DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Dr. Sangita Dhingra Sehgal, (President) and Rajan Sharma, Member (Judicial)
M/s. Accurate Corrugation Industries —Complainant
versus
New India Insurance Co. Ltd. —Opp. Party
Complaint Case No.794 of 2018
Decided on 29.3.2022

IMPORTANT POINTS
(1) Commercial Activity – The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured, may be that insurance coverage is taken for commercial activity carried out by the insured.
(2) Deficiency of Service – failure of the insurance company to comply with the contractual obligation to release the claimed amount after the fire incident amounts to a deficiency in service.

Headnote:

Consumer Protection Act, 1986 – Section 17 [Consumer Protection Act, 2019 – Section 47(1)] – Services – Insurance – Jurisdiction of State Commission – Whether The Complainant Falls Under The Definition of ‘Consumer’ – The policy is taken for reimbursement or for indemnity for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured, may be that insurance coverage is taken for commercial activity carried out by the insured – Thus, complainant is a consumer under the Consumer protection Act, 1986 as the insurance policy is taken by the complainant for the protection of its interest and not for making any profit out of it. [Paras 8, 9]

(ii) Consumer Protection Act, 1986 – Section 17[Consumer Protection Act, 2019 – Section 47(1)] – Services – Insurance – Jurisdiction of State Commission – Whether barred for having complicated questions of law and fact to decide – The perusal of the record shows that the Complainant entered into an agreement to avail the services of the Opposite Party for a consideration. However, the Opposite Party failed to honour the terms of the agreement, aggrieved by which, the Complainant has approached this commission. Hence, the Complainant is entitled to file the present complaint before this commission since the Complainant is aggrieved by the deficient services of the Opposite Party i.e. the failure of the Opposite Party to release the insurance claim – Moreover, nothing cogent has been brought on record by the Opposite Party which would reflect that there are such complicated questions involved which cannot be settled on the basis of the pleadings filed on behalf of the contesting parties – On facts, complaint falls within the four corners of the jurisdiction of this commission and there is no bar with respect to the jurisdiction of this commission to entertain cases related to the refund of amount deposited with the Opposite Party. [Paras 14 to 16]

(iii) Consumer Protection Act, 1986 – Section 17[Consumer Protection Act, 2019 – Section 47(1)] – Services – Insurance – Whether the Complainant Has Breached The Policy Conditions By Concealing The Incident of Previous Fire – It is clear that as per the standard practice of the industry, a pre- inspection is necessary prior to taking any fire insurance for the purpose of assessing its valuation. The opposite party inspected the said premises before granting the said policy as per the complainant. If a pre-inspection had been done by the opposite party, then the question of concealment of the past fire won’t arise. The opposite party could have verified the incident of past fire if they have exercises due diligence in inspecting the said premises – Therefore, the complainant had not concealed the material facts while taking the said policy and it is the responsibility of the opposite party to take due care before issuing policy to the policy holder. [Paras 18, 19]

(iv) Consumer Protection Act, 1986 – Section 17[Consumer Protection Act, 2019 – Section 47(1)] – Services – Insurance – Whether the Opposite Party is Deficient in Providing its Services to The Complainant – A failure of the insurance company to comply with the contractual obligation to release the claimed amount after the fire incident amounts to a deficiency in service. It is a shortcoming on the part of the Opposite party, by failing to release the insurance claim. The Opposite Party further submitted that the fire incident of 06.04.2017 was intentional as there was no electrical point near the spot of fire. On perusal of Fire report dated 06.042017, it is noted that the reason for the fire is electrical short circuit – Therefore, in the said report, it is further advised to install the electric wire as per the load, in order to avoid any future fire incident – Thus, Commission is of the view that the cause of the fire on 06.04.2017 was due the electrical short circuit. [Para 21]

Held: In addition to the aforesaid and taking into consideration the facts of the present case, the Opposite Party is directed to pay a sum of:

A. Rs. 2,00,000/- as cost for mental agony and harassment to the complainant; and

B. The litigation cost to the extent of Rs. 50,000/-.

Result: Compliant allowed.