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New India Assurance Co. Ltd. v/s Somesh Readymade Garments

    Revision Petition No. 853 of 2007 in Appeal No. 1080 of 04
    Decided On, 14 July 2011
    At, National Consumer Disputes Redressal Commission NCDRC
    By, THE HONOURABLE MR. JUSTICE ASHOK BHAN
    By, PRESIDENT & THE HONOURABLE MRS. JUSTICE VINEETA RAI
    By, MEMBER
    For the Petitioner: S.K. Ray, R.A. Gupta, Advocates. For the Respondent: S.K. Sharma, Advocate.


Judgment Text
Mrs. Vineeta Rai, Member:

1. The New India Assurance Co. Ltd., petitioner herein, has filed the present revision petition against the order of the State Consumer Disputes Redressal Commission, Rajasthan (hereinafter referred to as the ‘State Commission’) in Appeal No. 1080/2004. M/s. Somesh Readymade Garments is the Respondent herein, who was the original complainant before the District Forum.

2. The brief facts of the case according to the Respondent are that he had a shop which dealt in readymade garments for which he had taken three different policies from the Petitioner in respect of the following:

(i) Stocks kept in the shop for Rs. 1,50,000 from 21.1.1995 to 20.1.1996.

(ii) Building covering the risk of fire for Rs. 1,00,000 from 15.7.1995 to 14.7.1996.

(iii) Furniture and fittings in the building for Rs. 60,000 from 17.7.1995 to 16.7.1996.

3. During the currency of these policies on the night of 3/4.8.1995, a major fire broke out in the premises causing extensive damage to the building, furniture and stocks. Respondent estimated the loss of Rs. 1,65,000 for stock in trade, Rs. 65,558 for furniture and fixtures and Rs. 68,228 for damage to the building, totalling to Rs. 2,94,436 in respect the above three insured items. An FIR regarding this incident was also lodged and Respondent also informed the DENA bank from where he had taken a loan for his business who after inspecting the site confirmed that major losses had occurred in the fire. Respondent informed the Petitioner on 4.8.1995 about the incident and filed a claim. Petitioner appointed a Surveyor to assess the loss and according to the Respondent, the Surveyor demanded illegal gratification from him which he refused to give and he made a complaint against the Surveyor to the concerned authorities. Because of this, the Surveyor wrongly assessed the loss at Rs. 17,993 only towards the building and gave a report that since there was no furniture and stocks in the premises at the time of fire, there was no loss. Aggrieved by this, Respondent issued a legal notice to the Petitioner and receiving no response filed a complaint before the District Forum seeking necessary relief.

4. Petitioner has challenged the above contentions and stated that the Surveyor had after detailed on the spot inspections and talking to witnesses rightly concluded that there was no evidence of furniture and stocks in the shop and further taking into account the small size of the building and the quality of its construction assessed the damage at Rs. 17,793. False allegations have been made by the Respondent against the Surveyor because he did not support the exorbitant insurance claim of the Respondent.

5. The District Forum initially dismissed the matter, on the grounds that the dispute involved complex and complicated questions and facts of law and the complainant should seek his remedy in the appropriate civil Court. The Respondent filed an appeal against this order before the State Commission whichvide its order dated 24.11.2003 remanded the case back to the District Forum to dispose it of on merits. The District Forum thereafter re-examined the case on merits and allowed the complaint by rejecting the report of the Surveyor and directed the Petitioner to pay the Respondent a sum of Rs. 2,71,817 within one month along with interest @ 9% from 13.5.1996 to the date of actual payment and Rs. 500 as cost of litigation.

6. Aggrieved by this order, Petitioner filed a complaint before the State Commission. The State Commission after hearing both parties concluded that the report of the Surveyor appointed by the Petitioner had not correctly assessed the extensive damage caused to the Respondent’s building, stocks and the furniture during the fire and, therefore, it was a biased report. It also concluded that on the other hand the District Forum on the basis of evidence produced before it had rightly held that there was in fact adequate proof of extensive damage to the building, stocks as well as to the furniture in the Respondent’s premises. The State Commission, however, reduced the total claim from Rs. 2,71,817 awarded by the District Forum to Rs. 2,40,000 by concluding that the loss to the building and furniture was a little less than that awarded by the District Forum. It, therefore, directed the Petitioner to pay Rs. 2,40,000 along with interest to the Respondent and confirmed rest of the order of the District Forum.

7. Aggrieved by this order, the present revision petition has been filed by the Petitioner.

8. Learned Counsel for both parties made oral submissions. Counsel for the Petitioner stated that the learned Fora below erred in not appreciating the detailed report of the Surveyor which gave clear reasons for assessing the indemnifiable loss at Rs. 17,793 being the damage caused to the building. It took into account the small size of the premises and the quality of its construction and thus concluded that the entire cost of the premises could not have been more than Rs. 28,000 and, therefore, the insurance claim sought by the Respondent at Rs. 68,228 was unrealistic and untenable. Therefore taking into account the actual damage caused to the walls, flooring, roof and shutters, the total loss was estimated at Rs. 17,793. Counsel for Petitioner further stated that during site inspections, no evidence at all was found of any readymade stocks and garments as well as furniture and fittings at the time of fire in the shop. This was also confirmed verbally by the Fire Service personnel during interaction with them. Further, neither the Bank nor the Respondent could provide any evidence in support of the fact that fittings, furniture and readymade garments also got burnt in the fire. For example, the Respondent could not produce the necessary stock register, etc. requested for by the Surveyor. The report of the Surveyor being a detailed and credible report was accepted by the Petitioner who is still ready to settle the insurance claim at Rs. 17,793.

9. Counsel for Respondent contended that as per the report of the Surveyor it is clear that there was extensive damage to the building which required reconstructing the roof, floor and replacing the rolling shutters and extensive white-washing etc. The Surveyor’s estimate that the building costs only at Rs. 28,000 is not acceptable because the Petitioner itself had agreed to insure the building for Rs. 1,00,000. Further, Respondent had led credible evidence before the Fora below by putting on record an assessment report by an Assessor appointed by him who was a retired Assistant Engineer regarding the loss to the building which confirmed the extensive damage. Unfortunately, it was not possible to produce the required stock register, etc. because these were totally burnt in the fire. However, Respondent had submitted monthly reports to the bank showing the stock-in-trade as proof. Respondent had also submitted his balance-sheets dated 31.3.1995 and details of stocks upto July, 1995 to prove presence of stocks in the premises upto that period. The Fora below had correctly accepted his contention and given necessary relief. There is no merit in the present revision petition which deserves to be dismissed.

10. We have carefully considered the averments made by Counsel for both parties and have gone through the evidence on record.

11. As per the Surveyor’s report it has been confirmed that the damage to the building was extensive because he had concluded that there was damage to the walls which required total plastering, roof and flooring required reconstruction, the rolling shutters needed extensive repairs and the entire premises had also to be re-painted. Despite this, the Surveyor concluded that the loss could not have been Rs. 68,228 because the cost of the entire construction itself was not more than Rs. 28,000 and therefore Rs. 17,793 was a correct and realistic assessment of the loss. We cannot accept either the reasoning or the conclusion of the Surveyor in this respect. It is not in dispute that the Petitioner/Insurance Company had insured the building premises for Rs. 1 lakh which was obviously done based on the cost of the construction. If the entire cost of building was only Rs. 28,000 the Petitioner/Insurance Company would not have under any circumstances, insured it for Rs. 1 lakh. It is also not in dispute that in view of the Surveyor’s report, extensive damage was caused to the building. Therefore, keeping in view both these facts, we are of the view that the insurance claim by the Respondent at Rs. 68,228 is a much more realistic estimate than the unacceptably low figure arrived at by the Surveyor.

12. We also find it difficult to accept the conclusion of the Surveyor that at the time of the fire, there were no stocks and furniture/fixtures in the premises and, therefore, no claim was made out in respect of these two items. The Respondent was running a shop of readymade garments at the time of fire and he could not have done so if there were no garments and furniture/fixtures required to run the shop. Also as per the report of Dena Bank and the stock statements produced by the Respondent, it is established that there were stocks of readymade garments lying in the premises. Regarding the furniture and fittings, the Fora below being the Courts of fact, after examining the evidence produced before it concluded that furnitur

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e and fittings were also present in the shop which were destroyed in the fire. The contention of the Surveyor that Fire Service personnel verbally stated to them that there were no stocks and furniture at the time of fire cannot be relied upon because it has also been stated in the same survey report that the Fire Service personnel refused to confirm these facts in writing. Taking into account all the above facts, we see no reason to differ with the findings of the Fora below. The State Commission no doubt has marginally reduced the amount awarded by the District Forum to the Respondent on grounds of depreciation and re-assessment based on facts produced before it which appears to be reasonable and acceptable. We, therefore, uphold these findings of the State Commission and direct the Petitioner to pay a sum of Rs. 2,40,000 within one month along with interest @ 9% from 13.5.1996 to the date of actual payment and Rs. 500 as cost of litigation. Revision petition is dismissed with no order as to costs. Revision Petition dismissed.
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