SHAFA MEDICAL AGENCIES Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) -ORDER dated 23. 3. 2006 passed by the Divisional Consumer Protection Forum, Jammu (hereinafter to be referred to as the Forum) has been taken in this appeal. The appellant owned a chemist shop in the town of Batote, Distt. Doda which was insured with the respondent for an amount of Rs. 4. 50 lakh for all kinds of medicines and in addition to that the furniture and fixtures of the shop were insured for a sum of Rs. 50,000. It was Fire 'a' policy issued under No. 234104/11/98/00777/305. The policy had commenced from 2. 2. 1998 and was valid upto 1. 2. 1999. The appellant had taken loan of Rs. 1. 50 lakh in the unemployed self-employment scheme from State Bank of India, Branch Batote. It is alleged that on 30. 3. 1998 at 11. 30 p. m. a fire broke out inside the shop which engulfed the stocks of medicines, furniture and fixtures. Insured claim was immediately raised with the respondent and on 1. 4. 1998 Mr. M. K. Gupta, Investigator of M. K. Gupta and Co. conducted the preliminary survey and submitted the report before the respondent on 5. 11. 1998. He mentioned in the report that appellant's representative on spot did not provide him account books, ledgers, etc. at the time of survey and had promised to produce later on. Consequently, zeroxed copies of ledgers, cash memos and account statements certified from chartered accountant were made available. The purchase bills till the date of loss i. e. 1. 4. 1998 were of the value of Rs. 5,52,120 and the sale records were to the tune of Rs. 2,13,696 The stocks were physically valued at Rs. 38,226. 80 and 10% was deducted as profit margin. The expired medicines were not taken into account and in this way the value of the stocks was assessed at Rs. 34,400. The loss of furniture, fixtures and fittings was assessed at Rs. 2000 and approximately the total loss was assessed at Rs. 36,300. It was stated that the fire was accidental and respondent was requested to get the final investigation report prepared for the loss assessor which was not got done. The appellant waited for the settlement of the claim and ultimately when nothing was done he filed the complaint before the Forum. After hearing the parties, the Forum vide its order dated 1. 6. 2001, directed the respondent to indemnify the appellant to the tune of Rs. 36,000 only. This order was challenged in the Commission and vide its order dated 18. 12. 2003, it was held that the appellant had lodged a claim of total loss to the tune of Rs. 4,89,986. 92 and the respondent in its written version had not explicitly refuted the claim. It was admitted that the survey had not been made on the basis of all the documents. Taking stock of all these factors the order was set aside and case was remanded back to the Forum with a direction to reopen it and a fresh Surveyor may be appointed "who shall be cooperated by both the parties". The Surveyor was required to furnish his report before the Forum within four weeks. The respondent was required to furnish all the documents to the Surveyor within one week from the date of his appointment. As a consequence of this order, Mr. Kuldeep Sharma of Sharma Surveyors was appointed as a Surveyor. On 8. 1. 2004, the appellant received a communication whereby he was informed about the appointment of the Surveyor and he was required to produce documentary evidence in order to assess quantum of loss. It is alleged that on 20. 1. 2004, all the record which was demanded was given to the Surveyor against a receipt. The said Surveyor Mr. Kuldeep Sharma made fresh assessment and assessed the loss to the tune of Rs. 63,487. 17 from which again deduction of Rs. 25% was made to take care of assumptions in absence of books of accounts. The Forum accepted the loss to the tune of Rs. 63,487 because of fire incident to the stock and a loss of Rs. 2,000 of the furniture and fixtures. In other words, a total liability of Rs. 65,487 was fixed against the respondent to indemnify the appellant along with interest @ 6% per annum with effect from 1. 7. 2004 till its final realization. Besides that, litigation charges in the sum of Rs. 2,000 were made payable. The order was passed on 23. 3. 2006 and the appellant felt aggrieved has challenged the same in this appeal inter alia on the following grounds:

(2.) HEARD the arguments and perused the record.

(3.) AT the outset, the learned Counsel appearing for the appellant has assailed the report of the Surveyor namely, Sharma Surveyors (proprietor Kuldeep Sharma) on the pleas raised in the memo of appeal as stated above. He has further stated that Mr. Kuldeep Sharma, Surveyor did not bother to visit the spot as he could still find out the condition of the burnt furniture and fixtures which had an insurance cover of Rs. 50,000 but blindly followed the finding of the Investigator namely, Mr. M. K. Gupta who without any reason had fixed the loss at Rs. 2,000. The litigation charges fixed at Rs. 2,000 are also arbitrary as the fee structure of the Advocates has increased manifold. This increase has been made by the Central and State Government of their Standing Counsel. That Mr. Sharma, Surveyor has not given any reason to discard the balance sheet prepared by the charted accountant namely, Babita and Associates which was prepared on 5. 8. 98 i. e. after the incident had taken place which had occurred during the intervening night of 30th-31st of March, 1998. His appointment was made by the respondent in a suspicious manner by giving a go-by to the directions of the Commission dated 18. 12. 2003. That the Surveyor has blown hot and cold in the same breath which fact can be established from his report dated 30. 4. 2004. In para No. 5 of his report, he has stated, "the financial statements pertaining to the financial years 1995-96 as submitted by the insured without having support from the books of account which reportedly burnt in the fire, can be considered genuine as the same had been submitted to the Income Tax Department on 26. 8. 1997 i. e. about 7 months prior to the date of loss and which have been attested by the Department". He does not assign any reason to discard the contents of these official statements prepared by the Income Tax Department, which were submitted 7 months prior to the date of loss. The financial statement for the period ending 30th March, 1998 was discarded on the ground that the same could not be verified in the absence of books of accounts. The second excuse for discarding it was given that, "the sales shown in the financial statements is quite disproportionate to the sales of previous year. Copies of sale bills submitted cannot be relied upon in the absence of account books". The appellant had produced the stock register and the sale bills but could not produce the ledger and the cash book before him on the plea that the latter were burnt in the fire. It is not known how and on what basis the Surveyor has stated that sale figures appear to be suppressed for increasing the value of stock in hand at the time of loss. This reason has emanated from personal imagination and not based on any data. That after the remand order dated 18. 12. 2003 passed by the Commission, the appellant placed on record the supplementary affidavit which was notarised by the Oath Commissioner on 20. 5. 2004 and subsequently placed on the record of the Forum wherein the copies of the Income Tax Returns were produced and in the balance sheet of 31. 3. 1998 the loss caused to furniture and fixtures destroyed in fire on 30. 3. 1998 was shown to the extent of Rs. 10,960. 20. In the absence of any contradictory evidence the authenticity of these income tax statements could not be doubted. The account of decretal amount which was paid in the Court of Additional Distt. Judge, Ramban supported by documentary evidence has also not been taken into account by the Surveyor. The purchase bills shown in Annexure J from running pages 39 to 54 (marked in red) is documentary evidence which show the purchases of the medicines at different times from Medicare Pharmaceutical Agencies at Batote, Bhagwati Medicine Traders, Nishat Traders, J. K. Pharma as well as Public Traders of Jammu City. Amongst these purchases, the purchases made immediately before the alleged incident could throw sufficient light regarding the stock position at the time of the incident but Mr. Sharma, Surveyor has not taken into account these medicines purchase bills and arbitrarily has discarded the claim of consumable stocks of medicines which had been valued at Rs. 3,86,772. 82 and that of the expired medicines had been priced at Rs. 10,894. 36. Their rejection in toto to assess the loss was an arbitrary exercise at the discretion of the Assessor Mr. Kuldeep Sharma. The Commission which is required to do justice on even scales as a Forum of equity can easily discard this report and base the finding on other evidence which is available on the record. In rebuttal it has been contended by the learned Counsel of the respondent that the Commission has not discarded the report of M. K. Gupta, Investigator and still it has evidentiary value. That M/s. Sharma Surveyors could take help from that report which recorded the first hand account of the incident just after the happening. That the appointment of M/s. Sharma Surveyors was delayed by about four and half years from the date of the incident and naturally he had to place reliance on the report of preliminary Surveyor Mr. M. K. Gupta. In the absence of stock register which was stated to have been burnt in the fire the chartered accountant M/s. Babita and Associates could not make authentic report and on that account their report loses the evidentiary value. The appellant had been found purchasing the medicines mostly from Batote and their sale in wholesale at the very place is a doubtful affair and cannot be believed. Concluding his arguments he stated that the Surveyor's report could not be disbelieved as this Commission in the case of Muzaffar Ahmed Ganie v. United India Insurance Co. Ltd. , 2003 (2) JKJ Cons. 183 (PC), has held that the report of the Surveyor deputed under rules to assess the damage caused cannot be challenged. He has also cited the case of National Insurance Co. Ltd v. Lone Pharmaceuticals, 2003 JKJ (Suppl.) 380, wherein it has been held that in absence of any ocular evidence or any documentary evidence in the form of vouchers or bills, the amount assessed by the Surveyor has to be accepted.