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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
A.P. Sahi, President
M/s. Okaya Fujikawa Power
Pvt. Ltd. – Complainant
versus
National Insurance Company Ltd. – Opp. Party
Consumer Case No.791 of 2015
Decided on 27.5.2024
Deficiency in Service – Unfair Trade Practice – Insurance company cannot compel and coerce claimant to accept lower claim as originally assessed by the surveyor without intimating the complainant as to the reasons for such reduction – Surveyor and Insurance Company both did not act fairly in discharging their obligations – No dispute about incident of fire and its occurrence as well as loss suffered on that count – On account of recalculation on separate parameters resulted in reduction of amount offered on second occasion by Surveyor – Complainant did not challenge said calculation and again sent an acceptance/consent on 8.3.2014 for receiving amount of Rs. 8.32 crore as suggested by Surveyor – Insurance Company had forfeited its right to file any written version and there is no rebuttal of allegations regarding these unilateral decisions taken by Surveyor of Insurance Company for reducing amount one after the other in quick succession – No facts or figures available for this reduction yet the complainant gave its consent for accepting the said amount on 7.11.2014 – Insurance Company was not sure on the calculations tendered by Surveyor and Complainant in the hope of settling matter and get over this ordeal, ultimately accepted the amount that was finally offered telephonically – This sort of procedure adopted by Insurance Company appears to be unjust – Surveyor has a responsibility to carry out these functions and obligations promptly and in accordance with IRDA guidelines for assessing the loss – The manner in which settlement in present case has been made by successive reductions indicates a trend of unfair treatment that does not deserve to be encouraged – Successive bargaining with no options to the insured might end up in an unfair trade practice – Complainant acquiesced to the offer made by Surveyor then finally by Insurance Company itself – Since consent to offer was accepted after revised offer against which no protest had been filed, acceptance of amount by complainant therefore cannot be reopened insofar as loss of building and other stocks are concerned as it is not an outcome of any established duress or coercion – Claim for enhancement as prayed for cannot be granted except for the damage caused to furniture, fixtures and fittings to the tune of Rs. 9,63,456/- with interest @ 6% p.a. from date of loss till realisation of payment. (Paras 18, 22, 31, 34, 35, 36, 41, 42, 45, 46, 47, 49, 50 and 51)
Result: Complaint partly allowed with direction
ORDER
This is a complaint alleging deficiency in service against the National Insurance Company Ltd. contending that once the loss assessment made by the Surveyor had been finalized, and accepted by the Complainant, then successive reductions by the surveyor at the instance of the Insurance Company are unjustified in the circumstances of the present case. This action is alleged as an unfair trade practice and deficiency in service.
2. The undisputed facts are that the Complainant acquired a Fire & Special Perils Insurance Policy, the duration whereof was from 13.05.2011 to 12.05.2012. The total sum insured was Rs.29,00,00,000/- covering the risk of stocks, buildings, furniture, fixtures and fittings of the unit.
3. The Complainant is a manufacturer of batteries and unfortunately, in the night of 17th November 2011, a fire occurred in the unit that is insured which spread to a large extent causing severe damage to the building, machinery, electrical installations, stocks as well as the furniture and fixtures. The intimation was immediately given to the Insurance Company on the date of the incident itself and the Surveyor appointed by the Insurance Company visited the affected premises and carried out the Survey on 19th, 20th and 21st November 2011.
4. The Complainant submitted a claim
stating a loss of Rs.14,40,24,036/- with
item-wise details in respect of the loss on account of damage to buildings, stocks and furniture etc.
5. The surveyor, upon a calculation of the loss, sent his report assessing the entire net loss on all the heads after deducting salvage value, less under insurance, less head stock and less excess. The amount assessed by the Surveyor was Rs.10,73,94,087/-. The surveyor Mr. Sanjay Dwivedi also initiated the salvage disposal that was conducted under him and the net loss as assessed on 06.08.2012 after carrying out deductions was assessed by him on 20.12.2012 as 8,95,93,585/-.
6. This assessment was made and vide email dated 20.12.2012, the Complainant was called upon to give his consent to the same.
7. The Complainant sent back a response indicating the calculations as per the Complainant including the calculation on stocks and the three storied building where-after the surveyor, on 22.12.2012 mailed back to the complaint for consent. It may be pointed out that the Complainant in order to avoid any further prolonging of the issue sent his consent on 20.12.2012 for a sum of Rs.8,95,93,585/-. The consent letter is extracted herein under:-
“20.12.2012
To,
M/s Sanjay Dwivedi & Associates,
IIIA/135, Rachna, Vaishali,
Distt Ghaziabad 201010
Sub: Fire Claim A/c Fujikawa Power
Dear Sir,
With reference to you email dated 20th Dec 2012 quantifying our final loss due to fire on 16.11.2011 in our factory at Village Handa Kundi, Nalagarh. Solan, H.P. amounting Rs.89593585/-, we hereby give consent of the same. Please take a note of it and proceed further in the matter in order to realization of our above claim amount from M/s National Insurance Company Limited.
Thanking you,
For Fujikawa Power,
Authorized Signatory”
8. The surveyor had demanded certain papers which were given and then certain more information was sought. The Complainant requested the Insurance Company to deal with the matter finally as the claim was pending resulting in further hindrances in the running of the unit.
9. It appears that in the year 2013, the Insurance Company obtained some report from the Indian Institute of Technology (IIT) Roorkee regarding the assessment of the damage to the building and the proposal for repairs. The Complainant was also called upon to assess and assist in respect of the correct assessment of the loss in buildings and the repairs that could be carried out. A report was obtained from NITTR indicating its opinion on the re-assessment of damage to the buildings.
10. A meeting was conducted on 18.11.2013 where the major damage to the three storied RCC building was discussed and the Insurance Company opined that the building
(1) Unfair Trade Practice – Successive Reductions indicates trend of unfair treatment that does deserve to be encouraged.(2) Insurance company is also regulated by IRDA regulations & reasonable perio....
The insurance company’s coercive practices in settling claims amount to deficiency in service under consumer law.
Insurance companies must provide substantial proof when denying claims; unjust repudiation leads to enforceable obligations to pay agreed amounts.
(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....
Insurance claims must be assessed based on fair and contractual standards, avoiding arbitrary deductions.
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.
Insurance companies cannot avoid liability by citing external compensations, and second surveyors must be appointed with regulatory oversight.
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