State Consumer Disputes Redressal Commission
United India Insurance Company Ltd. vs M/S Ram Sarup Subhash Chander on 22 April, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH
1st Additional Bench
FIRST APPEAL NO. 741 OF 2010
Date of Institution: 05.05.2010
Date of Decision: 22.04.2014
United India Insurance Company Ltd., Regional Office, SCO - 123-
124, Sector 17B, Chandigarh through its duly constituted attorney.
.....Appellant
VERSUS
M/s Ram Sarup Subhash Chander, Village Pul Pukhta, P.O. Miani
Urmar Tanda, District Hoshiarpur through its partner's Subhash
Chander.
.....Respondent/Complainant
First Appeal against the order
dated 1.4.2010 passed by the
District Consumer Disputes
Redressal Forum, Hoshiarpur.
Quorum:
Sh. Baldev Singh Sekhon, Presiding Member
Sh. Jasbir Singh Gill, Member Present:
For the appellant : Sh.D.K.Dogra, Advocate
For the respondent : Ex-parte
BALDEV SINGH SEKHON, PRESIDING MEMBER
This appeal has been filed by the appellant on behalf of opposite party against the order dated 1.4.2010 passed by the District Consumer Disputes Redressal Forum, Hoshiarpur (in short "District Forum"), vide which the complaint filed by the respondent was accepted and the opposite party was directed to make the balance payment of Rs.68,600/- (Rs.1,26,181-Rs.57,581/-) with interest @ 9% per annum from the date of complaint i.e. 23.9.2009 till the payment. First Appeal No. 741 of 2010 Page 2 of 7 The opposite party was further directed to pay Rs.1,000/- as cost of the litigation.
2. The facts, as stated in the complaint, are that the complainant firm got installed a Surya Electro Control make, 400 KVA, transformer in its premises, which was insured for Rs.6,00,000/- with opposite party, vide cover note No.777937 that was valid from 11.9.2008 to 10.9.2009. On 18.1.2009, all of a sudden, the said transformer ceased to operate and the burning smell and smoke started coming out of it. The electrician on duty immediately disconnected the supply from the main pole to save any further loss to it. The matter was reported to the opposite party. The spot inspection was got carried out by it from a surveyor. After obtaining consent of the opposite party, the transformer was sent for repairs to M/s Surya Electricals, Ludhiana and an amount of Rs.1,22,096/- was spent by the complainant firm on its repairs. It was further pleaded that the insurance claim was lodged with the opposite party and the repair bill, alongwith other requisite documents, were supplied to it. However, Sh.Arun Mehta, Surveyor of the opposite party, assessed the loss to the tune of Rs.58,147/-, which was on the lower side. The opposite party sent a cheque dated 25.6.2009 for Rs.57,581/- as insurance claim, which was received by the complainant under protest. In the complaint filed before the District Forum balance amount of the repair bill was claimed.
3. The opposite party filed written reply in which it was denied that the transformer was sent for repairs with its consent. It was rather First Appeal No. 741 of 2010 Page 3 of 7 pleaded that Sh.Arun Mehta, Surveyor and Loss Assessor assessed the loss to transformer as Rs.58,147/-. The depreciation was charged on the transformer oil as it had a limited life. It was pleaded that the complainant did not supply the log book of transformer or the record pertaining to its previous breakdowns to the Surveyor. Therefore, the opposite party was unable to further compensate the complainant.
4. The parties led their evidence by way of affidavits and documents and the District Forum, after going through the pleadings of the parties and evidence on record, allowed the complaint in aforesaid terms.
5. Aggrieved by this order, the opposite party has come up in appeal on the ground that Survey Report which was prepared by a qualified and competent duly approved independent surveyor, was very well reasoned, and therefore, the same was conclusive and binding upon the insured. Moreover, the Survey Report is an important material document which has to be accepted in toto as there was nothing to disregard or rebut the same. It was submitted that the District Forum had no jurisdiction to act as a Surveyor itself as it had no authority to decide the quantum of the loss. The claim made by the insured was highly exaggerated and the District Forum allowed the balance amount merely on the basis of the bill dated 2.2.2009 of Surya Electricals for Rs.1,26,181/- which had nothing to do with the assessment part of the claim. Acceptance of the appeal and setting aside of the impugned order was prayed.
First Appeal No. 741 of 2010 Page 4 of 7
6. We have thoroughly gone through the pleadings of the parties and have carefully perused the evidence on record.
7. Admittedly, the transformer of the complainant, which was insured with the opposite party, got damaged on 18.1.2009 during the subsistence of the policy and the same was got repaired by the complainant from M/s Surya Electricals. It is contended by the complainant that Rs.1,26,181/- were spent on its repairs, vide VAT Invoice dated 2.2.2009 (Mark-D). The claim was filed with the opposite party, who appointed Sh.Arun Mehta as Surveyor. He assessed the damage caused to the transformer as Rs.58,147/-. This Survey Report is proved on record as Mark-F. It has been mentioned under the head "VALUATION" as under:-
"VALUATION:
As per the policy, the insured has declared the replacement price of Surya Electro Controls make, 400KVA power distribution transformer and its oil, amounting to Rs.2,50,000/- and Rs.50,000/- respectively. On my request, the insured submitted a latest quotation of same featured transformer.
With respect to this enclosed quotation dated 23.1.2009 of M/S Surya Electricals, Ludhiana, captioned transformer is evaluated as under;
___________________________________________________ Description of item: Amount: (Rs.) ___________________________________________________ To the cost of 400KVA power distribution 350000-00 transformer with oil First Appeal No. 741 of 2010 Page 5 of 7 (VAT @4% is not considered, as insured avails ITC) Add misc. expenses @2%, as per my confirmation..... 007000-00 _________ 357000-00 _________"
It is further mentioned under the heading "DEPRECIATION FACTOR" as under:-
"DEPRECIATION FACTOR:
As per the policy, depreciation is not applicable on rewinding of transformer limbs. However, as the transformer oil is having a limited life of seven to eight years only and after every eight years, the same is to be replaced with fresh one, so depreciation on the same becomes applicable. Accordingly, I convinced Mr.Subhash to accept net depreciation @50% on transformer oil, as he could not provide any record of last replacement of oil."
8. The report of the Surveyor is very exhaustive one and the repair bill submitted by the complainant has been duly discussed and the loss has been assessed after giving detailed reasons for including and excluding the each item. Certain items i.e. tap changer switch, 3 numbers of LT Bushings and 3 numbers of HT Bushings, have been disallowed because these were not found damaged.
9. It has been held by the Hon'ble Supreme Court in Sikka Papers Ltd. V/s National Insurance Company and ors. (Civil Appeal First Appeal No. 741 of 2010 Page 6 of 7 No.6527 of 2002) that the Surveyor's report is an important document of evidence and cannot be discarded without any specific reasons.
10. However, it is observed that depreciation on the transformer oil to the tune of 50% has been charged arbitrarily by stating that the surveyor convinced Subhash Chander to accept the same. Even the total assessed amount, that was worked out as Rs.72,765/-, was further reduced by applying the average clause. It is seen that the surveyor applied average clause because transformer, including oil, was insured for Rs.3 lacs while its prevailing market value, as mentioned in fresh quotation, was Rs.3,57,000/-. Thus, value of fresh transformer oil was taken into account while working out market value of transformer whereas 50% depreciation is levied after 4 months of insurance by considering that it was old used oil. This stand of the surveyor is found self-contradictory. Therefore, amount of Rs.36,250/-, deducted by the surveyor on account of depreciation on transformer oil, is allowed in addition to assessment made by the surveyor.
11. In view of the above discussion and findings, the appeal of the appellant is partly accepted and the impugned order of the District Forum is modified and balance amount payable to the complainant/respondent is reduced from Rs.68,000/- to Rs.36,250/-. Remaining part of the order is upheld. No order as to costs.
12. The appellant deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal. This amount, alongwith interest, which has accrued thereon, if any, be remitted by the Registry to the respondent/complainant, by way of a crossed First Appeal No. 741 of 2010 Page 7 of 7 cheque/demand draft, after expiry of 45 days under intimation to the learned District Forum.
13. Remaining amount shall be paid by the appellant to the respondent/complainant immediately as per this order.
14. The arguments in the case were heard on 9.4.2014 and the order was reserved. Now, the order be communicated to the parties.
15. The appeal could not be decided within the statutory period because of the heavy pendency of the court cases.
(BALDEV SINGH SEKHON) PRESIDING MEMBER (JASBIR SINGH GILL) MEMBER April 22, 2014 VINAY