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United India Insurance Co. Ltd. & Others v/s Radhalaxmi Cotton Industries & Others

    First Appeal Nos. 63 of 2010 & 155 of 2010

    Decided On, 17 August 2016

    At, National Consumer Disputes Redressal Commission NCDRC

    By, MEMBER

    For the Appellants: Rajesh Dwivedi, A.K. De, Advocates. For the Respondents: K.B. Patel, Advocate.

Judgment Text

K.S. Chaudhari, Presiding MemberBoth these appeals arise out of single order of State Commission; hence, decided by common order.

2. Appeal No. 63 of 2010 – United India Ins. Co. Ltd. Vs. Radhalaxmi Cotton Industries has been filed by OP and Appeal No. 155 of 2010 - Radhalaxmi Cotton Industries Vs. United India Ins. Co. Ltd. has been filed by Complainant against the order dated 25.01.2010 passed by the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad (in short 'the State Commission) in Complaint No. 20 of 2005 – Radhalaxmi Cotton Industries Vs. M/s. The Branch Manager, United Indian Ins. Co. Ltd. by which, complaint was partly allowed.

3. Brief facts of the case are that complainant is a registered partnership firm and engaged in ginning of loose kapas. Complainant obtained 4 insurance policies of Rs. 50,00,000/- each from OP and was obtaining policies since 1999. During the subsistence of policy, in the night of 31.3.2005 fire broke out in complainant’s insured premises on account of which, heap of Kalyan Kapas was destroyed. Intimation was given to fire brigade and Police and to OP. Fire was controlled at 5.30 in the morning of 1.4.2005. It was further submitted that kapas was burnt due to fire and some kapas was destroyed due to spraying of water for extinguishing fire. Police prepared Panchnama according to which, 24,000 Mon of Kapas was destroyed and total loss was estimated to the tune of Rs.90,00,000/-. OP deputed surveyor who found that 24,238 Mon kapas was affected out of which, 19,338.75 mons of kapas was destroyed due to fire and rate of kapas was Rs. 330/- per mon. Surveyor assessed loss of Rs.63,69,000/- and after deduction of salvage value, Rs.53,09,920/- loss was assessed. OP vide letter dated 19.7.2005 sent voucher of Rs.8,48,000/-. Alleging deficiency on the part of OP, complainant filed complaint before State Commission. OP resisted complaint, admitted issuance of policy and occurrence of fire, but denied loss to the extent alleged in the complaint and submitted that surveyor rightly assessed loss and they are ready to pay Rs. 8,48,400/- and denied any deficiency on their part and prayed for dismissal of complaint. Learned State Commission after hearing both the parties allowed complaint partly and directed OP to pay Rs.53,09,920/- with 6% p.a. interest along with cost of Rs.5,000/-. Both parties filed appeals against impugned order along with application for condonation of delay.

4. Appeal No. 63 of 2010 was filed with delay of 6 days which was condoned by order dated 13.5.2010. Appeal No. 155 of 2010 was filed with delay of 89 days in which it was mentioned that complainant requested his Advocate to file cross objections in the appeal filed by OP, but he advised to file appeal; so, delay occurred. No doubt, there is delay of 89 days in filing appeal, but as this appeal has been filed only to the extent of enhancement of interest, we deem it appropriate to condone the delay for the reasons mentioned in the application and delay in filing appeal in F.A. No. 155 of 2010 stands condoned.

5. Heard learned Counsel for the parties and perused record.

6. Learned Counsel for the OP submitted that learned State Commission has committed error in placing reliance on report of complainant’s surveyor Mr. S.K. Gokhru and has committed error in discarding OP’s surveyors report and allowing huge compensation; hence, appeal be allowed and impugned order be modified. On the other hand, learned Counsel for the complainant submitted that learned State Commission rightly allowed compensation, but has committed error in not allowing appropriate interest; hence, appeal of OP be dismissed and his appeal be allowed and interest rate be enhanced and compensation be granted.

7. It is not disputed that fire broke out in insured’s premises of complainant during subsistence of insurance policy. It is also not disputed that loss was caused to kapas due to fire and part of kapas was burnt and part of kapas was damaged due to water sprinkled for controlling fire.

8. Now, the core question to be decided is whether learned State Commission was justified in awarding compensation?

9. First inspection report dated 4.4.2005 prepared by surveyor of OP reveals that 19339 mons of kapas was affected due to fire and rate of kapas was Rs. 330/- per mon. In his hand written note, he has mentioned quantum of water affected kapas to be 7304.31 and burnt kapas to be 2000 mons which is, prima facie wrong because when 19339 mons of kapas was affected and out of this quantity if water affected kapas 7304.31 is subtracted, burnt kapas would be 12034.22 mons.

10. OP surveyor has assessed loss of Rs.1,98,426/- pertaining to water affected kapas and no reasonable explanation has been given for assessing loss only to this extent. There is no dispute regarding price of kapas Rs.330/- per mon and clause 14.5 of surveyors report reveals that highest bid for water affected kapas was Rs.139 per mon, but complainant offered Rs.145/- per mon. In such circumstances, after deducting Rs. 145/- per mon from Rs.330/-, compensation regarding water affected kapas should have been calculated which comes to Rs. 13,51,336.20 (185 x 7304.52) and surveyor committed error in assessing loss of only Rs.198426 pertaining to water affected kapas.

11. As far loss of burnt kapas is concerned, he has calculated compensation for 2000 mons whereas as per his earlier hand written notes in which he has mentioned total quantity of affected kapas being 19339 mons burnt kapas comes to 12034.22 mons after deducting water affected kapas and he should have calculated loss of aforesaid quantity of burnt kapas instead of only 2000 mons of kapas and thus, surveyor committed error in calculating only Rs.6,60,000/- as loss towards burnt kapas whereas it comes to Rs.39,71,291/- and in such circumstances, learned State Commission has not committed any error in placing reliance on opinion of other expert produced by complainant who has proved his report on affidavit and has not been crossed on that point. But as complainant himself by letter dated 11.4.2005 claimed loss of Rs.10,00,421/- towards water affected kapas, learned State Commission has committed error in allowing loss of Rs.13,51,338/- towards water affected kapas on the basis of expert opinion because learned State Commission could not have allowed claim more than amount claimed and proved by complainant himself.

12. In such circumstances, in the light of above discussion, it becomes clear that after deduction of Rs.10,000/- towards excess clause complainant was entitled to Rs.49,61,712/- towards loss of kapas due to incident of fire and learned State Commission committed error in allowing Rs.53,09,920/- and to this extent, OP’s appeal is to be allowed.

13. As far appeal No. 155 of 2010 is concerned, learned Counsel for the complainant submitted that learned State Commission has committed error in not allowing 10% interest and not allowing compensation. Learned State Comm

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ission rightly allowed 6% interest and we do not intend to interfere in the interest allowed by learned State Commission as at that time interest rate was on lower side. As far compensation part is concerned, when learned State Commission has already allowed interest, we are not inclined to grant compensation. 14. Consequently. Appeal No. 63 of 2010 filed by the appellant is partly allowed and impugned order dated 25.1.2010 passed by learned State Commission in Complaint No. 20/2005 – Radhalaxmi Cotton Industries Vs. United India Insurance Co. Ltd. & Ors. is modified and amount of compensation of Rs.53,09,920/- is substituted by Rs.49,61,712/- and rest of the order is upheld. Appeal No. 155 of 2010 filed by the complainant is dismissed. Parties to bear their costs.