Kerala

Idukki

CC/135/2019

GOPI K M - Complainant(s)

Versus

The New India assurance Co. Pvt ltd - Opp.Party(s)

25 Oct 2023

ORDER

DATE OF FILING : 11.7.2019

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 25^th  day of  August,  2023

Present :

SRI. C. SURESHKUMAR                  PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.135/2019

Between

Complainants                                          : 1. M/s. Karinellickal Stores,

                                                                   Upputhara.

                                                                   Represented by its Proprietor

                                                                   Gopi K.M.

      2.  Gopi K.M.,

                                                                   Karinellickal House,

                                                                   Upputhara P.O.,

                                                                   Idukki – 685 505.

 (Both by Adv: Sijimon K. Augustine)

And

Opposite Parties                                       : 1. The New India Assurance Company Ltd.,

                                                                   Parakandathil Buildings,

                                                                   Puliyanmala Road, Kattappana,

           Idukki District – 685 508.

       2. The New India Assurance Company Ltd.,

                                                                   Registered & Head Office,

New India Assurance Building,

                                                                   87 M.G. Road, Fort Mumbai – 400 001.

(Both by Adv: Thomas Sebastian)

 

O R D E R

 

SRI. C. SURESHKUMAR, PRESIDENT

 

1.  This is a complaint filed under Section 12 of the Consumer Protection Act of 1986 (the Act, for short).Complaint averments are briefly discussed hereunder :

 

Complainant is  proprietor of a provision store known as M/s. Karinellickal stores, functioning in a 5 shutter building bearing door Nos.154/VI, 155/VI, 156/VI, 157/VI and 158/VI of Upputhara Gramapanchayath.  Complainant is running this provision store for earning his livelihood with the assistance of his 2 children.  He had taken a Standard Fire and Special Perils Policy for non-corporate on 22.6.2018, from 1^st opposite party, which is the branch of New India Assurance Company Ltd., functioning in Kattappana.  2^nd opposite party is the Company itself, having its registered office in Mumbai.  Insurance policy number is 76230011180100000112 and it is valid till 21.6.2019.  Stock and goods and furniture of the store are insured against destruction / damages caused by  riots, strikes, natural calamities like storm, cyclone and floods.  Furniture and fittings of the shop is insured for Rs.1 lakh.  Stock and stock in process for Rs.49 lakhs.  Duing great floods of 2018, entire building including provision store of  complainant was submerged in water on 15^th and 16^th of August.  On 15.8.2018, store had stock and stationery items worth Rs.64,59,044.79/-.  Purchase bills for previous 3 months, that is, June, July and August 2018 shows an average purchase of Rs.35 to 45 lakhs per month.  This could be seen from GST returns filed for the period.  Damage estimated to stock and stationery is between 30 – 35 lakhs owing to flood.   This was claimed from opposite parties.  Opposite parties had inspected the shop, collected stock details, copies of previous bill and had assessed damages to the extent of Rs.25 lakhs.  However, to the surprise of complainant, only Rs.5.72 lakhs was sanctioned as insurance money, despite heavy loss sustained by complainant.  Total sum assured is Rs.50 lakhs which covers risk of entire stock and stationery items of the shop.  Though complainant had produced all the documents to prove the damages caused, opposite parties had willfully denied  legal claim of complainant without any reason what so ever.  Complainant is entitled to get insurance amount for damages actually sustained which is limited to Rs.24 lakhs for the purpose of this complaint.  Opposite party has only given Rs.5 lakhs.  Complainant is entitled to get back the remaining amount of Rs.19 lakhs from opposite parties.  Non-payment of rightful insurance money amounts to deficiency in service and unfair trade practice.  Complainant therefore prays for payment of Rs.19 lakhs by opposite parties towards his insurance claim with 12% interest from the date of complaint, grant of Rs.50,000/- as damages and Rs.10,000/- as litigation costs. 

 

2.  Upon notice, opposite parties have appeared and filed a joint written version.  Their contentions are briefly discussed hereunder :

         

According to opposite parties, complaint is not maintainable in law or upon facts of the case.  1^st opposite party is not the branch office of 2^nd opposite party, but is it’s divisional office.  1^st opposite party admits that complainant’s business concern, M/s. Karinellickal stores, Upputhara was insured with it as per Standard Fire and Special Perils Policy No.76230011180100000112, for the period from 22.6.2018 to 21.6.2019.  Policy covers furniture, fittings and fixtures for Rs.1 lakh, stock and stock in process (provision and stationary) for Rs.49 lakhs.  It is incorrect to say that stock worth Rs.30-35 lakhs was submerged in water and damaged due to flood.  It is also incorrect to say that opposite parties have assessed damages to the tune of Rs.25 lakhs.  Complainant had submitted claim showing estimated loss of Rs.25,70,113/-.  Assessment of 1^st opposite party is that total value of damaged stock is Rs.10,09,640/-.  Amount payable as pr policy conditions is Rs.5,73,235/-.  Upon intimation from complainant, 1^st opposite party had deputed Mr. T.S. Biju, a surveyor who is an expert and qualified person, licensed by IRDA, for assessing the damages.  Surveyor had inspected the shop without delay and found that flood water had entered inside the shop only to a height of 2 feet from ground level.  Stock stored at lower levels inside the shop got wet and was damaged.  Surveyor had prepared a list of damaged items in the shop and had assessed the loss caused due to flood.  According to surveyor, 42 items stored in the shop were damaged.  Surveyor had assessed total value of damaged stock as Rs.10,09,640/-.  After deducting Rs.1,02,983/- towards average profit and GST, loss on purchase was fixed at Rs.9,06,657/-.  After deducting salvage value of Rs.25,000/-, net loss assessed was Rs.8,81,657/-.  Upon verification of sales records, GST returns, audited balance sheet and profit and loss account of the concern, value of pre-incidental stock (closing stock) as on 15.8.2018 was found to be Rs.71,59,566/-.  However, sum insured is only Rs.49 lakhs.  There was no insurance for entire stock.  Real value of  stock was suppressed by complainant.  As policy conditions were violated, policy became voidable at the instance of opposite party.  On the basis of norms for assessing value in case of any insurance, surveyor had assessed net loss as Rs.6,03,405/-.  From this, an amount of Rs.30,170/- is deducted towards policy excess.  Total payable amount according to surveyor is Rs.5,73,235/-.  A report was filed by surveyor showing the assessment of loss and amount payable to complainant.  Surveyor  assessed net loss on the basis of actual loss caused due to flood, on the basis of norms for assessment in case of under insurance.  Since real value of stock was not disclosed by complainant, there is non- disclosure of material facts.  Complainant is only entitled to get claim amount as assessed by surveyor.  As per condition No.10 of policy, if stock (insured property) is of greater value than the sum insured, the insured will have to bear a rateable proportion of loss.  

 

On the basis of survey report, opposite party had paid Rs.5,73,235/- in full and final settlement of the claim.  This amount was received by complainant also in full and final settlement of claim.  Hence there is no cause of action against opposite parties.  There is no deficiency in service or unfair trade practice from the side of opposite parties.  Opposite parties are not liable to pay anything more than what has been paid towards claim of complainant.  Complainant is not entitled for the amount prayed for in the complaint towards insurance value, damages or litigation costs.  Instead complaint is liable to be dismissed with costs of opposite parties under section 26 of the Act.

 

We notice that written version was filed out time.  An application was also preferred by opposite parties for reception of written version.  Proceedings of the case would reveal that version was received by our predecessors in office and therefore it is to be taken that delay occasioned has been condoned.  It is also seen that after this case was taken for orders, opposite parties have come out with another application for amending the written version and also have filed a witness schedule.  In so far as amendment of written version is concerned, prayer was to incorporate a plea that complainant was indulging in commercial activities and was not running the store for earning his livelihood.  This plea could have been taken by opposite parties in the first instance itself, while filing their written version.  We do not  think that any amendment is to be made since  evidence on this count by complainant has not been challenged in cross examination by opposite party.  In so far as witness schedule is concerned, wisdom had dawned upon opposite parties too late.  Earlier,  upon application filed by opposite parties, 2 documents were admitted from their side without formal proof.  Therefore we are not inclined to again reopen evidence for examination of witness from the side of opposite parties. No reason is given for not taking steps in time. It is pertinent to note that  opposite parties have chosen to tender evidence,  In this case, apparently, only to get the survey report admitted which has already been done.  Now what has been stated in the survey report alone can be supported in evidence and any improvisation by the surveyor cannot be considered without corroboration which is lacking from the evidence which has now surfaced.  Therefore, applications for amendment of written version and reopening of evidence fail again and are hereby dismissed. 

 

3.  Case was posted for evidence after affording sufficient opportunity to both sides to take steps.  From the side of complainant, he himself was examined as PW1 and Exts.P1 to P7 were marked.  No oral evidence was tendered by opposite parties.  Ext.R1 and R2 series 2 in numbers were marked from their side without formal proof.  Therefore evidence was closed and case was finally heard.  No argument notes have been filed by both sides.  On the date of final hearing, complainant or his counsel were not present.  We have heard the learned counsel appearing for opposite parties 1 and 2.  Now the point which arise for consideration are :

1)  Whether the complaint is maintainable ?

2)  Whether there is any deficiency in service or unfair trade practice from the side of opposite parties ?

3)  Whether complainant is entitled for the reliefs prayed for ?

4)  Final order and costs ?

 

4.  Point No.1 :

 

          Opposite parties had raised a contention that complaint is not maintainable. Presumably, this is upon the premises that complainant is running the shop for commercial purposes.  That there is only profit earning motive and not for  livelihood.  Complainant has specifically pleaded and given evidence that the shop is run  by him with the assistance of his 2 children, for his livelihood.  Evidence tendered by PW1 in this regard has not been challenged during cross examination.  That being so, we are of the view that complainant has proved that he is running the shop for the purpose of earning his livelihood. He comes within the definition of consumer u/s 2(7) of the Act. No other contentions were raised by opposite parties regarding maintainability.  Hence we find that complaint is maintainable.

 

 

 

 

5.  Point Nos.2 and 3 are considered together for the sake of convenience :

 

          According to complainant, he had taken policy cover for a sum of Rs.49 lakhs towards insuring of stock and stock in process.  He claims that a portion of stock was damaged due to flood.  According to him loss occasioned was of Rs.25,70,113/-.  Though he had intimated opposite parties and claimed this amount towards his insurance, opposite parties have only assessed loss as Rs.5,73,235/-.  This amount is not the actual loss.  Non-payment of actual loss sustained towards insurance claim, according to him, amounts to deficiency in service and unfair trade practice.  Complainant has alleged that surveyor has not properly assessed the loss caused to the stock owing to flood.

 

          On the other hand, opposite parties have contended that inspection of the surveyor had revealed that water level had risen only to 2 feet from the floor level of the shop.  Due to this, stock kept near to the floor at low level alone were damaged.  Surveyor had, after physical verification, prepared a list of damaged stock, value of which comes to Rs.10,09,640/-.  After due deductions and also excess, total amount payable is only Rs.5,73,235/-, which has been paid and nothing more is to be paid to complainant toward his insurance claim.  Inter alia, it is also contended that there was under insurance.  As per final accounts pertaining to the period maintained by the complainant, value of stock as on 15.8.2018 was Rs.71,59,566/-.  However, insured stock is only of Rs.49 lakhs.  Due to under insurance, complainant is entitled to get only proportionate amount as he also has to bear a rateable proportion of the loss. 

 

          Thus, these are the rival contentions.  In so far as method of calculation of loss  is concerned, complainant has not raised any contentions challenging the same.  However, he would challenge Ext.R2 report by the surveyor on the premises that actual loss sustained come to about Rs.25 lakhs.  Though the surveyor was convinced about this, he had shown a lesser value of the loss occasioned.  Upon perusing the survey report and the photographs produced along with it, we are inclined to agree with the complainant.  Firstly stock mainly consists of edible items meant for human consumption.  Surveyor himself had admitted that the flood water had entered the shop room to a level of 2 feet from the floor.  Photographs would reveal that the damaged items are kept inside the shop upon racks horizontally and in sacks on floor too.  Obviously sacks and gunny bags containing provisions and other stock were kept upon the floor of the shop. Quantity of stock in sacks or gunny bags is higher than those of items in packages kept upon racks. Those packed provisions and stock kept on racks above the level of 2 feet may not have been damaged. However it remains to be seen whether these were fit for human use due to damp atmosphere inside owing to flood waters. However, those at level below 2 feet inside the shop were submerged in water and damaged.

 

          In so far, gunny bags and sacks are concerned, those were admittedly kept upon the floor.  Going by the surveyor’s assessment, these sacks must have been submerged in water to a level of 2 feet.  If that be so, the remaining portion inside the sack which is above 2 feet level must also have become damaged.  The report does not say whether the surveyor had opened the sacks and carried out inspection as to ascertain what was the extent of damages caused to the provisions kept inside sacks and gunny bags.  We should also bear in mind that these are mostly edible contents meant for human consumption.  The question whether remaining contents inside the sacks or gunny bags were damaged or not, could have been effectively answered only upon examination of the contents with the assistance of a health inspector or a person specialized in this regard.  Admittedly, surveyor alone has inspected and assessed damages without getting assistance of any expert. R2 does not reveal the method of physical verification. It is stated in report that provision items arranged at floor level were damaged. However, water stood at 2ft. level from floor. All stock to a level of 2 feet were damaged and not stock at the level of floor alone. Besides, it cannot be concluded that entire stock above 2 feet level was undamaged or fit for use.  One cannot say with certainty that this stock was fit for human consumption, especially, grains, pulses and flour, without lab test or expert certification. Therefore, we are not inclined to believe that the loss totally assessed at Rs.10.09,640/-  is correct. 

 

 When a portion of the sacks/gunny bags containing edible stock are submerged, there is every possibility of contents above water level also getting damp which may cause occurrence of fungus and other damage causing parasites inside the containers.  Entire stock will become unfit for human consumption.

 

          To prove his contentions that loss was of Rs 25,70,113/-,complainant has produced Ext.P7 which is a list of damaged items as on 15.8.2018, prepared by his Chartered Accountant.  This list was proved by complainant.  No questions were put by complainant regarding Ext.P7. Besides, since loss was certified by chartered accountant it will be entered in accounts of complainant too. That being so, we are of the view that Ext.P7 reflects the actual damages caused to the stock.  In so far as surveyor’s report is concerned, For the reasons mentioned above, we are of the view that it does not reflect the actual loss or any estimate near to it.

 

          As per Ext.P7, value of damaged stock is Rs.25,70,113/-.  When 10.2% is deducted towards average profit and GST, deductable amount comes to Rs.2,62,151.526/-.  Balance would be Rs.23,07,961.474/-.  When salvage value (2.75% as per Ext.R2) is deducted, (23,07,961.474 – 63,468.94) balance is Rs 22,44,492.534, which is the actual loss occasioned.  As per clause 10, in case of under insurance, a proportion of loss is to be borne by the insured himself.  Going by the methodology given in Ext.R2, amount to be borne by the insured will come to Rs.15,36,128.50/-.  When policy excess (5%) is deducted, net loss payable to complainant would come to Rs.14,59,322.075/- (15,36,128.50 – 76,806.425).   Amount payable rounded off to the nearest rupee would come to Rs.14,59,322/-.  Out of this, Rs.5,73,235/- has already been paid by opposite parties.  Remaining amount payable is Rs.8,86,087/-.  Non-payment of actual net loss in accordance with Ext.R1 policy terms and conditions would certainly amounts to deficiency in service from the side of opposite parties.  It was for them to verify the correctness of Ext.R2 before venturing to repudiate the claim of complainant.  

 

          Therefore, we find that complainant is entitled to get Rs.8,86,087/- towards remaining insurance claim for his loss.  Apart from this, upon a fair estimate, we are of the view that complainant is entitled for Rs.20,000/- towards damages and Rs.5,000/- towards litigation costs also.  Point Nos.2 and 3 are answered accordingly.

 

6.  Point No.4 :

 

          In the result, this complaint is allowed in part with costs upon the following terms:

 

1.  Opposite parties are directed to pay a sum of Rs.8,86,087/- with simple interest @ 12% to complainant from the date of complaint, which is 11.7.2019, till date of payment or realization.

 

2.  They are further directed to pay Rs.20,000/- as damages to complainant which amount would carry interest at the rate of 12% per annum simple, from the date of order, till date of payment or realization.

 

3.  Opposite parties shall pay litigation costs Rs.5,000/- to complainant also.

 

          Amount ordered above shall be paid within a period of 30 days from the date of receipt of a copy of this order.  Parties to take back extra copies, without delay.

 

                    Pronounced by this Commission on this the   25^th   day of  August, 2023

 

                                                                                                Sd/-

  SRI. C. SURESHKUMAR, PRESIDENT

 

                             Sd/-

 SMT. ASAMOL P., MEMBER

 

                        Sd/-

SRI. AMPADY K.S., MEMBER

 

 

 

 

APPENDIX

 

Depositions :

On the side of the Complainant :

PW1        -   Gopi K.M.

On the side of the Opposite Party :

Nil.

Exhibits :

On the side of the Complainant :

Ext.P1    -   Copy of the policy.

Ext.P2    -   Copy of  D & O licence of complainant issued from the panchayath.

Ext.P3    -   Copy of GST registration certificate.

Ext.P4    -   Copy of Form GSTR-1, details of outward supplies of goods or services.

Ext.P5    -   Copy of stock report as on 15.8.2018.

Ext.P6    -   3 photographs of damaged items.

Ext.P7    -   List of damaged items as on 15.8.2018.

On the side of the Opposite Party :

Ext.R1    -  Copy of the policy.

Ext.R2    -   Copy of survey report with photographs.

 

 

 

             Forwarded by Order,

 

 

 

        ASSISTANT REGISTRAR