaint is not maintainable. The absence of any expression of protest or of the reservation while taking possession before or after the conveyance or silence does NC/FA/128/2010 Page | 50 not dissolve the remedy of the consumer fora or foreclose the rights of the purchaser of a residential flat or plot alleging deficiencies as per the agreement / representation or the deficiencies detected post purchase. Hon'ble Supreme Court in Wg. Cdr. Arifur Rehman Vs. DLF Southern Homes Private Limited, (2020) 16 SCC 512, held that execution of a sale deed during pendency of the complaint, does not affect the other rights/remedies claimed in the complaint. In Debashis Sinha Vs. R.N.R. Enterprises (2023) 3 SCC 195, it has been held that any deficiency detected post purchase, opens up an avenue for the aggrieved consumer to seek relief before the consumer fora."
23. We therefore find the claim to survive and not extinguished by virtue of the signing of the claim settlement voucher.
24. The third contention is about Under Insurance as also the calculations made by the Surveyor for assessing the loss.
25. As to what is under Insurance, the law relating to the same deserves to be understood. We find from the report of the Surveyor mentioning that the policy does not specifically endorse it to be a policy covering a risk on reinstatement basis, but the same has been left to be decided by the Insurance Company. The Insurance Company instead has settled the claim without there being any comment on the same. The complainant seems to have staked its claim on the basis of reinstatement basis. The claim form also indicates that the claim had to be made on the basis of the actual value of the goods at the time of the fire. This was followed by the documents tendered by the appellant including the estimate given by the manufacturers. The Surveyor, even though has raised a question about the absence of an NC/FA/128/2010 Page | 51 endorsement of reinstatement but has proceeded to calculate observing that it was done on the same basis.
26. Learned counsel for the complainant has relied on the decision of Dharmendra Goel vs. Oriental Insurance Co., (2008) 8 SCC 279 and that of Sumit Kumar Saha vs. Reliance General Insurance Co. Ltd., (2019) 16 SCC 370. The case of Dharmendra Goel (supra) was in relation to a motor accident insurance claim where it was held that the Insurance Company itself had accepted the value of the vehicle as claimed therein. Then while computing total loss, the said value could not have been reduced by the Insurance Company for the purpose of indemnity. The second decision in the case of Sumit Kumar Saha (supra) is on the principle relating to the Insured Declared Value (IDV) as opposed to the depreciated market value of damaged goods. The said case was with regard to a Volvo Hydraulic Excavator insured under a CAR policy. The National Commission in that case held that the Insurance Company was responsible to indemnify the loss on the basis of the replacement of the damaged machine in the same condition at which it was on the day of the accident. The Apex Court was also apprised of the decision in the case of Dharmendra Goel (supra) as well as the decision in the case of Sikka Papers Ltd. vs. National Insurance Company Ltd. & Ors., (2009) 7 SCC 777. The Apex Court came to the conclusion that in that case there was no under insurance claimed by the Insurance Company and accordingly it was held that the Insurance Company and the Surveyor were not justified in disregarding the amount of sum insured which was stipulated in NC/FA/128/2010 Page | 52 the policy. The deduction made therein on account of depreciation was therefore not accepted and the order of the National Commission was reversed upholding the order of the State Commission.
27. In the case of Sikka Papers Ltd. (supra), the Apex Court had directly dealt with the issue of under insurance in relation to a dispute about the value of a diesel generating set that had broken down and was got repaired by the complainant. The set had been repaired for Rs. 25 lakhs, but the Insurance Company admitted the claim of Rs. 8,07,110/- only. A deduction of 25.71% had been made in that case as under insurance. The Apex Court discussed this issue while answering question no. 2 in paragraphs 23, 24 and 25. The same is extracted hereinunder:
Re: Question (2)
23. In Dictionary of Insurance (2nd Edn.) by C. Bennett, "underinsurance" is explained thus:
"underinsurance occurs when the amount of insurance is less than the full value of property insured and means that the insured pays a smaller premium than that required as the rate is fixed on the basis of full values being insured. It leads to partial loss claims being scaled down by average (qv.)."
The expression "average" is explained thus:
"In non-marine property insurance if a sum insured is 'subject to average', and the sum insured is less than the value at risk at the time of loss, the claim will be reduced in the same proportion. The measure combats underinsurance."
24. As per the invoice, the diesel generating set and the alternator was purchased by the complainant in the year 1997 for Rs 45,25,000. The complainant, however, got the insurance cover valuing diesel generating set (Rs 26,00,000) and alternator (Rs 9,00,000), in all for Rs 35,00,000. Apparently, therefore, there is an element of underinsurance. There is merit in the contention of learned counsel for the insurer that the value of the item is always declared by the NC/FA/128/2010 Page | 53 insured at the time of issuance of the insurance policy while the element of underinsurance is calculated by the insurer at the time of assessment of loss.
25. Although on behalf of the complainant, it was contended that underinsurance, if any, must be calculated at the time of issuance of policy and could not be deducted at the time of assessment of the loss but we find it difficult to accept the same. The policy provides that if the sum insured is less than the amount required to be insured, the insurer will pay only in such proportion as the sum insured bears to the amount insured. In accordance with the said provision in the policy if the surveyor applied the pro rata formula and deducted 25.71% from the loss so assessed i.e. Rs 3,71,509.50 from the sum payable as underinsurance, such deduction cannot be faulted.
28. The observation with illustrations has been made by the Apex Court in the case of I.C. Sharma vs. Oriental Insurance Company Ltd., (2018) 2 SCC 76 paragraphs 8 to 11 extracted hereinunder:
8. The only legal issue which arises for consideration is "what is underinsurance -- and the effect thereof?" Underinsurance basically means that the insured has taken out an insurance policy in which he has valued the insured items for a sum which is less than the actual value of the insured item. In a country like India this is normally done to pay a lesser premium. This is, in fact, harmful to the policyholder and not to the Insurance Company because even if the entire insured property is lost, the policyholder will only get the maximum sum for which the property has been insured and not a paisa more than the sum insured. To give an example, in case a person takes out the householder policy covering fire insurance and gives the value of the structure of his house and goods stored therein at Rs 50,00,000 even though the value of the same is Rs 1,00,00,000 then even if the entire house and goods are completely lost in a fire, he cannot get an amount above Rs 50,00,000 even though the value may be more.
9. If all the insured goods are lost then there is no problem. The insured is entitled to the amount for which the goods were insured even if that be less than the actual value of the goods. In case a person gets a painting insured for Rs 1,00,000 though the value of the same is Rs 10,00,000, if the NC/FA/128/2010 Page | 54 painting is lost the insured is entitled to Rs 1,00,000 only. If all the insured goods falling under one head are stolen or lost then the insurance company cannot apply the principle of averaging out because, though the loss may be Rs 10,00,000, the claimant will get only one Rs 1,00,000 as per the value assessed and the insurance premium paid by him.
10. The Insurance Company can however apply the principle of averaging out when all the goods are not destroyed. Supposing the entire house was insured for Rs 50,00,000, but on valuation it is found that the value of the structure and the goods was Rs 1,00,00,000 and if the policyholder claims that he has suffered loss of Rs 40,00,000 then he will be entitled to only Rs 20,00,000, by applying the principle of averaging out.
What this means is that if the value of the goods is more than the sum for which they are insured then it is presumed that the policyholder has not taken out insurance policy for the uninsured value of the goods. The claim is allowed by applying the principle of averaging out i.e. the insured is paid an amount proportionate to the extent of insurance as compared to the actual value of the goods insured.
11. To clarify the matter further, we may give another example. Supposing, the insurer owns two paintings of Rs 5,00,000 each but pays premium for insurance cover of Rs 1,00,000 for both the paintings. If one painting is lost, even though the value of the painting may Rs 5,00,000 he will not get Rs 1,00,000 but will get only Rs 50,000, as proportionate amount. Therefore, when a group of items is insured under one heading and only some of the items and not all items are lost/stolen then the principle of underinsurance will apply. However, if all or most of the items of value covered under the policy are stolen, then the insurance company is bound to pay the value of the goods insured.
29. We will discuss these principles later on and at the moment it would be appropriate to deal with the adequacy of the quantum assessed by the Surveyor. Learned counsel for the complainant has filed written submissions and in paragraph 4(a) to (e) has urged as under:
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4. It is submitted that the Hon'ble State Commission erred in mechanically relying upon the surveyor's report without appreciating that the said Report suffers from patent, factual and technical errors, is contrary to the evidence on record and ignores material documents produced by the Appellant which are briefly as under:
a) The Surveyor despite computing the total loss to the tune of Rs.
59,90,713/-approved and assessed an amount of Rs. 22,67,576/- payable to the Appellant on the sole basis of assessing the value of a higher capacity, build and engine New DG set of 18V, 28/32S manufactured by a different company as 9,47 Crores, and applying the principle of underinsurance on the Appellant's DG set of 12V.
b) The Surveyor failed to appreciate that the manufacturer of the Appellant's DG set, M/s Wartsila itself had stated that the cost of a new model DG set was Rs.2.5 Crores excluding freight, packing, erection charges and taxes, and thus there was no occasion of taking the value of a New DG set manufactured by a different company of a much higher capacity, built and engine.
c) Admittedly, the value of the New DG taken by the Surveyor was of 18V whereas the Appellant's DG set was of 12V i.e. of a much less capacity, built having 6 less cylinders. Thus taking the value of a much higher capacity/different manufacturer's DG set is blatantly perverse, unreasonable, arbitrary and defies logic.
d) Without prejudice to the above, it is submitted that the Surveyor vide Reply dated 21.11.2006 before the State Commission stated that as per him the market value of the Machinery as on the date of accident was Rs. 4.73 Crores, however despite the same, applied the averaging in the Survey Report and computed the amount of Rs. 22.67 Lakhs on the basis of the new purchase value i.e. 9.47 Crores, and not on Rs. 4.73 Crore as per his own statement before the Ld. State Commission.
e) The State Commission and the surveyor failed to consider that the Respondent Insurance Company accepted the real market value of one DG set as Rs.3,72,20,991/- (7 years old) on the date of the execution of the NC/FA/128/2010 Page | 56 Insurance Policy and on the basis thereof accepted the premium, which was binding on the Insurance Co as per the legal principles enunciated by the Hon'ble Supreme Court. Hence, the Insurance company was bound by stipulation of the said figure and could not have questioned or disregarded the same.
The State Commission and the Surveyor wrongly applied/ accepted the principle of under insurance, contrary to and without considering the law laid down by the Hon'ble Supreme Court in Dharmendra Goel, (2008) 8 SCC 279 & Sumit Kumar Saha v. Reliance General Insurance, (2019) 16 SCC 370.
30. While narrating the brief facts in paragraph 10 has stated as under:
10. That the surveyor, Mr. Rajiv Dausage vide its Report dated 21.10.2003 /@30-52/ assessed the total loss as Rs.59.90,713/- however granted applied the principle of under-insurance/ averaging and computed an amount of Rs.22,67,568/- to be paid to the Appellant, despite noticing the below in the said Survey Report:
i. The type of DG set insured is 12V (32 Bore Size) [i.e. 12 Cylinder] manufactured by M/s Wartsila, purchased in the year 1996 and insured in the 2002-2003.
ii. That M/s Wartsila stopped manufacturing the said DG set of 12V. M/s Wartsila vide letter dated 10.08.2003 [ANNEXURE B] quoted the price of a new model DG set [12V (32 Bore Size)] as Rs. 2.5 Crores excluding freight, packing, erection charges and taxes. /@37/ iii. The Surveyor approached a different manufacturer who sold a DG set being 18V, 28/32S at a cost of Rs. 6.30 Crores. The Surveyor on basis of price of such New 18V DG set assessed the cost of a new DG set of 12V (owned by the Appellant & damaged in the fire) as Rs.9,47,64,750/- /@39/ by applying taxes, freight and other charges to the cost of Rs. 6.30 Crores.
This was despite noticing that M/s Wartsila vide letter dated 10.08.2003 had quoted Rs. 2.5 Crore as the cost of the DG set that was most related to the NC/FA/128/2010 Page | 57 subject matter of the case. [Annexure OP-76/R-34 at Pg. 63, State Commission] A Copy of the letter dated 10.08.2003 issued by M/s Wartsila is enclosed herein and marked as ANNEXURE B. iv. Based on the aforesaid figure of Rs. 9.47 Crores for a new DG set (albeit by a different manufacturer and admittedly of a much higher capacity, built and engine) the Surveyor came to the conclusion that since the sum insured for 1 DG set is Rs.3.72,20,991/-, hence the Sum Insured is under insured.
Note: The total loss was calculated by the Surveyor initially as Rs. 15,41,959/- (which was later corrected vide addendum dated 12.01.2004 to Rs.22,94,071/-).
31. Further in paragraph 14 of the written submissions, it has been averred as under:
14. The Surveyor vide its Affidavit dated 21.11.2006 filed before the Ld. State Commission stated as under:
"9. After thoroughly considering all the facts and documentary evidence furnished by the parties, I assessed the loss as under- i. Rs. 51,98,713/- For values of items which were to be replaced assessed after depreciation on account of their limited life. ii. Rs.8,00,000/-Labour charges (total Rs. 59,40,713/-only)
10. The insurer had opted the insurance of one DG set for Rs.3,72,20,991.61 where as he should have opted for Rs.9,47,64,750/-as justified by me on page 10 of my survey report. Since the insured had not opted insurance of DG set for adequate sum I applied average formula as per clause 2 of general conditions of the Fire Policy and assessed the loss at Rs.15,41,959/- according to this condition if the sum insured under the policy is less than the value of the property on the date of loss the amount of compensation payable would be proportionately reduced. The Formula adopted was loss assessed multiplied by sum insured divided by the Value of NC/FA/128/2010 Page | 58 Machine on the date of loss. This assessment of loss was based on Reinstatement clause in the policy....
12. As the insured had not carried out repairs of the D.G. set for more than 12 months from the date of loss. I also calculated the loss based on market value of the DG set on the date of loss. The market value of a new DG set on date of loss was Rs.9,47,64,750/. The damage DG set had been purchased in the year 1996-97, It was eight years old at the time of loss. I therefore assessed market Value of the damaged D.G. set at 50% i.e. at Rs. 4,73,82,375/- and taking this Value assessed the loss at Rs.22,80,138/."
Pertinently in Para 12 above, the Survevor himself assessed the market value of the DG set now at Rs. 4.73 Crores, however he had applied the averaging in the Survey Report and computed the amount of Rs. 22.67 Lakhs on the basis of the New purchase value i.e. 9.47 Crores and not on 4.73 Crores as per his own understanding.
Thus, the Appellant submits that without prejudice to the fact that value of the New DG set taken by the Surveyor for a different capacity, built and engine, and by a different manufacturer was manifestly perverse and unreasonable, even otherwise the Surveyor ought to have applied the principle of averaging on the value of Rs. 4.73 Crores as stated by him to be the market value in Para 12 of his Reply before the State Commission, and not on the figure of Rs. 9.47 Crores.
32. In the submissions in paragraph 18 and 19, it has been stated as under:
18. That the Surveyor fundamentally and blatantly erred in assessing the value of a 12V DG Set on the new value of a 18V DG set having a much higher capacity, built and engine being manufactured by a different manufacturer. This was despite the manufacturer of the Appellant's DG set, M/s Wartsila vide its letter dt. 10.08.2003 to the surveyor stating that the new value of the Appellant's DG set is Rs. 2.5 Crores.
Further, the Survey Report erred in not taking into account that the total loss assessed by the engineers of Wartsila India Ltd i.e. the manufacturer of the DG set was Rs.1,00,00,000/-. The Survey Report further erred in not considering that the damaged parts of the DG set were to be replaced and not repaired, as was decided in the Joint Meeting dated 23.07.2003.
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19. It is submitted that the DG sets were insured on the real value as accepted by the Respondent Insurance Company, and premium was duly paid on the said amount. Thus, as per the well settled legal position, the Insurance Co. was bound by stipulation of the said figure and could not have questioned or disregarded the same.
33. We may point out that while narrating the facts in the written submission and the grounds raised, learned counsel for the complainant seems to have nowhere reflected upon the following observations made by the Surveyor at internal page 10 of the report:
34. Apart from this, the complainant has nowhere questioned the exact calculations made in respect of the value of the items as detailed therein.
35. The calculation made by the Surveyor in the penultimate paragraph demonstrates that the total under writing liability was worked out to the tune of Rs. 59,90,713/-. Out of a salvage value approximately of Rs. 1,50,000/- was deducted and accordingly the liability was worked out to the tune of Rs. 58,40,713/-. The contention of the complainant is that a sum of Rs. 1 crore had been assessed earlier. The said assessment was an estimate that was NC/FA/128/2010 Page | 60 prima facie and an approximation, whereas the calculation made by the Surveyor is based on the estimates and quotations. The Surveyor has observed that this was based on the desire of the complainant for a payment on account basis, but all the items and their costs have been worked out by the Surveyor. The Surveyor has also indicated the change of rates in the currency and has also observed that he has worked out the calculations as per reinstatement basis.
36. The Surveyor has also indicated that the quotations received from M/s. Wartsila of the price of Rs. 2.5 crores is for a diesel generators excluding freight, packing, forwarding etc. It has been further clarified by the manufacturer that they have stopped manufacturing the engines of the type involved in the present controversy and that they are now manufacturing a different type of low nox engine. The quotation given is only the cost of the engine. As such the Surveyor obtained quotations from other different manufacturers of similar types of engines and it is on the said basis that the price has been compared and then in order to arrive at actual cost, the calculations have been made pegging it at Rs. 9,47,64,750/-. As against this, the complainant has opted for a sum of Rs. 3,72,20,991/- and it is for this reason that the Surveyor has applied the principle of under insurance.
37. Thus, in our opinion, we have not been able to find any fault with the method of calculation which appears to be rational and even credit worthy. The objections taken in the written submissions by the appellant on the calculations are therefore untenable.
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38. Apart from this, the Surveyor has filed his affidavit before the State Commission and the same has been extracted in the written submissions of the appellant in paragraph 14. The contention that the understanding of the Surveyor and having assessed the market value of the DG set also appears to be rational at 50% and then proceeded to value the assesses loss which, in our opinion, is appropriate, in as much as, the damaged DG set had been purchased in 1996-1997 and was almost 8 years old at the time of the loss. The submission of the appellant alleging an incorrect approach by the Surveyor is not founded on any rational basis and consequently having assessed the submissions raised on behalf of the appellant, we do not find the applicability of under insurance applied by the Surveyor to be contrary to any of the principles laid down by the Apex Court as discussed hereinabove, more particularly on the facts of the present case. The principle of applying average in the case of a partial loss as explained in para 10 of I.C. Sharma's case (supra) would apply in the instant case as the generator involved in the present case was partially impacted by the fire.
39. Unless the approach of the Surveyor can be said to be perverse or otherwise arbitrary, it will not be appropriate to disapprove the same merely because some other adjustment may have been possible. The Surveyor's report has to be given due weightage as we do not find any malafides attributed to the Surveyor or to his competence in proceeding to carry out the survey.
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40. We therefore do not find any flaw in the penultimate analysis so as to interfere with the impugned order dated 04.02.2010 passed by the Chhattisgarh State Consumer Disputes Redressal Commission.
41. The appeal therefore lacks merit and is accordingly dismissed.
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(A.P. SAHI, J) PRESIDENT .............................................
(BHARATKUMAR PANDYA)
MEMBER
Pramod/Vandana/Court-1/CAV
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