An insurance claim cannot be totally repudiated for a technical policy breach if the breach lacks a causal connection to the loss; in such cases, settlement on a non-standard basis of 75% of the insured sum is considered fair and equitable.

JUDGMENT

AVM JONNALAGADDA RAJENDRA, AVSM, VSM (Retd), MEMBER

1. The present Revision Petition has been filed under Section 21(b) of the Consumer Protection Act, 1986 (“the Act”) against the Haryana State Consumer Disputes Redressal Commission, Panchkula (‘the State Commission’) order dated 30.10.2017 in FA No.953/2016 partly allowing the Appeal filed by the OP1-3/Respondents No.1-3 and modified the District Consumer Disputes Redressal Forum, Narnaul (‘the District Forum’) order dated 26.07.2016 in C.C. No.171/2014.

2. As per the Registry report, there is 22 days delay in filing this Revision Petition which was condoned vide order dated 12.11.2018.

3. For convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

4. Brief facts of the case, as per the Complainant, are that the Complainant obtained an insurance policy in respect of his building for a sum insured of Rs.17,75,000 vide policy dated 14.04.2009, valid up to 13.04.2019. The said policy was procured by OP-4 on his behalf, as the Complainant availed a loan from it. It was further averred that on 12.08.2013, while the Complainant was away at Delhi, a fire broke out during the intervening night of 12/13.08.2013, resulting in complete destruction of the building, including the shop, household goods, etc. Tragically, the Complainant’s only son also lost his life in the incident. An FIR under Sections 302, 380, 427, 436 and 457 of the Indian Penal Code, 1860 (IPC) was registered at Police Station Satnali. The Complainant suffered a total loss of Rs.41,07,400, though the building was insured for Rs.17,75,000. Despite repeated requests, the OP repudiated the claim. Thus, the instant consumer complaint was filed by the Complainant.

5. On being issued notice, OP- 1 to 3 filed a joint written statement admitting the existence of the insurance policy in question. However, OPs contended that while the policy was issued for a residential building, the Complainant was using the premises for commercial purposes without obtaining prior permission. This is in violation of the terms and conditions of the policy. It was further alleged that, as per the Complainant’s own version, the fire was an act of arson committed by some person due to personal enmity. Therefore, the Complainant ought to seek compensation from the alleged wrongdoer. The OPs further stated that they had appointed a surveyor, namely D.K. Taneja, who assessed the loss at Rs.10,06,121. The loss assessed by the Complainant through a private assessor was unreliable. The ground floor of the building was being used as a shop and the remaining floors as a godown. Preliminary objections regarding maintainability, jurisdiction of the Consumer Fora, limitation, estoppel, etc., were also raised, and sought dismissal of the complaint.

6. OP- 4, in its reply contended that it had merely sanctioned a loan of Rs.10,00,000 out of which the Complainant utilized only Rs.7,00,000. It was further stated that the loan was availed for running a business in the name of the Complainant’s wife in the said premises. OP-4 denied any liability to pay compensation under the insurance policy and prayed that the complaint be dismissed qua OP-4.

7. The learned District Forum vide Order dated 26.07.2016 allowed the complaint and relevant portion is as under:-

“6. Therefore, keeping in view the discussions made above, there is deficiency in service on the part of the opposite parties. Hence, the complaint of the complainant is hereby allowed with costs and opposite parties No.1 to 3 are directed:-

1. To pay Rs.17,75,000/- to the complainant along with inte