J.M. Malik, Presiding Member
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 and 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 complainants claim as œNo 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 and 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 œStatement 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 - œParticulars of payments made to persons specified under Section 40 A (2) (b), it is stated that œInterest to Partner Rs.8,21,951/-œ. This is prepared by M/s. S.V.Pandya and 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 and 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:-
œSurvey and 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 œSurvey and Inspection? and œThe 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 œThe 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:-
œ14. 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|
|Less: Policy Excess||Rs.10,000.00|
|Net amount of damage||Rs.8,40,000.00 (Rupees Eight Lakhs Forty-Thousand only)|
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 Surveyors 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.BadoniVs. Oriental Insurance Co.Ltd, 1 (2012) CPJ 272 (NC). In United India Insurance Co. Ltd., and Ors. Vs. Roshan Lal Oil Mills Ltd. and Ors., (2000) 10 SCC 19, the Honble Apex court was pleased to hold :-
œThe 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 Surveyors 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.