NEW INDIA ASSURANCE COMPANY LIMITED Vs. POLYCAP INDUSTRIES

JUDGEMENT

(1.) This appeal by the New India Assurance Company Limited challenges the order dated 13.11.2007 of the Delhi State Consumer Disputes Redressal Commission (in short, 'the State Commission'), Delhi in complaint case No. 355 of 1998. By this order, the State Commission held that the surveyor had erred in assessing the value of the insured stocks and machinery of the respondent proprietary concern which were damaged by the fire that broke out in its business premises in the night of 27.2.1997. By using some of the figures adopted by .the surveyor in arriving at his assessment, the State Commission held that the indemnifiable loss was Rs.12,17,309 (as against the sum of Rs.4, 44,102, assessed by the surveyor) and directed the appellant to pay the balance sum along with Rs.50,000 as compensation towards mental agony, costs, etc.

(2.) The facts of the case are mostly undisputed. The respondent concern was engaged in manufacturing printed polythene bags for its customers. It had obtained a fire policy 'c' from the appellant for the period 9.1.97-8.1.98. In the night of 27.2.97, afire broke out in the mezzanine floor store room of the factory, due to electrical short-circuit. A large part of the raw material and finished stocks as well as some machinery (mainly printing cylinders) were severely damaged. The proprietor of the insured concern filed a claim of Rs.14, 65,650. The surveyor appointed by the appellant assessed the payable loss at Rs. 4,44,102. The insured accepted the payment of Rs.4,32,972 offered finally by the appellant and signed a discharge certificate dated 17.9.97 for the said amount in the presence of the Chief Manager of Jammu and Kashmir Bank, Azadpur Branch to which the stocks, etc., were hypothecated. The insured, however, wrote a letter dated 10.11.97 to the appellant's Branch Manager concerned protesting against the low amount of payment vis-avis his claim and requested reconsideration of the amount of loss assessed. He also wanted to know the basis on which the payment had been worked out. When there was no reply to this letter, the insured issued a legal notice dated 27.1.98 to settle the claim for Rs. 10,35,678. It was then that the insurer wrote back under its letter of 4.2.98 conveying the bare details of the calculations leading to the assessed amount of Rs.4,44,102 and the actual amount paid, i.e., Rs.4,32,972 (after deduction of additional premium payable, etc.

(3.) We have heard Mr. S.'L. Gupta, learned counsel for the appellant and Mr. Dhananjay Shahi, learned counsel for the complainant/respondent and perused the documents on record. Mr. Gupta has asserted that the complainant could not have filed this complaint having accepted the payment offered by the insurance company in full and final settlement of his claim. Secondly, according to Mr. Gupta, the State Commission had misread the survey report in arriving at the amount of loss of stocks. On the other hand, Mr. Shahi has argued that the acceptance of the payment was under duress, because of the financial pressures that the complainant was facing at the relevant time and his letter of November 1997 to the insurer was proof of this. Hence, the complaint was maintainable in view of rulings of the Apex Court as well as this Commission. Moreover, the assessment of the surveyor did not do justice to the complainant inasmuch as it adopted the book value of stocks in arriving at the extent of underinsurance and yet rejected the same while working out the value of damaged stocks.