National Consumer Disputes Redressal
Narain Cold Storage And Allied ... vs Oriental Insurance Co. Ltd. on 13 August, 2003
ORDER
B.K. Taimni, Member
1. Complainant, Narain Cold Storage & Allied Industries Ltd., have filed this complaint alleging deficiency in service on the part of the Opposite Party, M/s. Oriental Insurance Company.
2. Undisputed facts of the case are that the complainant had a valid fire Policy 'C' obtained from the Opposite Party for the period 1.9.93 to 31.8.94 for Rs. 25 Lakh - Rs. 10 Lakh for Building, Rs. 10 Lakh for Machine & Accessories and Rs. 5 Lakh for Racks and Insulation. On 11.4.94, there was fire in the cold storage. Fire Brigades came and extinguished the fire. F.I.R. was lodged and OP was notified of the episode. Spot Surveyor M/s. S.M. Gupta visited the spot on 13.4.94 and after protracted correspondence and several rounds of discussions submitted a report dated 4.1.95 to the Op recommending settlement of claim at Rs. 97,061/-. The loss was got reassessed by a second surveyor, namely, K.D. Kohli & Company appointed by the Opposite Party on 1.3.95, who submitted his report on 4.4.95 assessing the loss at Rs. 1,30,921/-. This assessed loss was against the complainant's estimate of loss placed at Rs. 19.95 lakh with the following break-up:-
3. When the claim was not getting settled, the complainant, after issuing a legal notice, which also did not help settle the claim, has filed the complaint before us, making the following prayers:
"a. Award a sum of Rs. 20,00,000/- (Rupees twenty lakh) towards the claim amount lodged by the complainant company with the respondent insurance company for the damages caused to premises on account of FIRE.
b. Direct the respondent insurance company to pay to the complainant company a sum of Rs. 5,00,000/-calculated w.e.f. 11.4.94 towards the loss and damage suffered by the complainant company for the breach on part of the respondent insurance company & to direct to insurance company to continue making such payment at the rate of Rs. 20,000/- per day till such time the claim of the complainant is finally settled in favour of the complainant.
c. award the costs of the case.
d. Any other relief(s) which this Hon'ble Commission may deem fit, just, proper and expedient under the facts and circumstances of the case be awarded to the complainant company."
4. Written version was filed by the Opposite Party starting with usual pleas, that the complaint is not a consumer, dispute involves complicated question of law and fact - hence should be dealt in by a civil court, claim is fraudulent as it is highly exaggerated on Merits undisputed facts enumerated earlier in the complain are admitted, but it is stated that any delay in settlement of claim is on account of non cooperation by the complaint of which the 1st Surveyor's report and correspondences on record bears ample testimony Surveyors are appointed under a statute and there are two reports on record. Opposite (SIC). Pay the insured:
(a) value of property at the time of happening of its destruction; or
(b) amount of such damage; or
(c) re-instate or replace such property or any part thereof.
5. Those alternative should be used interchangeably. Replacement costs has to worked out at current cost without taking of depreciation etc. and thirdly, deductions made under the head 'Under-insurance' are not applicable in the case as it forms of the 'proviso 's' of the terms of policy which read as under:
"Provided that the liability of the company shall in no case exceed in respect of each item the sum expressed in the said schedule to be insured thereon or in the whole the total sum insured hereby, or such other sum or sums as may be substituted thereof by memorandum hereon or attached hereto signed by or such other sum or sums as may be substituted thereof by memorandum hereon or attached hereto signed by or on behalf of the company."
6. Report of the Surveyor is arbitrary and at no stage they discussed the issue relating to assessment of loss with the complainant. The figure of loss estimated by the second surveyor without deduction for under-insurance would be acceptable to the complainant. Rate of interest on the amount which the Commission finally decides to grant, should be 18% p.a. as the complainant is paying this rate of interest. Complainant is also entitled to damages as claimed / prayed for in the complaint for loss of business for not settling the claim within a reasonable time. For this he relies on 11(1992) CPJ 354 (MC) 11(1993) CPJ - 150 (MC) and order passed by this Commission in FA 63 / 2001. On the other hand, it is argued by the Learned Counsel for the Opposite Party that the Surveyors are appointed under the law whose report is an important document and has to be given great importance. For that he relies on judgement of the Hon'ble Supreme Court in New India Assurance Company v. Roshan Lal Oil Mills - (2000) 10 SCC 19. IN the present case delay in settling the claim has been on account of complainant's non-cooperation, which has been recorded by the 1st Surveyor in his report Ops were willing to settle the claim but instead of complying with the conditions laid down it decided to knock the doors of the Commission. As per order of the Commission recorded amount has been paid alongwith (SIC) Court is now allowing interest only @8% p.a. After the payment heaving been made nothing survives the complaint needs to be dismissed.
7. We have heard the arguments and perused the material on records. Basically the controversy boils down a case to the quantum of loss / indemnification dispute. Case of the complainant is that he is entitled to Rs. 19.95 lakh (as per its letter dated 4.5.94), Rs. 20.01 Lakh (as per letter dated 1.7.94, based on loss estimated by New Pearl Insulation, M/s. Tomar & Associates & M/s. Gupta Electricals, New Delhi) Rs. 22.25 Lakh (As per estimates prepared by M/s. Super Breeze Food Tech Consultants Ltd.) and Rs. 25.55 Lakh (as per estimates prepared by M/s. A.K. Gupta Government Approved Valuers. On record also we see the same M/s. Gupta estimating the loss at Rs. 19,79,959/- on 10.6.94) Rs. 13,72,464.90 (estimated loss by Abhimanyu Bhatia & Associates as on 30.7.2003) and finally a valuation report of damages by Er. R.L. Piplani who estimate the loss at Rs. 8,32,793/-. So much for the proof of loss estimates advanced by the complainant. These verigated estimates notwithstanding, when we see the prayer it is for grant of Rs. 20 lakh for the damages caused by fire but if we see para 39 of the complaint the rationale propounded for such a claim is loss of Rs. 20,000/- per day w.e.f. 11.4.94 for the period the cold storage remained closed and Rs. 5 lakh for 'inaction on the part of Opposite Party insurance Company.' All these varying figures lead us to think that the complainant has no idea as to how to project his case. Rationale for the prayed for amount is perhaps ignorance - but subsequent flip-flop appears to indicate that the complaint is not finding any firm ground to stand on hence the varying figures.
8. First point raised by the complainant is that report of loss of the surveyor is against the terms of contract. No proof or evidence has been advanced to show us any thing in support of this plea except to state that he should have been taken into confidence. Record shows that he was taken into confidence from 13.4.94 onwards. It is the complainant who did not supply or supplied late the asked for information in full. It is on record as part of the report of Surveyor that Mr. Uppal would cancel meeting with the surveyor after fixing (SIC) Correspondence exchanged between the Surveyor. Complamant and Ops is proof enough that there was interaction between the parties. As far as second point is concerned, it is settled law that purpose of the insurance is to indemnify the loss to re-instate the damaged property as it was at the time of (SIC) This is a tested proposition. Third point raised appears to be very strange coming as it is from the Learned Counsel. Plea that since some part is mentioned in the Proviso hence that provision is not applicable. Provision are part of the clauses of any statues / terms and conditions and have to be read together in a homogeneous and harmonious manner. The complainant has also failed to show as to how the reports of the Surveyors are arbitrary. There is a detailed report on the estimates of loss. Current prices have been estimated at a certain cost of CPWD current schedule of rates (CSR) and value of property, Building, machinery ets. arrived at after depreciation, from which deduction are made for under insurance. These are as per terms of Policy and as per existing Insurance practices. The complainant would have been entitled to estimated loss without any deduction had he not under insured. This had not been challenged backed by anything by way of ruling / judgement to the contrary. The only point made at the time of arguments on 28.12.2002 was challenging the basis of costing. We have recorded vide our order dated 28.10.02.
'We have heard the arguments for some time.....Mr. Singh (L.C. for the complainant) has further referred to the report of K.D. Kohli & Co. (pp 121 - 122 ) where case of construction has been given. He states that cost has unnecessarily been raised without any basis. He wants time to bring on record on affidavit the prices as were at that time given in the CPWD Schedule.....'
9. Hearing was adjourned and opportunity was given to the complaint to make good his statement. After the complainant filed two affidavits - one on 10.1.2003 and the other on 7.8.2003. Both of these fail to satisfy us on the point made by the L.C. of complainant. In both these affidavits there is no mention of any costing by CPWD Schedule. As per the complainant's affidavit CPWD schedule does not give the cost of construction per sq. ft. With the second affidavit, also enclosed are two more loss estimates Rs. 13,72,464.90 by Abutmany Bhatia and another for Rs. 9,32,793/- by one Er. R.L. Piplani. Complainant completely failed to satisfy us with the material, for which he sought an opportunity from us. It is not that the CPWD - CSR was not available. It would have required effort to work out per sq. ft. cost of construction based on CSR. IN spite of opportunity this was not done hence in out view the complainant has not been able to substantiate or back up his plea that loss estimated by Surveyor was faulty in any manner. As held by the Hon'ble Supreme Court in New India Assurace Co. v. Roshan Lal Oil Mills (Supra), Surveyor's report is an important document which cannot be brushed aside easily. Complainant has not produced any material to the contrary to not to rely upon the report of the Surveyor. We have no hesitation in accepting the report of the 2nd Surveyor, Mr. K.D. Kohli.
10. Two additional points have been raised by the L.C. of the complainant - one on the rate of interest and other deficiency by way of delayed settlement. There is no dispute that period of incidence relates to the year 1994, when the interest rate was high. In similar cases, we have awarded 12% p.a. rate of interest. In the present case also awarded amount shall carry rate of interest @12% p.a. from 1.3.1995, i.e., from two months after receipt of the report of first surveyor till the date of payment already made.
11. IN the present case, incident of fire occurred on 11.4.94 and the case was not settled till it was ordered to be done by this Commission. Nothing prevented the OP to send a cheque with interest to the complainant when it decided to settle the claim. We have severally held that not settling the claim within a reasonable time by the insurers, itself amount to deficiency. Learned Counsel for the complainant had given these citations (supra). Not settling the claim for seven long years is a clear case of deficiency for which the complainants shall be entitled to compensation of Rs. 50,000/-.
12. Admitted position is that the OPs have already paid the awarded amount alogwith interest @9%. Difference thus p ayable on account of interestt @12% shall be worked out by the OP within four weeks of the order from 1.3.1995 upto the date of payment already made.
13. The complaint is allowed in above terms alongwith costs of Rs. 5,000/-. payable by the OP to the complainant. All these amounts shall be paid within six weeks of the order failing which interest shall start accruing @15% p.a. after the expiry of this time frame.