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Sunday, August 11, 2013

Fire Accident - Insurance = Surveyor’s report has significant and evidentiary value = It is well settled law that a Surveyor’s report has significant and evidentiary value unless it is proved otherwise which the complainants have failed to do so in the instant case. This view finds support from the judgment of this Commission, in D.N.Badoni Vs. Oriental Insurance Co.Ltd, 1 (2012) CPJ 272 (NC). In United India Insurance Co. Ltd., & Ors. Vs. Roshan Lal Oil Mills Ltd. & Ors., (2000) 10 SCC 19, the Hon’ble Apex court was pleased to hold :- “The appellant had appointed joint surveyors in terms of Section 64-UM(2) of the Insurance Act, 1938. Their report has been placed on the record in which a detailed account of the factors on the basis of which the joint surveyors had come to the conclusion that there was no loss or damage caused on account of fire, was given and it was on this basis that the claim was not found entertainable. This is an important document which was placed before the Commission, but the Commission, curiously, has not considered the report. Since the claim of the respondent was repudiated by the appellant on the basis of the joint survey report, the Commission was not justified in awarding the insurance amount to the respondent without adverting itself to the contents of the joint survey report, specially the facts enumerated therein. In our opinion, non-consideration of this important document has resulted in serious miscarriage of justice and vitiates the judgment passed by the Commission. The case has, therefore, to be sent back to the Commission, for a fresh hearing”. He has placed reliance on ‘Panchanama’, prepared at the place of incident by the independent ‘Panchas’. He stated that ‘Panchas’ and Police, have stated that damage in the sum of Rs.76,39,090/- was accrued. It is noteworthy to see that no ‘Pancha’ was produced before this Commission. No affidavit of the ‘Pancha’ saw the light of the day. The said ‘Panchanama’ has an exiguous value. Moreover, in view of the Surveyor’s Report, the ‘Panchanamas’, prepared by self-appointed ‘Panchas’, pales into insignificance. It is, therefore, ordered that rest of the amount in the sum of Rs.2,10,000/-, with interest @ 9% p.a., be paid to the complainant, M/s. Keshav Trading Co., from the date of filing of the claim, till its realization. It may be mentioned here that there is inordinate delay in settling the claim of the complainant. Even if the complainant was not available, the claim should have been settled and the amount should have been sent at the given address. Keeping in view of these facts and circumstances, we also award compensation in the sum of Rs.50,000/-, which be paid within sixty days, by the insurance company, or else, it will carry interest @ 9% p.a. The Original Petition stands disposed of, in above terms.

published in http://164.100.72.12/ncdrcrep/judgement/00130807131226383OP6405.htm
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI


           ORIGINAL PETITION NO. 64 OF 2005

 

                      
Keshav Trading Company
Bhilwada Circle, Talati Road
Palitana, District Bhavnagar
Gujarat
Through Attorney, Sh.Nasruddin Bhai
S/o Noor Muhammad
Sneh Milan, ‘A’ Wing, Ground Floor
Room No.1, Dewan Maan
Vasai, Mumbai                                                                      … Complainant

Versus


Divisional Manager
United India Insurance Co.Ltd
Nava Para, Kaveri Shopping Centre
2nd Floor, Bhavnagar, Gujarat                                    … Opp. Party




BEFORE:

HON’BLE MR. JUSTICE J. M. MALIK, PRESIDING MEMBER

          HON’BLE DR. S. M. KANTIKAR, MEMBER



For the Complainant   : Mr. D.K.Thakur, Advocate
For the Opp. Party        : Mr. Vishnu Mehra,  Advocate

 

PRONOUNCED ON_1st  AUGUST, 2013



                                                O R D E R
JUSTICE J.M. MALIK
1.      The instant complaint was filed by Keshav Trading Company, which at present, consists of  three Partners, wherein  they  have claimed Rs.60.00 lakhs, with interest @ 18% p.a., from the Divisional Manager, United India Insurance Co. Ltd., from the date of filing the claim for the  loss due to fire in their premises. The complainant has  also           claimed compensation in the sum of Rs.75.00 lakhs.

2.      The complainant transacts the business of manufacturing and trading of raw material, finished cotton, cotton seeds, seed cake, seed oil, Bajaro, etc. 
Other traders used  to keep their cotton in the premises of  the complainant  company.  
Three  other parties also kept  their goods in the premises of  the complainant.
(i) In Hall No.1, Loose finished cotton weighing 22302 kgs  belonging to Babbha Shivubha Neshiyain;
(ii) In hall No.2, Loose finished  cotton belonging to  Jayvantsinh Mangal Singh, weighing 13628 kgs ;
(iii) 29 Bales, 29 Bal loose weighing 10945 kgs belonging to Bhagabhai Mulabhai;
(iv) In the rest of the premises, i.e., Hall Nos. 3, 4, 5 & 6, cotton weighing 115544 kgs, worth Rs.52,65,340/- were kept,  which belonged to the complainant  company.  
The entire premises  was  insured by  the  opposite party.  The total sum insured  was  in the sum of  Rs.60,00,000/-, i.e., Rs.50,00,000/- for the goods and Rs.10,00,000/-  for the premises building, machinery.
3.      During the night falling between 26th-27th, March, 2002, the entire  State of Gujarat was burning in communal violence and at about 3.00AM, the cotton in the premises caught fire due to electric short circuit.  The  fire  brigade and police were called.  They tried to extinguish the fire, but the cotton could not be saved.  The entire cotton turned into ashes. The  building  also  got  major damage due to fire.  The ‘Panchas’, from the neighbourhood  were called. They and the police opined that damage in the sum of Rs.76,39,090/- was  accrued. 

4.      The Insurance Company was also informed immediately.  The Surveyor assessed the loss.  All the documents were furnished.  
The insurance company, undue delayed the matter and did not settle the claim.  
Due to riots in Gujarat,  the  complainants got scared and they left  Bhavnagar  and  took  shelter  in Vadi, in Karnataka, where they had  some  contacts.  
Subsequently, they shifted to Mumbai as they were on  the verge of  starvation. The three  other persons, named above, also made claim against their respective cotton.Their claims were paid, but nothing was paid to the complainant.  
Ultimately, this complaint was filed  before  this Commission, on 18.07.2005.  

5.      The Opposite Party  contested  this case.  
The complainant alleges that it is a Partnership firm, 
but no registration certificate  has been filed under Section 69 of the Indian Partnership Act, 1932. 
The insurance company, vide its letter dated 11.11.2003, has validly declared the complainant’s claim as “No claim”. 
After repeated reminders  to  the complainant  firm, the complainant firm did not provide the relevant documents and information, records, etc., to the Surveyor as well as to the Insurance Company, in order to enable the insurance company to finalise the claim.  
The Surveyor, in his report, gave 25 reasons for not giving any claim to the complainant.  
All these reasons have been detailed  in the written statement itself. 
         
6.      The complainant  has denied that the above said three persons had kept the cotton in Hall Nos. 2 & 3. 

7.      We  have  gone through the evidence and heard the counsel for the parties.  
The counsel for the complainant has invited our attention towards 
Form No.’3CB’, under the Heading 
“Statement of Particulars required to be furnished under  Section 44 AB of the Income Tax Act, 1961, in case of  a person carrying  business”.   
The name of  Assessee is mentioned as Keshav Trading Company.  
In Col. No.18 - “Particulars of payments made to persons specified under Section 40 A (2) (b),
it is stated that  “Interest  to Partner  Rs.8,21,951/-“.  
This is prepared by M/s. S.V.Pandya & Associates, Chartered Accountants, dated 25.07.2002.   
The  complainants  have  also  placed on record 
Annexure-1, 
wherein Quantitative Details of Items Traded or Manufactured (Forming Part of Clause No.28 of Form No.3CD), dated 25.07.2002 and other documents which were prepared by M/s.S.V.Pandya & Associates.

8.      The learned counsel for the complainant submitted that OP be directed to pay the said loss of  Rs.60,00,000/-, with interest and compensation.

9.      We find  force in his argument, in a measure.  
The survey report clearly goes to show  the reasons  for  not allowing the entire claim.  
Para No.12 of the report is very significant and the same is hereby reproduced:-
“Survey & Inspection :
          Pursuant  to the  instructions  received  from the Insurer, I had been to Palitana on 29.03.2002  and subsequently, on 13.04.2002.  Visits were paid to the ginning and pressing factory of M/s. Keshav Trading Co., at Palitana, duly accompanied with the concerned Development Officer, Sh.C.V.Shah.  It was observed, as under:-
          12(1)  There  appeared no balance stock of kapas stored  and/or staked anywhere in  the factory premises  awaiting ginning and/or that on the platform of gin house to gin/process.

          12(2) There  appeared  no balance of any FP bales of cotton stored and/or staked anywhere in the premises.

          12(3) The gin house and press house were silent during my/our said visits.

          12(4) Stock of loose cotton in all 5 halls and gang-way spread all over the floor not up to the full capacity of halls to store loose cotton (i.e. equal to 50-100FP bales lot in the case hall are or size to store loose cotton for 100FP bales lot) and found to have burnt and or suffered fire damage.

          12(5) Quantity burnt and/or suffered  damage in the halls and gang-way explained as above was not obvious looking to the normal practice  of storing  and processing of cotton press factories, pressing the loose cotton party-wise for specific quality, cotton stored in the hall equal to 50 or 100 FP bales, as may be the case, of size of hall and expected supply, turn-by-turn, and on very few occasions, all  halls were full of stock, except  stock  of cotton received  from  the outside parties in a form of dhokdas.

          12(6) Contrary to the above, stock of cotton in all five halls and gang-way found  spread  all over the floor having reached height in range between 1’ to 2, excess and residual stock in nature which is normally found in the hall/s  and or press house after completion of converting and or processing of stock stored in individual hall of specified lot and quality.

          12(7) In view of  above aggregate stock of loose cotton in all 5 halls and gang-way worked out on basis of its volume in the vicinity of 120 FP bales.

          12(8) The press installed at the far end of the gang-way of press house seemed  to  have  been out  of function/quite since long, as can be seen  from the photographs taken in course of survey.  The same was also explained to have been broken down at the time of occurrence.

          12(9)  The press house halls are normally built of size which can house and/or can store stock of loose cotton equal to 50 FP bales and or 100 FP bales, around 600 sq.ft. and 1200  sq.ft, respectively.  In the instant case, the halls are found to have been built  bigger-than-normal capacity to store loose cotton equal to 100 FP bales, being super cleaner and  process on  super  cleaner built-in with three halls and extra floor space of the hall  apprehended to have arranged for movement of super cleaned cotton manually in each communicated halls from super cleaner room continently.

          12(10) Self prepared and computer generated records of the factory showing arrivals of stock only by couple of trucks belonging to the Factory Authority/ies are furnished.

          12(11) The building of press house with attached halls, press and super cleaner  were  not found to have caused any apparent fire damage and/or  any damage of whatsoever nature except that of gradual taken place of operational and wear and tear kind.

          12(12) An extent of damage caused to the surroundings, and/or press  house  buildings  did not  seem in order  to the quantity claimed to have  burnt  and/or  suffered  as can be seen from the photographs taken in course of  survey and photographs of  damage submitted by the authority of  the  factory  and  one of the insured/ M/s.Keshav Trading Co.

          12(13) Fire damage stains  and fire flame marks in the halls and in gang-way are ranging from 1’ height to 1.5’ average except for few small staking in heap form giving indication of pre-damage condition of stock staked therein bit less in height of the stain mark.

          12(14) Halls at their full capacity can store stock of loose cotton equal to 50 FP bales and or 100 bales as may be the case, reach the height of around 10’, which in this case was not found to appear in whatsoever nature and/or in any hall as can be seen from the photographs.

          12(15) In this context, matter/s in connection with “Survey and Inspection” and “The Claim”, and extent of damages surveyed to have been caused,  were  discussed at  length and Insured Authority/ies of the factory were explained  at  length about  consequential damages that could have been resulted to the building, machineries and surroundings of press  house if  the entire quantity  as per the idea about authority of the factory would have  been engulfed and/or attacked by the fire.

          12(16) Authority of  the factory and one of the Insureds M/s.Keshav Trading Co., subsequently had furnished an estimate of damage caused to the building amounting to Rs.10,00,000/- as if entire building required major reinstatement  as a result of the occurrence, contrary to post  occurrence  condition of  the same  as can be seen from the photographs having  not  caused any apparent damages and/or distortion and/or collapsed.

          12(17)  The Authority  of the factory and one of the insureds as well,  failed to  substantiate  the  quantity  claimed to have been damaged  in  the occurrence, in following respect.  Only self-prepared and computer  generated stock statement of arrival, process and that balance, as on date of loss, were shown and/or made available to me to substantiate “The claim”.

          12 (18) Inward-outward gate passes with weigh-bridge, load chits for quantity arrived in the factory for process and dispatched after processing were/are not made available.

          12 (19) Copies  of bills issued for processing charges to the outsider parties issued and details of payments, received from them and/or outstanding as the case may be were/are not made available.

          12(20) Records showing the history of the factory having processed stock  belonging to the other  parties in  the  recent past  or in the previous years were/are not made available. 

          12(21) Copies of sales bills in respect of current crop season pertaining to stock belonging to themselves were/are not made available.
          12 (22) Copies of sales tax returns for current and previous financial  years  mandatory  to file with sales tax department were/are not made available.

          12 (23) Factory authority and/or one of the insured were communicated vide my letter dated 17.04.2002 to comply the requirements to process their claim and subsequently, vide my RAD letter dated 24.06.2002  to furnish the same within the 15 days on receipt of the letter informing that default in compliance would lead to believe that they were/are not  interested in pursuing the claim and that the matter would be informed accordingly to the insurer.

          12 (24) Till this date, Authority of the factory and one of the insureds, M/s.Keshav Trading Co., Palitana, have not responded in  any way to fulfill the requirements to process the claim/s as under, vide said communications.
a) certified copy of Forensic Science Laboratory Analysis report.
b) Copies of gate passes of stock taken inward for processing and outward for delivery after processing of stocks belonging to other parties.
c) Copies of bills issued for processing to   respective  parties in connection  with two 
above.
                    d) Copies of bills with statement/s of own                     goods sold.
          e) Party-wise as well quantity-wise detailed
reports on processing carried out in the
current crop season of FP bales with lot
numbers and press numbers.
                   f) Audited accounts of sales-purchase and
stocks for last two years.
                    g) Certified copies of sales tax returns for
current and previous years.
                    h) Affidavit/s of rest of insureds/outside
parties in respect of goods sent to
M/s.Keshav Trading Co. for processing and bills issued to them for processing.
                    i) Statement showing full details of ginning
and pressing for last fifteen days preceding the occurrence, including the occurrence.
                  
12(25) To avoid further delay and to keep the report and record in order,  I am releasing the report on basis of volumetric inventory of the stock surveyed to have been burnt and or suffered damaged, although the  reported  cause and/or occurrence did not seem obvious giving rise to doubt-free effect of insured peril/s and in absence of vital details regarding arrival, processing and sales of stocks,  as asked for,  to comply with”.

10.    In para 14 of the Survey Report, the Surveyor has mentioned the loss and damage, as follows:-

“14.    Loss and Damage
Entire Stock valued as above burnt and or suffered fire damages
       
Rs.9,00,000.00
Less : Salvage
Rs.50,000.00

Rs.8,50,000.00
Less: Policy Excess
Rs.10,000.00
Net amount of damage
Rs.8,40,000.00 (Rupees Eight Lakhs Forty-Thousand only)

Issued without prejudice, subject to terms and conditions of the insurance/policy/ies.
                           Sd/-
                           Udayana Vora
                           Surveyor/Loss Assessor”.


11.    It is, thus, clear that the loss occurred in the sum  of Rs.8,40,000/- , in respect of the premises of the complainant, in respect of all the four claimants, including the complainant.  
The counsel for the complainant  admitted  that the Surveyor did not have ill-will, bad blood or enmity, against the complainant.  He could not give a single, cogent and plausible reason  why  the report of  the Surveyor should be discarded. 
 It is well settled  law  that a Surveyor’s report has significant and evidentiary value unless it is proved otherwise which the complainants have failed to do so in the instant case.  
This view finds support from the judgment of this Commission, in  D.N.Badoni Vs. Oriental Insurance Co.Ltd, 1 (2012) CPJ 272 (NC).  In United India Insurance Co. Ltd., & Ors.  Vs. Roshan Lal Oil Mills Ltd. & Ors., (2000) 10 SCC 19, the Hon’ble Apex court was pleased to hold :-
          “The  appellant had appointed joint surveyors in terms of Section 64-UM(2) of the Insurance Act, 1938.  Their report has been placed on the record in which a detailed account  of the factors on the basis of which the joint surveyors had come to the conclusion that there was no loss or damage caused on account of fire, was given and it was on this basis that the claim was not  found entertainable.  This is an important document which was  placed before the Commission, but the Commission, curiously, has not considered the report.  Since the claim of the respondent was repudiated by the appellant on the basis of the joint survey report, the Commission was not justified in awarding the insurance amount to the respondent without adverting itself to the contents of the joint survey report, specially the facts enumerated therein.  In our opinion, non-consideration of this important document has resulted in serious miscarriage of justice and vitiates the judgment passed by the Commission.  The case has, therefore, to be sent back to the Commission, for  a  fresh hearing”.

12.    For all these reasons, we place reliance on the report of the Surveyor.  The complainants have failed to bolster their case, with evidence.  They have not co-operated with the Surveyor/Insurance Company.  The Partners of the complainant  themselves  admit  that  they had left for Vadi, in Karnataka.  They should have furnished their address to the Insurance Company or extended co-operation to the Insurance Company so as to enable the Surveyor to winnow truth from the falsehood.  Absence is too feeble, an excuse to be taken seriously.  The complainant should have produced  the solid and unflappable  evidence  before the  Surveyor or in the proceedings before us.  Till now, the complainant has failed to lead any cogent, convincing and conclusive evidence  to bolster his entire claim.

13.    We have also  perused  the  Affidavit/Evidence  of Nasaruddin Bhai.  He has placed  reliance on ‘Panchanama’, prepared at the place of incident by  the independent  ‘Panchas’.  He stated that ‘Panchas’ and Police, have stated that damage in the sum of Rs.76,39,090/- was accrued.  It is noteworthy to see that no ‘Pancha’ was  produced  before this Commission.   No  affidavit  of  the ‘Pancha’  saw the  light of the day.  The   said ‘Panchanama’ has  an exiguous value. Moreover, in view of the Surveyor’s Report, the ‘Panchanamas’,  prepared by self-appointed ‘Panchas’,  pales into insignificance.

14.    He also  submitted  that  he has  placed on record the Audit of loss. It is stated that all the documents were handed over to the OP.  The complainant  has placed on record the statement of loss occurred to the aforesaid Halls.   Except these insignificant documents, no other document, mentioned by the Surveyor, was produced.

15.    The  learned  Counsel for the OP also brought to our notice that, as a matter of fact, three other complaints, by other three claimants,   were filed  before the District Forum, Bhavnagar.  M/s.  Keshav  Trading Co. was arrayed  as OP No.3. OP No.3 did not contest  these  complaint cases.  Consequently,  in these  three  cases,  the claim in the sum of Rs.2,10,000/-, was granted  to the other complainants, namely,  Babbha Shivubha Gohil, Bhagwanbhai Mulabhai and  Jayendrashi  Mangalshih Gohil.

16.    Counsel  for  the OP argued  that  the  opposite  party has no objection  if  the claim of  the complainant is allowed to pay rest of Rs.2,10,000/-. The amount  already  paid to the three other complainants goes to Rs.6,30,000/-. The amount assessed by the Assessor is Rs.8,40,000/-  It is, therefore, ordered that  rest of the amount in the sum of  Rs.2,10,000/-,  with interest @ 9% p.a., be paid  to the complainant, M/s. Keshav Trading Co., from the date of filing of the claim, till  its realization.  
It may be mentioned  here that  there  is  inordinate  delay in settling the claim of the complainant.  Even if the complainant  was  not available, the claim should have  been  settled and  the  amount  should  have  been sent at the given address.  Keeping in view of these facts and circumstances, we also award compensation  in the sum of Rs.50,000/-, which be paid within sixty days,  by the  insurance company, or else, it will carry interest @ 9% p.a.
          The Original Petition stands disposed of, in above terms.

....…………………………..
(J. M. MALIK, J)
                       PRESIDING MEMBER


                        .…..………………………..
(S. M. KANTIKAR)
                MEMBER



dd/29

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