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2022 Supreme(Online)(Del) 7179
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
C. Viswanath (Presiding Member), Ram Surat Ram Maurya, MEMBER
Ram Company – Appellant
Versus
United India Insurance Company Ltd. – Respondent
Consumer Complaint No. 277 of 2012
For the Appellants/Petitioners: Ms. Annu Arora
For the Respondents: Mr. Abhishek Kumar
The Insurer's repudiation of the fire damage claim was unjustified due to the Insured's satisfactory evidence presentation, requiring reimbursement and interest for delayed payment.
Headnote:(A) Insurance Act, 1938 - Claim repudiation - Section 13(3) of the Insurance Surveyors and Loss Assessors (Licensing, Professional Requirements and Code of Conduct) Regulations, 2000 - Claim involves fire damages, with parties disputing assessments of loss - The Insured claimed Rs. 3,62,45,114 for losses due to fire, but the Insurer assessed it at Rs. 1,31,90,508 citing exaggeration and lack of cooperation from Insured - Court found the Insurer failed to accept evidence while undervaluing reported claims - The actual cause of fire, i.e., electrical short circuit, was covered under the insurance policy. (Paras 4, 6, 7, 17, and 18)
(B) Surveyor's report - The Insured objected to discrepancies and protracted delays in assessments by the Surveyor and highlighted biased actions leading to an unjust claim denial - Insurer's refusal to settle based on a flawed Surveyor’s report was deemed unjustified. (Paras 4, 5, 6, 7, 8, and 10)
(C) Interest on claims - Imposed 12% interest from July 2011 for delay in payment beyond statutory limits. (Paras 7, 18)
Facts of the case:
The Insured, operating a partnership firm, filed a claim for losses from a fire incident on December 18, 2010. The Insurer denied the claim based on the argument of excessive losses and misrepresentation of stock value.
Findings of Court:
Court ruled the claim by the Insured was valid, determining the initial repudiation unjustified and that the Insurer must reimburse based on appropriate assessments.
Issues: Whether the Insurer’s refusal to settle the claim was justified based on the reported figures of loss and conformity of required documentation.
Ratio Decidendi: Court concluded that the Insured provided sufficient evidence despite discrepancies, and that the Surveyor's assessment lacked credibility due to potential biases and procedural failings by the Insurer, leading to an erroneous repudiation.
Result: Complaint allowed.
| Table of Content |
|---|
| 1. background facts of the insurance claim. (Para 2 , 3) |
| 2. insurer's response and main arguments. (Para 4) |
| 3. verify documentation and evidence submission. (Para 5 , 6) |
| 4. surveyor's assessment and contradictions. (Para 7 , 8) |
| 5. assessment of damages and valuation disputes. (Para 9 , 10 , 16 , 17) |
| 6. claim misrepresentation and evidence credibility. (Para 11 , 12 , 13 , 14 , 15) |
| 7. legal obligations regarding timely report submission. (Para 18) |
1. Heard Ms. Annu Arora, Advocate, for the complainants and Mr. Abhishek Kumar, Advocate, for the opposite parties.
2. Ram Company and another (the complainants) (hereinafter referred to as the Insured) filed aforementioned complaint, for directing United India Insurance Company Ltd. (opposite party - 1) (hereinafter referred to as the Insurer) to pay (i) Rs. 2,85,60000 as insurance claim, along with interest at the rate of 24% per annum on the said amount, w.e.f. 18.12.2010 till actual payment, under Insurance Policy Nos. 221000/11/10 / / 13/00000110, 221000/11/10 / / 11/00000111 221000/11/10 / / 11/00000112. (ii) Rs. 50,00,000 as compensation for mental agony and harassment, due to negligence and deficiency in service, (iii) cost of litigation and (iv) any other relief, which may deem fit and proper in the circumstances of the case.
3. The facts as stated in the complaint and emerged from the documents attached with the complaint are as follows:
(a) The Insured was a partnership firm and engaged in the trade of food grains product and also had a woodcraft unit for manufacturing and trading wooden doors, windows, furniture and other wooden items for retail is the forte of the company. The showroom, administration & account Section, sawing, seasoning (chemical & dry) manufacturing & carpentering, polishing, quality verification, storage, transport loadingunloading wing, warehousing and main office were all under one roof at National Highway No. - 2, Bathain Gate, Kosi Kalan, district Mathura. The industry of the Insured was registered under Industrial Development and Regulation Act, 1951 as Timber Industry, scheduled at Serial - 36 and was regarded as a reputed businessman.
(b) The Insurer was a Public Insurance Company and engaged in business of providing insurance services. The Insured used to obtain insurance policies from the Insurer since 2009. The Insured obtained Standard Fire and Special Peril Policy, i.e. (i) Floater Policy No. 221000/11/10/13/00000110 risk covered was Industrial Manufacturing risk valid from 23.5.2010 to 22.5.2011, sum assured of Rs. 1.9 crore, on stock of all kinds of wood, semi - finished related to the Insured trade, (ii) Policy No. 221000/11/10 / / 13/00000111, risk covered was Building, covered area 3965 sq. ft., built of RCC, occupied as a wood seasoning plant and building, covered area 7,930 sq. ft., built of cement shed, valid from 23.5.2010 to 22.5.2011, for a sum assured of Rs. 45.6 lac, (iii) Policy No. 221000/11/10 / / 11/00000112, valid from 23.5.2010 to 22.5.2011, for a sum assured of Rs. 50 lac, on plant and machinery tools, accessories, electrical installations, spares etc. whilst lying or stored, installed at the said address for wood seasoning plant.
(c) On 18.12.2010, at about 3.00 a.m., security guard of the complainants informed Deepak Bichhoria, a partner of the firm, about the fire incident in the factory. Deepak Bichhoria and Harisharan Agarwal immediately rushed to the factory. By the time, they could reach the spot, the fire was spread in the factory. They informed nearest Fire Service Station, from where, 7 fire tenders' were sent on the spot, which took about 12 hours in extinguishing the fire. The incident was reported to Police Station Koshikalan, on 18.12.2010, where it was registered vide Rapat No. 36 at 19.20 hours, who later on submitted final report on 20.1.2011.
(d) The Insured informed the Insurer about the fire incident, on 18.12.2010, stating therein that his loss was approximately of Rs. 290 lacs. On which,
