NEW INDIA ASSURANCE COMPANY LTD Vs. SUSHIL SHARMA

JUDGEMENT

(1.) This appeal challenges the order dated 4.4.2005 of the Madhya Pradesh State Consumer Disputes Redressal Commission, Bhopal (in short 'the State Commission) in Complaint Case No. 37/2002. By the said order, the State Commission partly allowed the complaint of the complainant and directed the appellant-opposite party, New India Assurance Company Limited (hereafter referred to as 'the Insurance Company') to pay to the complainant the sum of Rs. 4,89,352 (through opposite party No. 2, State Bank of India, Govindpura Branch) with interest @ 9% per annum w.e.f. 1.2.2002 and cost of Rs. 2,000. The said sum of Rs. 4,89,352 represented the difference between Rs. 12,88,106 (the total amount held by the State Commission to be payable by the Insurance Company on account of the loss suffered by the complainant due to damage to the insured stocks and machinery in his business premises) and the amount of Rs. 7,98,754 (which the Insurance Company had already paid to the bank account of the complainant towards settlement of his insurance claim). Aggrieved by this order, the appellant-opposite party, Insurance Company has preferred this appeal.

(2.) The essential facts of the case are that the complainant ran a business in the name of M/s. Ajay Industries, dealing in auto parts, repairs to two-wheeler and four-wheeler vehicles, including denting, painting, servicing, etc. The complainant secured term loan and cash credit facility from opposite party (OP) No. 2, State Bank of India (SB I) and also obtained a Miscellaneous Accident Insurance Policy (covering burglary and material damage) for the period 11.12.2000-10.12.2001. The said policy was actually in the name of the SBI and the name of the complainant's unit (M/s. Ajay Industries) was entered as part of the address. The plant and machinery were insured for Rs. 5 lakh while the stocks and raw material for Rs. 15 lakh. On account of a fire in the night of 13.9.2001 due to electrical short circuit, the machines, spare parts, various equipment, furniture, cables, wires, etc., in the complainant's unit got completely damaged. The complainant intimated the incidence of fire to the Insurance Company and promptly filed the insurance claim. The Insurance Company appointed a Surveyor (one Amit Rupal) to survey and assess the loss. In his report dated 12.11.2001, the Surveyor assessed the loss to plant and machinery at Rs. 50,000 and that to stocks at Rs. 8,86,735. After deducting the salvage value @ 10% of the value of stocks, the net assessed loss of stocks was estimated at Rs. 7,78,110 and that of machinery at Rs. 50,000, aggregating to Rs. 8,28,110.

(3.) It is the case of the Insurance Company that at the time of under writing the policy the insured unit was working, in accordance with the representation of the insured, as an "engineering" workshop whereas in reality it turned to be an "automobile" workshop for which the amount of premium would have been higher. Therefore, on receipt of report of the Surveyor and loss assessor, a sum of Rs. 32,000 was deducted from the assessed value of the loss in arriving at the amount payable towards the claim, which worked out to Rs. 7,98,754. The Insurance Company paid this amount directly to OP No. 2, SBI in the name of which the insurance policy was under written. The SBI acknowledged the payment on 11.1.2005. It was also contended by the Insurance Company that this payment was in full and final settlement of the insurance claim of the complainant, which was accepted without any protest on behalf of the complainant by the State Bank of India. Therefore, according to the Insurance Company, the complainant could not have agitated the matter before the State Commission and the latter's order was erroneous.