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DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Dr. Sangita Dhingra Sehgal, (President) and Rajan Sharma, Member (Judicial)
M/s. Goel Spinning & Weaving Mills —Complainant
versus
United India Insurance Co. Ltd. and Anr. —Opp. Parties
Complaint Case No.157 of 2010
Decided on 5.4.2022
(A) Consumer Protection Act, 1986 – Section 12(1)(a)[Consumer Protection Act, 2019 – Section 35(1)(a)] – Insurance – Fire Accident – Repudiation of Claim – Whether Complainant Falls Under The Definition of ‘Consumer’ – “protecting and securing his livelihood” – Under The Consumer Protection Act, 1986 – Opposite Parties has merely made a statement that the Complainant took the insurance cover for commercial purposes and therefore, it should not be considered as ‘consumer’ under the definition of consumer – Thus, if the commercial purpose is used by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods will come under the definition of a consumer – Thus, In the present case, it is clear that the Complainant had bought the insurance policy for the purposes of protecting and securing his livelihood, thereby he will fall within the definition of consumer under the Consumer Protection Act, 1986 [Para 12]
(B)Consumer Protection Act, 1986 – Section 12(1)(a)[Consumer Protection Act, 2019 – Section 35(1)(a)] – Insurance – Fire Accident – Repudiation of Claim – Arbitration not a bar for Repudiation of Claim – Whether The Existence of Arbitration Clause in The Insurance Policy Bars Jurisdiction of Consumer Fora – Even if there exists an arbitration clause in the insurance agreement, no dispute shall be compulsorily be referred to arbitration in case the insurance Company disputes or does not accepted liability under or in respect of this policy – From the said clause, it can be interpreted that the language used in the insurance contract dealing with arbitration stipulates that no disputes shall be referred to arbitration if the company did not accepted the liability of a claim. Hence, the Complainant is not obliged to go for arbitration if the Opposite Parties has repudiated their claims and is free to approach this commission and this commission is authorised to adjudicate the present case and the existence of an arbitration clause in the agreement does not affect the jurisdiction of this commission. [Paras 15, 16].
(C) Consumer Protection Act, 1986 – Section 12(1)(a)[Consumer Protection Act, 2019 – Section 35(1)(a)] – Insurance – Fire Accident – Repudiation of Claim – Admission of claim in surveyor report – Whether The Opposite Party is Deficient in Providing Services by Repudiating The Claim of The Complainant – In the surveyor report, it is clear that the Surveyor Report accepted that the claims made by the complainant are genuine and is well covered within their insurance policy – Insurance Company was not justified in repudiating the claim of the Complainant as the surveyor report dated 20.05.2003, admitted the claim of the insured. However, the Opposite Parties wrongly repudiated the claim of the Complainant. Hence, is liable for Deficiency of Service – Thus, direct the Opposite Party to pay an amount of Rs. 69,82,987/-. [Paras 17 to 22].
Result: Compliant Allowed.
JUDGMENT
Dr. Sangita Dhingra Sehgal, (President).—The present Complaint has been filed before this Commission under Section 12 of the Consumer Protection Act, 1986, by the Complainant alleging deficiency in service and Unfair Trade Practice on the part of Opposite Parties and has prayed for the following reliefs:
“Direct the Opposite Party to pay an amount of Rs. 69,82,987/- with interest as per the Insurance Regulatory Development Authority (in short IRDA) on account of damages due to fire and with further compensation to the tune of Rs. 10 lacs on account of physical as well as mental agony suffered due to the inaction of the Opposite Party.”
2. Brief facts necessary for the adjudication of the present complaint are that the Complainant had taken the insurance cover against fire and other allied perils, vide policy no. 112000/11/1538/2000 and 112000/11/1539/2000 for a sum insured a total of Rs. 3 crores for a period starting from 30.1.2001 to 29.1.2002 from the Opposite Parties. The insurance cover included building, plant, machinery and stocks whilst lying or installed at its aforesaid premises. A fire broke out on 15.12.2001 in the premises of the complainant mill and wide spread damage to the stocks lying there and building took place. Thereafter the Complainant duly reported the incident to the police and fire brigade agency in regard to lodge its claims from the Opposite Parties under the said policy. The Complainant computed its loss to the tune of Rs. 69,82,987/-. To investigate the said claim the Opposite Parties changed over three surveyors namely M/s Duggal Gupta & Associates, Mr. Ashish Behl and lastly M/s R.K. Singhal & Co. over the period of time.
3. Meanwhile, the claim made by the Complainant on account of loss to building was settled by the other branches of the Opposite Parties by which the policy regarding the building was issued. As the Complainant was suffering on account of losses due to fire as well as the attitude adopted by the Opposite Parties in not settling the claim despite several requests, a complaint regarding the present issue was made to the Insurance Regulatory & Development Authority.
4. Consequently, the Opposite Party repudiated the claim of the complainant without assigning any cogent reasons for the same vide letter dated 17.11.2003. Thereafter, a legal notice dated 15.12.2003 was served upon the Opposite Party but no reply was given by the Opposite Party against the said legal notice. The Complainant also wrote a letter dated 03.09.2004 to the Opposite Parties raising certain debatable points in respect of the reports and conduct of the surveyors and a request was made to settle the claim of the Complainant immediately but was of no avail.
5. Thus, left with no other option, alleging deficiency of service and unfair trade practice on the part of the Opposite Parties, the Complainant approached this commission.
6. The Opposite Parties have contested the present case and had raised preliminary objection as to the maintainability of the complaint case. The counsel for the Opposite Parties submitted that the Complainant is not “Consumer” as he purchased the insurance for commercial purposes. The Opposite Parties further contended that in view of the terms and conditions of the policy, there exists an arbitration clause in the insurance policy, the parties should be referred to arbitration and this commission is barred from exercising its jurisdiction.
7. The counsel for the Opposite Parties submits on merits that the loss computed by the Complainant is fictious as no surveyor or investigator had assessed the loss of the Complainant to the tune of Rs.69,82,987/- for which present complaint has been filed. It further contended that as per the surveyors report the Complainant failed to establish the cause of loss and has not furnished proper records to capitulate the actual loss. Thus, the Opposite Parties have the right within its capacity to repudiate the claim of the Complainant. Pressin
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