IMPORTANT POINT
In case Insurance Company is unable to reinstate or repair property insured, insurance company shall be liable to pay such sum as would be requisite to reinstate or repair such property if same could lawfully be reinstated to its former condition.

JUDGMENT :

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 20.02.2019, passed by the National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as the NCDRC) in First Appeal No. 207/2015, by which the NCDRC has set aside the order passed by the State Consumer Disputes Redressal Commission, Punjab (hereinafter referred to as the State Commission) and has modified the same to the extent that the insurance company shall be liable to pay only Rs. 12,60,000/- instead of Rs. 29,17,500/-, the original complainant has preferred the present appeal.

2. That the appellant herein obtained Standard Fire and Special Perils Policy with effect from 02.07.2009. The sum insured was Rs. 2.50 crores. According to the appellant, the policy was on reinstatement value. The policy was enhanced to Rs. 4.50 crores. That during the validity period of policy i.e., on 17.10.2009 fire broke out in the factory premises resulting into loss of material, stock, and machinery of the value of Rs. 76,64,000/-. The surveyor appointed by the insurance company observed/assessed as such the loss on reinstatement value basis at Rs. 29,17,500/- and on depreciated value at Rs. 12,60,000/-. The insurance company despite the reports of the surveyor and investigator repudiated the claim. The appellant herein – original complainant filed the complaint before the State Commission, interalia, seeking a claim of Rs. 76,64,000/- together with interest. It was the case on behalf of the complainant that the complainant had purchased the machinery to replace the damaged machinery at the cost of Rs. 1,34,07,836/-. The State Commission vide order dated 10.11.2014 relying upon the surveyor report and the loss assessed by the surveyor on the basis of the reinstatement value awarded a sum of Rs. 29,17,500/- together with 9% interest from the date of repudiation letter dated 28.10.2010. The State Commission also awarded Rs. 1 lakh as compensation and Rs. 11,000/- as litigation expenses. At this stage, it is required to be noted that though the original complaint was for Rs. 76,64,000/-, however, in view of surveyor report and on reinstatement value determined at Rs. 29,17,500/-, the State Commission awarded Rs. 29,17,500/- being reinstatement value. The order passed by the State Commission was the subject matter of appeal by the insurance company before the NCDRC. By the impugned judgment and order, the NCDRC has allowed the said appeal and has modified the order passed by the State Commission awarding Rs. 12,60,000/- along with interest @ 7% from Rs. 29,17,500/- by observing that the complainant shall be entitled to the depreciated value and not the reinstatement value. The NCDRC also set aside the award of compensation of Rs. 1 lakh.

2.1 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the NCDRC awarding Rs. 12,60,000/- only instead of Rs. 29,17,500/- i.e., awarding depreciated value and not the reinstatement value, the original complainant has preferred the present appeal.

3. Shri Jay Savla, learned Senior Advocate appearing on behalf of the appellant herein – original complainant has vehemently submitted that the impugned judgment and order passed by the NCDRC awarding depreciated value and not the reinstatement value is just contrary to Clause 9 of Section 2 of the insurance policy.

3.1 It is submitted that as such the surveyor assessed the loss on reinstatement basis at Rs. 29,17,500/-. It is submitted that therefore, as such the repudiation was rightly held to be improper.

3.2 It is submitted that as such the complainant had purchased the new machinery in view of five machines being gutted in fire and therefore, the State Commission was absolutely justified in awarding Rs. 29,17,500/- being reinstatement value on the basis of the surveyor report.

3.3 Relying upon Clause 9 of Section 2 of the policy, it is vehemently submitted that the complainant shall be entitled to the reinstatemen