The New India Assurance Company ... vs M/S. Miryalaguda Ground Nut Oil ...
2022 Latest Caselaw 6046 Tel

           HON'BLE Smt. JUSTICE P.SREE SUDHA

                 APPEAL SUIT No.1703 of 2001

                        JUDGMENT

1. This appeal is directed against the judgment and decree

dated 29.01.2001 passed in O.S.No.9 of 1996 on the file of the

learned Senior Civil Judge, Miryalguda, wherein and whereby

the suit filed by the plaintiff is decreed with proportionate costs

and interest thereon at 12% per annum.

2. The defendant is the appellant and the plaintiff is the

respondent herein. The plaintiff filed a suit against the

defendant for grant of compensation of Rs.5,44,000/- with

interest thereon at 24% per annum from 14.05.1995 till the

date of realisation.

3. The trial Court considering the evidence on record and

also the arguments advanced by both the counsel granted

decree in favour of the plaintiff for an amount of Rs.3,12,410/-

with proportionate costs along with interest thereon at 12% per

annum from the date of gales i.e. 14.05.1995 till the date of

filing the suit i.e. 12.04.1996 and thereafter at 6% per annum

on Rs.3,12,410/- till realisation and the rest of the claim was

dismissed. The defendant was also directed to pay Rs.17,002/-

towards proportionate costs of the suit. Aggrieved by the said

judgment and decree, the defendant in the suit i.e. The New

India Assurance Company Limited, Nalgonda Branch, preferred

this appeal.

4. Heard the learned counsel for the appellant-defendant

and the learned counsel appearing for the respondent-plaintiff.

Perused the record.

5. Learned counsel for the appellant-defendant would

contend that the judgment of the trial Court is contrary to law

and material on record and it erred in granting compensation at

the rate of Rs.3,2,410/- without any basis and also erred in

believing the evidence of P.Ws.1 to 6 and disbelieving the

evidence of D.Ws.1 and 2. Learned counsel would also assert

that the trial Court has not considered the insurance policy

which is marked as Ex.B1 and the judgment under appeal is

not in consideration of the conditions of policy. Learned counsel

would also aver that the trial Court has not believed the report

of the joint survey-Ex.B3, but believed the survey report-Ex.B2

and also the subject matter of the lis has to be referred to the

Arbitrator as per the arbitration clause and lastly contended

that the damages awarded by the trial Court are excessive, and

thus, prayed the Court to set aside the judgment and decree

under appeal.

6. M/s.Miryalguda Groundnut Oil Mill represented by its

Partner filed the suit against the Insurance Company seeking

compensation. The plaintiff would submit that the firm was

dealing in oil business and in that connection the firm obtained

loan of Rs.8,05,000/- from the Andhra Pradesh State Financial

Corporation (APSFC) at Nalgonda Branch for construction of

building and erection of machinery and they were insured with

the defendant Insurance Company bearing Policy

No.161010602947 covering risk under the head Fire-Policy 'C'

on 01.10.1994 and that the said policy is being renewed from

time to time. The plaintiff would further submit that on

14.05.1995 there were heavy rains and gales and as a result of

which the plaintiff sustained huge loss apart from several other

business concerns - Electricity Board, Roads and Buildings

Department and Telephones at Miryalaguda town. Immediately

the plaintiff reported the matter to the APSFC and to the

defendant. On 17.05.1995 the Insurance Company appointed

the Surveyor by name R.L.N.Shastry and he visited the mill and

recorded his findings for the purpose of assessing the loss

caused to the building and machinery. Apart from the

Insurance Company's Surveyor, the plaintiff also appointed one

Surveyor - V.Goverdhan, Junior Engineer in Nagarjuna Sagar

Project at Miryalguda for assessment of damage caused to the

building and machinery and the work-sheet submitted by him

are also filed. The Surveyor sent a letter bearing

No.NIA/1412/MGN dated 24.05.1995 to the plaintiff firm with a

request to send certain papers and the plaintiff firm complied

with the same on 02.06.1995 and also received

acknowledgment. Later, the plaintiff firm waited for a period of

five or six weeks and met the defendant and enquired as to what

happened to the claim and upon which the Manager of the

defendant informed that the Surveyor estimated the loss to an

extent of Rs.3,10,000/- and also showed the report of the

Surveyor to the plaintiff and hence the plaintiff requested the

Manager of the defendant to grant the real loss of Rs.4,37,000/-

sustained by it. Thereafter, the Manager of the defendant

company sent a letter to the Surveyor seeking some more

clarifications and also instructed the plaintiff to meet the

Manager and accordingly, the plaintiff met with the Manager of

the defendant company after one week, but he has not

responded positively. The plaintiff would also assert that after

three days the Manager of the defendant bank accompanied

with another Surveyor-Nageswara Rao visited the plaintiff firm

to assess the loss. The plaintiff informed the joint surveyor that

the damage to the machinery and building was taken place

about two months back and he got it repaired by investing more

than Rs.4,00,000/- as he could not run the firm without getting

them repaired and he has obtained loan from SFC. The joint

surveyor did not see the photographs shown by the plaintiff and

did not even enquire with any of the neighbours and he was in

the mill only for one hour and he informed to the plaintiff that

he may get the claim of Rs.30,000/- towards damages. After

visiting of the joint surveyor the plaintiff ventilated its grievance

before the Senior Divisional Manager of the defendant company

and he sent a reply asking the plaintiff to obtain a certificate

from the Meteorological Department at Hyderabad confirming

that there was heavy gale in Miryalaguda on 14.05.1995. On 2nd

week of September, 1995 the Branch Manager of the defendant

company sent a letter along with discharge voucher settling the

loss at Rs.30,368/-. The plaintiff firm did not return the loss

voucher as it wanted to contest the matter before the Court. The

Branch Manager also sent another letter on 02.11.1995

instructing the plaintiff that if he fails to return the discharge

voucher within fifteen days from the date of receipt of the said

letter, the claim of plaintiff firm will be treated as closed. The

letter and voucher were filed by the plaintiff before the Court.

On 28.02.1996 the plaintiff got issued a legal notice to the

Branch Manager of the defendant company requesting for

supply of copies of the report of the surveyors but in spite of

receiving the notice the defendant company neither supplied the

copies nor replied to the notice. APSFC also took a policy for an

amount of Rs.8,50,000/- to protect its own interest over the

loan amount and the policy was taken on its own accord

without consulting the plaintiff firm. The plaintiff suffered loss

of Rs.5,44,000/- towards damage to the plant and machinery

including building Rs.4,37,000/- loss of Rs.45,000/- towards

non-functioning of the mill during the period from 14.05.1995

to 30.06.1995 and loss caused to the groundnut stock due to

the non-functioning of the mill is Rs.36,000/- along with the

interest paid to the creditors at the rate of Rs.6,000/- and

therefore the plaintiff filed the present suit for recovery of the

aforesaid amounts.

7. The defendant in his written statement denied the

contentions and submitted that the person who signed the

plaint is not competent. Initially the surveyor was appointed to

conduct survey but he did not consider the following aspects

while submitting the report:

a) The policy issued is a fire-C with F.S.T. extension and the policy was not issued on re-instatement value clause. The surveyor has not applied the relevant depreciations and considered the loss on replacement value contrary to the agreed conditions of the policy.

b) The surveyor has not given the dimensions of the building in the Mill premises and has not worked out the total value of the buildings. From the lay out planned it is noticed that total plinth area as per the dimensions of the different worked out at around 611 sq. meters. As such the total value is more than the value declared by the plaintiff on which basis the premium was calculated and collected. If the correct calculations are made there is an under insurance.

c) Similarly the surveyor's assessment in case of under-insurance of the machinery does not give the details of all the machineries with reference to the same insured.

and as such another surveyor was appointed to assess the loss

afresh and accordingly joint survey was conducted by both the

surveyors. In the joint survey the repairs done to the plaintiff

firm was also considered and the loss was rightly assessed for

an amount of Rs.30,368/- and thus the defendant company

offered the said amount and stated that they are ready and

willing to release the said amount on submission of the

vouchers by the plaintiff. The defendant also stated that there is

an arbitration clause in the policy and as such suit is not

maintainable and moreover suit is to be filed in a Court having

jurisdiction where the regional office is located and thus the

Court has no territorial jurisdiction and further stated that the

Court has no jurisdiction to award interest on unliquidated

damages.

8. The plaintiff examined himself as P.W.1 and also

examined the mechanic, mason, gumatha, hamali and an

independent witness as P.Ws.2 to 6 on his behalf. He filed

Exs.A1 to A19. The Branch Manager of the defendant company

was examined as D.W.1 and he examined the first surveyor as

D.W.2 and marked Exs.B1 to B6.

9. The plaintiff firm was registered by Registrar of the firms

on 27.06.1991 and filed the Xerox copy of the acknowledgment

dated 12.04.1996 and it clearly shows that the plaintiff is a

registered partnership firm. They also filed the newspaper under

Ex.A1 dated 16.05.1995 to prove the heavy gales in Miryalaguda

town on 14.05.1995 but the insurance company insisted the

plaintiff to obtain a certified copy from the Metrological

Department after conducting of the survey at a later date only to

harass the plaintiff. The letter was also addressed under Ex.A6

on 26.07.1995 and when he approached the concerned office

they stated that the barrow meter was taken away by somebody

and they noticed it only on 06.05.1995 and to that effect they

gave certificate. When there were no gales on 14.05.1995, the

defendant would not have appointed the surveyor D.W.2 to

proceed to the spot and estimate the damages. The Branch

Manager in his evidence deposed that there was under

insurance of the policy and as such in the event of loss the

company pays rateable proportion of loss and as such they

appointed a joint surveyor and rightly assessed the

compensation as Rs.30,368/-. He also admitted that they have

not filed the discrepancies found by the surveyors in the report

of the D.W.2. D.W.2 in his evidence stated that he considered

partial under insurance in respect of plant and machinery in his

report Ex.B2 and the loss and damage assessed by him is

correct. The joint surveyor has not collected the copy of the

policy before proceeding to the plaintiff firm and he has not even

collected the same from the head office before preparing the

report. In fact the said surveyor visited the places of damage for

several times and submitted his report and that no report was

reversed or required any joint survey. In this case only the

defendant company wanted to have joint survey for the reasons

best known to it. The photographs of the damaged plant and

machinery were taken by the surveyor-D.W.2 and in his report

he clearly stated that damage was caused to the machinery,

walls, roofs etc., and the roof collapsed and the debris were

lying throughout the plant and machinery and hence it is

necessary to change some of the equipment of the machinery

but the joint surveyor in his report stated that the damaged

items can be replaced with minor repairs and gave report under

Ex.P3.

10. The trial Court considering the entire evidence on record

rightly arrived to the conclusion that the plaintiff is entitled to

compensation of Rs.3,12,410/- as assessed by D.W.2 in his first

survey report and granted the amount along with interest and it

was also stated that the amount assessed by the surveyor is not

disputed by the plaintiff firm and as such the matter cannot be

referred to the arbitrator and the plaintiff rightly filed suit before

the civil Court. It was also observed by the trial Court that if

there are any irregularities in the procedural aspects by the

surveyors of the defendant company, P.W.1 cannot be

penalised. Moreover, the defendant did not opt for any arbitrator

and as such the plaintiff rightly approached the civil Court for

redressal. The counsel for the insurance company would submit

that the plaintiff is entitled for compensation at Rs.30,000/-

and odd as per Ex.B3. The trial Court after analysing the entire

evidence on record rightly arrived to the conclusion for grant of

compensation to an extent of Rs.3,12,410/- and there is no

infirmity in the judgment of the trial Court. Therefore, this

Court finds no reason to interfere with the judgment of the trial

Court.

11. In the result, the appeal merits no consideration and is

dismissed with costs confirming the judgment of the trial Court.

12. Miscellaneous Petitions, if any, pending in this revision

shall stand dismissed in the light of this final order.

____________________ P.SREE SUDHA, J.

22nd NOVEMBER, 2022.

PGS