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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member
M/s Citizen Scale (India) Pvt. Ltd. – Complainant
versus
M/s New India Assurance Co. Ltd. – Opp. Party
Consumer Case No.272 of 2013
Decided on 6.12.2022
Consumer Protection Act, 1986 – Section 12(1)(a)[Consumer Protection Act, 2019 – Section 35(1)(a)] – Services – Insurance – Repudiation of Claim – Unjustified - Assessment of Damage not done proper – Surveyor report set aside - In the absence of any concrete evidence to justify the assessment of the damage on account of the fire on the premises of the complainant to be valued differently from that claimed by him, the Final Report of the Surveyors is liable to be set aside. There was enough opportunity for the Surveyors to assess the loss on the basis of documentary evidence of invoices and other cost details. Even with the loss of documentary evidence in the fire, the cost of materials damaged on account of the fire could have been put together. Instead of doing the same, the Surveyors appear to have concentrated upon obtaining reports from and ‘expert’s including regarding the potential of the salvaged material being usable - In view of the foregoing it is evident that the reasons for repudiating the claim of insurance of the complainant by the opposite party are arbitrary, perverse and not sustainable. The opposite party has been deficient in service under the insurance policies availed by the complainant. The complainant is entitled to the relief sought by him – Complaint allowed, The opposite party is directed to allow the entire claim of the complainant of Rs.1,72,00,000/ [Paras 10 to 14].
Result: Complaint allowed.
ORDER
This complaint has been filed under section 12 of the Consumer Protection Act, 1986 (in short, the Act) alleging deficiency in service in repudiation of his claim preferred before the opposite party under the Standard Fire and Special Perils policies arising from an incident of a fire accident in his premises.
2. The facts of the case, in brief, are that the complainant who is in the business of electronic weighing scales and balances had obtained two policies for Standard Fire and Special Perils from the opposite party in March 2009. The policies related to stocks and for building with plinth, foundation, furniture, fixtures, and electronic equipments respectively. The two policies covered his premises at Citizen House, Plot 50 AB, Government Industrial Estate, Charkop Naka, Kandivali, Mumbai 400 067 for the period 30.03.2009 to 29.03.2010. Policy number 111900/11/08/13/00002640 for stocks was issued for a value of Rs.3.25 crores and policy number 111900/11/08/11/00002369 for building, furniture and equipment was for Rs 4.50 crores. On 24.12.2009 there was an accident of fire in the premises of the insured at about 12.05 pm. The complainant informed the opposite party the same day and the opposite party appointed M/s B P Shah and Associates as Surveyors. Mr Nabade and Mr Vasant Kumar, representatives of the Surveyors, visited the insured premises on the same date. The complainant provided copies of the balance sheet for 2006-07, 2007-08 and 2008-09 along with the stock registers which showed the storage of stocks valued at approximately Rs 2.00 crores. Complainant also provided details of other documents sought by the Surveyors from time to time.
3. The Surveyors engaged the services of one Mr Katkar who was stated to be an instrumentation expert. However, the details of this expert were not provided to the complainant. The complainant had submitted a claim for Rs.1,72,10,000/- to the opposite party as a composite claim under both the policies. According to the complainant, the claim pertains to damage to electronic weighing scales and their parts along with the damage to the building, furniture and fixtures. The opposite party also deputed an officer Mr V.R. Nawate and Mr Santosh Kumar on 25.06.2010 to count the damaged goods. In the meanwhile, the opposite party also engaged another surveyor Mr Jagdish N. Vakil who also visited the premises and investigated the claim on various occasions. It was subsequently informed by the surveyors, M/s BP Shah and Associates, that the said Mr J N Vakil was their associate.
4. As per the Preliminary Survey Report dated 08.01.2010 prepared by the opposite party, an estimated loss ranging between Rs.95,00,000/- and Rs.1,45,00,000/- was arrived at. The estimated loss, including cost of repairs as per the instrumentation expert Mr Katkar, was Rs.80,00,000/-. On the basis of the overall interim survey report, the surveyors recommended an interim part payment of Rs.50,00,000/- out of the total liability of Rs.1,50,00,000/-.
5. The Final Survey Report dated 20.04.2011 processed the complainant’s claim under the two policies for an amount of Rs.74,86,439/-. This settlement has not been accepted by the complainant. It is alleged that the amount proposed by way of settlement by the opposite party indicates gross deficiency in service and unfair trade practice since it limits the claim arbitrarily. The Final Survey Report dated 20.04.2011 indicates that the complainant has not carried out reinstatement and no invoices are submitted. This is despite the Surveyors recommending an interim part payment of Rs.50,00,000/- at the interim stage which was reduced to Rs.30,00,000/- by the opposite party. An amount of Rs.4,08,374/- was deducted by the opposite party as recoverable from the complainant who, it was alleged, had not declared multiple occupancy in the insured premises. In addition, a reinstatement premium of Rs 1,670/- was also indicated to be collected. The discharge voucher forwarded by th
Assessment of Damage - In the absence of any concrete evidence to justify the assessment of the damage on account of the fire on the premises of the complainant to be valued differently from that cla....
The insurer must settle valid insurance claims timely, and failure to substantiate claims can lead to repudiation; however, claimants must provide adequate documentation to support their claims.
(1) Adverse Claim – The law mandates that a party confronted with an adverse claim must voice its opposition; failure to do so results in a deemed acceptance of the allegations or facts asserted agai....
(1) Contract of Insurance – It is well settled that a contract of Insurance is to be honoured strictly in terms of the conditions specified in the Policy without making any alteration in the words us....
The insurer's repudiation of a claim must adhere to statutory timelines; arbitrary and unfounded repudiation constitutes deficiency in service.
Surveyor – The assessment made by a surveyor holds significant importance.
Second Surveyor – In the present case, there no valid reasons are stated for the appointment of the second surveyor. There is nothing to suggest that the first surveyor’s report to be arbitrary or th....
Repudiation - For repudiation viz; cause of fire not established, OP could not show any clause in the policy which would permit the OP to repudiate the claim if the cause of fire is not established.
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
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.
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