Back
JAMMU AND KASHMIR STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Justice G.D. Sharma, President and Khalid Hussain, Member
CHANIANA RICE MILL - Appellant
Versus
NATIONAL INSURANCE COMPANY - Respondent
Complaint No. 2509 of 2003
Decided on : 07-02-2008
Surinder Singh, Advocate, for the Complainant; S.C. Gupta and Madan Lal, Advocates, for the Opposite Party
The acceptance of an initial payment does not preclude the insured from claiming the difference if the actual loss suffered exceeds the amount received, and the insurer is obligated to indemnify the insured to the extent of actual loss suffered.
Headnote:
Insurance Claim - Property Damage - [Insurance Act, 1938, Section 64VB; Consumer Protection Act, 1986, Section 2(1)(d), Section 14(1)(d)] - The court discussed the provisions of the Insurance Act, 1938, specifically Section 64VB, which deals with the duty of the insurer to indemnify the insured to the extent of actual loss suffered. The court also referred to the Consumer Protection Act, 1986, particularly Section 2(1)(d) and Section 14(1)(d), which outlines the rights of consumers and the grounds for filing a complaint. The court emphasized that the insurer is obligated to compensate the insured for the actual loss suffered, and the acceptance of an initial payment does not preclude the insured from claiming the difference if the actual loss exceeds the amount received.
Fact of the Case:
The complainant, a rice mill proprietor, filed a complaint against the insurer for inadequate compensation for property damage caused by a storm. The insurer contended that the complainant had received full and final payment for the loss and was estopped from claiming further compensation.
Finding of the Court:
The court found that the complainant was entitled to claim the difference in the amount awarded as the initial payment did not preclude further claims for the actual loss suffered. The court directed the insurer to make the additional payment and awarded interest at 6% per annum from the date of filing the complaint.
Issues: The main issue was whether the complainant was entitled to claim additional compensation for the property damage despite having received a full and final payment from the insurer.
Ratio Decidendi: The court held that the acceptance of an initial payment does not preclude the insured from claiming the difference if the actual loss suffered exceeds the amount received. The insurer is obligated to indemnify the insured to the extent of actual loss suffered.
Final Decision: The court directed the insurer to make the payment of the difference in the amount awarded and awarded interest at 6% per annum from the date of filing the complaint.
ORDER
Justice G.D. Sharma, President - This complaint has been filed by Sardar Narinder Singh who is the proprietor of the Rice Mill which is being run under the name and style of "M/s. Chaniana Rice Mill" (hereinafter to be referred as the Mill). On 28.4.1986, the mill had been registered with the District Industry Centre, Jammu under registration No. 07/04/3070/DMT/ SST. On 28.9.1999 the complainant got the said Mill insured with OP for Rs. 72 lakh and 50 thousands and obtained policy cover No. 04632 from OPs Branch Office, Bari Brahamana, Jammu. The policy had become effective on 29.9.1999 and had to expire on 28.9.1999. The policy covered the risk in respect of machinery, building, stocks, furniture, and fixtures. The insured limit of the above said items has been specified in para No. 4 of the complaint. The yearly premium of the policy was Rs. 1,79,360. It is alleged that on 30th May, 2000 at about 9.30 p.m., due to heavy rain and lightning the building of said Mill sustained heavy damage upto the plinth level. That the velocity of the storm was so severe that it affected the entire stocks of paddy and rice lying inside the building as it was washed away and a loss to the tune of Rs. 50 lacs was caused. The incident was reported on the same day in the Police Station, Miran Sahib under Daily Diary Report No. 16. The complainant had made an attempt to get a certificate of the incident from Government, of Indias Meteorological Department Ram Bagh, Srinagar but vide their letter dated 12.7.2000 they issued a certificate that there was no departmental observatory at R.S. Pura. However, the observatory situated at Subash Nagar, Jammu has recorded the weather phenomenon of 30.5.2000 which has been reproduced in para 6 of the complaint. The complainant lodged a complaint with the OP for compensation tor the loss caused and damage suffered to the building, machinery and stocks and as a consequence thereof, Mr. Sham Sunder from ELITE Surveyor and Loss Assessors was deputed who visited the spot and asked the complainant to submit the requisite documents which he had produced in the form of stock statement, stock register which contained the details of stocks of rice and paddy in the godown, bills of the machinery, furniture and other infrastructure. After a lapse of 2 years, the OP informed the complainant that the loss assessed was to the tune of Rs. 6,78,708 which is stated to have been received by him under protest. The complainant has claimed, compensation to the tune of Rs. 19,90,000 as loss suffered along with interest thereon. Besides that, compensation for mental torture and agony has also been claimed.
2. The OP has filed the objections wherein it is pleaded that no "Cause of action" has arisen in favour of the complainant to file the complaint. The complaint is not maintainable as there is non-joinder of necessary parties. The complaint is also not maintainable because the complainant has received Rs. 6,78,708 as full and final payment for the settlement of his claim. OP has admitted the liability of the policy to the extent of Rs. 60.00 lacs which is delineated in para 4 of the objections. It is also pleaded that only a limited portion of the property of the complainant was damaged in the hail storm and the rest of the property which was safe was covered under fire policy C but the complainant has lodged the complaint in respect of the whole of the property claiming that it was also damaged. That OP in view of the report of the Surveyor has discharged its obligation. The claim in the sum of Rs. 19,90,000 is totally baseless and the complaint requires dismissal.
3. The complainant Narinder Singh has appeared as a witness in support of his claim and stated that the OP has settled his claim on a meagre amount of Rs. 6,78,708 against the insured amount of Rs. 72.00 lakh. That under compelled circumstances, he received the amount under protest which fact he had told orally before the concerned Branch Manager and specifically tol
