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2025 Supreme(Online)(NCDRC) 2490
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AVM J RAJENDRA AVSM VSM (Retd), Presiding Member, MR. ANOOP KUMAR MENDIRATTA, Member
S.B.I. General Insurance Company Ltd. – Appellant
Versus
Jabbar Singh – Respondent
Revision Petition No.737 of 2019 | Revision Petition No.738 of 2019
For the Appellants/Petitioners: Mr. Satya Sai Sumanth
For the Respondents: Ms. Madhurima Tatia
The insurer's liability must reflect both policy coverage and under-insurance principles, ensuring compensation aligns with established loss evaluations.
Headnote:(A) Consumer Protection Act, 1986 - Section 12, 21(b) - Insurance claims - The complainant alleged deficiency in service due to claim rejection by the insurer for losses caused by heavy rainfall - The State Commission modified the District Forum's order awarding higher compensation - The court found that under-insurance principles applied, determining proportionate liability - The policy covered inundation and the insurer's denial was unjustified. (Paras 7, 18, 19, 21, 22)
(B) Insurance Law - Under-insurance principle - The insured claimed only a proportionate amount due to under-insurance, barring him from claiming full loss coverage - The nature of losses and policy exclusions were critically evaluated, establishing the grounds for compensation. (Paras 11, 20)
Facts of the case:
The complainant suffered complete destruction of his Kajawa (brick kiln) due to unprecedented flooding beyond forecast, leading to a claim against the insurer which was initially denied.
Findings of Court:
The court found that the insurer incorrectly applied policy exclusions, leading to undue rejection of a legitimate claim based on terminology interpretation in advanced legal precedents.
Issues: Whether heavy rainfall causing stock loss is covered under the insurance policy? Is there a case of under-insurance, and what is the liability owed by the insurer?
Ratio Decidendi: The court clarified the definitions of flood and inundation in insurance contexts and asserted clear liability principles in under-insurance scenarios, correcting the State Commission's previous order.
Result: Revision Petitions allowed, restoring the lower court’s findings.
| Table of Content |
|---|
| 1. the complainant suffered flood-related losses covered by the insurance policy. (Para 5 , 6 , 7) |
| 2. arguments highlight the misapplication of policy terms regarding compensation. (Para 10 , 11) |
| 3. the court considers overlapping issues of insurance coverage and liability. (Para 12 , 13) |
| 4. court delineates between flood and inundation in policy coverage applications. (Para 14 , 18 , 21) |
| 5. final ruling confirms the precedent of providing compensation according to established principles. (Para 22 , 24) |
JUDGMENT
Air Vice Marshal J. RAJENDRA, AVSM, VSM (Retd.)
1. These two Revision Petitions No.737 and 738 of 2019 have been filed by the Opposite Party (OP) under Section 21 (b) of the Consumer Protection Act, 1986 („the Act‟) against the Rajasthan State Consumer Disputes Redressal Commission, Jodhpur (State Commission) order dated 05.11.2018 in FA Nos. 68 & 69 of 2015, wherein the State Commission modified the District Consumer Disputes Redressal Forum, Sirohi, Rajasthan (“District Forum”) order dated 20.11.2014 in Consumer Complaint Nos.87/2013 and order dated 20.11.2014 in Consumer Complaint Nos.85/2013 respectively, which allowed the complaints.
2. As per report of the Registry, there is a delay of 32 days in filing the present Revision Petitions. For the reasons stated in IA/6146/2019 and IA/6148/2019 the same are allowed and the delay is condoned.
3. Since the facts and questions of law involved in both Revision Petitions are substantially similar, except for minor variations in dates and events, both the petitions are being disposed of by this common Order. For ease of reference, R.P. No.737 of 2019 is considered as the lead case, and the facts presented below are drawn from Consumer Complaint No. 87/2013.
4. For convenience, the parties are being referred to as placed in the original Complaint filed before the District Forum.
5. Brief facts of the case, as per the Complainant, are that Shri Jabbar Singh, the Complainant filed a complaint under Section 12 of the Consumer Protection Act, 1986 against the Opposite Party (OP) alleging deficiency in service on rejection of his claim. The Complainant took an insurance policy for his Kajawa from S.B.B.J. Bank, Branch Sirohi through SBI General Insurance Company vide policy No. 684717, valid from 15.01.2013 to 14.01.2014. He contended that on 22.04.2013, at about 4:00 AM, unexpected rainfall commenced accompanied by strong winds, without any prior meteorological forecast. The weather conditions rapidly deteriorated, with powerful gusts carrying dust particles and the subsequent onset of thunderstorm activity. The intensity of rain escalated dramatically, resulting in flash flooding that caused complete destruction of the complainant's Kajawa structure. Despite all efforts undertaken to preserve the property, the flood water proved overwhelming and the structure was irreparably damaged. The flooding also caused significant waterlogging in the surrounding rivers and drainage systems. According to official records from the meteorological department, Mount Abu recorded 19 MM of rainfall during this weather event. Following the destruction of the Kajawa, the Complainant promptly intimated in writing to the relevant insurance company and to the branch of S.B.B.J Sirohi Branch, where he maintained CC Limit A/c No. 61144200332 and requested immediate site inspection and initiation of appropriate claim procedures. However, despite his formal application, the OP insurer denied disbursement of the claim amount on 08.05.2013. The rejection was based on the insurance company's assertion that losses resulting from rainfall damage were not covered under the terms of the insurance policy. The complainant contends that this rejection of claim Application No. 684717 was conducted in an improper, unlawful, and arbitrary manner, lacking proper justification under the policy terms. Being aggrieved, he filed a Consumer Complaint before the District Forum.
6. On being issued notice, the State Ba
