The insurance company’s coercive practices in settling claims amount to deficiency in service under consumer law.

1. This complaint under S.21 of the Consumer Protection Act, 1986 (in short, 'the Act') is filed against the opposite parties for against disallowance of the amount claimed under the Fire and Special Perils Policy obtained by it alleging deficiency in service by the opposite party.

2. The facts of the case as per the complainant in brief are that complainant No. 2 is engaged in the business of manufacture and export of shawls, scarfs, mufflers, stoles, upholstery etc. The complainant's factory was covered by a Standard Fire and Special Policy (Floater Policy) dated 1.4.2011 for the period 1.4.2011 to 31.3.2012 for a sum of Rs.13,50,00,000. On account of torrential rain on the night of 12/13.8.2011 the factory was inundated by rain and flood water. On being informed the opposite parties appointed M/s N Kumar, Surveyors Pvt. Ltd. as Loss Assessors who, after inspecting the premises, submitted a report on 18.8.2011 estimating a loss of Rs.3.15 crores based on physical verification and stock statement, considering the extent of damage against the insured's tentative estimate of loss of Rs.4,61,43,000 net of salvage. Thereafter, M/s Sanjay Dwivedi and Associates were appointed surveyors by the opposite parties on 16.8.2011. They visited the factory premises on 19-20.8.2011 and submitted a final report dated 6.12.2012 estimating the loss as Rs.2,99,00,000. Complainant states that at the instance of the surveyor, he consented on 19.10.2012 to accept Rs.2,99,00,000 in full and final settlement even though no surveyor's report had been submitted. Thereafter on 25.6.2013, pursuant to the Surveyor's email dated 25.6.2013 seeking complainant's prior consent before forwarding of report, the complainant again agreed to accept Rs.2,39,92,590 crores instead of Rs.2,99,00,000 consented to earlier, since he was facing cash crunch because of non - settlement of the claim. Subsequently, vide letter dated 28.6.2013 addressed to the opposite party No. 1 / Insurance Company, the loss was revised to Rs.2,39,96,758 after discussions with the opposite party No. 1. On 10.9.2013, the opposite parties conveyed by email that the claim had been settled for Rs.2,39,92,590 and the amount was electronically transferred to the complainant's account on 5.9.2013. The complainant issued a protest letter by email on 11.9.2013 followed by a letter dated 30.9.2013. The acceptance of settlement of the claim is stated to be under protest by the complainant as there had been inordinate delay in settlement of the claim which was causing him financial hardship. As no details of calculations pertaining to the claim were provided, the complainants obtained the same under Right to Information Act (RTI) on 31.10.2013. The complainant is before this Commission with the following prayer :
(i) To pay sum of different amount payable - Rs. 3,15,00,000 less Rs.2,39,92,590 : Rs.75,07,410 plus
(ii) To pay different of value of salvage amount illegally deducted : Rs.48,13,482 ' Rs.18,00,000 : Rs.30,13,482 plus
(iii) To pay surveyor fee wrongly and illegally deducted : Rs.2,85,518
Total of (i) + (ii) + (iii) : Rs.1,08,07,410 plus
(iv) To pay interest @ 18% on Rs.1,08,07,410 from the date of loss i.e., from 12.8.2011 till realisation 12.1.2014 i.e., for 29 months : Rs.47,01,223 plus
(v) To pay interest @ 18% on Rs.2, 39,92,590 for 18 months (As the claim was delayed by 18 months keeping in view Regulation 9.2 and 9.5 of Insurance Regulatory and Development Authority (Protection of Policy Holders' interest) regulations, 2002 : Rs.64,78,000 plus
(vi) To pay compensation for harassment and financial loss