Back
UTTAR PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, LUCKNOW
Hon’ble Mr. Justice K.C. Bhargava, President &
Mr. D.D. Bahuguna, Member
ORIENTAL INSURANCE COMPANY—Appellant
versus
M/S. GOSIA CLOTH HOUSE—Respondent
Appeal No. 1520/SC of 1997—Decided on 15.12.1999
INSURANCE - FIRE INSURANCE - CLAIM SETTLEMENT - LIMITATION - INSURANCE COMPANY'S LIABILITY - INTERPRETATION OF POLICY CONDITIONS - CONSUMER PROTECTION ACT, 1986.
Fact of the Case:
The complainant, a cloth merchant, insured his shop for one year against fire. During the policy period, a fire broke out in the shop causing damage to the stock. The complainant filed a claim with the insurance company, which appointed a surveyor to assess the loss. The surveyor submitted a report, based on which the insurance company paid a sum of Rs. 24,242/- to the bank, which had a loan outstanding against the complainant. The complainant challenged the settlement, claiming that the amount paid was insufficient and that he was not informed about the surveyor's report or the settlement with the bank. The District Consumer Forum allowed the complaint and awarded compensation and damages to the complainant.
Finding of the Court:
The court held that the insurance company's settlement with the bank without informing the complainant was not justified. However, the court also held that the complainant's claim was barred by limitation, as it was filed more than 12 calendar months from the date of intimation of settlement of the claim, as per the policy conditions.
Issues: 1. Whether the insurance company's settlement with the bank without informing the complainant was justified. 2. Whether the complainant's claim was barred by limitation.
Ratio Decidendi: 1. The court held that the insurance company's settlement with the bank without informing the complainant was not justified, as the complainant was not given an opportunity to scrutinize the statement given by the bank and to verify the correctness of the figure. 2. The court held that the complainant's claim was barred by limitation, as it was filed more than 12 calendar months from the date of intimation of settlement of the claim, as per the policy conditions. The court interpreted the policy condition as extinguishing the right to claim the amount if an action is not taken within 12 calendar months in a Court of Law.
Final Decision: The court allowed the appeal and set aside the judgment and order of the District Consumer Forum. The complaint was dismissed, but there was no order as to the cost.
Mr. Justice K.C. Bhargava, President—This is an appeal against the judgment and order dated 1.8.1997 passed by District Consumer Forum, Rae Bareilly in Complaint Case No. 280/1995.
2. The facts of the case stated in brief are that the complainant has claimed a sum of Rs. 1,85,640.99 as compensation and for future damages. According to the complainant he is the owner of M/s. Gosia Cloth House, Furzatganj, Rae Bareilly and was doing cloth business. He got shop insured for one year which was in force from 5th of June, 1987 to 4th June, 1988. A policy was also issued to the complainant. At the time of insurance, furniture worth Rs. 15,000/-, cloths worth Rs. 1,05,000/- thus totalling Rs. 1,20,000/- was in stock in the shop. The insurance was for a sum of Rs. 1,20,000/-. During the night of 14th/15th April, 1988 a fire broke out in the shop of which he got the information at his residence and when the complainant reached the shop he found it was damaged by fire. He informed the Police Station, Nazirabad District Rae Bareilly on 15.4.1988. An information was also sent to the Insurance Company as well as bank.
3. The Insurance Company appointed a Surveyor Sri B.K. Kapoor for assessment of the loss. Sri Kapoor submitted his report but this fact was never told to the complainant. On 27.12.1988 the complainant has put forward a claim alongwith all the required papers. He had filed copy of policy, copy of NCR, balance sheet of 1986-87 from December, 1986 to March, 1987. He also provided the monthly statement from April, 1987 to March, 1988 including a list of unburnt cloth.
4. It is alleged that the complainant had taken loan of Rs. 25,000/- from the Bank of Baroda. The complainant has given a statement of accounts on 31st March, 1988 to the bank. At that time there was a stock worth Rs. 1,01,500/-. A day prior to this incident, the complainant had sold clothes worth Rs. 5,000/- on credit and cloth worth Rs. 4,500/- on cash basis. In this way at the time of the fire, clothes worth Rs. 91,940.99 was in stock. The clothes which have been damaged has not been including in this amount.
5. Opposite parties have not, inspite of several reminders, settled claim of the complainant who is sitting idle. The complainant used to earn Rs. 1,550/- per day. He has suffered loss of Rs. 83,700/- on non-settlement of the claim. Cash credit facility was also provided to the complainant.
6. The complainant was informed by the Insurance Company later on that the claim of Rs. 24,242/- has been approved and this much amount has been paid to Bank of Baroda on 30.11.1989. This amount was claimed to be the final claim amount.
7. The opposite party filed a statement in which they admitted the happening of the fire and payment of Rs. 24,242/- to the bank in view of the final settlement of the claim. The opposite parties have denied the incidence of stocks claimed by the complainant. There is no deficiency in service on behalf of the Insurance Company. The payment was made by them vide cheque dated 20.11.1990
8. After the perusal of the evidence, the learned District Forum allowed the complaint for a sum of Rs. 67,698.99 as damages alongwith 18% per annum interest from 14.4.1988 till the date of payment. It also allowed Rs. 25,000/- as compensation and Rs. 1,000/- as cost.
9. Aggrieved against the order, the Insurance Company has come in appeal and has challenged the correctness of the order passed by the learned District Forum.
10. We have heard the learned Counsel for both the parties and have perused the records.
11. In the present case the incident is admitted by both the parties. The only dispute which remains between the parties is about the amount which has to be awarded to the complainant for the loss caused to his belongings kept in the shop when the incident of fire took place. According to the complainant he has suffered a loss of Rs. 83,700/- and damages. According to the complainant at the time when the fire took place, cloth worth Rs. 91,940.99 were kept in
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
