The central legal point established in the judgment is the application of the principle of 'cost or market price, whichever is less' in assessing the compensation for loss in an insurance claim under the Consumer Protection Act, 1986, Section 21.

Mr. Justice K.K. Srivastava, President—In this appeal filed against judgment and order dated 5.3.2004 passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (for short hereinafter referred to be as District Forum), the Complaint Case No. 211 of 2003 filed by the appellant Mohan Fiber Products Limited was allowed to the extent that the respondent - United India Insurance Company Limited (for short hereinafter to be referred as Insurance Company) was directed to pay a sum of Rs. 52,800/- assessed as loss by the Surveyor-cum-Loss Assessor namely Shri Rakesh Khanna in respect of the stock destroyed in the fire, which broke out in the premises of the factory situated in Village Mubarikpur, Tehsil Rajpura, District Patiala. Besides, the payment of the amount of Rs. 52,800, interest was also directed to be paid @ 7% per annum from the date of repudiation i.e., 6.8.1996 till its payment and a sum of Rs. 1,100 was awarded as costs of complaint.

2. It is not disputed that the respondent - Insurance Company has made the payment of the said amount to the appellant. However, the appellant felt aggrieved by the quantum of damages of loss assessed at Rs. 52,800 as against the claim of Rs. 1,42,600, which was filed by the appellant with the respondent - Insurance Company. Before the District Forum, the respondent - Insurance Company took various pleas including the fire being caught deliberately by the management of the appellant and thus the incident of fire was engineered and deliberated for causing wrongful loss to the respondent - Insurance Company by raising bogus and fabricated claims under the policy of insurance taken in respect of the stock vide cover note No. 456314 dated 5.4.1995 with validity period up to 3.4.1996 for recovering the risk up to the stock valued at Rs. 30 lac. The respondent - Insurance Company has accepted the judgment of the District Forum, which has been impugned in this appeal and has complied with the directions made therein by making the payment of the amounts directed to be paid to the appellant.

3. In this appeal, the short point, which arises for our consideration and determination is as to whether the appellant is entitled to be paid a sum of Rs. 1,42,600 as loss of the stock or whether the District Forum has rightly accepted the loss assessed by the Surveyor. The Surveyor-cum-Loss Assessor namely Shri Rakesh Khanna gave his reasons for disallowing the claim made by the appellant of a sum of Rs. 1,42,600 and quoted the reasons in the impugned judgment and order and after quoting the reasons, the District Forum accepted the report of the Surveyor-cum-Loss Assessor to the extent that the loss suffered by the appellant was to the tune of Rs. 52,800, which has been calculated at the rate of Rs. 100 each for 528 bundles of egg trays and did not accept the claim of the appellant at the rate of Rs. 140 for each bundle of 100 egg trays for total 528 bundles. The difference in the rate of 100 egg trays as claimed by the appellant and the rate at which the Surveyor-cum-Loss Assessor assessed the loss is of a sum of Rs. 40 per each such bundle of 100 egg trays for 528 bundles. The amount, which works out after multiplying with Rs. 140 to 528 bundles comes to Rs. 83,920, which again is less than the amount of Rs. 1,42,600, the difference being of a sum of Rs. 58,680.

4. In Sub-para (g) of the report Annexure D-I of the Surveyor-cum-Loss Assessor, it was mentioned that the Insured had exaggerated the quantity as well as claimed the loss at cost price, which was higher than the sale rate. The Insured was selling the product at the rate of Rs. 100 per 100 pieces of egg trays whereas reported cost was Rs. 140 per 100 pieces. The principal is cost or market price, whichever is less. As earlier in Sub-para (g) of the report of the Surveyor-cum-Loss Assessor, reference was made to rejection of 484 bundles of egg trays during the month of May, 1995. It was further mentioned that the stock of these rej