IMPORTANT POINT
Report given by Surveyor has to be given due value.

J.M. Malik, Presiding Member—This cases was remanded by the Hon’ble Apex Court with the direction to decide, “Whether, the complainant was entitled to damages on account of “Loss of Profit” (in short, ‘LOP’)?”.

2. This is a claim made by Rotex Automation Ltd., the complainant, against United India Insurance Co. Ltd., the OP, with the following prayers :

“i) Rs.11,087/- for damage to the plants and machineries;

ii) Rs.57,71,000/- for loss of profit as explained in the petition

So total loss comes to Rs.58,88,000/- plus interest at the rate of 18% from Jan, 1998 to June, 2001 which will make total loss of Rs.1,04,65,420 (Rs.57,82,000/- + Rs.46,83,420)

b) direct the respondent company to pay the aforesaid amount of Rs.1,04,65,420/- with further interest @ 18% from July, 2001 till its realisation.

The complainant has also claimed damages in the sum of Rs.5,00,000/-. This complaint was filed before this Commission as back as on 14.09.2001.

3. The facts germane to this case are as follows. The complainant has its factory at Vadodara, Gujarat, where, it transacts the business of manufacturing valves, pneumatic elements, etc. In order to safeguard the interest of the complainant, against all the natural risks, including the risk against the strike by the workers, the complainant company had started buying insurance policies from the OP, right from 1983 and LOP (Loss of Profit), from 1997. The complainant obtained insurance policies from United India Insurance Co. Ltd., the OP, from 1993 to 1997. It has never claimed any loss under the aforesaid policies.

4. For the period from 10.03.1997 to 09.03.1998, the complainant purchased two policies, i.e., Main Fire Policy and Loss of Profit Policy, after paying premium of Rs.64,842/- and Rs.31,899/- covering the risk of Rs.3,16,00,000/- and Rs.2,17,00,000/-, respectively. In the month of March, 1997, the complainant had to dismiss 4-5 employees for their fraudulent conduct. The entire work force of the complainant went on strike, w.e.f. 22.03.1997 and damaged the plant and machinery. Consequently, there was no production at all, from 22.03.1997 to 16.04.1997. The complainant had to suffer heavy loss. On 16.04.1997, the workers resumed their duty. On account of threat by the dismissed employees, a number of workers left the company and a number of workers adopted ‘go-slow’ policy and continued the act of damaging the plant and machinery. Due to this, the complainant could produce production of inferior quality. The goods delivered to the buyers were rejected causing heavy loss to the complainant and the complainant could not achieve the targeted production.

5. The Certificate prepared by Sh. Shrikant S. Shah & Co, Chartered Accountants, showing the loss, calculated at Rs.57,71,000/- was annexed as Annexure B. The complainant company had to replace the damaged parts and plant and machinery, during June-July, 1997. The Balance Sheet (Annexure – C – colly), dated 31.03.1997, reveals those parts which have been replaced, vouchers and details for repairing works. Again, Chart, Annexure-D, was filed to show the targeted production during the relevant period and the compensation paid to the retrenched workers during the relevant period.

6. Thereafter, the insurance company appointed Shailesh Shah & Associates, as its Surveyor. The complainant co-operated with the Surveyor and furnished all the documents. The Survey report has been called into question because it did not report that there is no loss to the main property or did not state that the complainant did not claim the compensation for the damage to the property. The Surveyor did not dispute the factum of strike. He has not disputed, but has admitted the damage to the property. He did not deny the consequential loss due to damage of the property and did not advise the OP for grant of award of these claims. After the lapse of more than 3 years, i.e., April, 2000, for the first time, the OP, vide its letter dated 24.04.2000, came out with a new s