State Consumer Disputes Redressal Commission
The Oriental Insurance Co. Ltd. vs Sh. Tarender Singh Rana And Another on 20 July, 2006
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARANCHAL - 5 - STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARANCHAL DEHRA DUN FIRST APPEAL NO. 259 / 2005 The Oriental Insurance Co. Ltd. ......Appellant Versus Sh. Tarender Singh Rana and another .....Respondents Sh. Niranjan Prakash, Learned Counsel for the Appellant Sh. Pradeep Barthwal, Learned Counsel for the Respondent No. 1 Sh. Shardul Negi, Learned Counsel for the Respondent No. 2 Coram: Hon'ble Justice Irshad Hussain, President Surendra Kumar, Member Ms. Luxmi Singh, Member Dated: 20.07.2006 ORDER
(Per:
Mr. Justice Irshad Hussain, President):
This is insurer's appeal under Section 15 of the Consumer Protection Act, 1986 against the order dated 01.10.2005 passed by the District Forum, Chamoli, Gopeshwar directing the insurer - appellant to indemnify the insured - complainant for the amount of loss to the tune of Rs. 59,931/- together with interest @5% p.a. from the date of filing of the complaint and also to pay Rs. 1,000/- as costs of the litigation.
2. Complainant took shopkeeper policy for a sum of Rs. 1,50,000/-. Policy was valid from 13.02.2004 to 12.02.2005. In the midnight of 23/24.09.2004, fire broke out in the shop due to short circuit of refrigerator and items of the grocery and daily need were burnt besides the furniture in the shop. These facts are not in dispute.
3. Insurer deputed surveyor and loss assessor Sh. Mohit Agarwal who submitted his report dated 20.12.2004 (Paper Nos. 22 to 24) and assessed the net loss for which the complainant could have been indemnified at Rs. 22,995/-. Complainant did not agree to receive the said amount on the ground that the loss assessed was inadequate and he preferred claim for higher amount which was repudiated by the insurer. Hence complaint was filed. In the complaint, compensation of Rs. 1,50,000/- together with interest @18% p.a. for the loss of goods; Rs. 40,000/- for financial loss and mental agony and Rs. 10,000/- as expenses of the litigation were claimed.
4. The complaint was resisted by the insurer on the ground that the surveyor and loss assessor correctly estimated the net loss because the items such as soap, shampoo, talcum powder and other grocery items were not totally burnt but the packings were damaged due to fire and smoke.
5. The District Forum made an appreciation of the material on record and opined that the complainant had not maintained any stock and sale register and, therefore, the claim for Rs. 1,50,000/- was not justified and was excessive. The District Forum also did not accept the net loss assessed by the surveyor, although accepted the value of total stock in the shop as of Rs. 56,431/- as verified by the surveyor in the above report and also cost of wood and rack assessed at Rs. 3,500/- by the surveyor but rejected the deductions made in regard to the salvage value of the damaged items @45% amounting to Rs. 25,394/-; average sum for loss of the furniture per average clause of the policy and also the excess clause for sum of Rs. 10,000/- and came to the conclusion that the complainant was entitled to be indemnified for sum of Rs. 59,931/- (Rs. 56,431.00 + Rs. 3,500.00 = Rs. 59,931.00) and allowed the complaint with costs as stated above.
6. We have heard the Learned Counsel for the parties and have considered their submissions in the light of the material on record. Learned Counsel for the insurer conceded that the excess clause of Rs. 10,000/- may not be enforced but urged that the District Forum fell in error in not taking into account the salvage value of the damaged items and also the fact that under the average clause of policy, the loss to the furniture by fire was only to the tune of Rs. 1,958/-. On the other hand, Learned Counsel for the complainant submitted that the surveyor had made a deduction in regard to the salvage at a very high rate of 45% of the total stock and further when the furniture, fixture, racks and counter were insured for a sum of Rs. 15,000/-, the cost of repair of these items or at any rate the damages could not have been assessed for any sum less than Rs. 3,500/- by applying average clause of the policy. According to the Learned Counsel for the complainant, the District Forum was justified to ignore the deduction of 45% for the salvage value of the items and further to permit indemnification for the amount of Rs. 3,500/- for damaged furniture. Considering the totality of the circumstances of the case, we cannot ignore the factual aspect that grocery items were not fully burnt or damaged but their packings were blackened due to fire and smoke and these items could very well be sold with a rebate. In our view, the District Forum fell in error in not making suitable deduction for the salvage value of the damaged items. Considering the brand items such as soap, shampoo, talcum powder etc., the deduction to the tune of 45% of the total stock in the shop towards salvage value of the damaged items, however, appear unjust and excessive. The reason being that the packings, labels etc. of grocery items have their own significance so far as the marketability of such items is concerned and when the packings were damaged or blackened due to fire and smoke, the grocery items like soap, shampoo etc. were likely to fetch much lower price. Considering this aspect of the matter, we are of the view that the deduction to the tune of 20% towards salvage value of the damaged items could be sufficient instead of 45% as made by the surveyor in his above report.
7. So far as the loss of the furniture and rack etc. is concerned, we cannot ignore the average clause No. 9 of the policy of insurance and, therefore, the cost of repair of wood and racks at Rs. 1,958/- was rightly calculated by the surveyor and the complainant was not entitled to be indemnified for sum of Rs. 3,500/- under this head. Therefore, the net amount of loss for which the complainant can be held entitled to be indemnified will be as below:
(a) Value of total stock in the shop - Rs. 56,431/-
(b) Less salvage value of the damaged items @20% - (-)Rs. 11,286/-
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Rs.
45,145/-
(c) Cost of repair of the wood and racks - Rs. 1,958/-
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Net
Loss Rs. 47,103/-
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8. For
the reasons aforesaid, we are of the considered view that the complainant was entitled to be indemnified for the amount of loss to the tune of Rs. 47,103/- only and that the District Forum fell in error in assessing the loss to the extent as observed above. Since the claim was repudiated in toto by the insurer, there was deficiency in the service and the complaint was fit to be allowed only to the said extent. In view of above, this appeal succeed partly and the order of the District is to be modified to the said extent.
9. In view of above, appeal is partly allowed. Judgment and order dated 01.10.2005 of the District Forum is modified to the extent that the complainant is held entitled to be indemnified for sum of Rs. 47,103/- along with interest @5% p.a. from the date of filing of the complaint till the date of actual payment and Rs. 1,000/- towards costs of the litigation. Costs of the appeal are made easy.
(MS.
LUXMI SINGH) (SURENDRA KUMAR) (JUSTICE IRSHAD HUSSAIN)