This consumer complaint has been filed by the complainant M/s. Perfectpac Ltd. against the opposite party United India Insurance Company Limited and two others.
2. The brief facts of the complaint are that the complainant company got its stock, machinery etc. insured for the period 29.3.2012 to 28.3.2013 wherein the sum insured was Rs.7 Crores and 2nd insurance for plant & machinery, furniture/fixture, electrical fitting, etc. for the period 11.4.2012 to 10.4.2013 wherein sum insured was Rs.17,65,00,000/- from OP1. On 23.9.2012 fire broke out in the company’s premises. After informing about the same to OP 1 & 3, complainant filed the claim form with detailed loss to OP1 and claimed amount of Rs.1,25,47,506/-. Complainant had taken separate policy towards building but OPs treated & assessed both the claims together. It has been alleged that the surveyor appointed has made a mistake by not considering the amount of Rs.6,51,800/- towards electricity consumed and Rs.4,500/- towards removal of debris & even made illegal deductions without any valid grounds. After 2 years OPs sent a discharge voucher for a very less amount of Rs.35,77,007/- which complainant was ready to accept subject to their right to claim the amount as filed in the claim form but OPs did not give a positive response. The main grievance in the complaint filed by the complainant is that the OP-1 has not included reinstatement value clause in the policy and therefore, the assessment has not been done by the surveyor on the basis of reinstatement value clause. Complainant has prayed in the complaint to direct OPs to pay the sum of Rs.65,69,569/- for one policy & Rs.59,77,937/- for the other, total amounting to Rs.1,25,47,506/- along with 18% interest, Rs.20 lakh as compensation and Rs.1 lakh towards cost.
3. The complaint has been resisted by the OP1 by filing the written statement. OP1, in its reply has stated that depreciation has been considered by the surveyor on the basis of age of the plant and machinery as well as by taking other related factors into account. It has been further stated that on the basis of assessment made by the surveyor, complainant was offered a sum of Rs.35,77,007/- for settlement of their claim but the complainant had refused to accept the same. It has been further contended that to contend that reinstatement clause was the basis of the policy is absolutely frivolous & forwarding of letter by OP 3 to rectify the policy after the loss had occurred is of no consequence.
4. None appeared for OP2 even after service of notice. Therefore, OP2 was proceeded ex-parte. The complaint has been resisted by the OP3 by filing the written statement. OP3, in its reply has stated that OP3 is not a necessary party to the dispute and by non-settlement of the claim deficiency in service has been committed only by OP1. It has been stated that this OP is an insurance broker duly licensed by the I.R.D.A. under the provisions of Insurance Act who for remuneration arranges insurance contracts with insurance companies on behalf of its clients and is not an agent. It has been further submitted that OP1 has committed mistake in issuing the policy by not including reinstatement value clause and OP3 affirms having requested OP1 to rectify the policy by adding re-instatement value clause in the policy.
5. The complainant and the OP No.1 filed evidence by way of affidavits which have been taken on record.
6. Heard the learned counsel for the parties and perused the record. Learned counsel for the complainant stated that the major deficiency on the part of the Insurance Company is that though it was a renewal policy but the Insurance Company did not include the reinstatement value clause in the policy and therefore the surveyor has applied heavy depreciation on all the items which has resulted in huge reduction in the claim value. The learned counsel stated that the depreciation has affected the value of claim for the building as well as for the machinery. Depreciation of 50% has been applied by the surveyor for assessment of the loss to the building. Similarly, for assessment of the machinery, the surveyor has applied a depreciation of 75%, thus eroding a major value of the claim in respect of the plant and machinery. Had the policy been issued with the reinstatement value clause, applicability of depreciation would not have been there.
7. It was further stated by the learned counsel for the complainant that the surveyor has also made certain mistakes in the assessment. The surveyor has not considered the amount of electricity consumed for repair for Rs.6,51,800/- and the cost of removal of debris. Similarly the surveyor has made a mistake in calculation of the assessed stock as gross loss has been taken as Rs.25,56,632/- instead of Rs.26,56,632/- which has been calculated by the surveyor himself.
8. Learned counsel for the complainant also referred to some other reasons for objecting to the report of the surveyor. It has been stated that the salvage value has been taken at Rs.6,79,237/- by the surveyor while the actual value is Rs.5,09,820/-. In respect of the stocks, the amount deducted on the basis of volumetric analysis @ 25% for passage /movement is on a high side. Similarly 10% deduction has been made on account of the dead stock whereas there was no dead stock in the corrugated boxes.
9. On the other hand, the learned counsel for the opposite party no.1/ the Insurance Company stated that the surveyor has correctly assessed the loss suffered by the complainant and accordingly an amount of Rs.35,77,007/- was released to the complainant however, the complainant had refused to take this amount and filed this consumer complaint. There was no reinstatement value clause in the policy and therefore the surveyor is justified in assessing the loss on the basis of depreciation. All the machinery was about 35 year old and therefore the maximum depreciation of 75% has been applied by the surveyor which is quite reasonable. The surveyors are appointed as loss assessor and they assess the loss on the basis of accepted principles of assessment. If there is some difference between the complainant’s assessment and the surveyor’s assessment, the surveyor’s assessment has to be taken unless there is any major difference. Apart from the depreciation, all the changes suggested by the complainant are marginal and in that condition, the surveyor’s figures are to be accepted.
10. Learned counsel appearing on behalf of the opposite party no. 3 stated that the opposite party number 3 is only an insurance broker and has written letters dated 24th July 2013 and 2nd August 2013 for rectification of the policy by including reinstatement value clause as the current policy was only a renewal policy. Complainant deserves the benefit of reinstatement value clause.
11. I have carefully considered the arguments advanced by the learned counsel for the parties and have examined the record. The surveyor has assessed loss of Rs.35,77,007/- and Insurance Company has already agreed to give this amount to the complainant as full and final settlement of the claim, however, the complainant has not accepted this amount and has filed the present consumer complaint. The main objection of the complainant against the surveyor’s report is that the surveyor has not assessed the claim on the basis of reinstatement value clause. The complainant has alleged deficiency on the part of the Insurance Company that they have issued the policy without any reinstatement value clause though it was only a renewal of the previous policy. The fact is that the policy does not have any reinstatement value clause and therefore the surveyor is perfectly justified in not assessing the claim on the basis of reinstatement value clause. The letter has been sent by the insurance broker/ opposite party no. 3 for including reinstatement value clause in the policy. This letter has been sent after about 11 months of the incident of fire in the premises and in fact after the conclusion of the policies. The surveyor has to assess the loss as per the policy that existed on the day of incident. So far as the deficiency on the part of the Insurance Company is concerned for not including the reinstatement value clause in the policy though it has been alleged as a renewal policy, it is to be understood that the policy that was issued by the Insurance Company would be treated as a counter proposal to the proposal of the complainant and if the same is not objected to by the complainant, the counter proposal will become the final agreement between the parties. This position has been clarified by the Hon’ble Supreme Court in its decision Deokar Exports Pvt. Ltd. Vs. New India Assurance Company Ltd., Civil Appeal No.5103 of 2002, decided on 23.09.2008 (SC), wherein the following has been observed:-
“11. A policy of insurance is a contract based on an offer (proposal) and an acceptance. The appellant made a proposal. The respondent accepted the proposal with a modification. Therefore, it was a counter proposal. The appellant had three choices. The first was to refuse to accept the counter-proposal, in which event there would have been no contract. The second was to accept either 10expressly or impliedly, the counter-proposal of the respondent (that is respondent's acceptance with modification) which would result in a concluded contract in terms of the counter proposal. The third was to make a counter proposal to the counter-proposal of the respondent in which event there would have been no concluded contract unless the respondent agreed to such counter-counter- proposal. But the appellant definitely did not have the fourth choice of propounding a concluded contract with a modification neither proposed nor agreed to by either party. If the appellant did not agree to the policy covering the period 26.8.1988 to 25.8.1989 instead of the period 12.3.1988 to 12.9.1989, the result would never create an insurance contract effective from 30.6.1989 or any other date.”
12. From the above, it is clear that the policy issued by the Insurance Company had become the final contract between the parties and if the same was not changed by a different agreement between the parties till the date of accident, it will remain valid on the day of accident and the claim has to be decided on the basis of this policy only. From this point of view, I do not see any deficiency on the part of the Insurance Company.
13. So far as certain other objections of the complainant against the report of the surveyor are concerned, it is seen that there is one apparent calculation mistake which is in respect of the assessed gross loss. The surveyor has assessed the gross loss to be Rs.26,56,632/- however, in the final assessment this value has been taken to be Rs.25,56,632/-. Thus, there is a difference of Rs.1,00,000/- and disbursement will accordingly be increased by Rs.1,00,000/-.
14. Another mistake that has been alleged by the complainant is that the surveyor has not considered the amount spent on electricity for the repairing of building under the assessment of repairing amounting to Rs.6,51,800/-.It is seen that the surveyor has assessed the loss on the basis of actual expenditure incurred by the complainant on the repair of the building. Clearly, the surveyor has not taken into consideration the expenditure incurred on electricity. This point has been raised by the complainant in para 9 of the complaint. The opposite party No.1, in their written statement, in reply to this para has mentioned nothing about the expenditure on electricity, though it says that all allegations are denied. When a specific point has been raised, the OP-1 should have categorically replied whether the allegation of the complainant is correct or not or why this expenditure has not been considered. It is further seen that the complainant has not submitted any bills of electricity. It is not sure whether any bills of electricity were submitted before the surveyor as the surveyor has mentioned all other bills. The complainant is also not asserting in the complaint that electricity bills were submitted before the surveyor. As no bills are there, the authenticity of the amount claimed by the complainant cannot be verified. However, it is certain that some expenditure must have been there for electricity and that the surveyor has not considered this expenditure. Therefore, in such situation, an adhoc figure of Rs.2,00,000/- can be considered for this expenditure which the complainant seems to be entitled to.
15. Coming to the other objections like deduction of 25% for passage/ movement on the basis of volumetric analysis, 10% deduction on account of dead stock, slightly lesser Salvage value etc., it is s
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een that these are such points which are decided by the surveyor on the basis of experience and prevalent practices in the field of surveying as well as in the facts and circumstances of a particular case. Thus, this Commission would not like to interfere with the assessment of these items. Surveyors are appointed under the provisions of the Insurance Act 1938 and their report cannot be brushed aside without any cogent reasons. Any marginal discrepancy in discretionary assessment of such items cannot be considered as cogent reason to interfere with the report of the surveyor. Important mistakes have already been considered for correction. Beyond this, I do not find any further opportunity to interfere with the report of the surveyor. 16. Based on the above discussion, the complaint is partly allowed and the opposite party No.1/Insurance Company is directed to pay Rs.3,00,000/- (rupees three lakhs only) to the complainant along with interest @ 6% per annum from the date of filing of the complaint i.e. from 29th December, 2015 till actual payment over and above the amount of Rs.35,77,007/- which is the assessment of the surveyor and the Insurance Company has already agreed to pay the same. Now, this amount of Rs.35,77,007/- be also paid to the complainant alongwith interest @3% p.a. (S.B.I. Savings Bank interest rate) from the date of filing of the complaint if not already received by the complainant.