State Consumer Disputes Redressal Commission
M/S.United India Insurance Co. ... vs D.N.Rumesh Babu,No.150, Gandhi Road, ... on 30 March, 2011
BEFORE THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI (BENCH II) Present: Thiru.A.K.Annamalai, M.A., M.L., M.Phil., Presiding Member Judicial Tmt.Vasugi Ramanan, M.A., B.L., Member F.A.No.739/2008 [Against order in C.C.No.37/2006 on the file of the DCDRF, Krishnagiri] WEDNESDAY, THE 30th DAY OF MARCH 2011. M/s.United India Insurance Co. Ltd., MM Reddy Complex, Old Bangalore Road, Hosur, Krishnagiri Dist. .. Appellant/Opposite party Vs. 1. D.N.Rumesh Babu, S/o.Desai M.Nrasimhan 2. D.N.Mohanasundaram, S/o.Desai M.Narasimhan Both are residing at : No.150, Gandhi Road, Denkanikotta Road, Krishnagiri District .. Respondents/Complainants. The Respondents as complainants filed a complaint before the District Forum, Krishnagiri, alleging deficiency against the opposite party to pay a sum of Rs.19,50,000/- with interest from the date of complaint till realization and costs. The District Forum, allowed the complaint against the opposite party. Against the said order, this appeal is preferred by the opposite party, praying to set aside the order of the District Forum, Krishnagiri, dated 17.04.08 in C.C.No.37/2006. This appeal coming before us for hearing finally on 16.3.2011, upon hearing the arguments of the counsel on both sides, and perused the documents, written submissions as well as the order of the District Forum, this Commission made the following order :- Counsel for the Appellant/opposite party : Mr.K.S.Narasimhan, Advocate. Counsel for the Respondents/complainants : Mr.K.Ganesan, Advocate, ORDER
A.K.ANNAMALAI, PRESIDING MEMBER JUDICIAL
1. The opposite party is the appellant.
2. The complainants/respondents filed a complaint against the opposite party claiming for compensation due to the fire accident in their factory on the basis of the insurance policy claiming for Rs.21,00,000/- restricting to Rs.19,50,000/- with interest and for cost.
3. The complainant have stated in their complaint that they insured the industry for a sum of Rs.21,00,000/- with the opposite party on the policy with the provisions for the loss of Rs.8,00,000/- towards building Rs.5,00,000/- each towards raw materials finished goods and machinery and when the policy was in force on 25.8.05 at about 1.30 pm when the lorry carrying the raw materials entered in to the premises due to the heavy wind there was spark from the top of the electric wire and the coir loaded on the lorry got fire and spread in to the entire premises and the finished goods as well as other raw materials got burnt and became ash. Immediately police complaint was given and three fire engines extinguished fire in six hours. Thereupon the claim was made for payment of Rs.21,52,245/- on 27.9.05 with the opposite party and for which on 30.5.06 they offered to settle the same for Rs.1,32,948/-.
Hence the dispute is only regarding the quantum of damages and the complainants have produced all the documents necessary for the claim and produced the approximate value of the building from the competent person and the opposite party wantonly and deliberately refused to pay for the damages and therefore the complainants have come forward with the complaint seeking relief as stated above.
4. The opposite party filed its version in which they denied the allegations of the complainants and stated that the claims are exaggerated by producing false documents and as per the survey report only a sum of Rs.1,32,948/- is the amount eligible for settlement of claim which was offered to the complainant.
But they have not accepted for the same and the opposite party has bound to settle the claim as per the terms and conditions of the insurance company.
5. On the basis of materials placed by both parties, the District Forum after an enquiry allowed the complaint by directing the opposite party to pay a sum of Rs.17,55,000/- within the period of 6 weeks from the date of the order failing which with 9% interest.
6. Aggrieved by the order of the District Forum, the appellants have come forward with this appeal and in the grounds of appeal among other things it is contended that the District Forum failed to note the surveyors report which was based on expert analyzed book value of the raw materials like coir, fiber rope and test particles which was estimated only for Rs.80,939.20, against the claim of Rs.8,06,310/- and Rs.9,000/- against machineries for Rs.44,000/- and Rs.80,160/- against for building, against the claim of Rs.7,94,000/- and the District Forum wrongly allowed the claim for Rs.17,55,000/- and appeal to be allowed.
7. While considering both sides contentions, averments and upon perusal of the records it is not in dispute that the complainants are having a fire policy along with other claims for the industry mainly concerned with the manufacture of coir goods to the extent of Rs.20,00,000/- under the policy with the opposite party and at the time of claim there was a fire accident in the premises even though initially the opposite party not accepted the same.
But the investigator report Exhibit B5 admitted the same. The claim of the complainants as per the Exhibit B1 claim form and Exhibit A3 and B8 the claim was originally made for Rs.21,52,846/- against the policy value of Rs.21,00,000/- in which the details are mentioned. Claiming Rs.7,94,000/-
for building against Rs.8,50,000/-.
Rs.8,06,310 for coir, fiber, raw materials against the value of Rs.8,25,000/- and Rs.5,08,536/- for finished goods against Rs.5,40,000/- and Rs.44,000/- for machinery against Rs.48,000/- in all for Rs.21,52,846/- and the complainants have also produced purchase bills as per Exhibit A4 and stock book Exhibit A5 the income tax assessment order Exhibit A6 and building estimate as Exhibit A7 which are also not in dispute that the opposite parties offered a sum of Rs.1,32,943/- only as per Exhibit B7 and A16. The appellants have offered that amount on the basis of the surveyors report Exhibit B4 done by one Rank Associates and on the basis of the investigator Report Exhibit B5 in which the fire accident was accepted as a true one and in Exhibit B5 it was stated the claimants produced bunch of purchase bills which are not confusing and admissible and the purchase bills or in the name purchaser do not gave the signature of the seller and there is no authenticated document to prove the actual purchase. The Stock Register also indicates similar irregularities. In the Rank Associates Report in Exhibit B4 also under the caption regarding the comments about the maintenance of records in para 8 it is pointed out that there was a discrepancy regarding the monthly purchase with reference to earlier financial statements and the value and contradictory on the higher side and it was also stated a note book claimed to be as stock register in which page number starts from 5 and pages 1 to 4 were found torn and removed and does not appeared to be maintained as a regular one and the note book cannot be considered as a stock register and missing of first 4 pages also makes the note book unreliable.
From those details relating to the stock book and other particulars regarding the existence of raw materials finished goods etc., the opposite party claim that they are either exaggerated or falsified for the purpose of higher claim from the insurance company which cannot be brushed aside. But at the same time whether the values verified by the opposite party on the basis of Exhibit B4 to grant only a sum of Rs.1,32,999/- is to be a proper one is a point to be considered. While perusing the surveyors report Exhibit B4 in which the stockyard building stated to be two years old and the depreciation of Rs.4,528/- at 4% was worked out and accordingly the machinery value also worked out for Rs.4,888/- along with building and the damaged bricks recovered as salvage mentioned as only for Rs.1,000/- and from the machinery for building gross assessed loss was mentioned as Rs.1,13,200/- and after reducing the depreciation and salvage mentioned as Rs.1,07,672/- and for the machinery mentioned as Rs.7,640/- in all total net assessed loss on stocks and buildings comes to Rs.1,96,252/- and regarding the building the statement shows the market value of the building with stock yard, labour quarters, office plant 1 and 2 and stores to the value of Rs.16,48,815/- and after depreciation value for two years, market value of the building mentioned as Rs.15,82,862/- for which for a sum of Rs.8,00,000/- was insured which is said to be inadequate as far as the insurance is concerned. But the complainant has submitted Exhibit A7 from a competent civil engineer regarding the damaged works under taken for the building due to the fire accident to the value of Rs.6,76,770/- and this report was not disputed by the opposite party and apart from the damaged work an additional work for betterment to prevent fire for a sum of Rs.1,17,115/- was mentioned in all a sum of Rs.7,94,000/- was spent towards building and the building worth as accepted by the opposite partys surveyors report in Exhibit B4 is for more than Rs.15,00,000/- after depreciation for two years for which it is recommended for more insurance amount since the complainant insured only for Rs.8,00,000/- towards the value of insurance for the building. But as per the Exhibit A7 competent Civil Engineer issued the detailed report along with breakup figures regarding the works for the repair of damaged building due to the fire accident to the extent of Rs.6,76,770/- and the report was not disputed by the opposite party. But in the surveyor report as per Exhibit B4 the entire claim towards the building was rejected and there is no reason why the details of Exhibit A7 was not taken into account except to state that the gross assessed loss on building is for Rs.1,13,200/- and after depreciation and salvage the value mentioned as Rs.1,07,672/- and by taking into the same with proportionate to the amount adjusted loss was mentioned as Rs.54,418.89 and total adjusted loss on building and net assess loss of stock and machinery worked out to Rs.1,42,999/- and excess policy amount applicable for each and every claim at the rate was adjusted for Rs.10,000/- and thereby coming to the net computed loss as Rs.1,32,999/- which cannot be considered to be a proper one. Hence we consider that while computing the loss and damages due to fire accident the probable loss towards the building for which damaged repairs were taken up to the extent of Rs.6,76,770/- to be granted to the complainant and also since there is no reliability of records regarding the loss of stock relating to raw material finished goods etc., the assessed value by the surveyor as in Exhibit B4 to the extent of Rs.80,939.52 apart from the revised value of the loss of machinery to the extent of Rs.9,000/- are all to be allowed under the policy to the complainant and thereby we estimate the loss sustained by the complainant in all as follows :-
a) Loss for damages to the building Rs.6,76,770.00
b) Loss of raw materials finished goods etc, Rs. 80,939.52
c) The value of damaged machinery Rs. 9,000.00
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Rs.
7,66,709.52
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-
The complainant is entitled for the above amount. The District Forum while awarding compensation by taking in to the claim made by the complainant in toto and by reducing 10% from the same awarded the compensation for Rs.17,55,000/-without going into the facts and circumstances of the case and as per the basis of surveyors report. The learned counsel for the complainant relied upon the following rulings reported in,
(i) II (2007) CPJ page 122 (NC), in which it is awarded for the loss of stock, damaged building and machinery with interest.
(ii) 2010 (4) CPR page 85 (NC), in which it is stated finished products also come within the purview of fire insurance policy.
(iii) 2010 (4) CPR page 164 (NC) in which it is stated even in case the claimant with insured raised inflated claim if he has not been able to substantiate or in the next of insurance exaggerated or based on some doubtful material like bills etc., In that situation insured should not be non suited altogether even a part of claim which company has itself found to be genuine or beyond suspicion. On the basis of those rulings also we consider as worked out above the complainant is to be compensated under the policy covered for the damages to the complainant and thereby to that extent the complaint should be allowed by modifying the order of the District Forum.
9. In the result, the appeal is allowed in part, by modifying the order of the District Forum, Krishnagiri in C.C.No.37/2006 dated 17.04.08 is as follows :-
(a) The opposite party is directed to pay a sum of Rs.7,66,709.52 to the complainant as the claim of the insured amount.
(b) Time for compliance two months from the date of this order failing which for the same complainant is entitled to 9% interest award.
(c) The opposite party shall pay a sum of Rs.3,000/- towards cost to the complainant and
(d) There will be no order as to cost in this appeal.
VASUGI RAMANAN A.K.ANNAMALAI, MEMBER PRESIDING MEMBER JUDICIAL INDEX : YES / NO sg/B-II/aka//United Ind.Ins.