IMPORTANT POINT
Insurance – NCDRC must independently apply its mind to quantification of claim and cannot blindly act upon failure of appellant to deny assessment in Surveyor’s report produced by respondent.

JUDGMENT

SANJAY KUMAR, J

1. United India Insurance Co. Ltd. is in appeal under Section 23 of the Consumer Protection Act, 1986, against the judgment dated 01.08.2022 passed by the National Consumer Disputes Redressal Commission, New Delhi (for brevity, ‘NCDRC’), in Consumer Complaint No. 171 of 2008 filed by the respondent herein, viz., M/s. Park Leather Industries Ltd., Agra.

2. While issuing notice in the appeal on 06.02.2023, this Court stayed the operation of the impugned judgment, subject to the appellant depositing 50% of the amount awarded within a time frame. Upon such deposit being made, the same was directed to be invested in a fixed deposit with auto-renewal facility. Thereupon, the appellant deposited Rs.57,12,874/- with the Registry and the same was placed in a fixed deposit. As on date, the deposit value stands at Rs.63,60,833/-.

3. The respondent filed the subject complaint before the NCDRC under Section 21(a)(1) of the Consumer Protection Act, 1986. Therein, it stated that it had taken a comprehensive insurance policy from the appellant against fire and special perils and the policy was operative from 30.06.2005 to 29.06.2006. While so, due to heavy rainfall during the night of 01.08.2005, the factory shed of the respondent collapsed, causing damage to plant & machinery, stocks and buildings. In consequence, the respondent raised an insurance claim for Rs.91,00,000/- The appellant appointed a surveyor to quantify the damage suffered by the respondent and he assessed the loss suffered at Rs.8,89,176/-. However, the appellant ultimately repudiated the claim of the respondent under its letter dated 19.12.2006, stating that the loss suffered was not due to the insured peril of ‘inundation’ and would, therefore, fall outside the purview of the policy.

4. Aggrieved by such repudiation, the respondent had approached the NCDRC. It reiterated its claim for the loss suffered by it due to inundation, quantified at Rs.91,50,000/-, along with interest and costs. The appellant contested the case, pointing out in its reply that its surveyor had assessed the loss at Rs.8,89,176/- but it was determined that the loss might have occurred due to gradual weakening of the walls and seepage, which would not be covered by the insurance policy. The appellant, accordingly, asserted that there was no deficiency in service on its part. The respondent filed a rejoinder to the appellant’s reply. Therein, for the first time, the respondent stated that it had engaged an independent surveyor who had confirmed that the damage was caused by inundation and assessed the loss at Rs.46,97,085/-. The respondent stated that its premises were renovated in 2003 and the insured shed/factory buildings were in sound condition, obviating the possibility of collapse due to weakening of walls or seepage.

5. By the impugned judgment, the NCDRC held that the appellant was liable to compensate the respondent under the insurance policy for the damage and loss suffered by it. As regards the quantum of compensation, the NCDRC stated, in paragraph 24 of the judgment, as under:

‘Regarding the question of compensation, the Surveyor appointed by the Complainant assessed the loss at Rs.46,97,085/-. In the written statement, filed by the Insurance Company they have not stated that the assessment made by the Surveyor deputed by the Complainant was wrong. Since the Insurance Company has not disputed the assessment made by the Surveyor appointed by the Complainant, the Complainant is entitled to the said amount of Rs.46,97,085/-.’

6. The NCDRC, accordingly, directed the appellant to pay Rs.46,97,085/- to the respondent with interest thereon @ 9 per cent p.a. from the date of repudiation till the date of realization. In the event, the order was not complied with in 8 weeks, the appellant was directed to pay enhanced interest @ 12 per cent p.a.

7. Learned counsel for the appellant fairly states that the appellant is not contesting its liability to pay compensation under the insurance