National Insurance Co. Ltd. vs M/S Mmd Enterprises Thr. Its Prop. ...
2018 Latest Caselaw 6774 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 528/2016

%                                                 15th November, 2018

NATIONAL INSURANCE CO. LTD.
                                                           ..... Appellant

                          Through:       Ms. Shantha Devi Raman and
                                         Mr.   Abhishek,   Advocates
                                         (9868101409)
                          versus

M/S MMD ENTERPRISES THR. ITS PROP. & ANR.

                                                       ..... Respondents

                          Through:       None

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.           This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the defendant/insurance

company impugning the Judgment of the trial court dated 30.03.2016

by which the trial court has decreed the suit for recovery of moneys

filed by the respondents/plaintiffs on account of loss caused due to fire

and which was covered by the insurance policy issued by the




RFA No. 528/2016                                               Page 1 of 8
 appellant/defendant. A money decree has been passed for a sum of Rs.

3,53,724/- alongwith interest at 18% per annum. It may be noted that

admittedly the policy was for insurance of goods upto Rs. 75,00,000/-

and the figure of Rs. 3,53,724/- is the value of the goods which was

assessed by the surveyor of the appellant/defendant itself, and the suit

has accordingly been decreed not for the amount of Rs. 10,14,648/- as

prayed along-with interest, but only for a sum of Rs. 3,53,724/- with

interest.


2.           I need not narrate the facts in detail because the admitted

position of facts is that the respondents/plaintiffs had insured their

goods with the appellant/defendant for the value of Rs. 75,00,000/-.

The goods in question belonging to the respondents/plaintiffs (and

which really is plaintiff no. 2, one        Mr. Manik Dawar, the sole

proprietor), were soft toys, artificial flowers, artificial plants, furniture

etc. These goods were imported by the respondent/plaintiff. Also, it

is not in dispute that the policy was with respect to the second floor of

the premises bearing no. WZ-442, Madhipur Village, New Delhi

where the goods were stored. The fire took place wherein the entire

property bearing no. WZ-442 was gutted including the second floor




RFA No. 528/2016                                                  Page 2 of 8
 where the insured goods were stored. A surveyor was appointed by

the appellant/defendant being M/s Associated Surveyors and

Consultants. The claim of the respondents/plaintiffs was that various

books showing stocks were destroyed in the fire, however certain

unaudited balance sheets were given by the respondents/plaintiffs to

the surveyor, and consequently, the surveyor assessed the loss for a

sum of Rs. 3,53,724 /-. This loss assessed is as per Clause 12.02 of

the Surveyor's Report, and which has been reproduced in the

impugned judgment as under:-

       Loss assessed was worked out in detail as under:-

       Clause 12.02:
       The loss assessment is as under:-


                                                           Amount (Rs)
                                                           6181679.45
Total value of the stocks as per Trading Account
Less: Saves Stock at Other Locations:
(i)    At      61A,      Cycle      Market, 1051924.08
       Jhandewalan Extn, New Delhi
(ii)   At      61A,      Cycle      Market, 100798.55
       Jhandewalan Extn, New Delhi
(iii) At       62B,      Cycle      Market, 482551.22
       Jhandewalan Extn, New Delhi
(iv) At        77B,      Cycle      Market, 247840.00
       Jhandewalan Extn, New Delhi
(v)    At      76B,      Cycle      Market, 492891.15
       Jhandewalan Extn, New Delhi




RFA No. 528/2016                                                    Page 3 of 8
 (vi)    At    76A,     Cycle     Market, 13466.76
        Jhandewalan Extn, New Delhi
(vii)   At WZ-431, Madipur, N. Delhi.    107250.00    3403909.76
                                                      .................

Value of Stock WZ-442 (GF, FF & SF), Madipur, 2777769.69 N. Delhi Less Stock at affected but uncovered locations

(viii) At WZ-442, (GF), Madipur, New 2197329.22 Delhi .................

                                                      580440.47

        At WZ-442 (FF)                                174132.14
        30% of Stock at WZ-442 (FF & SF)              .................
        Madipur, New Delhi
        Net Value of stock at WZ-442(SF)              406308.33
        Madipur, N.D
        Less: Cost of Deed & Obsolete stock @ 5%       20315.42
                                                       ..............

Value of the stocks of M/s. MMD Enterprises at 385992.91 2nd Floor, WZ-442, Madipur, New Delhi Less: Salvage @ 2% (Lump Sum) 7719.86 ............

        Net Assessed Loss with VAT                     378273.05
        Less; VAT @ 4%                                 14549.00
                                                       ..............
                                                       363724.05
        Less: Policy Deductible                        10000.00
                                                       .............
        Net Assessed Loss with VAT                     353724.05
                                                       .............
                         Or, Say Rs.353,724/-




3(i).          Learned counsel for the appellant/defendant argued that

the trial court has committed an error in decreeing the suit because the

respondent/plaintiff admitted in his cross-examination that he was the

owner of various firms with other family members, and that there was

a mixing of goods of all the three firms in all the three floors of the

building WZ-442, and therefore it is argued that once there is no

demarcation of the goods of the respondent/plaintiff, hence the suit

could not have been decreed.

3(ii). I cannot agree with this argument urged on behalf of the

appellant/defendant because the issue is not that there were goods of

other firms which were also stored in the premises covered by the

insurance policy but the issue is as to whether the goods were in fact

found stored in the premises which were insured, and which goods

were gutted in the fire in the premises on 11.07.2005. The surveyor

appointed by the appellant/defendant itself has assessed the loss of the

goods belonging to the respondents/plaintiffs at the figure of Rs.

3,53,724/-. Therefore, once there is an insurance policy, and further

the insured goods belonging to the respondents/plaintiffs which were

destroyed in the fire were found in the premises and have been

assessed at a sum of Rs. 3,53,724/-, then the respondents/plaintiffs had

to be compensated for this amount. It is not as if the

appellant/defendant/insurance company is compensating the

respondents/plaintiffs for goods which did not belong to the

respondents/plaintiffs and were not covered under the insurance policy

i.e. merely because other goods of other firms were stored on the

second floor of property bearing no. WZ-442, it cannot mean that the

surveyor has wrongly assessed, and as per his assessment, goods of

the respondents/plaintiffs of the value of Rs. 3,53,724/- were lying in

the premises and the same were insured. In my opinion, therefore

there is no illegality in the impugned judgment decreeing the suit for

the sum of Rs. 3,53,724/-.

4(i). Learned counsel for the appellant/defendant is, however,

justified in arguing that the trial court has committed an illegality in

granting a very high rate of interest pendente lite and future at 18%

per annum. It is argued that the Supreme Court has held in a catena of

judgments that in view of the fall of the rate of interest, over the last

two decades, courts must refrain from granting high rates of interest.

These judgments of the Supreme Court are Rajendra Construction

Co. v. Maharashtra Housing & Area Development Authority and

others, 2005 (6) SCC 678, McDermott International Inc. v. Burn

Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State

Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC

700, Krishna Bhagya Jala Nigam Ltd. v. G. Harischandra Reddy,

2007 (2) SCC 720 & State of Rajasthan v. Ferro Concrete

Construction Pvt. Ltd (2009) 12 SCC 1.

4(ii). Accordingly, I reduce the rate of interest granted by the

trial court, for pendente lite and future period till payment, to 9% per

annum simple instead of 18% per annum simple granted by the trial

court.

5. The appellant/defendant had deposited the entire decretal

amount in this Court which is lying in a fixed deposit. The Registry of

this Court will now calculate the decretal amount being Rs. 3,53,724/-

with interest thereon at 9% per annum from 16.03.2011 till the amount

was deposited in this Court as this amount is the liability of the

appellant/defendant to the respondent/plaintiff under this judgment.

On this amount, so determined, whatever interest has accrued as the

same is lying in a fixed deposit, such accrued interest will be the

entitlement of the respondents/plaintiffs. The balance amount existing,

beyond this amount of Rs. 3,53,724/- along-with interest @ 9% per

annum simple till the date of deposit in this court, will be refunded

back to the appellant/defendant along-with interest accrued thereon i.e.

it is clarified that whatever amount is now due and payable to the

appellant/defendant since the same is deposited in this Court and

earning interest, the interest accrued on this balance amount repayable

to the appellant/defendant, will be paid to the appellant/defendant.

6. In view of the aforesaid discussion, the appeal is

accordingly partially allowed by reducing the rate of interest but

otherwise dismissed by sustaining the impugned judgment. Parties are

left to bear their own costs.

NOVEMBER 15, 2018/ib                         VALMIKI J. MEHTA, J