1. THE complainant is a farmer and sole proprietor of M/s. Srinivasa Poultries, Veerampalem village, West Godavari District which is having a capacity of 40,000 birds (layers) which was established with the financial assistance of M/s. Vysya Bank Ltd., Tadepalligudem. THE complainant had insured the poultry shed, poultry feed, eggs etc., under Policy No. 116610500 06189 dated 19.9.1996 for a period of one year for Rs. 60,38,000/- by paying a premium of Rs. 18,793/-.
2. WHILE so there was an unprecedented cyclone storm in Bay of Bengal which hit the coast in East Godavari District causing devastating loss to life and property in both the Godavari Districts. The complainants suffered extensive damage to his poultry sheds, feed and eggs apart from death of 1,000 birds. The complainant informed the opposite party Insurance Company through their banker on 7.11.1996. On 8.11.1996 the opposite party deputed one Mr. M. Venkateswara Rao who conducted preliminary survey. On 23.11.1996 one Mr. N. Prasad another Surveyor visited the farm of the complainant and conducted survey. He verified the stock position and initialled in the records.
The complainant submitted his claim to the Surveyor claiming a sum of Rs. 9,92,692/- towards loss of feed and eggs. However, the opposite party after long correspondence sent a voucher for Rs. 83,661/- on 5.12.1997 towards full and final settlement. The complainant and his banker protested for the meagre settlement. The opposite party again sent another voucher for Rs. 1,01,559/- as full and final settlement. The complainant and his banker did not accept the settlement. But the opposite party refused to pay the said amount since the complainant did not accept to sign the voucher as having received under full satisfaction. In view of the unreasonable attitude of the opposite party, the complainant suffered irreparable loss as he was constrained to pay heavy amounts as interest towards the loan account in the Bank. Hence the complaint.
In the written version filed by the opposite party it is admitted that on 6/7.11.1996 there was a cyclonic storm which caused to the coastal areas. The complainant preferred a claim for the damage caused to his poultry farm under Policy No. 116610500 06189. One Mr. M. Venkateswara Rao conducted preliminary survey. Later Mr. N. Prasad was appointed to conduct a detailed survey. The insured chose to submit the claim form to the Surveyor directly and not to the opposite party Company. The Surveyor submitted his report on 8.10.1997 and the Company settled the claim at Rs. 83,661/-. On the request of the Bank Manager and the insured, the claim was reviewed and the loss was assessed at Rs. 1,01,539/-. Though the claim vouchers were sent to them, the insured chose to accept the payment ''Under Protest''. Therefore, the claim could not be settled.
3. IN the claim form the insured had not mentioned about the damage caused to eggs. Similarly the insured claimed Rs. 15,000/- under the head ''damages to feed, grinder, mixer and motors and panel board''. Depending on the size of the shed where feed is stored and the monthly consumption of the birds it was calculated that about 1600 bags of feed could be stored in the shed. As per policy condition No. 13 in case of dispute it should be referred to the Arbitrator under the provisions of Arbitration Act, 1940. The complainant had not submitted any claim for Rs. 13,60,933/-. Hence there is no deficiency in service.
The complainant besides filing his affidavit also filed Exs. A-1 to A-30. The opposite party also filed affidavit evidence and marked Exs. B-1 to B-10. The point that arises for consideration, therefore, is whether there is deficiency in service on the part of the opposite party. The complainant is proprietor of M/s. Srinivasa Poultries, Veerampalem village, West Godavari District. He has obtained a policy covering poultry sheds, poultry feed, eggs etc., which is admitted. While the policy is in force on 6/7.11.1996 a severe cyclone storm in the Bay of Bengal hit the Coastal Districts causing havoc and severe loss to life and property. The complainant informed the opposite party through his banker under Ex. A-6 that he sustained heavy damages. A Surveyor was appointed by the opposite party.
4. THE complainant states that he filed the claim for Rs. 9,92,692/- for the loss suffered by him for the stock of deed damaged in the sheds. THE Surveyor however submitted his report on 8.10.1997 and the opposite party under Ex. A-10 dated 9.1.1998 offered a sum of Rs. 83,661/- and requested the complainant to receive the said amount in full and final settlement. As the complainant did not accept, the opposite party again increased the figure to Rs. 1,01,559/- under Ex. A-13 dated 23.2.1998 and asked the complainant to accept the said figure in full and final settlement. But the complainant did not accept the said amount. Hence the opposite party did not pay the said amount. Even then the opposite party did not deposit this amount or pay the same to the complainant.
This Commission had occasion to observe earlier in similar matters that it is not fair to say the least on the part of the opposite party to withhold the payment of the admitted amount merely because the insured agreed to receive the amount ''under protest''. This is nothing but tale twisting approach adopted by the opposite party to coerce the insured to come to terms forgetting the insured has to pay the heavy interest towards the loan amount borrowed and it has both moral and legal responsibility to pay the agreed amount to the insured without creating problems. It is a clear case where the opposite party did not budge an inch from its unholy stand and does not seem to realise their responsibility to deposit the admitted amount or pay the same to the complainant though the complaint is pending since 1998. This attitude of the opposite party to say the least is reprehensible.
The complainant relies on the survey report Ex. B-9. The Surveyor observed the cause of loss as follows :
"Severe cyclone/hurricane hit the Andhra coast near Kakinada during the intervening night of 6/7.11.1996 winds with velocities ranging from 150-200 kmph coupled with heavy rains caused devastation in the North coastal districts of A.P. the worst effected being East and West Godavari districts. The (Bay of Bengal) waves rose to about 3 mts. height above the normal level and the sea water entered the coastal village/towns and submerged the low-lying areas several houses collapsed. Thousands of people lost their lives while lakhs were rendered home-less. Several thousands of trees including of coconut trees which are widely grown got uprooted. The trees blocked the roads at several places. Power and communications lines throughout the Godavari districts got snapped/destroyed and life came to a stand still. The villages and towns in the districts plunged into darkness for several days. Standing crops got destroyed. Cattle/poultry birds in thousands were died. The loss of property was roughly estimated to be around Rs. 5,500/- crores. The loss caused by the cyclone is so devastating that it has been accepted as a "National Calamity". Roofs of a number of sheds including rice mills, poultry sheds etc., were blown off by the hurricane winds and the accompanying rains lashed the contents. Insured poultry complex one among them."
He also further observed that "A/c sheets on the roof of the feed godowns were blown off at different locations. Due to dislocation of A/c sheets on roof the rain water gained entry into the godown. The stocks of sunflower, ground nut and dry fish were found extensively damaged due to soaking in the rain water". He further observed that "the feed stocks such as dry fish, GNDOC, SFDOC and broken rice etc., when once become wet they will not be useful to feed as poultry feed as they are prone to develop funguns and afflotaxins and became toxic to the birds. Hence all the affected stocks do not fetch any salvage value".5. THE only dispute is what is the exact loss caused to the feed and the eggs in the complainant''s poultry farm. Under Ex. A-17 which is the eggs account on 7.11.1996 the stock of eggs was shown as 2,12,651 and damaged eggs were shown as 1,80,216. THE said account was initialled by the Surveyor on 23.11.1996. THE Surveyor also mentioned in his report that eggs in godown as 2,12,651, but however has stated that number of eggs broken are 21,575 instead of 1,08,216. He has not stated the basis as to how he arrived at the figure 21,575/- having signed the register without any protest or remark which clearly shows that number of damaged eggs is 1,80,216/-. THE opposite party addressed the Surveyor under Ex. A-8 on 12.11.1997 to submit details immediately as claim could not be settled for want of clarifications and in fact the report was submitted almost after one year of happening of the incident without giving any reason for this undue delay. Ex. A-9 is the reminder for the same purpose. THEse letters show that even the opposite party was at a loss to know how the figures are arrived at in the report. Hence we have to accept Ex. A-17 which shows that the damaged eggs are 1,80,216 which was initialled by the Surveyor without any remark. In fact he has observed in his report that he has verified the feed stock record and feed purchaser bills and found that they are in order. It is common knowledge that eggs floating in water for few days develop spots on the shell and there won''t be market for sale of such damaged eggs. THE Surveyor has fixed the rate at Re. 1/- per egg. THErefore, when calculated at that rate the loss of 1,80,216 eggs would come to Rs. 1,80,216/-.
6. THOUGH the opposite party offered Rs. 83,661/- under Ex. A-10 there is no basis as to how this sum is arrived at by them. It is also not stated how they arrived at Rs. 1,01,559/- as offered under Ex. A-13 except stating that both the banker and the complainant requested for a revision, and so they revised the figure. Inasmuch as there is no basis for both these figures we have to discard them as baseless.
It is next contended by the learned Counsel for the complainant that there is extensive loss for maize, broken rice, GNDOC, SFDOC etc. The Surveyor has reported that there is extensive damage to the stocks and that when they are soaked and become wet they will not be useful as poultry feed since they develop fungus and afflotaxins which cannot be consumed being unfit for consumption and they do not also fetch any salvage value. Ex. A-20 is the account of the stocked feed which shows that on 7.11.1996 there are 310 bags of maize out of which 274 are damaged. So also out of 771 broken 589 bags damaged, out of 365 bags of GNDOC 312 bags are damaged, out of 311 bags of SFDOC 284 bags were damaged, and out of 414 bags of DOB 363 bags are damaged.
Regarding fish it is stated that 282 bags are damaged out of 450 bags, mineral mix of 196 bags are damaged out of 329.5 bags, Propack of 150 bags are damaged out of 222 bags, shell 99 bags are damaged out of 377 bags.
7. HAVING observed that the feed stock which is drenched or become wet cannot be used as poultry feed, the Surveyor has again reduced this quantity drastically while assessing the loss in his report. We do not find any basis how he felt that the damaged bags are few compared to the figures shown in Ex. A-20. He has not given any reason on what basis he arrived at those reduced figures. There is no whisper in the entire report that the rest of the material/bags are intact without any damage. HAVING regard to the nature of the cyclone which has blown off A/c sheets from the roof, it is not possible to hold that some of the bags would be left intact unaffected by rain and cyclone in such extraordinary situation.
Therefore, we are of the opinion that the damaged stock as shown in Ex. A-20 should have been adopted by the Surveyor and should have worked out the loss at the value adopted by the Surveyor for each item as shown in page 20 of his report. As the Surveyor has filed his report after one year with abnormal delay and as the opposite party also is not satisfied with the reasoning on the figures adopted by the Surveyor, we are of the opinion that the said figures adopted by the Surveyor cannot be accepted.
8. WE may also point out that the Surveyor signed on Ex. A-18 the account sheet which contains the account upto 31.12.1996. But he signed the same purporting to have verified on 23.11.1996. WE are of the opinion that he could not have verified the accounts from 1.12.1996 to 31.12.1996 on 23.11.1996 and signed. This also points out that the report filed after one year does not inspire confidence.
The Surveyor has observed in his report that insurance is adequate and there is no under insurance. However he deducted 4.1 per cent as under insurance for feed stocks for which also there is no basis. Therefore, deduction of 4.1 per cent is also impermissible under this head ''Under Insurance''.
For all these reasons there shall be a direction to the opposite party to adopt the damaged quantity as reflected in Ex. A-20 and calculate the loss at the rate adopted by the Surveyor and pay the loss as arrived at towards the stock of feed as discussed above as well as the cost of eggs i.e., Rs. 1,80,216/- and pay the same to the complainant, subject to deduction of Rs. 2,500/- as per policy exclusions. The sum so arrived at is payable to the complainant with interest at 9 per cent per annum from the date of complaint till payment. 20. The complaint is accordingly allowed to the extent indicated above with costs of Rs. 10,000/-. Six weeks'' time is granted for payment. Complaint allowed.
