ORDER
Rajyalakshmi Rao, Member
1. The present appeal is filed by the appellant Shri S.T. Vallinayagam Pillai, who is the original complainant whose complaint of deficiency in service against Oriental Insurance Co. Ltd. has been dismissed by the order dated 29.9.1998 by the State Commission, Chennai in O.P. No. 118/1997.
2. Brief facts of the case are:
Appellant is a Jewellery Mart firm in Tenkasi. He had insured the stock in trade both gold and silver for Rs. 14 lakh with the respondents, Oriental Insurance Company for a period of 21.12.1994 to 20.12.1995. The appellant’s shop was closed at 10 p.m. on 22.10.1995 and was opened on 24.10.1995 by 11 a.m. by the appellant’s partner V. Muthusamy. 23.10.1995, being Deepawali day, the shop was not opened. When the shop was opened on 24.10.1995 it was found that the shop was burgled and the burglary must have happened between 10 p.m. on 22.10.1995 and 11 a.m. of 24.10.1995.
3. It is appellant’s case that the burglars looted the entire gold and silver ornaments and jewelleries kept in the show case such as (i) Mangal Sutra; (ii) Gold Rings; (iii) Gold Stud pair; (iv) Gold chain; and (v) silverware worth Rs. 5,72,721.30. The complaint was lodged with the Tenkasi Police and respondent was also informed by a telegram and also by a letter dated 25.10.1995. On 25.10.1995 respondents’ Surveyor visited the appellant’s shop and made investigation and gave a report on 10.2.1996. In his report which is placed on at page 66, details are given as under:
Books of Accounts Ledger, day book, stock
maintained book, sales register and other
subsidiary ledgers. On examining
the above, we have satisfied with the
books of account were properly
maintained till date.
Stock On perusal of stock records stock
taking is done by the proprietor
every day and the stock record is
duly maintained by him. Stock
statement as on 31.3.95 is herewith
enclosed.
Purchase bills We have examined all purchase bills
(both gold and silver) from 1.4.95 to
22.10.95 and the above bills were
genuine. Certified copies of the
above are herewith enclosed.
Outward We have examined the
Voucher/Bill vouchers/bill for outward, raw
materials which are given to gold
smith and silversmith for conversion
of finished goods and the certified
copies of the above are herewith
enclosed.
Inward Voucher/ Inward voucher receipts for finished
Receipts goods received from goldsmith were
checked and the certified copies of the
above are herewith enclosed.
Daily Sales We have checked daily sales register
Register with sales bills from 1.4.1995 to
22.10.1995 and it was properly
maintained.
4. In addition, the monthly-wise cooly (making charges) paid to goldsmit hs along with the audited statements of the financial year ending 31.3.1994 to 31.3.1995 were examined by the surveyor who assessed the loss due to theft as under:
Theft items Quantity Weight Cost
Gm.Mg. excluding
profit
margin
Rs. Ps.
1. Thirumanga 24 43.350 18,982.60
laym
2. Ring 322 516.500 2,26,165.70
3. Stud 133 550.700 2,41,143.30
4. Chain 19 172.100 75,359.70
5. Silver 1500.000 11,070.00
Ornaments ___________
Total 5,72,721.30
___________
5. After the case was registered Tenkasi police had investigated the complaint of theft and one person was arrested on 8.2.1996 from whom 19.500 gm. gold was seized. This gold was worth Rs. 9,700 and it was given to the appellant. The said report by Inspector of Police certified that regarding remaining gold, silver and cash, they were unable to trace in the above case. The respondent vide letter dated 5.2.1997 asked the appellant to submit the following particulars at the earliest to pass the claim:
1. Details of the purchase of the old ornaments from family members of the partners in the month of December 1996 including documentary proof, if any.
2. The Chartered Accountant Mr. Ravi has physically verified the stock of Jewellery/Silver ornaments at your premises on 24.12.1996. You have also submitted the purchases/sales during the period between 22.10.19,95 and 24.10.1996. The stock in the custody of Goldsmith on those two days i.e. 22.10.95 and 24.12.96 is also known. With these figures, we would be able to reconcile and arrive at the stock in trade as on 22.10.95. This was discussed in detail with your representative and he has agreed to prepare one such reconciliation statement and forward to us soon.
6. Mr. Ravi, a Chartered Accountant, appointed by the Insurance Company submitted his report on 7.2.1997. To arrive at the stock on the date of theft, he physically verified the stock at the shop on 24.12.1996 and worked backwards taking into account the purchases/sales between 24.10.1995 (the date of the theft) and 24.12.1996 from the books. Based on this, he arrived at the balance of gold as on 24.10.1995 at 2981.540 gm. However, this did not tally with the balance of stock as on 24.12.1995 as per books of account, which showed it as 3345.336 gm. The State Commission took this difference in stock into account, while arriving at a decision against the complainant.
7. However, as desired by the Insurance Company the complainant filed a reconciliation statement and satisfactorily accounted that in actual fact there is no difference in stock except for one gram of gold. The reconciliation statement given below would show that Mr. Ravi, the Chartered Accountant, did not take into account 364.796 gm. of gold. This tallies with the alleged stock difference of 363.796 gm. except to the extent of one gram.
Reconciliation Statement
________________________________________________________________
Conculation As shown As per Difference Remkarks R.M.
made to arrive by Auditor Books Readymade
stock of Gold Mr. Ravi Jewellery
RM as on
24.10.1995
Add 256.580 +256.580 Standard Bar
Stock of Completely
Standard omitted by
Bar on the auditor
24.12.1996 as he verified
233.280+23.300) only jewels.
Sales after 2725.300 2735.00 +9.700 The sale on
the date of the date of
burglary physical
verification
concurrently
going on when
Mr. Ravi
visited,
completely
omitted by him
Less: Purchases 3878.240 3877.960 +0.280 Actual Copper
after the date content
of Burglary to
the date of
Physical
Verification
by Mr. Ravi
on 24.12.1996
Stock of Gold 3345.336 3247.100 +98.239 Stock of Gold
RM as per Books with goldsmith
before the date on 24.10.1994
of burglary omitted by
Mr.Ravi.
Difference 363.796 1.000 +364.796 Total stock as
per Book:
3345.336 stockas
per Mr. Ravi
Verification:
2981.540
_______
363.796
________________________________________________________________
8. As regards silver, Mr. Ravi, the Chartered Accountant, based on his method arrived at a stock of 5416.950 gm. as on 24.10.1995 whereas as per books of account, the stock on that date was 4760.55 gm. Thus there is apparently a difference (excess) of 650.400 gm. in the stock of silver. However, the appellant satisfactorily explained the reason for this difference. According to him, when the Auditor, Mr. Ravi visited the shop on 24.12.1996 a new model “KOLUSE” (waist band) supplied by one of the appellant’s suppliers, Dharamrajan and Company, weighing 651 gm. was in the show-case. The appellant did not add this in the stock as it was a new item sent by the supplier whereas Mr. Ravi added this in the stock. In support of this, a letter dated 20.12.1996 given by Dharamrajan and Company is filed as Exhibit A-14 and it is argued that this letter was shown to the auditor at that time itself and the difference in silver was explained to him. In view of this, we hold that the case of the appellant cannot be rejected on the ground of difference in stock, since the alleged difference has been satisfactorily explained by the appellant.
9. From the record, it is clear that the claim was rejected by the respondents on 14.8.1997 on the ground that charge-sheet has been filed against the culprit Raja for having stolen only 19.5 gm. of gold and that the said gold recovered from the said culprit was handed over to the appellant and that the final investigation report of the police in the proper format has not been submitted by the appellant. On careful perusal of the report, we find that the FIR was filed on the date of theft itself, i.e. on 24.10.1995. The FIR clearly shows the amount of stolen property as gold jewellery worth Rs. 5,77,192.50, silver ornaments worth Rs. 10,500 and cash worth Rs. 466.50. The details of the culprit are shown as “Not known”. It is a different matter that 4 months later the police arrested one Raja and recovered from him 19.5 gm. of gold. However, it is seen that the police have filed an amended charge-sheet on 8.11.1997 wherein it was mentioned that further investigation is in progress and steps are being taken to arrest the real culprits. However, filing of this additional charge-sheet or recovery of only 19.5 gm. of gold from an arrested person earlier is not relevant for a decision on the issue before us.
10. The Surveyor appointed by the respondents vide his report dated March 29, 1996 clearly assessed the loss at Rs. 5,72,721.80 taking into account the value of 19.50 gm. of gold jewellery recovered and applying the average clause, he assessed the loss at Rs. 5,42,161. The subsequent report dated 7.2.1997 of the Chartered Accountant appointed by the respondents showed some apparent difference in the stock of gold and silver jewellery as on the date of burglary. However, these differences have been fully reconciled except to the extent of 1 gm. of gold. Under these circumstances, we find there is merit in the case of the appellant. There was no justification for the Insurance Company to reject the claim especially after the appellant reconciled the difference in stock. This clearly amounts to deficiency in service by the respondents. The burglary had taken place way back at the end of 1995. On one pretext or the other the respondents Insurance Company has been faulting the appellant and rejected the claim on flimsy grounds.
11. In view of the above said discussion, the appeal is allowed and the respondents are directed to pay Rs. 5,42,161 along with interest 8% p.a. from 1.4.1996, i.e. six months after the burglary and cost of Rs. 10,000 within two months from the date of receipt of this order.
