NATIONAL INSURANCE CO. LTD Vs. JYOTHI TOBACCO TRADERS

JUDGEMENT

(1.) This First Appeal has been filed by the National Insurance Co. Ltd. (hereinafter referred to as the 'Appellant') being aggrieved by the order of the State Consumer Disputes Redressal Commission, Andhra Pradesh (hereinafter referred to as the 'State Commission') which had allowed the complaint of M/s Jyothi Tobacco Traders, complainant before the State Commission and Respondent herein.

(2.) Respondent/complainant is a proprietory concern doing business in the name and style of M/s Jyothi Tobacco Traders since 1992. It had been insuring stocks which were under hypothecation of State Bank of India for a total sum of Rs.35 lakhs and for which 3 Fire Insurance Policies were taken with validity periods running from 29.10.1997 to 10.12.1998. Respondent stated that regular stock statements were being submitted to the Bank which also periodically inspected the stocks in question. On 02.09.1998, a fire broke-out in the godown in which the Respondent's goods were stored when its proprietor was away to Chennai, and the entire goods stored there were gutted in the fire which also caused extensive damage to the godown building. Police registered a case of accidental fire. The Appellant/Insurance Company who was informed appointed a Surveyor who immediately visited the site and also made subsequent visits to assess the loss. The entire ledger, stock registers, bank statement etc. were handed over to him and the Surveyor assessed the loss at Rs.7,68,416/-. On 20.03.2001, Appellant/Insurance Company repudiated the claim of the Respondent without any valid reason. Respondent approached the Ombudsman for redressal of his grievance and projected a total loss of Rs.20 lakhs although the actual loss was even higher. The Ombudsman passed an Award on 10.02.2003 directing the Appellant/Insurance Company to settle the claim as assessed by the Surveyor. However, no interest or damages were awarded. Respondent contended that the Ombudsman merely accepted the report of the Surveyor and did not go into the details of actual loss suffered by the Respondent. In fact, value of the goods destroyed was apparent from the certified Accounts/Stock Statements given to the Bank as also the prevailing price of the stocks which was not appreciated by the Surveyor who made his assessment based largely on the ash remains that were available at the site even though it was specifically pointed out that a substantial amount of the ash had been washed away while extinguishing the fire and thereafter. Since the Surveyor grossly under-estimated the loss which was also accepted by the Ombudsman, Respondent being aggrieved filed a complaint before the State Commission requesting that the Appellant/Insurance Company be directed to pay Rs.28,41,069/- towards insurance claim with interest @ 18% p.a. from the date of accident till the date of payment and Rs.2 lakhs towards damages and other costs and reliefs.

(3.) The above contentions were denied by the Appellant/Insurance Company who stated that the Respondent had given an unconditional written acceptance of the awarded amount of Rs.7,68,416/- as assessed by the Surveyor in full and final settlement in respect of the insurance claim and accordingly this amount was paid.