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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
A. P. Sahi, President and Dr. Inder Jit Singh, Member
Krishna Spico Industires – Complainant
versus
Oriental Insurance Company Ltd. and Anr. – Opp. Parties
Consumer Case No.51 of 2008
Decided on 22.8.2024
Insurance Act, 1938 – Section 64 UM – Insurance Surveyors & Loss Assessors (Licensing, Professional Requirements & Code of Conduct) Regulation, 2000 – Regulation 15(5) – IRDA (Protection of Policy Holders-Interest) regulations, 2002 – Regulation 9 – Insurance Policy – Fire at Complainant’s Cold Storage – Claim of amount of Rs.1,60,00,000/- by Complainant – Repudiation of claim by Insurance Company – No cogent & reliable evidence on record to establish that the fire in question was not accidental but as a result of arson caused by Complainant/his representatives – No definite finding Surveyor or investigator or OP-1 Insurance Company that fire was not accidental – Whole case of Insurance company is based on mere suspicion, possibly due to higher amount of claim – There was no delay on part of Complainant in informing the concerned police, fire & other authorities as well as OP-1 Insurance Company – Discrepancy in timing of fire stand well-explained & is mere clerical mistake – Even Surveyors in its report have accepted this inconsistency as due to clerical mistake – Observations that complainant have taken heavy amounts of loans/finances from bank & were not in a position to make regular repayments is also factually incorrect – It is only on account of fire incident & Complainant not getting insurance claims from insurance companies that their bank accounts became irregular & non-performing & OP-2 took action under SARFAESI – These are not a valid ground to deny the claim of Complainant – OP-1 Insurance Company was not justified in repudiating the claim of Complainant on grounds mentioned in repudiation letter – Repudiation letter set aside & OP-1 was held guilty of deficiency in service in wrongfully rejecting claim merely on basis of suspicion that fire was not accidental & not deciding the claim within prescribed timeline, not providing surveyor’s report to complainant in accordance with Regulation 9 of 2000 Regulations etc. – OP-1 was guilty of deficiency of service to Complainant – Complainant is entitled to claim under policy of OP-1 – As period of 19 years have lapsed since the date of incident, at this stage fresh assessment is neither possible nor desirable – Complainant is entitled to get his claim as per the loss assessed by Surveyor in its final report i.e., Rs. 1,36,94,588/- – Directions. (Paras 31, 32 and 33)
Result: OP Dismissed.
ORDER
Dr. Inder Jit Singh, Member.—The present Consumer Complaint/Original Petition (hereinafter referred to as CC) has been filed by the Complainant against Opposite Parties (OPs) as detailed above, inter alia praying for the following directions:-
(i) OP-1 to pay a sum of Rs.1,47,87,672/- on account of loss to the plant & machinery, building and firefighting operation, with interest @13.5% from the date of fire till realization and award additional interest @ 2% per annum under Regulation 9 (6) of IRDA on Rs. 1,47,87,672/-;
(ii) OP-1 to pay a sum of Rs.2,69,07,774/ on account of loss in business;
(iii) OP-2 to pay a sum of Rs.2,86,39,337/- in favour of the Complainant on account of deficiency in service;
(iv) OPs-1 & 2 to pay Rs.25,00,000/- as cost.
2. Notice was issued to the OPs on 28.04.2008. Written Statement was filed by OP-1 (hereinafter also referred to as Insurance Company) on 07.12.2008 and by OP-2 (hereinafter also referred to as the Bank) on 18.08.2008. Complainant filed Rejoinder on 17.07.2009. The parties filed their Evidence by way of Affidavit on 05.10.2009 and 04.05.2017 (Complainant), 15.02.2011 (OP-1) and 02.07.2010 (OP-2). The complainant filed Written Arguments/Synopsis on 10.01.2019, 25.05.2022 and on 18.07.2024. The OP-1 and OP-2 filed its written arguments on 05.01.2017 and 10.02.2022 respectively.
3. Brief facts of the case, as presented by the Complainant and as emerged from the pleadings of the parties and other case records are that:
(i) The complainant company is incorporated under the Companies Act and originally promoted by Shri Krishan Gopal Garg and Shri Deepak Kumar Garg in the year 1989. Shri Krishan Gopal Garg is one of its Directors.
(ii) The Ministry of Agriculture formulated a scheme for capital investment subsidy for construction/expansion/modernization of cold Storage. National Horticulture Board (NHB) and National Bank for Agriculture and Rural Development (NABARD) are the agencies to implement the scheme. This scheme was introduced considering that nearly 1/3rd of the Horticulture Produce, especially fruits, vegetables and other agricultural products, were being wasted mainly on account of poor storage facilities.
(iii) The Complainant Company set up a Cold Storage and sought financial assistance from OP-2 for setting up the Cold Storage Plant. The Complainant is carrying on the activities of the grinding and trading of the spices and Uttar Pradesh Financial Corporation (UPFC) had given a loan of Rs.18,70,000/-. The Bank of India-OP-2 also sanctioned a working capital limit of Rs.8 lacs to the Complainant. The loan of UPFC was repaid in full and being satisfied with the performance of the complainant, OP-2 granted Term Loan @12.5% interest and cash credit facilities @13.5% to the complainant.
(iv) Opposite Party No.1 is a public sector Insurance Company and Opposite Party No. 2 is a Public Sector Bank. The Complainant has been associated with the OP-1 Insurance Co. since 1989. The insurance policy with OP-1 for the present building has been renewed four times since 2002. The complainant obtained Insurance Policy from OP-1 for insurance coverage of the building, plant and machinery, furniture, fixtures and fittings in the Cold Storage of the Complainant Company located at 105, G.T. Road, Chhipiyana Buzurg, District Gautam Budh Nagar, U.P. for a sum of Rs.1.60 crores for the year 2005-06 being Policy No. 252100/10/2006 issued by OP-1. The period of insurance was from 08.04.2005 to 07.04.2006. Out of the total sum insured, Rs.70 Lakh was the cover for the building, Rs.40 Lakh for the machinery and Rs.50 Lakh for fittings, fixtures and furniture.
(v) On 18th April 2005, there was major fire at the Complainant’s cold storage. The fire brigade and the police authorities including in-chrage of the police station were informed about the fire immediately on the same day by the Complainant by making call on telephone No.100. The villagers of the nearby villages and traders wh
Insurance Company cannot travel beyond the grounds mentioned in repudiation letter.
1. Insurance claim cannot be inordinately delayed.2. Delay will result in payment of interest to ensured.3. Random inspections and obsequious objections cannot be grounds to hold up claims
(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.
(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.
Complainant failed to prove that fire, which had taken place on 13.03.2016 at 2.30 pm at his premises was due to any of the perils covered in the Insurance Policy.
(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....
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