H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA.

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FIRST APPEAL NO.43/2009.

RESERVED ON 02.06.2009.

DATE OF DECISION: 23.6.2009.



National Insurance Company Ltd. Divisional Office, Him Land Hotel, Shimla-1, H.P. through its Assistant Manager.

… … Appellant.

Versus

M/S Durga Products through its Proprietor Sh. Ashok Kumar R/O Village Rampur Jattan, P.O. Kala Amb, Tehsil Nahan, District Sirmour, H.P.

… … Respondent.



Hon’ble Mr. Justice Arun Kumar Goel (Retd.), President.

Hon’ble Mrs. Saroj Sharma, Member.

Hon’ble Mr. Chander Shekhar Sharma, Member.



Whether approved for reporting? Yes.



For the Appellant: Mr. Jagdish Thakur, Advocate.

For the Respondent: Mr. Ashok Tyagi, Advocate.



O R D E R





Justice Arun Kumar Goel (Retd.), President.





1. Appellant-Insurance Company is aggrieved from the order of the District Forum, Sirmour at Nahan, dated 16.1.2009 passed in Complaint No.60/2005. By means of impugned order while allowing the complaint of the respondent, appellant has been directed to pay Rs.7,85,768/- after adjusting Rs.19,14,232/- already paid, with interest @ 9% per annum from the date of filing of the complaint i.e. 7.7.2005 till full payment of the said amount, alongwith litigation cost of Rs.2,000/-. Appellant has been directed to comply with the order within 45 days after receipt of the copy of the said order.



2. Admitted facts giving rise to this case are that respondent was insured under a valid policy of insurance on 26.10.2003 when fire incident took place at its Industrial Unit. It was insured to the extent of Rs.37,00,000/- for stocks of all kinds of papers, stationery, raw material,

finished goods etc. Record of the complaint file shows that cause of fire was due to short circuit and the fire fighting department as well as Surveyor both have also come to this conclusion. On receipt of intimation regarding fire, appellant deputed Surveyor Shri Atul Gupta, Chartered Accountant to assess the loss. His report is Annexure OP.1 dated 28.2.2004. This date is of significance in the context of consent referred to, as well as relied upon by the Surveyor in his report and was pressed into service by Shri Thakur while placing reliance on OP.6, the discharge voucher jointly signed on behalf of the respondent alongwith its financier i.e. UCO Bank, Ogli.



3. According to the respondent, as a result of the fire in question which broke out at about 6.00 A.M., the entire insured stocks were destroyed. Report to this effect was recorded at Police Post, Kala Amb. Stock destroyed as a result of the fire was of the value of Rs.27,00,000/- according to the respondent. As already observed Shri Atul Gupta was appointed to assess the loss. On a reference having been made by Regional Office, he visited the spot on 30.10.2003, 7.11.2003 and 8.11.2003. In the aforesaid background while submitting his report dated 28.2.2004, Shri Atul Gupta attached consent given on behalf of the respondent vide Annexure OP.2. This consent letter is dated 25.2.2004 when it was agreed on behalf of the respondent that it accepts the sum of Rs.19,39,512/- in full and final settlement of its fire claim . Vide Annexure OP.6 based on this consent, Rs.19,14,232/- was paid as noted above.



4. Specific averments made in his complaint by the respondent were, that he was in no win situation because of total loss due to fire, the Surveyor had correctly assessed the loss but the appellant had illegally reduced it to Rs.19,14,232/-. And because respondent had lost everything and was completely shattered as well as ruined and virtually had come on the road, so much so that he had no hope of his livelihood. Banker of the respondent was also pressing hard requiring it to arrange repayment of loan and had threatened to take over the assets without going to Court of law and threat of his being sent to civil prison was looming large per him. On the other hand, after 18 months of the fire, according to respondent, the staff of the appellant informed it to either accept Rs.19,14,232/- or else it shall not pay any amount for years together. Respondent being already under financial crunch, mental tension and pressure on account of heavy losses and loan etc. also mounting, had no option but to succumb to duress tactics of the appellant. Had he not surrendered to the duress exercised on him, respondent alleges that he would have committed suicide. It was due to these reasons that the amount was received vide Annexure OP.6. Thus it is the case of the respondent that it was under duress, as well as for these compelling reasons that OP.6 was executed. This being an involuntary act of having accepted lesser amount offered by the appellant, he filed the complaint and claimed Rs.7,85,768/- being the difference of the loss actually sustained i.e. in the sum of Rs.27.00 lacs and of the amount actually paid to him. He claimed interest @ 13% per annum on this amount, besides cost of litigation .



5. When put to notice, stand of the appellant was that the complaint was not maintainable since the amount of Rs.19,14,232/- was received in full and final settlement of its claim and that the respondent was not a consumer as defined under Section 2(a) (it should be 2 (1) (d) ) of the Consumer Protection Act, 1986), hereinafter referred to as the Act. On merits, it was pleaded that Ashok Kumar was not authorised to maintain the complaint and it was not a consumer. Averments qua financier were denied. Appointment of Surveyor was admitted after receipt of intimation of loss having been sustained due to fire. Loss being of Rs.27.00 lacs was not admitted. Respondent did not produce the stock register which was deliberately withheld with the sole aim to get undue compensation. Allegations of pressure, duress etc. were purely after-thought according to the appellant. This was aimed to extract undue money. With the payment of Rs.19,14,232/- controversy was set at rest between the parties is the mainstay of the case of the appellant.



6. District forum below after having taken note of the pleadings and evidence produced by the parties, and after hearing them allowed the complaint as noted in the preceding paras of this order. Hence this appeal.



7. Shri Thakur on behalf of the appellant submitted that with the payment of Rs.19,14,232/- which was accepted out of his free will and volition by the respondent, the matter stood settled finally once and for all. In case this amount was not acceptable, respondent was not bound to accept the same or having signed the discharge voucher Annexure OP.6. He further submitted that not only the appellant but even its financier also countersigned it, amount was paid only then to the latter.



8. This plea was seriously contested on behalf of the respondent. Per its learned Counsel situation in which his client was placed can better be imagined than explained. On one hand, his client was on the road, on the other hand bank was insisting for repayment of its outstanding amount, and the appellant-Insurance Company was taking its own time. In these circumstances, he had no option but to succumb to whatsoever was offered by the appellant. It was for these compelling reasons as well as on account of the stand of the respondent as noted hereinabove that he signed Annexure OP.6.



9. Submission of the voucher having been signed by the financier, falsifies the denial of financier in its reply by the appellant.



10. For the reasons to be recorded hereinafter, this plea urged on behalf of the Insurance Company merits rejection. Ordered accordingly. Fire in this case is of 26.10.2003. Surveyor leisurely took his time to furnish his report, which he did exactly after 5 months after fire, vide Annexure OP.1. It is accompanied by the consent given by the respondent, Annexure OP.2. It is dated 25.2.2004. Appellant did not accept the consent given by the respondent on receipt of OP.1, the Surveyor’s report within reasonable time. Why, Mr. Thakur had no answer. Had this amount been paid immediately after receipt of the Surveyor’s report, respondent might not have been in a position to question the payment received by him. In this behalf we are of the confirmed view that at a given point of time as well as with a view to buy peace and above all in order to start a new leaf of life, a litigant like respondent might agree to accept a lesser amount. But then appellant cannot be allowed to say that it will bind down the respondent with consent Annexure OP.2, but will not act with expedition and dispatch. In case it was acceptable to the appellant, then the payment ought to have been made within a week or so after receipt of Annexure OP.1. With a view to cover this lapse of his client, Shri Thakur submitted that Insurance Company had appointed another Surveyor, namely, N. Kumar Surveyors Pvt. Ltd. whose report is Annexure OP.5. It is dated 25.3.2005, whereas Annexure OP.6 is undated. When this amount was paid vide this discharge voucher, Shri Thakur had no explanation. We are sure that staff of the Insurance Company is not a bunch of illiterate rustic people who had got it executed. In their reply on one hand, their plea is that they are custodians of public money, whereas Annexure OP.6 shows the seriousness with which the public money was dealt with by the appellant. We leave this matter here only.

11. In these circumstances we hold that appellant cannot be allowed to use Annexure OP.2 as a trap to bind down the respondent for all times to come. If the submission of Shri Thakur is upheld which is based on Annexure OP.6, then it leads to the situation “heads I win, tails you lose”.



12. In this context we are further of the view, that the Annexure OP.6 was executed by the respondent under compelling reasons unwillingly, as well as on holding out by the staff of the appellant that either he should accept this amount or he will not get anything for years. We also accept the stand of the respondent that the bank was after him to take over his assets and he was under the threat of being sent to civil prison. In these circumstances, respondent could not be precluded from instituting the complaint out of which this appeal has arisen.



13. What is the effect of a receipt under such circumstances is no more res integra in view of the decisions of the National Commission in the case of United India Insurance Co. Ltd. Versus K. Gangadharan, 2001 (3) CPR 192 (NC) and Oriental Insurance Co. Ltd. & Ors. Versus Government Tool Room and Training Centre, 2008 (1) CPC 495.



14. Next submission urged by Mr. Thakur was that the report of the Surveyor, Annexure OP.1, was not controverted on behalf of the respondent, therefore according to him, District Forum below fell into error while allowing the complaint and awarding compensation as noted in the preceding paras. In this behalf he also laid great emphasis on Annexure C.2 as well. When reference is made to Annexure OP.1, it is clear that in paragraph 11.18.2 the Surveyor has come to the conclusion, that stocks reduced to ashes/semi burnt were of the value of Rs.26,22,252/-.



15. In this context he has also taken note of bank statements in paragraph 16.6 from February, 2003 upto October, 2003. These range between rupees thirty lacs to thirty seven lacs. Surprisingly in paragraph 16.8, he has brushed aside these figures by observing, “However, these figures have only academic value and no reliance can be placed on them for assessment of loss”. Why and for what reasons, as well as on what basis he came to this conclusion that no reliance could be placed on them for assessment of loss, he is silent. As an expert, in case he wanted this opinion to be upheld, he was supposed to assign reasons howsoever brief those might have been. He admits that there was no breach of policy conditions or warranty by the respondents.



16. In this behalf we are constrained to observe that out of the claim of Rs.27.00 lacs, stock of the value of Rs.2,98,913/- i.e. finished stock/raw material was found to be unaffected. Surveyor according to us was not justified when he deducted the cost of stocks of semi burnt copies or of stocks damaged due to heat/water alongwith stocks of finished stocks/raw material that was unaffected. Annexures referred to in his report have not been placed on record. Again, why these were not produced, learned Counsel for the appellant had no answer. In fact the report of Surveyor cannot be accepted being incomplete.



17. At this juncture we may also notice that no case was made out for appointment of subsequent surveyor who submitted his report, Annexure OP.5. Surveyor one after the other cannot be appointed at the whim and fancy of the insurer like appellant. Moreover Surveyor’s report is a pre-requisite for settlement of insurance claim of rupees twenty thousand or more. However, it is not a last and final word. This is what was observed by the Hon’ble Supreme Court in its judgment dated 9.4.2009, in the case of New India Assurance Company Ltd. Versus Pradeep Kumar, 2009 CTJ 599 (Supreme Court) (CP). As such submission of Mr. Thakur that Surveyor’s report was not rebutted, is of no consequence. We may also observe here that everything including stock registers were burnt due to fire in the premises is clearly made out from the complaint file. In these circumstances respondent cannot be directed to produce what was impossible. As such this plea urged by Mr. Thakur is hereby rejected.



18. Next plea in support of this appeal urged by Mr. Thakur is based on the affidavits of the Shri Atul Gupta, Surveyor in support of his report, Annexure OP.1, and of Shri Dhumal Singh, Fire Officer, Fire Station, Nahan and his report, Annexure OP.3. According to Mr. Thakur, Fire Officer had clearly stated that loss caused due to fire to the factory was of Rs.3.50 lacs and material worth Rs.12.00 lacs was saved from fire. Report in Occurrence Book of the Himachal Pradesh Fire Service also speaks of the loss caused as well as stocks saved. What was the basis for the Fire Officer to have arrived at the conclusion as stated by him in his affidavit which is at page 55 and the entry in the Occurrence Book, Annexure OP.3, could not be pointed out on behalf of the appellant. Situation would have been different if the Officer had spoken about the loss approximately as well as valuation of the stock that was saved in the like manner. Therefore, no benefit can be derived from the affidavit of the Fire Officer as well as the entry contained in Occurrence Book Annexure OP.3. If this stand of the appellant on the valuation of the damaged as well as unaffected stocks after fire is accepted, then the report of Surveyor, Annexure OP.1 has to be rejected. This is because of vast difference given by them about the stock that was destroyed due to fire and that was unaffected.



19. Reasons for not accepting Surveyor’s report on the basis of which he has sworn his affidavit have been dealt with in preceding paras, hence no benefit can be derived by the appellant from the said affidavit.



20. Next ground urged in support of this appeal by Mr. Thakur was that on what basis the respondent had claimed loss to the extent of Rs.27.00 lacs, because no bills as well as record from any other quarter like the Sales Tax Barrier through which the finished goods/raw material had ingress and egress to and fro to the factory premises, was produced. This would have been the best evidence according to Mr. Thakur to support the plea of the respondent regarding extent of loss suffered as a result of the fire in question. We find no substance in this plea. Reason being that it is not the case of the appellant that either fire had not taken place and/or the respondent had not sustained any loss due to fire.



21. In this behalf, the bank statements assume significance. Reason being that the Unit was admittedly financed by the bank. We have no reasons to disbelieve the stock statements furnished by the respondent to his banker. Strangely enough, the Surveyor in his report, Annexure OP.1 in its paragraph 16.8 has conveniently and with a terse two liner refused to accept the same. In all fairness, the Surveyor, who was a Chartered Accountant in this case, ought to have verified the factual position from the bank before coming to his findings that stock statements furnished to the bank were only of academic value and no reliance could be placed on those. By making this observation, he has in fact raised a serious doubt even on the working of the bank. Why the Surveyor did not verify the factual position regarding the stock statements from bank, Mr. Thakur had no answer save and except by arguing that these are prepared at the instance of the bank who has to ensure that 25% margin is maintained over and above the financed amount/limit allowed. This plea is being noted to be rejected for the simple reason that if this is correct then what falls from it is, that bank was hand in glove with the respondent when the latter was doing window dressing in the stock statements furnished to the bank and on such basis was getting the finance from the bank by filling incorrect statements. In case this was correct position, then there was no question of any amount having been paid to the respondent/its banker by the appellant much less the sum paid vide Annexure OP.6.



22. Now coming to the question as to whether assessment made by the District Forum below is correct or not, and at the same time whether the impugned order deserves to be upheld and/or needs to be modified.



23. Looking to the totality of the facts and circumstances of the case, we are of the view that there is no material placed on record by the respondent to uphold its plea that damage caused due to fire was in the sum of Rs.27.00 lacs. As according to the respondent, stock registers, all other records showing the goods received and sold after conversion as well as the stocks of finished/unfinished goods were destroyed in the fire in question. As such he was not in a position to place anything before the Surveyor or in support of the complaint. In these circumstances we are of the view that some guess work has to be there as the loss assessed at a sum of Rs.27.00 lacs is mere ipse dixit of the respondent, and it cannot be accepted on its face value. As such we are of the view that it needs to be reduced from Rs.27.00 lacs to Rs.24,05,571/-. We order accordingly. This figure based on guess work we have taken from the report of the Surveyor. Reason being that neither the semi burnt/damaged goods, nor those which were spoiled due to heat and water would be of any use to the respondent. What were the details of the stocks that is alleged to have been ”as saved from the fire” in Annexure OP.1, there is no material on record. In fact incomplete report has been filed by the appellant with a view to accept this appeal. Accordingly the impugned order of the District Forum below in our opinion needs to be modified. Ordered accordingly.



24. No other point was urged.



In view of the aforesaid discussion, while partly allowing this appeal, it is ordered that the respondent is entitled to Rs.24,05,571/- minus already paid sum of Rs.19,14,232/- i.e. to Rs.4,91,339/- only. It is on this sum of Rs. 4,91,339/- that the respondent will be entitled to interest at the rate as well as from the date with costs, as directed by the District Forum below in the impugned order. Subject to this modification, appeal stands disposed of, leaving the parties to bear their own costs.



All interim orders passed from time to time in this appeal shall stand vacated forthwith.

Learned Counsel for the parties have undertaken to collect authenticated copy of this order free of cost from the Court Secretary as per Rules.

Shimla,

June 23, 2009.

( Justice Arun Kumar Goel ) (Retd.)

President



( Saroj Sharma )

Member



/BS/ ( Chander Shekhar Sharma )

Member.