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RAJASTHAN STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, JAIPUR
Honble Mr. Justice S.K.M. Lodha, President; Mr. Damodar Thanvi, Member
PRADEEP TIKKIWAL & ANR.—Complainants
versus
THE BRANCH MANAGER, NATIONAL INSURANCE CO. LTD. & ORS.—Opposite Parties
Complaint Case No. 75 of 1990—Decided on 2.8.1991
The Consumer Forum has jurisdiction to adjudicate the dispute between the complainant and the insurance company regarding the assessment of loss, despite the existence of an arbitration clause in the insurance policy. The provisions of the Consumer Protection Act, 1986 are in addition to and not in derogation of any other law in force, including the provisions of the Arbitration Act, 1940.
Headnote:
CONSUMER PROTECTION ACT, 1986 - INSURANCE - DEFICIENCY IN SERVICE - ASSESSMENT OF LOSS - ARBITRATION - JURISDICTION OF CONSUMER FORUM - INTEREST ON COMPENSATION - INSURANCE COMPANY LIABLE TO PAY INTEREST ON COMPENSATION FOR DELAY IN SETTLEMENT OF CLAIM.
Fact of the Case:
The complainant, a medical and provision store, took insurance from the opposite parties for the stock worth Rs. 3,00,000/- under Sec.1 as a coverage of risk of fire. On 27-11-1989, the shop was set on fire by rioters and the entire stock was damaged. The complainant lodged an FIR and informed the insurance company about the loss. The insurance company appointed a surveyor who assessed the loss at Rs. 1,03,460/-. The complainant was not satisfied with the assessment and got a survey done by a chartered accountant who assessed the loss at Rs. 2,74,800/-. The insurance company refused to pay the higher amount and the complainant filed a complaint before the Consumer Forum.
Finding of the Court:
The Consumer Forum held that the insurance company was liable to pay the complainant the loss assessed by the chartered accountant, i.e., Rs. 2,56,777.50. The Forum also held that the insurance company was liable to pay interest on the compensation amount from the date of consent given by the complainant to accept the loss assessed by the chartered accountant, i.e., from 1-10-1990, until payment at the rate of 12% per annum.
Issues: 1. Whether the Consumer Forum has jurisdiction to adjudicate the dispute between the complainant and the insurance company regarding the assessment of loss, despite the existence of an arbitration clause in the insurance policy? 2. Whether the insurance company is liable to pay interest on the compensation amount for delay in settlement of the claim?
Ratio Decidendi: 1. The Consumer Forum has jurisdiction to adjudicate the dispute between the complainant and the insurance company regarding the assessment of loss, despite the existence of an arbitration clause in the insurance policy. The provisions of the Consumer Protection Act, 1986 are in addition to and not in derogation of any other law in force, including the provisions of the Arbitration Act, 1940. 2. The insurance company is liable to pay interest on the compensation amount for delay in settlement of the claim. The Consumer Forum has the power to award interest by way of compensation under Sec. 14(1)(d) read with Sec. 18 of the Consumer Protection Act, 1986.
Final Decision: The Consumer Forum directed the insurance company to settle the claim of the complainant by making payment of Rs. 2,56,777.50 and interest by way of compensation on the aforesaid sum at the rate of 12% per annum from 1-10-1990.
Mr. Justice S.K.M. Lodha, President — This complaint has been filed under Sec. 12 read with Sec. 17(a)(i) of the Consumer Protection Act, 1986 ("the Act" herein) by the partners of M/s. Mamta Medical and Provision Store against opposite parties No. 1 to.3 and also against opposite party No. 4 who is the surveyor and loss assessor (fire, marine and accident), deputed by the officers of the National Insurance Co. (opposite party No. 3) to assess the loss sustained to the complainants. Opposite parties No. 2 and 3 are subordinates of opposite party No. 1. Opposite parties No. 1 to 3 are carrying on business of insurance. The complainants took insurance policy in the name of the firm for the stock worth Rs. 3,00,000/- under Sec.1 as a coverage of risk of fire and a sum of Rs. 1,413/- was paid as premium for the insurance. Interim Protection Note (I.P. Note) NRO No. 731675-352101 was issued on 12-7-1989 alongwith debit note. The period of insurance was from 15-7-1989 to 14-7-1990. The complainants have alleged that they are having cash credit facility CC (Hyp. limit) upto Rs. 2,00,000/- from Central Bank of India Chandpole Bazar, Jaipur. They were allowed 50% amount of the stock, declared and stock statement submitted by the party from time to time i.e. at margin of 50% which means that as against stock of Rs. 100/- available with the borrower the loan will be financed to the extent of Rs. 50/- only. During the currency of the insurance, on 27-11-1989 sudden communal riots broke out in the city. The complainants shop was set on fire by some unknown miscreants and unsocial elements and the entire stock kept in the shop at the time of incident caught fire. Besides the stock other furniture and fixtures etc. were completely either lost or damaged in the fire and nothing remained. The curfew was imposed in the city immediately. After the curfew was relaxed Shri Pradeep Tikkiwal one of the partner of the firm lodged the First Information Report before the S.H.O. Police Station Kotwali, Chhoti Chopad, Jaipur. The bank in its turn also informed opposite party No. 1 about the loss and further intimated that the stock kept in the shop at the time of incident caught fire and was damaged. The Bank requested to take necessary steps in this regard. The complainants also made request to opposite party No. 1 on 5-12-1989 to appoint a surveyor to assess the loss. Opposite party No. 4 was appointed surveyor. The surveyor wrote letter to the complainants on 7-12-1989 asking them to submit certain documents for the purpose of assessment. The documents were made available to him. The complainant submitted the prescribed fire claim form and all other relevant documents as and when required by the opposite parties. It is said that the complainants wrote a letter dated 31-1-1990 to Shri P.P. Mehta opposite party No. 4 informing him that since he has completed all the requisite formalities, the assessment of loss/damage of the firm may be got done at an early date so as to enable opposite parties No. 1 to 3 to finalise the claim at an early date. Shri Pradeep Tikkiwal partner of the complainant firm contacted opposite party No. 3 and also opposite party No. 4 but no satisfactory reply was given. Last meeting between the complainant and the opposite parties Nos. 1 to 3 was held on 8-3-1990. An information was orally given that opposite party No. 4 has submitted his report to settle the claim at Rs. 1,03,460/-. The complainants directed to it and asked for a copy of the report which was not made available to them. The method of calculation to assess the loss was also not made known.
2. The case of the complainants is that opposite parties No. 1 to 3 neither sent the report nor settled the claim of the complainants even after the lapse of more than three months, and as such the complainant inferred that there was deficiency in service. The complainants approached Shri Subhash Jain C.A. and registered surveyor and loss assessor and requested him to assess
