NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Bright Vision Pvt. Ltd. … Complainant
Versus
BEFORE :
HON’BLE
MR. JUSTICE M.B. SHAH, PRESIDENT
For the Complainant : Mr.
T.B. Majumdar &Mr. S.Nayank,
Adv.
For the Opp.
Party : Mr. Sunil Kapoor,
Adv.
Dated
Complainant
has approached this Commission with a prayer to direct the Insurance Company to
reimburse the balance amount of the claim which was assessed at Rs.20,63,479/-, after adjustment of the amount of Rs.11,02,818/-
which was paid by the Insurance Company and accepted by the Complainant under
duress and compelling circumstances, with interest at the rate of 18% p.a. from
the date of institution of the claim till realization, and also for a direction
for payment of Rs.5 lakhs as compensation for the
harassment and mental agony suffered by the Complainant.
(a). Admittedly,
the Complainant has taken Fire Policy ‘C' from the Insurance Company for a sum
of Rs.30 lakhs which also covers damage due to storm,
flood, inundation, etc. for the period from 10.10.1998 to 9.10.1999.
(b). Admittedly,
on 23/24.9.1999, due to devastating rainfall and flood, the Complainant’s godown suffered heavy damage as the electronic articles
stored therein were completely submerged by the flood water. On the next date,
i.e. 25.9.1999, the Complainant informed about the said fact to the Divisional
Manager, M/s. National Insurance Company Ltd.
On 28.9.1999, Mr.A.P.Roy Choudhury
was appointed as
Surveyor for assessing the loss. After
conducting the preliminary survey, Mr. Choudhury
asked the Complainant, by letter dated 1.10.1999, to furnish certain papers and
documents. Further, by letter dated
1.10.1999, the Insurance Company directed Mr.Choudhry
to submit the final survey report within one month.
In the meantime,
the surveyor Mr.Choudhry made a joint survey along
with other surveyor Mr. I.Chadha and conducted
physical verifiction of the stock-in-trade as on
20.4.1999 lying at the Complainant’s godown.
Thereafter, Mr.Choudhury, Surveyor, by his letter dated 5.11.1999,
raised certain queries which were replied by letter dated 11.11.1999 by the
Complainant. The Complainant also submitted the claim form dated 10.11.1999
stating that the value of stock-in-trade as on 24.9.1999 was Rs.31,66,298/- and
that he has suffered total loss due to inundation resulting from water-logging
due to heavy rainfall. It is also stated that the Mr.Choudhury,
the Surveyor, has made a technical assessment by carrying out tests on the
damaged articles through a competent agency, namely Electronics Regional Test
Laboratory (EAST), Department of Electronics, Government of India, and obtained
a test report thereof dated 11.11.1999.
As per the Test Report, the damaged articles were rendered unusable.
That report is produced on record. It is also pointed out that the Surveyor
took the assistance of a competent Hardware Engineer, named Arindam
Ghosh, for the purpose of physical inspection of the
damaged stock-in-trade.
Undisputedly, the surveyor, Roy Choudhary, visited the spot within 3 days of the rain
generated flood and submitted his report dated 15.11.1999 assessing the loss at
Rs.21.87 lakhs. This submission of the report is on
the basis of the direction given to him by Senior Divisional Manager, Insurance
Company, by its letter dated 1.10.1999 to submit the final survey report within
a month from the said date. As the report was not complete, he wrote a letter
dated 11.10.1999 to National Insurance Co. wherein he stated as under:-
1. “This refers to your verbal instructions on 28.9.99 authorising
me to undertake the survey and loss assessment in respect of the above claim. I
accordingly visited the insured’s office at B-2/3, Gillander
House, 8, Netaji Subhash
Road, Calcutta- 700 001 on the same afternoon and carried out preliminary
survey at the spot and took a number of photographs, leaving instructions to
arrange for sorting, segregation & stacking of the damaged goods for our
physical stock verification. Thereafter physical stock verification was
jointly conducted for 3 days along with the other Surveyor,
Mr. Inder Chadha who was
allotted the similar job in respect of the insured’s another unit under one
roof in the name and style of M/s. Vision Infotec. We have completed the physical stock
verification only yesterday.
2. The insured deals in Computer Peripherals & Telephone
Instrument (Electronic Set) and its component parts. It is a fact that there was heavy water
logging in that area as it is low-lying whereby the insured suffered a great
loss. Since these are electronic complete units & components which
are highly vulnerable to water, and particularly remained submerged
under water for atleast 2 days, all were water soaked. The individual
units and components were packed in cardboard cartons & stacked. These stacks fell on the floor headlong
because of the side walls becoming weak and downward pressure thrust from the
top cartons. As a result, the entire
stock had been affected & damaged.
As these were consumer electronic products and each individual cartons were pouring out water on pick-up, there would
be no useful life to these products.
However, I have earmarked representative samples of several items for
submitting to reputed Test House for their carrying
out necessary tests. Because of
Election, holidays and one day transport strike, this could not be progressed.
At the time of this accident, the insured had a stock of Rs.
31.66 lakhs and on physical verification of stocks, the stocks were more or less in agreement with the
book stocks. The sum insured is for Rs. 30 lakhs. Subject to Test Report, as the position
stands now, the loss is estimated to be upto the
limit of the sum insured. Later, if there is scope for any negotiation, this
will be discussed and negotiated with the insured. This is now open for further inspection from
your side.
3. The insured has expressed their disinterest about holding back the
damaged goods. They have told that now these are your properties and you may
deal with them in the manner you like.
The insured have been requested not to disturb the position for some
time until we come to them regarding their disposal. We shall have to find out methods and
procedure for disposal action.
4. While I would certainly put priority for early finalisation
of the survey report, the formalities, as it appears, would take some
time. However, I shall let you know the
progress of the work time to time so that you are kept updated on the status of
the claim. In the meantime, this may be taken as the Preliminary Report.”
He has assessed the total value of the damaged stock at Rs.28.73 lakhs. Thereafter, while assessing the loss he has identified the stock worth Rs.4.16 lakhs which was not covered under the policy and reduced the same from Rs.28.73 lakhs. Further, he has deducted a sum of Rs.1.20 lakhs on the ground that there was lack of proper care and precaution as due from the insured. Again he has deducted Rs.75,000/- towards the salvage of the damaged stock, and, thereafter, reduced it for excess as policy condition by Rs.75,000/- Thereafter, he submitted his report dated 15.11.1999 assessing the net loss suffered by the Complainant at Rs.21.87 lakhs.
Despite the aforesaid report, the National Insurance Co. appointed, by letter dated 22.11.1999, Shri Manotosh Bhakta, with a request to submit final survey report within a month from the date of receipt of that letter. Thereafter, he submitted the report by assessing the loss on 10.2.2000 along with the Joint Inspection Report. At the outset, he has recorded his findings and observations as under:-
a)
“In the first appearance, it is
noted that various electronic items like computer spares and accessories are
stored in the said Godown. As stated by the insured that there was
about 24” of stagnant water inside the Godown,
which stayed therein for about 4 days continuously.
b)
In majority of the cartons and equipments/spares
found water soaking marks are present.
As seen many of the items are in naked condition, since the respective
cartons were dilapidated due to water soaking and heap of water soaked
dilapidated empty cartons also seen in the said Godown.
c)
To evaluate the extent of damage,
all the physically available items has been checked physically and details of
findings are noted in the tabular form below.
Some of the materials, although water soaked and/or carton dilapidated,
has been checked electrically by the undersigned Surveyor in presence of the
technical person Mr. Paritosh of the Insured and most
of the samples of the damaged/ water soaked items checked found electrically
working.”
Further, while assessing the loss,
he has stated that the First Surveyor has verified the documents which were
referred by him wherein he has stated as under:-
“However, it is considered that the first Surveyor has verified the
above said documents
as certified by them, as well the consideration of market price of the Survey
Report of Mr. A.P. Roy Choudhary, the undersigned has also cross checked the
market price of the said items and found the considered market price of various items are more or less correct.”
Thereafter, finally he assessed the loss
at Rs. 11,02,818.34.
FINDINGS:
Therefore,
from the aforesaid evidence brought on record, the questions which require
consideration are:
(i). whether the
Complainant has accepted the amount of Rs.11,02,818/- under coercion of
financial constraints and hardship? And
(ii). whether the
assessment made by Roy Choudhury, the Surveyor, is to be accepted or the assessment made by
the second Surveyor, Mr. Manotosh Bhakta, is to be
accepted?
As far as the
first question is concerned, we have to state that due to heavy damage caused
to the electronic items which were kept in the godown,
as pointed out by the Complainant, his business came to a grinding halt. This
would be clear from the correspondence made by the Complainant to the Insurance
Company. We would only refer to a few such letters.
As
the Complainant was in financial difficulty by letter dated
Further,
by letter dated
Subsequently,
the Complainant sought information about the basis of arrival at the net
payable claim amount by Surveyor Bhakta. In response
to that the Insurance Company gave the details of assessment, as under:
|
“ |
Description |
Amount (in Rs.) |
|
a. |
The amount of stock that was present in the said godown |
19,99,064.46 |
|
b. |
The total amount of stock that had not suffered from any
water damage |
( -
) 6,61,716.12 |
|
c. |
The total amount of stock that had suffered damage due to
water soaking |
13,37,348.34 |
|
d. |
Less: Salvage value recommended |
( -
) 1,59,530.34 |
|
|
|
11,77,818.34 |
|
e. |
Less : The policy excess |
( - ) 75,000.00 |
|
|
The net amount payable claim amount |
11,02,818.34” |
As the amount was not released the
Complainant wrote again letter dated
“With reference to your letter dated
4.4.2000, we beg to submit as under:
.1. We
disagree with your statement that the discharge voucher sent to you under cover
of our letter dated 28.3.2000 was qualified. As a matter of fact, we only
quoted the holy inscription “Without Prejudice”, which unfailingly in each and
every correspondence or letter of your Company is incorporated and therefore it
defines all common logic as to how the same holy words assumed a sinister
meaning in our case and when used by us?
.2. You
are fully aware that since 24.09.99, our business has totally collapsed and
even after a period of 9 months we have not received any financial relief from
your end and now our mere existence is under threat to the point of extinction.
Under the circumstances, we have no other
alternative, and are compelled to follow your directives and accordingly the
discharge voucher for Rs.11,02,818.34 (Rupees eleven lakhs two thousand eight hundred and eighteen and paise thirty four only) duly signed and discharged by us as
well as our bankers is enclosed for obtaining payment. Kindly expedite the
matter and arrange to hand over the cheque to us as the earliest”.
Again the
Complainant wrote a letter dated 8.6.2000 narrating the difficulties faced by
him and stating that the insurance company resorted to deliberate delay tactics
coercive bargaining and exercise of undue pressure for slashing the payment
which was rightful due to them. And, subsequently, the
complaint was filed for recovering the balance amount.
From
the above correspondence it is apparent that acceptance of the amount by the
Complainant was under financial hardship as his business had come to a grinding
halt.
The
next question is to be decided on the basis of the reports submitted by both
the surveyors. Mr.Bhakta, the second Surveyor, has
not doubted the report submitted by Mr. Roy Choudhury. On the contrary, he has accepted the report
to a large extent and based his findings on the same lines.
Mr.Roy Choudhury assessed the
value of the damaged stock at Rs.28.73 lakhs, whereas, Mr. Manotosh
Bhakta has assessed the value of the total damaged
stock at Rs.19,99,064.46. Assuming that the total value of the stock as valued
by Mr.Bhakta, was only Rs.19,99,646/-
there was no reason to arrive at the conclusion that the affected stock would
be Rs.13,37,348/-. On this ground, it appears that he has assessed the value of
unaffected stock at Rs.6,61,716/-.
We
have to find out whether this deduction of Rs.6,61,716/-
on the basis of such stock was not damaged, is justifiable. We hold that for
the said finding there is no justifiable ground. Admittedly, the Complainant
was dealing in electronic items. Mr. Roy Chaudhury
visited the spot within three days after the flood and he found that the said stock was under water
for more than three days. If that is so,
then the electronic items would obviously be damaged. For this, with regard to
some of the items he has sent for testing with the Electronics Regional Test
Laboratory (EAST) of the Government of India, and the test report clearly
indicates that the articles were rendered unusable. In any case, Roy Choudhury inspected the spot within three days after the
flood and spot inspection carried out by him is required to be given due weightage. Therefore, the deduction of the said amount of
Rs.6,61,716/- is totally unjustifiable one. He has recorded the finding that the salvage of
damaged stock was only Rs.75,000/-.
In this view of the matter, we arrive
at the conclusion that taking the value of stock at Rs.19,99,064/-
policy excess Rs.75,000/- as per the policy condition is required to be
deducted from the said amount. Further, for the value of the salvage of damaged
stock as assessed at Rs.75,000/- by Roy Choudhury is accepted.
In the result, the Complainant is entitled to the balance amount, i.e.
Rs.19,99,064/- less the amount of Rs.11,02,818/- paid to the Complainant;
Rs.75,000/- for the policy excess; and less Rs.75,000/- for salvage value of
the stock, which comes to Rs.7,46,246/-. Hence, the Insurance Company is
directed to pay Rs.7,46,250/- (rounded figure) with
interest at the rate of 10% p.a. from
01.01.2001 i.e after three months from the date of
occurrence of the peril, till the date of payment. The Insurance Company shall
also pay a sum of Rs.50,000/- by way of costs to the
Complainant. The complaint is allowed in the above terms.
…………………………..J.
(M.B.SHAH)
PRESIDENT
…………………………….
(P.D.SHENOY)
MEMBER