B.M. Bedi, Judicial Member:
1. The complainant is a partnership firm run in the name and style M/s M.S Manufacturing Company, situated at Plot No.233, Rai, District Sonepat. It runs the business of manufacturing of Corrugated Boxes. The firm purchased Standard Fire and Special Perils Policy (Exhibit C-4) from the New India Insurance Co. Ltd (opposite parties) covering the period from 18thJune 2012 to 17thJune, 2013. Prior thereto also, the insurance policy was purchased from the opposite parties. The total insured amount was Rs.70.00 lacs (i.e. Rs.30.00 lacs for building-super structure, Rs.20.00 lacs for plant machinery and accessories and Rs.20.00 lacs for stock and stocks in process). In the insurance policy, there was Clause 4, that is, reinstatement of value policy clause.
2. On January 5th, 2013, at about 3.30 a.m. fire took place in the premises of the company. Fire tenders were called (Ex.C-11). The fire could be extinguished after about six hours. FIR (Ex.C-12) was got registered in police station Rai. The insurance company was informed. Surveyor appointed by the insurance company, visited the spot. The report of the surveyor is Exhibit C-30. The surveyor assessed the loss to the tune of Rs.42,84,138/-. Rs.15,68,243/- for the loss of plant and machinery. The loss to the building/super structure was assessed at Rs.6,28,520/-. An amount Rs.20,87,375/- was assessed for the loss caused to the stocks. However, the depreciation was assessed on the loss to the plant and machinery, building and after deducting that, the loss assessed qua plant and machinery was Rs.7,84,120.50 and for building Rs.4,89,647/-. The depreciation could not have been taken into consideration in view of the Clause 4 of the insurance policy. The entire loss assessed was to be taken into consideration.
3. The company also got the loss assessed to building from Harpal and Associates, Valuers. In its report (Exhibit C-15), Harpal and Associates assessed the loss of the building in the sum of Rs.6,53,521.46. It was also observed by Harpal and Associates that the useful life of the building was reduced to 50% approximately. The photographs taken on the spot are Exhibit C-44 (25 photographs).
4. The grievance of the complainant is that the surveyor has wrongly assessed the loss and applied method of deduction of depreciation wrongly and illegally.
5. The complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.
6. The opposite parties appeared and contested the complaint by filing written reply denying the averments made in the complaint. It was stated that the surveyor had assessed the loss at Rs.14,39,700/- on the basis of depreciation. The complainant had made representation July 18th, 2013 and thereafter the surveyor revised the assessment to the extent of Rs.15,79,730/-, as the complainant had not reinstated the property as stipulated in the Reinstatement of Value Clause. It was denied that the complainant had suffered loss worth Rs.48,45,176/-. The complainant had delayed in furnishing the documents and for that reason it took some more time in settling claim of the complainant.
7. Both the parties led evidence in support of their respective claims. Complainant examined CW-1 Satvir Singh and tendered documents in evidence. On the other hand, the opposite parties examined Shri A.L. Madan, Manager and Shri Piyush Singhal, one of the Directors in M/s V.P. Singhal and Company Insurance Surveyor and Loss Assessor Private Limited.
5. Arguments heard. File perused.
6. The complainant has primarily challenged the report of the surveyor in respect of the loss to the building under the heading of depreciation in expectancy of the building. The surveyor in his report Exhibit C-30/R-2, has taken into consideration the loss under different heads including the Dismantling of Brick Work, ACC Sheets in Roof/Truss, Flooring, Shutter for D/W, Brick work in Mortar, ACC Sheet Roof, Angle Iron Truss Support, Flooring, Plastering, P/F Panveled, White Wash & Painting and Electrification of Building while assessing the loss worth Rs.6,28,520/- and depreciating the same taking the life of the building into consideration worked total loss of Rs.4,89,647/-.
7. Similarly, the surveyor under the heading of loss to ‘Plant & Machinery’ taking the total cost as Rs.1568243/- and depreciating by book value by taking other aspects into consideration, assessed the net loss worth Rs.3,93,750/-. The surveyor under the heading of loss to stock assessed it at Rs.7,82,765/-. The surveyor considering the amount claimed at Rs.20,87,375/- by pointing out error in calculation took the figure at Rs.10,43,687/- and by reducing the un-burnt stock to be recovered and depreciation net loss was worth Rs.7,82,765/-. Thus, worked out the total net loss under the headings of plant and machinery, building and stocks to Rs.14,39,700/-.
8. The complainant filed representation upon which considering the documents supplied, the opposite parties revised the net loss at Rs.15,89,730/- vide report Exhibit R-2.
9. The main stress of the learned counsel for the complainant was that the complainant was not required to maintain the Stock Register and laid stress only upon the Vat Returns, filed for the quarter endings June 12th, September 12th, and December 12th. All these Vat Returns were only for the current year of the occurrence. Vat Returns of the previous year were not filed.
10. On the other hand learned counsel for the opposite parties has referred to closing stock position for the previous four years. Closing Stock as on 31.3.2009 was of Rs.2,37,750/-, on 31.3.2010 was of Rs.5,59,250/- (Ex.C-5). The closing stock on 31stMarch, 2011 was Rs.5,67,150/- as mentioned in Ex.C-6 and on 31stMarch, 2012 the closing stock was Rs.3,82,500/- vide Ex.C-7.
11. The contention of the learned counsel for the complainant was that the manufacturing unit was seasonal and order based. The firm is engaged in the manufacture of Corrugated Boxes and the same were manufactured only on the order being placed and therefore, there could be sudden spurt in the stock.
12. Going by the trend of the previous years that the stock position as given by the opposite parties for the years ending March, 2009, March, 2010, March, 2011 and March, 2012, there could not be sudden jump to such high inflation, more particularly when there was recession during that period throughout in the industry. Besides, in the absence of any stock register and going by the trend of previous years, the complainant appears to have based his claim with respect to his stock in the trade by giving inflated figures of only the current year. Therefore, the vat returns pertaining to three quarters only could not be formed basis qua assessing the loss.
13. The surveyor’s report is a cogent piece of evidence and cannot be ignored lightly without any evidence contrary to it. Hon’ble Supreme Court in SRI VENKATESWARA SYNDICATE versus ORIENTAL INSURANCE COMPANY LTD & ANR, II (2010) CPJ 1 (SC) has held as under:-
'…….There is no disputing the fact that the Surveyor/Surveyors are appointed by the insurance company under the provisions of Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them. We also add, that, under this Section the insurance company cannot go on appointing Surveyors one after another so as to get a tailor made report to the satisfaction of the concerned officer of the insurance company, if for any reason, the report of the Surveyors is not acceptable, the insurer has to give valid reason for not accepting the report. Scheme of Section 64-UM particularly, of Sub-sections (2),(3) and (4) would show that the insurer cannot appoint a second surveyor just as a matter of course. If for any valid reason the report of the Surveyor is not acceptable to the insurer may be for the reason if there are inherent defects, if it is found to be arbitrary, excessive, exaggerated, etc., it must specify cogent reasons, without which it is not free to appoint second Surveyor or Surveyors till it gets a report which would satisfy its interest. Alternatively, it can be stated that there must be sufficient ground to disagree with the findings of Surveyor/Surveyors. There is no prohibition in the Insurance Act for appointment of second Surveyor by the Insurance Company, but while doing so, the insurance company has to give satisfactory reasons for nor accepting the report of the first Surveyor and the need to appoint second Surveyor.'
14. In D.N. BADONI versus ORIENTAL INSURANCE CO. LTD. 1(2012) CPJ 272 (NC), Hon’ble National Commission has observed as under:-
'It is well settled law that a Surveyor’s report has significant evidentiary value unless it is proved otherwise………..'
15. In NEW INDIA ROAD CARRIER (REGD.) versus NATIONAL INSURANCE COMPANY LTD. & ORS. I(2013) CPJ 243 (NC), Hon’ble National Commission held as under:-
'5. …………………….Initial burden to prove that loss was due to cyclone or rainfall was on the appellant which the appellant failed to discharge by leading any cogent and trustworthy evidence. In the absence of any evidence to the contrary the report of the surveyor could not be discarded. The appellant did not produce any evidence worth the name to show that the damage to the building was caused due to cyclone or the rainfall. It also failed to produce any evidence to prove the estimated loss. The report of the surveyor is an important piece of evidence and has to be given due weight. We agree with the contention of the Counsel for the appellant that report of the Surveyor is not sacrosanct but there has to be some trustworthy evidence to displace or discard the same. The appellant has not been able to counter the findings recorded by the surveyor by leading any independent and cogent evidence. In the absence of evidence to the contrary the report of the surveyor has to be accepted.'
16. In New Horizon Sugar Mills Ltd. v. United India Insurance Co. Ltd. & Ors, 2003(3) CPR 136 (NC), the Hon’ble National Commission has observed that 'report of Surveyor appointed under the provisions of Insurance Act has to be given greater importance.'
17. In the i
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nstant case no cogent and convincing evidence has been produced on behalf of the complainant to ignore the report of the surveyor whereby the loss of the complainant was assessed at Rs.15,79,730/-. Though only the reinstatement risk was covered on re-instatement basis, however, there is a proviso to Clause 9 of the policy, that is, in the event of company being unable to reinstate the property insured because of municipal or other regulations, the company shall, only be liable to pay such sum as would be requisite to reinstate or repair, if the same could lawfully be reinstated to its former condition. Therefore, though the policy covered the risk of building on instatement basis, however, the policy also provided for compensation even in the event of the insured not being able to reinstate. 18. Having considered the facts and circumstances of the case and the evidence available on the record, the complaint is partly allowed. The opposite parties are directed to pay Rs.15,79,730/- to the complainant as assessed by Surveyor appointed by the opposite parties alongwith interest @ 9% per annum from the date of filing complaint till its realization.