78,35,492.11.
1,61,746/ .
They, however, deducted an amount of Rs.
Thereafter the Commission has also referred and companysidered the Report submitted by the Investigator.
of stock was number provided, in the absence of which they are unable to certify the companyrectness of the stock and its valuation.
27,80,620.15 Less Salvage of leftover after loss Based on Surveyors report.
The appellant issued their cheque for the aforesaid amount and served the same to the said bank on 31.07.2000 which was acknowledged by the bank on the same date.
In the light of the aforesaid background facts, we examined the grounds taken in the present appeal by the appellant Insurance Company with the assistance of their companynsel.
Consequent upon the said order, the respondent has withdrawn 25 per cent of the amount awarded by the National Commission without furnishing any security and the balance 75 per cent amount was also withdrawn by furnishing a bank guarantee which is valid till date.
The relevant details are given under the Heading Assessment of Loss.
The respondent Company, aggrieved by the meager amount paid towards its claim, filed a companyplaint before the National Consumer Disputes Redressal Commission alleging deficiency of service against the appellant Company.
Accordingly M s. S. Soni Co., Surveyors were appointed engaged as the investigators who caused an enquiry during the companyrse of which records available with the claimant Company were examined.
28,64,560/ with interest 10 per annum from 1.6.1998 i.e. after seven months from the date of the incident and three months from the date of the report of the Surveyor .
62,38,655.76.
During the period of the aforesaid two policies, on 25.11.1997, a fire broke out in the factory which engulfed the godowns of the said factory and companypletely destroyed all the stocks which were lying within the said godown resulting in heavy loss to the respondent.
It was also made clear in the said order that the Commission was relying on the assessment made by the Surveyor and number by the Investigator.
1,13,554.25 and arrived at loss for the stock at Rs.
In the said interim report, the Surveyor accepted that it was an accidental fire.
It had taken two insurance policies as stated hereinbefore from the appellant after paying full premium.
A. No.
It was mentioned in the Report that they have thoroughly checked the sale transactions during the period 1996 97 and during 1997 98 to check the date of loss and found them in order with the sale bills.
The Surveyor also reported that the Company did number maintain reasonable record of the stock and therefore the said Surveyor is unable to certify the companyrectness of the valuation of closing stock because of the discrepancies between the physical stock and the book records, as details of stock, companysumption etc.
The aforesaid claim includes a claim of a sum of Rs.
Thereafter, the loss for building and other plant and machinery was assessed and the loss was summarized as under SUMMARY OF TOTAL LOSS ASSESSMENT The loss is summarized as below Particulars Loss Average Dead Stock NET LOSS Allowed Clause Factor 5 ASSESSED STOCKS 2271065.15 NIL 113554.25 21,57,530.90 Building 610137.00 28798.00 NIL 32,239.00 Electrical Fittings Plant 63500.00 1733.55 NIL 61,766.45 TOTAL 239560.15 30531.55 113554.25 22,51,536.35 Less Excess Clause 2500 x 2 Policies 5,000.00 NET LOSS ASSESSED 22,46,536.35 The Commission factually recorded in its order that in the aforesaid companyplaint it is only companycerned with the method adopted by the Surveyor in deducting the value of the stock of 50 per cent and deduction of stock of Rs.
Paragraph 55 of the said Survey Report wherein the reason for discount of 50 was given by the Surveyor was also quoted by the Commission which we reproduce hereinafter Gross stock amount after adjustment for above salvage value has been discounted by 50 to account for i inaccuracies in Audited Balance Sheet, ii Auditors qualifying remarks that the Insured had number maintained reasonable records of stocks, iii number establishment of precise production of Face and Core Veneer within the factory premises iv Wastage of wood from logs to Face and Core Veneer and v sale of scrap saw dust etc.
32,08,624/ on the alleged ground that the purchases were number genuine because two lorry receipts were number tallying.
The said investigator verified all those records and on examination thereof and on the basis of other records examined by them which were companyleted by them number only from the respondent Company but also from other quarters, made an assessment recording therein the loss of stock as on 25.11.1997 as Rs.
79,08,314/ for the stocks which were destroyed by the fire and which were duly companyered by the Insurance Policy issued by the appellant after payment of full premium.
It also transpires from the report submitted that Stock Register, Ledger Accounts and production statements were submitted before the investigator by the respondent Company in terms of their request and therefore all relevant records appeared to have been submitted by the respondent companypany to the said investigator.
61,50,990.15.
32,08,624.00 from the total loss of the stock of Rs.
3 is, accordingly, disposed of.
28,64,560.38.
To this th extent, order dated 19 October, 2006, stands modified.
After receipt of the aforesaid claim of the respondent companypany, the insurance companypany appointed and engaged a Surveyor M s. Subhash Kapoor Associates for making assessment of the loss.
61,50,990.15 holding that the purchases are number genuine and also an amount of Rs.
1 lakh.
The companyplainant respondent thereafter submitted a claim as stated hereinbefore for a sum of Rs.
61,50,990.15 respectively.
57,29,120.76.
It was held that the deduction of 50 of the alleged various deficiencies made by the Surveyor were unjustified.
The aforesaid companyplaint was entertained by the Commission and the appellant companypany filed a reply enclosing therewith the report of Surveyor and the Investigator.
The respondent Company, however, filed an application seeking modification of the order passed by this Court on 19.10.2006.
They also verified the sales with the sales tax returns and found that sales are companyrelating with the sales tax returns.
5,09,535.00 LOSS OF STOCK Rs.
Consequent upon the said order of the Commission, the Insurance Company deposited the amount calculated on the basis of the said judgment and order with the National Commission.
The appellant was also directed to pay a companyt of Rs.
1,61,746.00 Rs.
22,46,536/ and companysequently appellant sent a discharge voucher to the Union Bank of India from whom the voucher was fully discharged in full and final payment of claim for an amount of Rs.
5,09,535.00 towards salvage of leftover stock based on Surveyors Report and thereby arrived at a total loss of stock of Rs.
1,61,746/ on the ground that these are purchases for which payment was number made or the bill is tampered with and does number have Form 31, thereby arrived at the stock position as on 25.11.1997 which was destroyed by fire at Rs.
We also verified the payments made by the insured through bank and found that they are in order except one payment mentioned above was number made for Rs.
The management of the companypany immediately sent information to the fire brigade, the Police and also the insurer.
The respondent herein is a small scale industry engaged in the manufacturing and marketing of plywood and allied products.
The Commission heard the companynsel appearing for the parties, examined the entire records and by its judgment and order dated 19.7.2006 it allowed the companyplaint of the respondent and held that the value of the stock destroyed by fire was Rs.
62,38,655.76 and Rs.
32,08,624/ by the Investigator on the record that the Lorry Receipts were fake and that the purchase of the stock for which payment is made to the vendor by an account payee cheque draft was number believed.
The ground that was taken by the respondent companyplainant was that the aforesaid 50 per cent deduction made by the Surveyors and number allowing the amount shown as deduction by the Investigator was unjustified.
It was stated in the said interim report that loss in respect of the stocks would be around Rs.
33,70,370.00 STOCK AS ON 25.11.97 Rs.
They also made a loss assessment entry in the report in the following manner LOSS ASSESSMENT Now based on our verification, we have assessed the loss of stock, which is companyputed as under Loss of Stock 22,71,085.15 Less Dead Stock Factor 5 1,13,554.25 Loss Assessed 21,57,530.90 On submission of the aforesaid report, the appellant Company approved the claim for an amount of Rs.
As per the banks inspection report, they inspected the stock on 5.11.1996 and 31.12.1996.
75 lakhs companysidering the unaffected stock, recoverable salvage lying in the premises of the insured.
Total value of stock as on the date of loss has been companycluded at Rs.
81.33 lakhs including a sum of Rs.
81.33 lakhs.
That was so recorded by the National Commission on the ground that both the Surveyor and the Investigator assessed the loss of stock of Rs.
The Commission thereafter numbered the fact of verification of bank records by the Investigator and their assessment and also the summary of total assessment which are reproduced hereinafter Verification of Bank Records We visited the Union Bank of India, the bank where the stock is hypothecated and obtained the stock inspection reports and stock statements.
While admitting the present appeal filed by the insurance Company, this Court directed that the respondent shall be permitted to withdraw the amount awarded, which was deposited before the National Commission upon furnishing a bank guarantee to the satisfaction of the Commission.
It is needless to point out that we are here companycerned only with regard to the claim and assessment made with regard to the loss of the stock destroyed.
27,80,620.15.
Not being satisfied with the said report, the insurance companypany companysidered it necessary to appoint an Investigator to investigate and to make re assessment of the claim amount based on verification of books and records.
They further found that the purchase transactions are properly entered in the books of accounts and payments are proper.
22,71,085.15.
22,23,404 and received from the bank under letter dated 27.07.2000.
Consequently, a direction was issued by the Commission directing the appellant to pay a deducted amount of Rs.
The Commission numbered that the investigator did number agree with the discount of stock of 50 per cent and also the findings and companyclusions arrived at by the investigator that for some purchases companyplainant had failed to establish the same because according to them lorry receipts were fictitious, inasmuch as one of the alleged transporters denied having issued the lorry receipt in question whereas the other transporter namely M s. Amit Transport Co. had numberexistence at all, which according to the investigator proves that the purchases stocks were actually number sent or even if it was sent they did number go to the factory but had gone elsewhere.
22,71,085.15 From the aforesaid amount, there was further deduction on the assessment that there would be deduction 5 for dead stock and further reduced it by Rs.
79,08,314/ for the stocks destroyed by fire.
In the said application, an order came to be passed by this Court to the following effect xxxxxxxxxx In view of the facts stated in the application, order dated 19th October, 2006, is modified to this extent only that the respondent shall be permitted to withdraw twenty five per cent of the amount awarded without furnishing any security and the rest as directed under the said order.
The Commission while companysidering the records extensively referred to the Survey Report dated 12.12.1997 and particularly relied upon the companytents of paragraph 42 and 53 of the said report, which we reproduce hereinafter Value of the stocks arrived at the aforestated basis was worked out at Rs.
The Commission further numbered the report of the investigator to the effect that the purchases made from Aggarwal Enterprises and from Bansal Co. although were entered into their records and payments were shown to have been made but the same are disallowed since the same as per explanations given in the report do number seem to be genuine or authentic.
Subsequently on 6.3.1998, the Surveyor submitted a final survey and assessment report in which the Surveyor assessed the loss caused to the stock of Rs.
61,50,990.15 Less Purchases which are number genuine as per Schedule A 32,08,624.00 Less Purchases whose payment is number made and bill is tampered with and does number have form 31.
The respondent was also represented by Mr. Yasobant Das, learned senior companynsel who also assisted us and took us through the various documents which the respondent are relying upon in support of their claim.
The Surveyor made an enquiry, examined the records and thereafter submitted an interim survey report dated 12.12.1997.
21,57,530.90.
The Insurance Company was aggrieved by the aforesaid judgment and order and, therefore, it has filed the present appeal in this Court.
They have also deducted an amount of Rs.
62,38,655.76 Refer details under the heading Assessment of loss.
In the said report, it was held that there was actually an accidental fire in the factory premises of the respondent as claimed and stated by the respondent.
Besides, the investigator also made enquiries with the banks of the respondent Company where the stocks of the companypany were hypothecated and also verified the records from various suppliers and transporters and checked the original G.Rs and production records and the stock records placed before it and thereafter submitted its report.
OUR ASSESSMENT On the basis of above facts, we assessed the loss as follows Stock as on 25.11.98 as per Trading A c Rs.
