NEW INDIA ASSURANCE CO LTD Vs. KOHINOOR SIZING FACTORY

JUDGEMENT

(1.) This is the first appeal filed by the appellant, New India Assurance Company, aggrieved by the order dated 6th May, 1999 of Gujarat Consumer Disputes Redressal Commission in Complaint No. 283 of 1993 whereby the appellants are directed to pay Rs. 5,64,696/- with interest @ 18% p.a. from the date of the complaint till realization and cost of Rs. 2,000/- to the complainant, M/s. Kohinoor Sizing Factory. Brief facts of the case are:

(2.) The respondent, a partnership firm, in the business of cotton sizing has filed the complaint in the State Commission for reimbursement of the loss suffered to the factory and the stock during communal riots, from the petitioner, New India Assurance Company Ltd. The respondent had taken three Insurance Policies from the petitioner which were valid for the period from June 12, 1992 to June 11, 1993. Under two fire policies "C", stocks of raw materials and semi-finished goods lying in their factory were insured for Rs. 1,45,000/- and stocks of cotton, cotton yarn, stock in process, raw materials and goods lying in the factory were insured for Rs. 3,50,000/-. The building of the factory was insured for Rs. 2 lakh and machinery, etc. for Rs. 3 lakh under the Fire Insurance Policy "A". Thus, the respondent had taken total insurance for Rs. 10 lakhs from the petitioner.

(3.) It is the case of the respondent in the complaint that on December 8, 1992, a mob of nearby 500 persons came to his factory and set it on fire. As a result, the factory along with stock, machinery and building was totally destroyed. FIR was lodged and the petitioner was informed accordingly. The petitioner appointed Kirj Consultants to survey and assess the loss suffered by the respondent. Since the books of accounts were destroyed in fire, the stock position was reconstructed on the basis of sales tax returns and bills of purchase and other relevant documents for making assessment of the loss. The Surveyor assessed the loss of building and machinery at Rs. 1,14,696/- and loss of stock at Rs. 1,44,387/- in total Rs. 2,59,083/-. The respondent accepted the assessment of loss of Rs. 1,14,696/- for the building and machinery but contested regarding the assessment of loss due to destruction of stock. According to the respondent this was for Rs. 4,83,147/- whereas the petitioner contended that this loss was Rs. 1,44,387/-. It is contended by the respondent that the stock lying in the factory was hypothecated with Bank of India and that he had to submit statement of stock to the bank every month for availing credit facilities with the Bank. The last statement of stock which was sent to the bank was on November 30, 1992 and Chief Manager of Bank of India, Shahibaug Branch has issued certificate dated October 1, 1994 wherein it is stated as follows: