TEXCONES TUBES COMPANY Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) THE only question which requires consideration is : Whether the reduction of assessment of loss for stock from Rs.21,59,568 to Rs.4,53,966/- by the Surveyor is justifiable? If not, what amount is required to be awarded? Damage to plant and machinery and building is not required to be discussed because learned Counsel for the Complainant has submitted that even though the damage is much more than what is assessed by the Surveyor he would confine his submission with regard to assessment of loss to the stocks and the stock in process. It is the say of the Complainant that it is a licenced manufacturer of papercones. It had obtained a fire policy from M/s.Oriental Insurance Co. Ltd., (hereinafter referred to as the Insurance Company) to cover the risks on the building, machinery, stocks, raw-materials, for a sum of Rs.46,50,000/-, and paid a premium of Rs.14,379/-. The details of the insurance coverage are as under:

(2.) ON the intervening night of 4th and 5th of October, 1997 a massive fire broke out in the processing hall of the Complainant"s factory and caused extensive damage. This was reported to the Insurance Company, fire bridge and the Police immediately. On the same day, the Insurance Company deputed M/s.Haniffa Associates, Surveyors to inspect the premises. The Complainant supplied the required information to the Surveyor. Thereafter, on 17.12.1997 the Complainant submitted claim form claiming a sum of Rs.29,53,386.38, for the loss caused to:

(3.) THE Surveyors found that probable cause was electrical short circuit. The Surveyors have specifically stated that possible malicious act or arson in collusion with the insured was investigated and there was no evidence for such acts. The dispute is only with regard to the assessment of loss by the Surveyor, particularly, the loss caused to the stock. The Surveyor arrived at the conclusion that as per the books of accounts and records loss could be assessed at Rs.21,64,140/-. However, the Surveyors adopted other dubious method of so called adjustment and reduced the loss to only Rs.4,53,966/-. Whether this adjustment or reduction of the loss is justifiable or not, is required to be decided in this complaint.