Principles of underinsurance apply when insured sums are disproportionate to asset values. Payment vouchers marked 'on account' do not extinguish further claims.

JUSTICE A. P. SAHI, PRESIDENT

1. The Appeal questions the order of the State Consumer Disputes Redressal Commission, Chhattisgarh dated 04.02.2010 in CC No. 8 of 2006 whereby the claim of the appellant, for indemnifying the loss caused to a diesel generating set in a fire, to the extent claimed beyond the amount awarded by the Insurance Company has been dismissed. The generating set was admittedly insured along with two other generators under a Standard Fire and Special Perils Policy for the duration dated 01.02.2002 to 31.01.2003. The incident of fire took place during this period on 08.06.2002 on account of which one of the diesel generating sets was partly damaged.

2. The generating set was manufactured by M/s. Wartsila of Finland which had its marketing set up in India in the name of M/s. M/s. Wartsila India Ltd. The generating set has been supplied by the said company and the sum insured for all the three generating sets was Rs. 3,72,20,991/-.

3. The damage was intimated promptly to the manufacturers as well as to the Insurance Company and surveys were conducted. A spot survey was conducted by M/s. Gulab Aggarwal that was followed by a regular and final survey by Mr. Rajiv Dausage. It is evident from the survey report that Mr. Gulab, the spot surveyor was incidently present in the premises on the date of the incident. He was on a visit to the unit in respect of some other loss, but he again went on 09.06.2002 and had a meeting with the Engineers of M/s.

Wartsila, who had arrived from Nagpur.

4. On 10.06.2002, the final surveyor Mr. Rajiv Dausage was appointed by the Insurance Company and he accordingly conducted the survey.

5. Prior to the tendering of his report, communications ensued between the representatives of the complainants, the manufacturer as well as the surveyor. The manufacturers had provided intimation as desired with regard to the damage assessment on 08.06.2022. The preliminary assessment report of the manufacturer is extracted hereinunder:

6. The damage assessment that was tendered by the complainant also

countersigned by the manufacturers is extracted hereinunder:

7. The manufacturers informed the complainant that all the spare parts

were not available in its entirety and further time was requested for by them.

8. The intimation sent by the manufacturer on 21.06.2002 is extracted hereinunder:

9. It appears from the record that with these documents and the intimation received from the manufacturer further negotiations seem to have been taken place. A meeting was held on 23.07.2003 at the Nagpur plant of the complainant in which the representatives of the complainant company, the representatives of the manufacturers and the final surveyor Mr. Dausage accompanied by Mr. K. K. Panda, Dr. B. R. Singh and Mr. Anil Kumar Pathak of the Insurance Company attended the said meeting. After discussions in the said meeting on 23.07.2003, the minutes that were drawn up and duly signed by all the participants is extracted hereinunder:

10. The complainants thereafter also submitted the quotations of procurement received from the manufacturers as well as another firm and on 17.09.2003, a request was made to the Insurance Company to release the amount of loss clamed “on account payment basis” to the extent of 75%. The said letter dated 17.09.2003 is extracted hereinunder:

11. After these negotiations, the Surveyor tendered his report on

21.10.2003 which is extracted hereinunder:

12. According to the complainant, the report was not appropriate and incorrect deductions including that of under insurance were made and the average formula was applied by the Surveyor to the tune of