IMPORTANT POINT
Insurance company has to indemnify bonafide claims.

Anupam Dasgupta, Member—This appeal is directed against the order dated 08.08.2001 of the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (in short, ‘the State Commission’) in consumer complaint no. 20 of 1994. By this order, the State Commission dismissed the complaint filed by the appellant, which had alleged deficiency in service on the part of respondent no. 1, Insurance Company in repudiating its insurance claim for indemnification of damage to the advertisement hoardings erected by it at various places within the municipal limits of Visakhapatnam by the officers of respondent no. 2.

2. The case of the appellant/complainant before the State Commission was as summarised below:

(i) The complainant company was engaged in advertising on behalf of its principals in various cities by erecting sky signs and hoardings. Accordingly, it had erected 531 hoardings with the permission of the Municipal Corporation in Visakhapatnam. These hoardings were insured with respondent no. 1 for Rs.58,56,500/- for the period 07.12.1990 - 06.12.1991. The insurance policy covered indemnification of loss or damage to these hoardings caused by various perils, including fire, burglary and “malicious damage”.

(ii) In 1986, the complainant approached the High Court of Andhra Pradesh by way of Writ Petition no. 17854 of 1986 against the Visakhapatnam Urban Development Authority and the Department of Roads and Buildings, National Highway Section, Visakhapatnam (represented by Assistant Executive Engineer) and Department of Roads and Buildings (represented by Superintending Engineer) praying for writ of mandamus against the proposed action of the aforesaid respondents to remove the advertisements/hoardings and sky signs of the complainant erected in and around the limits of Municipal Corporation of Visakhapatnam and along National Highway no. 5, passing through Visakhapatnam City.

(iii) On hearing the parties, the High Court passed the following order on 29.08.1989:

“It is claimed by the petitioner that after obtaining permission from the Municipal Corporation, Visakhapatnam, on payment of advertisement tax and ground rent, hoardings were erected at various places in the city of Visakhapatnam, respondents 1 to 3 have no authority whatsoever to direct the petitioner to remove the hoardings. What is more, the impugned notice dated 23.11.1986 issued by the Assistant Executive Engineer (R&B), Visakhapatnam is vague and silent in respect of ownership of the roads on the margins of which the petitioner erected hoardings.

The impugned notice is, therefore, quashed and the writ petition is allowed. No cost”.

(iv) Though the said order of the High Court attained finality, the officials of the Project Director of Roads and Buildings Department, National Highway no. 5, ADB Circle removed 120 hoardings with advertisements in spite of being informed about the above-mentioned final order of the High Court. After protesting against this action, the complainant filed contempt petition no. 442 of 1991 before the High Court. The contempt petition was allowed by the High Court under its order dated 24.12.1991. The findings and operative part of the order are reproduced below:

“The plea of the respondents that the contempt petition is barred by time is devoid of any merit. The affidavit filed in the contempt application emphatically mentions the judgment of the High Court was violated by forcible removal of the hoardings on 4th and 5th May, 1991. That is nowhere controverted in the counter-affidavit. The present contempt application was presented to the Court on 10.06.1991. The Court admitted it on 16.09.1991 after going into the question of limitation. The plea of the Government pleader regarding bar of limitation fails.

In the writ petition, the Roads and Buildings Department had adequately respondents (sic – represented) by making the person who issued the notice for removal of the hoardings as second respondent and the Department of R