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2020 Supreme(Online)(NCDRC) 251
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
MR. PREM NARAIN, PRESIDING MEMBER
M/S. PROGRESSIVE AGRO FARMS & ANR. – Appellant
Versus
ORIENTAL INSURANCE CO. LTD. & 4 ORS. – Respondent
FIRST APPEAL NO. 130 OF 2012 | FIRST APPEAL NO. 196 OF 2012
For the Appellant: Mr Hamid Ali, Mr Rajinder Singh, Mr S S Saini
For the Respondent: NEMO
Insurance claims cannot be denied solely for delayed policy commencement if covered risks are acknowledged in the policy.
Headnote:(A) Consumer Protection Act, 1986 - Insurance - Claim of crop loss - Insurance company denied liability citing late insurance commencement - While the State Commission awarded Rs.12,17,766, court modified to Rs.10,95,990 after considering policy’s mandatory provision on excess deduction - As per the surveyor, insurance was valid despite the late coverage - Claim payable. (Paras 10, 11, 12)
(B) Insurance - General principles - Insurance must be availed timely to avoid risk exposure - However, if risks are covered under the policy, liability cannot be denied based on timing. (Paras 10.1, 10.2)
Facts of the case:
Complaints arose from crop loss due to infestation and late insurance initiation, resulting in a consumer complaint against the insurer. The State Commission initially ruled in favor of the complainant, awarding financial compensation.
Findings of Court:
Court supports the State Commission’s decision for recovery allowing for policy excess deduction—final compensation set at Rs.10,95,990.
Issues: The primary issue was whether the insurer could deny claims on grounds of delayed policy commencement despite covered perils.
Ratio Decidendi: The court determined that late insurance acquisition does not invalidate the claim if covered perils are acknowledged, enforcing liability on the insurer.
Result: FA no. 196 of 2012 is partly allowed; FA no. 130 of 2012 is dismissed.
| Table of Content |
|---|
| 1. parties identified for cross appeals. (Para 1 , 2) |
| 2. claim based on insured crop loss. (Para 3 , 4 , 5) |
| 3. appeal for enhanced insurance claim. (Para 6) |
| 4. arguments on loss assessment and insurer's responsibility. (Para 7 , 8 , 9) |
| 5. court's findings on insurer liability and assessment. (Para 10 , 11) |
The present first appeal no. 130 of 2012 has been filed by M/s Progressive Agro Farms and Anr., and first appeal no.196 of 2012 has been filed by Oriental Insurance Co. Ltd., challenging the order dated 22.12.2011 passed by the Punjab State Consumer Disputes Redressal Commission, Chandigarh (‘the State Commission’) in Consumer Complaint no. 37 of 2007.
2. As these are cross appeals, the parties will be called by their party names as mentioned in the order of the State Commission.
3. The brief facts relevant for the disposal of the present appeals are that 20 acres of land was taken on lease by the complainant and loan was taken from the bank for the project Safed Musli. HDFC bank sanctioned the loan of Rs.45 lakh with the condition that the crops must be insured. Though, the musli was sown in July, however, the crop was ultimately insured from 31.10.2005 to 30.10.2006. When the crop safed musli was finally dug out it was found that production of safed musli was very less than as compared to the norms as there was infestation of nematodes. Accordingly, the claim for the loss was filed before the insurance company. The surveyor was appointed by the insurance company and the surveyor assessed the loss to the tune of Rs.7,56,423/-.
4. After receiving the surveyor’s report, the insurance company appointed an investigator and the investigator has opined that the crop was insured about three months after sowing and by that time the crop was already infested by infection at the initial stage. The investigation also questioned the insurance of the crop after three months of sowing without any reasons. Based on the surveyor’s report and the investigator’s report, the insurance company repudiated the claim vide letter dated 19.07.2007.
5. Aggrieved by this, the complainant filed a consumer complaint before the State Commission. The complaint was resisted by the insurance company by raising the same grounds as in the repudiation letter, however, the State Commission allowed the complaint partly vide its order dated 22.12.2011 by directing the insurance company to pay Rs.12,17,766.03 to the complainant. Hence, the present appeals.
6. Aggrieved, the complainant has preferred an appeal against the order of the State Commission for enhancement of the insurance amount on the ground that there was total loss to the crop of safed musli. The insurance company also preferred appeal against the order of the State Commission claiming that no amount is payable to the complainant.
7. Heard the learned counsel for the appellant and perused the records. The learned counsel for the complainant stated that the surveyor has himself assessed in his report that the total crop was insured for Rs. 38 lakh and the actual crop of safed musli was sold to Diverse Agro for Rs.3,66,000/-. It was stated by the learned counsel that the State Commission has relied on the letter dated 03.05.2006 which was written by the complainant informing that there may be loss to the crop to the tune of 30% to 40%. On this basis the State Commission has allowed Rs.12,17,766.03 as gross loss assessed by the surveyor. It was stated that the loss has occurred to the tune of 90% but the compensation has been given for about 30-35%. The loss has not been denied by the surveyor and therefore the insurance company is liable to pay the total loss suffered by the complainant.
8. Coming to the report of the investigator, the learned counsel for the appellant has stated that it is wrong to say that when the crop was insured it was already infested. Crop was inspected by various persons of the insurance company. It was further stated that the crop was in a very good condition when the cro
