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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath, Presiding Member and Ram Surat Ram Maurya, Member
M/s. Jitendra Impex (Pvt.) Ltd. —Complainant
versus
The Oriental Insurance Company
Limited —Opp. Party
Consumer Case No.278 of 2012
Decided on 29.4.2022
Consumer Protection Act, 1986 –S.21(1)(a)(i)[Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Contract Act, 1872 -S. 19 – Services – Insurance – Standard Fire and Special Perils-Floater Policy – Non communication of status of claim – cause of fire unestablished – Burden of Proof – Compliant filed against repudiation of claim - On merits, once it is established that there was fire, it is settled law that it is upon the Insurer to prove that the fire was intentionally caused by the Insured - The Opposite Party Insurance Company, after deputing the Surveyor, failed to communicate to the Complainant the status of the claim – The Surveyor observed that the cause of fire remained unestablished – It is relevant to mention that when the Opposite Party doubted the cause of fire, the burden of proof lay on them. The Opposite Party cannot shift the burden of proof on the Complainant. Forensic report stated that – the possibility of arson cannot be ruled out – Even the forensic report did not specify the cause of fire – The Opposite Party, therefore, cannot be permitted to deny the genuine claim of the Complainant – In the absence of any evidence to the contrary, the report submitted by the Surveyor of the Insurance Company is to be accepted – Therefore, the Complainant and direct the Opposite Party/Insurance Company to pay Rs. 75,28,967/- as assessed by the Surveyor with interest at the rate of 9% p.a. from the date of repudiation of the claim till realization. [Paras 10 to 12]
Result: Complaint allowed.
ORDER
The present Complaint is filed under Section 21(a)(1) of the Consumer Protection Act, 1986.
2. The Complainant is a Company incorporated under the Companies Act, 1956 and is carrying out the business of trading of paper, duplex board, etc.. The Complainant holds a Standard Fire and Special Perils-Floater Policy bearing No. 271701/11/2010/108 issued by the Opposite Party insuring the Stocks in Trade of the Complainant. The sum insured under the said Policy was Rs.1,75,00,000/- and the Gross Premium paid by the Complainant for the said insurance was Rs.65,820/- including Service Tax and Stamp Duty.
3. The case of the Complainant is that a fire broke out in the godown of the Complainant, situated at Khasra No. 562/563, village Sirsapur, Libaspur, Delhi-110034 on 06.12.2010, at around 07:30 AM. According to the Complainant, the godown of the Complainant had stock in trade worth Rs.1,43,27,095.60/- at the time of fire and as a result of fire, the entire stock was destroyed. The Complainant immediately intimated the Opposite Party about the said fire in writing and requested the Opposite Party to depute a Surveyor. The Opposite Party, accordingly, deputed M/s Aditi Consultants Pvt. Ltd. as Surveyors to assess the loss suffered by the Complainant as a result of the fire incident. The Surveyors visited the site of the incident on 06.12.2012 and duly examined the site as well as all the documents that were furnished to them. The Surveyors also requested the Complainant to provide additional documents. The Complainant, vide letter dated 31.01.2011, enclosed all the documents requested by the Surveyors, vide letter dated 06.12.2010. The Complainant further cleared queries of the Surveyors and provided the requisite documents through various letters dated 26.02.2011, 28.07.2011 and 23.01.2012. Despite all documents and clarifications provided by the Complainant, the Opposite Party failed to settle the claim of the Complainant. There was no response from the Opposite Party after letter dated 23.01.2012 was issued by the Complainant. Due to inaction on the part of the Opposite Party, the Complainant issued letters dated 18.06.2012 and 08.08.2012 to the Opposite Party requesting them to approve and release the claim amount of the Complainant. Aggrieved by the Opposite Party not settling the claim, the Complainant issued a legal notice dated 21.08.2012 to the Opposite Party, calling upon them to settle the claim within 7 days from the receipt of the said notice. However, the Opposite Party failed to reply and settle the claim of the Complainant. The Complainant, thus, filed this Consumer Complaint alleging deficiency in service by the Opposite Party with the following prayer:-
“(i) Pass an order thereby directing the Opposite Party to settle and release the claim of the Complainant amounting to Rs.1,43,27,095.60 along with interest @ 18% per annum;
(ii) Direct the Opposite Party to pay a sum of Rs.30,00,000/- to the Complainant as a result of the business loss suffered by the Complainant as a result of the delay in the settlement of the claim caused by the inactions of the Opposite Party;
(iii) Direct the Opposite party to pay a sum of Rs.20,00,000/- to the Complainant towards the mental torture and agony suffered by the Complainant due to the omissions and commissions of the Opposite Party;
(iv) Direct the Opposite Party to pay a sum of Rs.10,00,000/- to the Complainant towards the cost of litigation;
(v) Pass any other or such further orders as this Hon’ble Commission may deem fit and proper to pass having regard to the facts and circumstances of the present complaint.”
4. The Opposite Party resisted the Complaint by filing Reply whereby it contended that the Complainant had concealed material facts from the Opposite Party/ Insurance Company, as well as from this Commission. The Surveyor inspected the premises and noted that
(1) Fire - On merits, once it is established that there was fire, it is settled law that it is upon the Insurer to prove that the fire was intentionally caused by the Insured.(2) Burden of Proof - wh....
(1) Liability of Insurance Company – Whether the fire took place by a short circuit or any other reason, as long as the insured is not the person who caused the fire, the Insurance Company cannot esc....
The court established that a consumer can claim under the Consumer Protection Act for insurance disputes, even with commercial intent, emphasizing assessment fairness by the appointed Surveyor.
IMPORATNT POINT Appointment of Surveyor – Insured can also appoint a Surveyor or loss accessor.
Insurance Policy – Fire in Insured Premises – For a surveyor’s report to be declared unacceptable, it is essential that it should be shown to be perverse & arbitrary.
Assessment - In absence of details relating to stage of production of items, the Surveyor was justified in considering the semi-finished cost rate at 50% of finished cost rate on an average of 50% co....
(1) Surveyor Report – Surveyor Report is an important piece of evidence and it has to be given due weight, though it is not sacrosanct and it can be displaced by leading a cogent evidence.
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
Insurance claims must be substantiated by sufficient evidence; the insurer’s assessment is valid if conducted thoroughly.
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