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Venkatesh Agro Industries Udaygiri Industrial Development Co-Operative Society, Maharastra v/s Oriental Insurance Co. Ltd., Maharastra & Others

    First Appeal No. 325 of 2011
    Decided On, 04 March 2022
    At, National Consumer Disputes Redressal Commission NCDRC
    By, THE HONOURABLE MR. C. VISWANATH
    By, PRESIDING MEMBER & THE HONOURABLE MR. JUSTICE RAM SURAT RAM MAURYA
    By, MEMBER
    For the Appellant: Shrish K Deshpande, Advocate. For the Respondents: R1, J.P.N. Shahi, Saddam Hussain, R2, Preetam Shah, Advocates.


Judgment Text
1. The present First Appeal has been filed against the order dated 06.07.2011 passed by State Consumer Disputes Redressal Commission, Maharashtra (in short ‘State Commission’) in Consumer Complaint No.13/2007.

2. Alongwith the Appeal IA/01/2011, an application for condonation of delay has also been filed. However, the Appellant has not mentioned the number of days sought to be condoned. According to the computation made by the Registry, the delay is of 16 days. For the reasons stated in the application and in the interest of justice, IA/01/2011 is allowed and delay condoned.

3. According to the Complainant/Appellant, Complainant Company started its industry in 1995, with financial assistance from Sangali Bank, Udgir Branch and subsequently in the year 1998 with financial aid and assistance from Solapur Janta Cooperative Bank Ltd., Udgir Branch. The Complainant insured its Dal Mill, Machinery, Plant, unfinished and finished goods with Oriental Insurance Co. Ltd./Opposite Party No.1. The details of the insured sum are as follows: -

i) The building was insured for a sum of Rs.18,10,000/-, vide Policy No.181903/1159/05, for the period 13.02.2005 to 12.02.2006.

ii) The Machinery and Plant were insured for a sum of Rs.17,00,000/- and unfinished goods were insured for a sum of Rs.40,00,000/-, vide Policy No.181903/802/05 .

iii) The finished goods was insured for a sum of Rs.50,00,000/-, vide Policy No.181903/1080/05 for a period of 23.01.2005 to 22.01.2006.

The above Policies were renewed from time to time. On 09.08.2005, at about 04:15 am, Servant of the Complainant telephonically informed the Complainant that fire broke out in the Dal Mill. Brother-in-law of the Complainant rushed to the Mill and called the fire brigade. He also informed the Police about the incident. The fire brigade could control the fire after 8 hours. Approximately 3000 bags of finished and unfinished goods were stored in the mill at the time of the incident. The entire stock, plant, machinery and building were damaged in the fire. The Police drew a Panchanama on 09.08.2005 between 2-3 pm which cited that short circuit was the reason for fire incident. The Panchanama also noted total loss of Rs.60 lakh (Rs.20 lakhs to the Machinery, Rs.30 lakhs due to burning of finished and unfinished goods and loss of Rs.10 lakhs to the Building.)

4. The Complainant intimated the incident to the Insurance Company, vide letter dated 09.08.2005. The Complainant also submitted claim for loss of Rs.67,20,000/- with the Insurance Company. The Insurance Company deputed Shri R.V. Sarda, as Surveyor for investigation and assessment of loss. The Surveyor assessed the loss at Rs.25,93,335/-. On 30.08.2006, the Insurance Company informed the Complainant that an amount of Rs.15,69,964/- was sanctioned against the claim submitted by Complainant and also informed to pay reinstatement premium of Rs.1605/-. On 30.08.2006, blank voucher for the claim of Rs.15,69,964/- was forwarded by the Insurance Company to the Complainant. The Complainant, through power of attorney Mr. Ajay Malge informed the Insurance Company that the claim sanctioned was much less than actual loss sustained by them. On 6.10.2006, proprietor of the Complainant personally met the Divisional Manager and explained the actual loss suffered by them. After meeting with the Divisional Manager, the amount was increased to Rs.18,23,436/- and same was communicated to the Complainant, vide letter dated 07.12.2006. The Insurance Company did not give any explanation for reduction of compensation, nor did they provide any details of calculation of loss. The Complainant accepted the amount under protest, vide letter dated 08.12.2006. According to the Complainant, they suffered loss of Rs.67,20,000/- but Insurance Company settled the claim at Rs.18,23,436/- without any basis. Alleging deficiency in service on the part of Opposite Party No.1, Complainant filed Consumer Complaint in the State Commission with following prayer:-

“A) The Hon'ble, State Commission may kindly be pleased to allow the present complaint.

B) The Hon'ble State Commission may kindly be pleased to direct the respondents to pay an amount of Rs.48,96,564/- towards the loss and damages sustained by the complainant with interest at 15% p.a. from date of protest i.e. 8.12.2006 till the realization of the entire amount.

C) The Hon'ble State commission may kindly be pleased to direct the respondents to pay an amount of Rs.1,00,000/- to the complainant towards the mental pain, agony and torture sustained by the complainant.

D) That, the cost of the petition of Rs.10,000/- may kindly be awarded to the complainant from the respondents.

E) Any other suitable and equitable relief may kindly be granted in favour of complainant as the facts of the matter and situation may warrant.”

5. The Complaint was contested by the Opposite Parties by filing separate written statements. Opposite Party No.1 denied that they took undue advantage of the financial situation of the Complainant and exploited them. The Insurance Company having found certain discrepancies in the Survey Report, removed them and increased the assessment amount to Rs.18,23,436/-, which showed the bonafides on the part of the Insurance Company. Thereafter, the Insurance Company offered the increased amount of Rs.18,23,436/- to the Complainant, The Complainant accepted the amount of Rs.18,23,436/- in full and final settlement of the claim and signed discharge voucher.

6. Opposite Party No.2/Bank filed its separate written statement. It was stated that they financed the amount to the Complainant. As the Complainant did not repay the loan, they initiated recovery proceedings. Opposite Party No.2 had nothing to do with the insurance dispute between the Complainant and Opposite Party No.2.

7. After hearing Learned Counsel for the Parties and perusing the record, the State Commission, vide impugned order dated 06.07.2011, dismissed the Complaint.

8. Aggrieved by the order of the State Commission, the Appellant/Complainant preferred the instant Appeal before this Commission with the following prayer:-

“A) Kindly be pleased to allow the First Appeal of the Appellant herein;

B) This Hon'ble Commission may be pleased to set aside the order of the State Commission, dated 6.7.2011 passed by Ld. Maharashtra State Commission, Mumbai in CC No. 13/2007 and complaint case No. 13/2007may be allowed as prayed for.”

9. Heard the Learned Counsel for the Parties and carefully perused the record. Learned Counsel for the Appellant submitted that the State Commission had not gone into the issue of deficiency in service and passed a cryptic order. It was also submitted that after signing the discharge voucher on 07.12.2006, the Complainant sent a protest letter dated 08.12.2006. First Surveyor appointed by Opposite Party No.1 assessed the loss at Rs.25,93,335/-. Opposite Party No.1 arbitrarily appointed a second Surveyor who assessed the loss at Rs.15,69964/-. The State Commission took notice of the fact that the Insurance Company appointed a second Surveyor. Other aspects of the matter were not taken into consideration. The Insurance Company was under obligation to indemnify the loss sustained by the Complainant.

10. Learned Counsel for Respondent No.1/Insurance Company submitted that as there were certain discrepancies in the Survey Report dated 13.03.2006, the Insurance Company appointed a second Surveyor. The second Surveyor discussed the discrepancies in his report and assessed the loss at Rs.15,69,964/-. Further, on the representation of the Complainant the amount was enhanced to Rs.18,23,436/-. This amount was accepted by the Complainant in full and final settlement of the claim and the Complainant issued a discharge voucher. It was also submitted that the discharge voucher was signed by the Complainant by his own freewill.

11. Learned Counsel for Respondent No.2 submitted that there is no allegation of deficiency in service on their part. Respondent No.2 had given a loan to the Complainant. As the Complainant could not repay the loan, the Bank initiated recovery proceedings against the Complainant.

12. The incident of fire is admitted by the Parties. It is also admitted that on the date of incident the Insurance Policy was in existence. Main dispute relates to the assessment of loss sustained by the Complainant. The Surveyor, vide report dated 13.03.2006, assessed the loss at Rs.25,83,335/-. The Insurance Company found certain discrepancies in the said report and thereafter appointed a second Surveyor, who submitted Survey Report dated 02.07.2006.

13. The Complainant alleged that appointment of Second Surveyor was illegal. In para 13 of the impugned order the State Commission observed that as per Section 64 UM, there was no prohibition in the Insurance Act for appointment of second Surveyor. While doing so, the Insurance Company was to satisfy the reason for not accepting the report of the first Surveyor and the need to appoint second Surveyor. In para 12 of the impugned order the State Commission dealt in detail the reason given by the Insurance Company for appointment of Second Surveyor. State Commission referred to Sub-section (2), (3) and (4) of Section 64-UM of the Insurance Act which says that 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, excessing exaggerated etc., the Insurer can appoint a second Surveyor. State Commission also relied on the judgment of Hon’ble Supreme Court in Shri Venkateswara Syndicate vs. Oriental Insurance Co. Ltd. & Anr. 2009 (8) SCC 507 wherein it was held that the Insurance Company can appoint a second Surveyor but it has to give satisfactory reasons for the same. We hold that appointment of second Surveyor by the Insurance Company was justified.

14. The Complainant also alleged that the second Surveyor arbitrarily reduced the assessment of loss to Rs.15,69,954/-. The Complainant had not produced any evidence to substantiate that the assessment made by the second Surveyor was arbitrary. The second Surveyor observed that for assessment of loss of stock, the first Surveyor had applied the rate in respect of ‘chana raw material’ more than the amount claimed. He also observed that MSEB bill for production of dal was also not consistent with the actual units consumed. Second Surveyor also found discrepancies in the price of machinery, spare parts, maintenance of machinery and sale receipt produced by the Complainant. State Commission observed that “as some discrepancies were found in the report of Shri Sarda the Insurance Company appointed second Surveyor who is Chartered Accountant and Surveyor for assessing the loss.” Second Surveyor assessed the loss at Rs.15,69,954/-. The Complainant

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had not produced any evidence to show that the Survey Report submitted by the second Surveyor was arbitrary. Moreover on a representation made by the Complainant, the claim was reviewed and enhanced to Rs.18,23,436/- which was accepted by the Complainant in full and final settlement of the claim and issued discharge voucher. The allegation of the Complainant that the second Surveyor arbitrarily reduced the assessment amount does not stand and is rejected. 15. The Complainant further alleged that the discharge voucher was issued due to financial crisis. In the instant cases the discharge voucher was executed voluntarily and the Complainant had not alleged any fraud, undue influence, misrepresentation or the like. However, the Complainant alleged that the discharge voucher was signed due to financial crisis. The Complainant had not produced any evidence oral or documentary to substantiate his argument. The argument is, therefore, rejected. 16. The State Commission has passed a well-reasoned order. The Appellant/Complainant failed to point out any illegality or material irregularity in the impugned order warranting interference in the Appellate jurisdiction. The Appeal is accordingly dismissed.
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