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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Ram Surat Ram Maurya, Presiding Member and Dr. Inder Jit Singh, Member
M/s. Abhay Ispat (India) Pvt. Ltd. – Complainant
versus
National Insurance Company Limited – Opp. Party
Consumer Case No.712 of 2018
Decided on 14.11.2022
Consumer Protection Act, 1986 – S.21(1)(a)(i)[Consumer Protection Act, 2019 – S.58(1)(a)(i)] – Services – Insurance – Repudiation of Claim – Investigator for investigation - plea of violation of terms and conditions cannot be raised at a subsequent stage - There is nothing on record that the Insurer wrote any letter to the surveyor to unwind each and every coil at the location and obtain separate chemical examination report in respect of damage of each coil. This ground is not a ground in repudiation letter - The Insurer took the ground that the Insured had not allowed the Investigator for investigation and thus violated the terms and conditions, now at a subsequent stage, it could not be said that the Insured had not allowed the Investigator for investigation – therefore, it is proved that repudiation of the claim was not on valid grounds - the Insured is entitled to interest @ 9% per annum after six months of the loss – On facts, the complaint is allowed. [Paras 9 to 11].
Result: Complaint allowed.
ORDER
Heard Mr. Karan Mehra, Advocate, for the complainant and Mr. Amit Kumar Singh, Advocate, for the opposite party.
2. M/s. Abhay Ispat (India) Private Limited (the Insured) has filed above complaint for setting aside repudiation letter dated 07.12.2017 and directing National Insurance Company Limited (the Insurer) to pay (i) Rs.16223193/- along with interest @18% per annum from the date of loss till actual payment, towards the insurance claim; (iii) Rs.5/- lacs, as the compensation for mental agony and harassment; (iv) the cost of litigation and (iv) any other relief which is deemed fit and proper, in the facts and circumstances of the case.
3. The facts as stated in the complaint and emerged from the documents are as follows:—
(a) M/s. Abhay Ispat (India) Private Limited (the Insured) was a company, registered under the Companies Act, 1956 and engaged in the trade of galvanized steel coils and hot rolled plates. The Insured had a tie up with steel service centre at MIDC Taloja Navi Mumbai and warehouses at various places, including inter-alia at MIDC Taloja, Ahmedabad, Chennai, New Panvel etc.
(b) National Insurance Company Limited (the Insurer) was a public sector corporation and engaged in the business of providing different types of insurance services. The Insured obtained “Standard Fire and Special Perils Policy” No.240100/11/15/3300000133 for the period of 28.04.2015 to 27.04.2016, from the Insurer, for sum insured of Rs.70/- crores, on Stock of all kinds of Galvanizes Plain, Galvanized Corrugated, Cold Rolled Coils, Sheets etc. pertaining to Insured’s trade, their own, in trust or on commission, lying at various locations as mentioned in the Policy. Present loss related to the location Sri Srinivasa Metal Industries, 3/136, Anna Salai, Andarkuppam, Dadapakkam, Chennai, Tamil Nadu, at Serial No.11 of the list.
(c) The Insured used to import/purchase Colour Coated Galvanized Steel Coil and store it at the location Sri Srinivasa Metal Industries, 3/136, Anna Salai, Andarkuppam, Dadapakkam, Chennai, Tamil Nadu, from where it is sold/supplied in market. Due to continuous heavy rain in Chennai, warehouse of Sri Srinivas Metal Industries, 3/136, Anna Salai, Andarkuppam, Dadapakkam, Chennai, Tamil Nadu was completely flooded with muddy water on 30.11.2015 at 20:00 hours. The flood water receded till 05.12.2015. The muddy water damaged Pre-painted Galvanized Steel Coil.
(d) The Insured informed the Insurer about incident of inundation at its warehouse and damaged caused by it on 07.12.2015 and preferred insurance claim of Rs.47500000/-. The Insurer appointed Professional Insurance Surveyors & Loss Assessors, Chennai as the surveyor. The surveyor inspected the warehouse on 11.12.2015, made inventory and took photographs. The Insured, with the permission of the surveyor shifted the goods from affected warehouse to another warehouse at 69, Annai Gangaiammal Nagar, Ernavoor, Chennai from 13.12.2015. The surveyor, vide letter dated 15.12.2015, demanded the papers, for assessing loss. The Insured provided all the required documents on 18.12.2015. The surveyor, vide letter dated 26.12.2015, again demanded some more papers, which were supplied on 07.01.2016 and 12.03.2016.
(e) The surveyor vide email dated 02.03.2016, sought for formal permission of the Insured for auction of the damaged colour coated coils by inviting tenders and advertising it, as per CVC Guidelines, as the value of salvage was likely to be more than Rs.5/- lakhs. The Insured gave its approval vide email dated 16.03.2016. Due to inordinate delay in settlement of the claim, the Insured made representation before Grievance Redressal Cell on 21.05.2016. The Insured wrote a letter dated 24.05.2016, to the Insurer for updating the stage of settlement. The surveyor advertised for disposal of salvage inviting tenders on 10.06.2016 in Financial Express (All India) Editions and Dinamalar (Tamil), Chennai Edition and opened tenders on 25.06.2016 and accepted highes
Subsequent stage - The Insurer took the ground that the Insured had not allowed the Investigator for investigation and thus violated the terms and conditions, now at a subsequent stage, it could not ....
The repudiation of the insurance claim was invalid due to the Insurer's failure to substantiate misrepresentation and procedural errors in claim handling and assessment.
Inundated - The rainfall measured 24 cm on a single day on 24th August, 2000. Many areas of these cities were inundated. As such, it is proved that cause of loss was inundation due continuous rain fa....
Insurance companies must provide valid reasons based on evidence when rejecting surveyor assessments to avoid unjust repudiation of claims.
Insurance claims must prove the cause of loss without reliance on unsupported allegations.
Insured is entitled to interest at 9% for delays beyond stipulated time frames following an accepted insurance claim settlement.
Insurance claims must be assessed justly, with surveyor reports not being conclusive and subject to scrutiny.
Mitigation charges – Claim mitigation charges are also not payable inasmuch as the damaged material is not proved.
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