In case of total loss under an insurance policy, the insured is entitled to the full claim amount and any reduction on the basis of averages is unreasonable and unjustified.

JUDGMENT - Justice G.G. LONEY, President:---In this complaint, it is alleged that the opposite party has been deficient in rendering the service to the complainant in not settling the complainants' insurance claim. Shortly stated the facts are that the complainant had obtained the shopkeeper insurance policy dated 21-6-1990 which was valid for a period upto 7-03-1992. The said policy is named as "shopkeeper policy" and covers loss of building, shop and all kinds/type of cloth, hosiery, garment and such other materials belonging to the complainant. The complainant alleged that in a devastating fire on 13-5-1991 between 3.30 to 7.30 a.m., the entire shop was reduced to ashes. The complainant lodged a report to the police on the same day and also intimated the occurance of fire to the opposite party. The opposite party conducted the survey of the incident of fire through the surveyor, M/s. Jodh Joshi Co., and M/s. Maharashtra Surveyor. A preliminary report of the said surveyor dated 17-7-1991 has been appended with the list of shops which were damaged in the said fire. The complainant name appears at serial number 10. It is mentioned in the said report that the complainants' shop has been turned to ashes. The complainant therefore alleged that he suffered a loss of Rs. 4,50,000/- in the said fire. However, according to complainant he learnt that his claim was sanctioned only for Rs. 2,58,000/- and not for Rs. 3,50,000/- as per value of his insurance policy. It is further alleged that the complainant protested to receive the insufficient compensation for his loss. But he was forced to receive the cheque by the opposite party which he received under protest. The complainant alleged that he was not allowed to write a word "under protest". The complainant further alleged that his insurance policy covers the risk upto Rs. 3,50,000/- for which he was charged the premium amount although he suffered a total loss. He was paid insufficient compensation without any convincing reason. The complainant therefore valued his claim for the balance amount of Rs. 92,000/- with interest and professional damage amounting to Rs. 2,04,600/-. The complainant also alleged that there has been delay in settlement of his claim. The opposite party in its written version admitted the incident of fire and that the complainant was issued the policy in question, for the value of Rs. 3,50,000/-. However, the contention of the opposite party is that the total claim is valued on the averages.

2. We have heard S.S. Tipnis, Advocate for the complainant and Shri Ramdas, Advocate for the opposite party.

3. Granting of shopkeeper policy to the complainant for the value of Rs. 3,50,000/- and that the complainants' shop was reduced to ashes, is an admitted fact. The following points arise for our consideration.

1) Whether the complainant is entitled for full value of his insurance policy?

2) Whether the grant of partial claim to the complainant amounts to deficiency in the service of opposite party ?

4. From reading of the survey report of M/s. Maharashtra Surveyors, dated 17th July 1991 it is abundantly clear that 15 to 16 shops including the complainants' shop were completely charred and burnt, leaving ashes of stock-in-trade. It is further mentioned that the entire building structure was completely burnt to ashes and none of the wooden material left uncharred. It is also stated therein that the Police panchanama was conducted and a certificate of loss due to fire was also issued by the Nagar Parishad. The copies of the said two documents were annexed with the report, of the Surveyor. It is also stated therein that the entire electric fittings were also burnt down. The Books of Accounts of the complainant were also burnt in fire. It is also stated that there was no breach of warranty committed by the shopkeeper. As against this loss caused to the complainant, the opposite party rejected the complainants' claim to the tune of Rs. 92,000 on the ground that the complainants

Click Here to Read the rest of this document