^F^ HIGH COURT OF CHHATTISGARH ATBU-ASPUR Division Bench: Hon'ble Shri Dhirendra Nlishra, & Hon'ble Shri R.N. Chandrakar, JJ Appellant Plaintiff No.1 Respondents Rrst Appeal No.53 of 2007 M/s Bastar Oil Mill & tnd Ltd. Versus The New India Insurance Company Ltd. & another. JUDGMENT FOR CONSIDERATION Sd/- DhirendraMishra Judge Hon'ble Shri R.N. Chandrakar, J ^) Sd/- Rangnath Cuandrakar J^ Poslfor Judament on Fi April, 2010 Sd/- Dhirendra Mishra Judge ">»<;. HIGH COURT OF CHHATTISGARH AT BILASPUR Division Bench: Hon'ble Shri Dhirendra Mishra, & Hon'ble Shri R.N. Chandrakar, JJ First Appeal No.53 of 2007 Present: i Mr. Vishnu Kostha, counselfor the appellant. Mr. Prashant Jaiswal, Sr. Advocate with Shri Shailendra Sharma, counsel for the respondent No.1. JUDGJVLENT (Delivered on (3 April, 2010) Per D/i/rendra Mishra. J This first appeal under Section 96 of the Code of Civil Procedure (in short "CPC") is directed against the judgment and decree dated 29 January, 2007 passed in Civil Suit No.2B/200Q,.whereby learned District Judge, Bastar at Jagdalpur, partly allowed the suit of the plaintiffs with cost and held that plaintiff No.1 is entitled for damages of Rs.3,53,054/- with interest @ 6% per annum from the date of application against the total claim of Rs.17,70,000/- with interest @ 24% p.a. from 1999. (Parties shall hereinafter be referred to as per their description before the trialCourt.) 02. A civil suit was filed by the plaintiffs with the averments that plaintiff Mp.1 is engaged in the business of extraction of oil from Sal seeds and selling Hl-nor'yn \v/'n ic*i Appellant Plaintiff No.1 M/s Bastar Oi] Mill & Ind Ltd. Registered under the Companies Act, Head Office : Kurundi Road, Jagdalpur, District : Bastar, through its Managing Director, Prithviraj Agrawal, Son of late Kundanlal Agrawal, aged about 50 years, resident of Brindavan Colony, Jagdalpur, District : Bastar (CG) Plaintiff Versus Respojidente 1. The New India Insurance Company Ltd. Head Office : New India Insurance Building 87, Mahatma Gandhi Road Fort, Mumbai, Branch Office at Jagdalpur, District: Bastar (CG) Defendants 2. State Bank of India, Head Office : Nariman Point, Bank Way Reclamation, Mumbai, Branch Office : Jagdalpur through its Manager: State Bank of India Main Branch Jagdalpur, District: Bastar. Plaintiff No.2 y =3^ '^, '•t,. '•«.-.. the same within and outside the country. He also exports Deoiled Cake (for brevity "DOC") - a byproduct, to the other countries and for the aforesaid purpose, he had taken one New T. Raju Godown, Valaspaka, Kakinada (hereinafter referred to as "Godown") for storing DOC. On 16.1.1999 the Godown caught fire, resulting in destruction of 9205.730 MT of Sal DOC powder and 1050.695 MT of Sal Cakes, totaling 10,256.425 MT. The Godown was insured by the defendant for the relevant period. Salvaging of the goods stored in the Godown began from 23 January, 1999 and the burnt goods were separated from the goods which were not burnt, after taking out the entire goods from the Godown. The process of salvaging could be compleited only after 45 days and finally, it was confirmed that 1200 MT of DOC in meal form was fully burnt. Negotiation continued between plaintiff No.1 and the defendant for many months, however, his insurance daim was not settled. Plaintiff No.1 submitted his claim before the Surveyor of the defendant, who submitted his report to the defendanVcompany. However, when his claim was not settled and limitation of 12 months for preferring claim, as per Clause 6(2) of the Insurance Policy, was about to expire, plaintiff No.1 filed a civil suit against the defendant and claimed a sum of Rs.14,40,000/- @ Rs.1200 per MT for the burnt DOC meal powder, Rs. 60.000/- towards expenses incurred in salvaging; interest @ 24% per annum from May, 1999 till filing of the suit, a sum of Rs.2,70,000/- by way of interest i.e. total Rs.17,70,000/-. 03. The defendant, in its written statement denying the averments in the plaint, averred thatthe defendant had appointed Coastal Consultant Pvt. Ltd., Kakinada a§ its Surveyor. There was delay in submission of report by the Sun/eyor as plaintiff No.1 did'not furnish the necessary documents to the Surveyor, despite being asked for the same. The Surveyor, after detailed enquiry, submitted its report, according to which because of fire accident, the plaintiff suffered loss of Rs.3,53,054/-. Since the Surveyor's report was not in accordance with law, compensation was not paid to plaintiff No.1 . At the time of insurance, plaintiff No.1 had stocked in its Godowns goods worth Rs.1,60,98,5927-, whereas the insurande was only for a sym of Rs.1 crore and therefore, as per underinsurance clause, plaintiff No.1 was entitled for Rs.3,53,054/- only according to Surveyor's report. 04. On the basis of pleadings of the respective parties, issues wereframed. Plaintiff No.1 examined Shyam Sunder Sharma - Supervisor (PW-1) & Prithvi Raj Agrawal - Managing Director (PW-2) of Plaintiff/Company, and Plaintiff No.2 examined Vasudev Dhora - Regional Officer of the State Bank of India BILASPOR (Chhattisgarh) as its witness. Whereas the defendant examined T.K. Ghosh -Administrative OfRcer & K.S.R. Prasad -Surveyor ofthe defendanVCompany. 05. Learned District Judge partly decreed the suit with a finding that plaintiff No.1 had insured 9205.730 MT DOC powder stored in its Godowns, negating the claim of plaintiff No.1 that 1200 MT DOC powder was burnt. It was held on the basis of Surveyor's report of Ex.D/1 that the total loss of goods due to burn was 588 MT whereas 30.165 MT was damaged during the process of fire extinguishing and accordingly, loss towards 588 MT was calculated @ Rs.951.47 per MT and loss was assessed at Rs.5,59,464.36. Similarly, loss towards damaged 30.165 MT DOC was assessed at Rs.28,701/- and accordingly, total loss was assessed at Rs.5,88,165.45. However, considering that plaintiff No.1 had stored 16,919 MT goods in all Godowns whereas Godowns were insured only for Rs.1 crore, the proportionate loss was assessed at Rs.3,53.054/- as per evidence of Surveyor K.S.R. Prasad. The expenditure towards salvaging was assessed at Rs.32,499/- on the basis of Surveyor's report and thus, a decree for a sum of Rs.3,85,553/- towards the loss with interest @ 6% p.a. from the date of application has been passed and the suit was decreed with cost. 06. Shri Vishnu Kostha, learned counsel for the plaintiffs, argued that the learned District Judge has committed ah error by not considering the duly proved Fire Insurance Policy of Ex.P/18 issued by the defendant for a sum insured of Rs.1.25 crore covering spontaneous combustion of all the Godowns, list of which is appended with the policy and it also covered fire risk of New T. Raju Godown, Valasapaka, Kakinada (AP) and the same was valid for a period commencing from 18.9.1998 to 17.3.1999, for a period of six months. PW-2 Prithvi Raj has proved the policy of Ex.P/18 in Para - 37 of his deposition and the same has not been controverted in his cross-examination and thus, stock of goods stored in all the Godowns was for Rs.1,60,98,592/- as found by the Surveyor and was less than the amount of Rs.2,25,000,00/-, vide Policy No.11451204 2296 for Rs.1 crore as per surveyor's report of Ex.D/1 proved by K.S.R. Prasad, Surveyor of the defendant/Company and Pblicy of Ex.P/18 for Rs.1.25 crbre bearing No.11451204 02328. It was further argued that award of interest @ 6% p.a. from the date of suit is also highly inadequate as from the conduct of the defendant, it would be evident that the defendant deliberately did not settle the claim even after receiving report from the Surveyor on one pretext or the other and plaintiff No.1 was compelled to file the civil suit for recovery of loss under the Insurance Policy. 07. Relying upon the decision of the Supreme Court in the matter of Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi, reported in AIR 1999 SC 2963, it was argued that plaintiff No.1 was entitled for interest @ 15% p.a. from 16.1.1999 when the insured DOC meal was destroyed due to fire in the Godown. 08. On the other hand, Shri Prashant Jaiswal, learned Sr. Advocate for the defendant, would argue that learned District Judge decreed the suit on the basis of Surveyor's report of Ex.D/1 duly proved by the Surveyor Shri K.S.R. Prasad as no evidencewas led by the plaintiffs to substantiate their claim regarding loss of 1200 MT of DOC powder and price of DOC @ Rs.1200 per MT. Since the Surveyor was npt cross-examined by the plaintiffs with respect to document of Ex.P/18 - Fire Insurance Policy for a sum of Rs.1.25 crore of the Godowns, and the same is not described in the Surveyor's report, contention of the plaintiffs that in the impugned judgment, the Fire Insurance Policy of Ex.P/18 has not been considered, cannot be considered. The proportionate reduction in the actual loss suffered by the insured on the ground of overstocking of goods worth Rs.1,60,98,592/- instead of goods insured for a sum of Rs.1 crore as per policy conditions, is just and proper. It was also argued that interest @ 6% p.a. from the date of application isalso just and proper, taking into consideration the prevailing rate of interest in the banks. 09. We have heard learned counsel for the parties, perused the pleadings of the respective parties as also the oral and documentary evidence adduced by the parties and available on record. 10. So far as finding of the trial Court based on the evidence of Surveyor, who has also proved the Sun/ey report of Ex.D/1, that total loss due to fire was only 588 MT of DOC powder and loss during salvaging was 30.165 MT & price of DOC powder was Rs.951/- per MT, is concemed, the same is just and proper as the plaintiff has not adduced any credible evidence to substantiate his claim in the plaint regarding actual loss as al?o price of the goods. Similarly, the expenditure towards salvaging the goods after fireat Rs.32.499/-, based on Surveyor's report, is also just and proper as no credible evidence has been adduced by plaintiff No.1 to establish his claim that he incurred expenditure of Rs.60,000/- in salvaging. 11. The only question for our consideration is - whether the learned District Judge was justified in proportionately reducing the assessed loss by the Surveyor on the ground that the insured had stocked goods worth Rs.1,60, 98.592/- whereas the Insurance Policy issued in his favour was for a surh of Rs.1 crore only? 12. PW-2 Prithvi Raj Agrawal, Managing Director of plaintiff No.1, has proved the Insurance Policy No. 11451204 02328 of Ex.P/18, which was for the goods stocked in all the Godowns and was in force at the time of fire accident. The said policy was for a sum of Rs.1.25 crore. There is no cross- examination of the plaintiff No.1 by the defendant with respect to document of Ex.P/18. From the amended pleadings in Para-6 of the plaint, we find that plaintiff No.1 had pleaded about both the policies i.e. Policy No.11451204 - 2296 dated 20.7.1998 and Policy No. 11451204 02328 dated 16.9.1998. The defendant in its written statement has not specifically controverted the above pleading. Thus, for the aforesaid reasons, we are of the opinion that the proportionate reduction from actual loss of Rs.5,98,165.45 to Rs.3,53,054/- on the ground of excess storage; of goods than the sum assured, cannot be sustained and we hold that! plaintiff No.1 was entitled for recovery of Rs.5,98,165.45, being the actual loss as assessed by the Surveyor of the defendant. 13. Now coming to the question - whether learned District Judge was justified in awarding interest @ 6% p.a. from the date offiling application? 14. Indisputably, plaintiff No.1 had insured the Godowns against any loss occasioned dueto fire for the relevant period for a sum of Rs.2.25 corers. His claim was got investigated by the defendant through its Surveyor, who submitted his report of Ex.D/1 to the defendant. However, the defendant did not settle the claim in terms of Survey report and plaintiff No.1 was compelled to file suit for recovery of loss. 15. In the matter of Sovintorg (India) Ltd. (supra), the appellant-company had a bank account with the respondent-bank, wherein a cheque of Rs.1 lac was deposited by the appellanl in the month of June, 1983. Proceeds of the ^iS—.^^^ '/ %s-.. " ;.! •<.SB>, i &^ •'''•gl^-.'81' .:-• ;sl^'ssnrf"f"'' cheque were collected on June 17, 1983. However, the same were not credited in the account of the appellant for a period of over seven years. In these circumstances, the appellant filed a complaint before the State Consumer Dispute Redressal Commission and prayed for penal interest and compensation for the business losses etc. to the tune of Rs.8,26,000/-. The Supreme Court considering that there was no contract between the parties regarding payment of interest on delayed deposit, held that interest cannot be claimed under Section 34 of the CPC as its provisions have not been specifically made applicable to the proceedings under the Consumer Protection Act. However, applying the general provision of Section 34 being based upon justice, equity and good conscience, it was held thcft the Commission can also grant interest appropriately under the circumstance of each case and accordingly, interest @ 15% p.a. was awarded in place of 12% awarded by the Commission. 16. In the instant case also, taking into consideration the overall conduct of the defendant/lnsurance Company, we are of the opiniori that interest @ 6% per annum and that too, from the date of application, is highly inadequate and imprpper, particularly when the plaintiff has claimed interest from the date of fire accident i.e.16.1.1999 till the date of realization @ 24% and claimed Rs.2,70,000/- towards interest. However, considering the prevailing rate of interest in the present days, we are of the opinion that ends ofjustice would be served if simple interest on the amount of actual loss of Rs.5,98,165.45 is awarded @ 9% from 16.1.1999 till the date of realization. 17. In the result, the appeal is partly allowed. Impugned judgment and decree awarding compensation of Rs.3,85.553/- with interest @ 6% per annum from the date of application till the date of realization is modified and it is held that plaintiff No.1 shall be entitled for a compensation of Rs. 5,98,165.45 with simple interest @ 9% per annum from 16.1.1999 till the date of realization. The defendant shall pay the aforesaid amount to plaintiff No.1 within a period of three months from the date of order. Plaintiff No.1 is also entitled for the cost throughout. Sd/- Dhirendra Mishra Judge SA/- R.N. Chandrakar Judge