National Consumer Disputes Redressal
Oriental Insurance Co. Ltd. vs Sri Jyothi Enterprises & Anr. on 19 February, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CIRCUIT BENCH AT HYDERABAD, A.P. FIRST APPEAL NO.176 OF 2008 (Against the order dated 10.01.2008 in C.D. No. 68 of 2004 of the A.P. State Consumer Disputes Redressal Commission, Hyderabad) Oriental Insurance Co. Ltd. Divisional Office, Above SBH Office Shantipet, Ongole Through Chief Manager Oriental Insurance Co. Ltd. Head Office, A-25/27, Asaf Ali Road New Delhi-110002 Appellant Versus 1. Sri Jyothi Enterprises Dharavari Gardens Ongole, Prakasham District (A.P.) Through its Proprietor M. Koteshwar Rao S/o M. Venkata Subbaiah Near Kalyani Restaurant Near Hotel Urvasi International Ongole-523001 2. Branch Manager Syndicate Bank Ongole Respondents FIRST APPEAL NO.341 OF 2008 (Against the order dated 10.01.2008 in C.D. No. 68 of 2004 of the A.P. State Consumer Disputes Redressal Commission, Hyderabad) S. Jyothi Enterprises Dharavari Gardens Ongole Prakasham District Rep. by its Proprietor M. Koteshwar Rao S/o M. Venkata Subbaiah Appellant Versus 1. Oriental Insurance Co. Ltd. Rep. by its Senior Divisional Manager Divisional Office above SBH Office Shantipet, Ongole Andhra Pradesh 2. Branch Manager Syndicate Bank, Ongole Prakasam District Andhra Pradesh Respondents BEFORE: HON'BLE MR. JUSTICE ASHOK BHAN, PRESIDENT HON'BLE MRS. VINEETA RAI, MEMBER FA 176/2008 For Appellant : Mr. Ajay Singh, Advocate For Respondents : Mr. Mr. Sudheer Kumar, Advocate For Mr. K. Subba Rao, Advocate FA 341/2008 For Appellant : Mr. Mr. Sudheer Kumar, Advocate For Mr. K. Subba Rao, Advocate For Respondents : Mr. Ajay Singh Advocate Pronounced on 19th February, 2013 ORDER
PER VINEETA RAI, MEMBER
1. Two separate appeals, namely, First Appeal No. 176 of 2008 and 341 of 2008, have been filed by Oriental Insurance Co. Ltd. (Opposite Party No.1) and Sri Jyothi Enterprises (Complainant) respectively against the order dated 10.01.2008 of the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (hereinafter referred to as the State Commission) passed in CD No. 68 of 2004, partly allowing the complaint of the Complainant-Sri Jyothi Enterprises.
2. Since the facts and the parties in both First Appeals are common/similar arising out of the same consumer dispute, it is proposed to dispose of these appeals by one common order by taking the facts from First Appeal No. 176 of 2008, wherein Oriental Insurance Co. Ltd. is the Appellant and the Complainant-Sri Jyothi Enterprises and Syndicate Bank are the Respondents, and the parties will be referred to in the manner in which they were referred to in the complaint.
FACTS AS ALLEGED IN THE COMPLAINT :
3. Complainant-Sri Jyothi Enterprises, which is a propriety concern doing the business of tobacco purchase from 1994, had during the period 1998-99 and upto the first quarter of 2000 stored tobacco stocks worth Rs.36 Lakhs in a godown and this fact was confirmed by the Syndicate Bank i.e. Opposite Party No.2, with which the stocks were hypothecated and which prepared the inventory of stocks every month after verification. The stocks were also insured with Opposite Party No.1 (Oriental Insurance Co. Ltd.) under a Standard Fire & Special Perils Policy, for which the necessary premium was also paid. It was submitted that in the intervening night of 31.12.2000 and 01.01.2001 at about 3 a.m. the godown accidentally caught fire, as a result of which Complainant-Sri Jyothi Enterprises sustained a loss of Rs.40 Lakhs, which included tobacco bales and furniture lying in the office premises. This incident was immediately reported to the concerned police station, which registered a case of accidental fire for investigation. Complainant also informed Opposite Party No.1/Oriental Insurance Co. Ltd. on 1.1.2001 and requested it to conduct a survey to assess the loss. According to the Complainant, investigations by the police confirmed that the fire accident was caused by crackers being lit by people in the area to celebrate New Years eve. Opposite Party No.1/Insurance Company appointed a Surveyor to whom Complainant submitted all the relevant documents. Thereafter, another Investigator Sri Juber was appointed who also conducted a detailed survey and filed his report. On 6.6.2002 Opposite Party No.1/Insurance Company repudiated the claim on the grounds that the damage to the stocks had actually been caused when rain waters entered the premises on 23.8.2000 through holes in the roofing rendering the entire stocks without any market value.
Further, no stocks had been purchased after 1.4.2000 and, therefore, there was no loss caused in the fire. Being aggrieved by the repudiation, which according to the Complainant, was without any basis, Complainant resubmitted the claim to Opposite Party No.1/Insurance Company as per the inventory prepared by Opposite Party No.2/Syndicate Bank as also other relevant documents, including the fire certificate, which clearly indicated that an accidental fire was the cause of the loss of the stocks and it was not correct that the stocks had been damaged in the rain or that no new stocks were bought after 01.04.2000. Since Opposite Party No.1/Insurance Company did not take back the repudiation letter, being aggrieved Complainant filed a complaint before the State Commission on grounds of deficiency in service and requested that Opposite Party No.1/Insurance Company be directed to pay the Complainant a sum of Rs.40 Lakhs with interest @ 12% p.a. from the date of accident as also Rs.10 Lakhs for mental agony.
4. Opposite Party No.1/Insurance Company on being served filed a written rejoinder, in which it was stated that it was not a case of accidental fire because the management of the nearby situated Urvashi International Hotel had made it clear that no fire crackers were allowed in that area. It was reiterated that tobacco stocks had been damaged in the heavy rains in August, 2000 and the Complainant had deliberately started the fire in the godown to file a false insurance claim. It was further contended that the various invoices submitted were not genuine since they were not supported by any CST or related registration/documents.
5. The State Commission after hearing the parties and considering the evidence before it, including the reports of Surveyor and Investigator, concluded that Opposite Party No.1/Insurance Company has failed to establish that the fire was not accidental and was deliberately caused by the Complainant and, therefore, partly allowed the complaint. The case against Opposite Party No.2-Syndicate Bank was dismissed since it was a proforma party. So far as the compensation is concerned, the State Commission after deducting necessary depreciation of 20% and 25% and Rs.5 Lakhs being the stocks reportedly saved by the fire fighting services directed Opposite Party No.1/Insurance Company to settle the claim by paying Rs.26,86,208.60 ps. with interest @ 9% per annum from the date of repudiation till the date of realization within a period of six weeks together with costs. The relevant part of the order of the State Commission is reproduced:
Taking into consideration the material available on record, the survey report and investigator report and the bank statements and that there have been no purchases and sales from 1-4-2000 to 31-12-2000 and that the bank statement (EX.A2) Rs.4,18,195/- was shown as stock in process and Rs.35,90,703/- in finished condition as on 30-11-2000, we are of the considered view to meet the ends of justice, a depreciation of 20% on the packed bales and depreciation of 25% on the loose stock i.e. Rs.4,18,195/- x 25% = Rs.3,13,646.25 and Rs.35,90,703/- x 20% - Rs.28,72,562.40 and the total value of the stock after depreciation is Rs.31,86208.60 ps. and from this we deduct Rs. 5,00,000/- worth stock which the firefighting services have stated that they have saved and we arrive at Rs.26,86,208.60 ps. to be paid by Opposite Party No.1 with interest @ 9% p.a. from the date of repudiation i.e. 6-6-2002 till the date of realization together with costs of Rs.5,000/-. The complaint against Opposite Party No.2 is dismissed since it is only a formal party.
6. Being aggrieved by the above order, both parties filed these two first appeals.
7. Learned counsels for the parties made oral submissions.
8. Learned counsel for Opposite Party No.1/Insurance Company (Appellant in FA/176/2008 and Respondent No.1 in FA/341/2008) stated that the State Commission erred in concluding that the fire, which purportedly destroyed the stocks, was accidental because there is credible evidence on record that no fireworks or rockets were being lit in the vicinity of the insured premises, as clearly indicated by witnesses during the course of investigations conducted by both the Investigator and the Surveyor. On the other hand, since admittedly a fire did take place in the insured premises, this could only have been started by the Complainant to file a false claim in respect of tobacco stocks which had already been damaged during heavy rains three months prior to the fire incident in which the stocks got wet and contaminated and, therefore, had no market value. Counsel for Opposite Party No.1/Insurance Company further stated that the rain waters entered the godown through large holes in the roof of the godown and this is borne out by the photographs, which were filed in evidence before the State Commission. Counsel for Opposite Party No.1/Insurance Company has also brought to our notice a report of Tobacco Quality Appraiser stating that the value of the tobacco stored in the premises was much less than what had been projected by the Complainant.
9. Counsel for the Complainant (Respondent No.1 in FA/176/2008 and Appellant in FA/341/2008) on the other hand stated that the State Commission had rightly concluded that the stocks were damaged in an accidental fire and, therefore, the claim was wrongly repudiated. It was pointed out that the fact that the fire took place in the godown was clearly proved from the reports of the police and the fire department which confirmed after investigation that fire had broken out in the insured premises when people had been lighting fireworks in the vicinity to celebrate the New Years eve and one of the fire crackers appears to have entered into the godown resulting in the fire and consequent loss of the stocks. The statement purportedly made by the owner of Urvashi International Hotel to the Surveyor that he did not allow anybody to light fireworks in his hotel or around his hotel is not confirmed by any affidavit filed in this connection before the State Commission or any deposition to this effect before the State Commission and, therefore, has little evidentiary value. Further, both Surveyors had confirmed that a fire had taken place in the insured premises and apart from the purported statement from the Manager of Urvashi International Hotel, no tangible proof was submitted in any of the reports of the Surveyors that this was not an accidental fire.
Counsel for the Complainant stated that the State Commission despite ruling that the claim was wrongly repudiated erred in granting lesser compensation by deducting 20% and 25% on loose and bonded stocks respectively on account of depreciation as also Rs.5 Lakhs on the ground that firefighting services had been able to save stocks worth this amount. However, no such statement has been made in the certificate issued by the fire department or any other report to this effect.
10. We have carefully considered the submissions made by learned counsel for both the parties and have also gone through the evidence on record including the reports of the Surveyors and Investigator. The fact that the godown for storing tobacco used by the Complainant was insured with the Opposite Party No.1/Insurance Company under the Standard Fire & Special Perils Policy for Rs.40 Lakhs is not in dispute. It is also not disputed that a fire occurred on the intervening night of 31.12.2000 and 1.1.2001 in the premises destroying the stocks of tobacco stored there, following which Complainant lodged a claim which was repudiated by Opposite Party No.1/Insurance Company on the ground that the fire was not an accidental fire but was deliberately started by the Complainant to file a false insurance claim in respect of tobacco stocks which had no market value on that date since they had already got spoiled during rains that occurred three months prior to the incident. After carefully going through the various documents, including the report of the Surveyor and the Investigator as also the reports of the police and the fire department, we are unable to accept this contention of Opposite Party No.1/Insurance Company. Except for a statement purportedly made by the Manager of a nearby hotel to the Surveyor that no fireworks were being lit in the vicinity of the hotel on that date, there is no evidence to prove this fact. The Manager who made the statement has neither been produced as a witness before the State Commission nor has he filed any affidavit in confirmation of this fact. On the other hand, investigations by both the police and the fire department have clearly confirmed that a fire incident had occurred as a result of fireworks and rockets being lit by people in the area to celebrate New Years Eve i.e. 31st December, 2000. No doubt, the reports of the Surveyors are important documents and have to be relied upon if they are backed by credible evidence in support of their findings.
However, in the instant case, their findings are not backed by any such evidence and, therefore, are conjectural statements, which have not been proved by the person who reportedly made the statement and, therefore, have little evidentiary value. The report of the tobacco quality appraiser filed by Opposite Party No.1/Insurance Company to show that the value of the tobacco was much less than what was projected has also not been supported by any statement or affidavit to this effect and as it is well established that production of a document does not amount to proving the same. We, therefore, agree with the finding of the State Commission that the claim was wrongly repudiated by Opposite Party No.1-Insurance Co. and therefore First Appeal No.176/2008 filed by Opposite Party No.1/Oriental Insurance Company Ltd. deserves to be dismissed for the above reasons.
11. Regarding the compensation to be paid to the Complainant, after considering all the documents, including the bank statements and other documents, we agree with the State Commission that only stocks purchased prior to 01.04.2000 had been lying in the premises and, therefore, deducting 20% on packed bales and 25% on loose stocks as depreciation is reasonable. However, we do not agree with the order of the State Commission, deducting a further amount of Rs.5 Lakhs on the ground that stocks worth this amount had been saved by the firefighting services because there is no such evidence or statement, including the certificate by the fire department or the police to this effect and, therefore, set aside this part of the order.
12. To sum up, we agree with the finding of the State Commission that the claim was wrongly repudiated by Opposite Party No.1-Insurance Co. and uphold the same and, therefore, dismiss First Appeal No.176/2008 filed by Opposite Party No.1/Oriental Insurance Company Ltd. However, First Appeal No.341/2008 filed by the Complainant is partly allowed for the reasons stated in para-11 of the order. Opposite Party No.1/Insurance Company is accordingly directed to pay Complainant Rs.31,86,208.60 ps. with interest @ 9% p.a. from the date of repudiation i.e. 6.6.2002 till the date of realization and cost of Rs.5,000/- within a period of six weeks from the date of issue of this order.
Sd/-
(ASHOK BHAN, J.) PRESIDENT Sd/-
(VINEETA RAI) MEMBER Mukesh