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Judgment
V.K. Jain, J
IA/14430/2018 (For c/delay)
The delay is condoned. The application stands disposed of.
FA/1396/2018
The complainant/respondent namely Citi Mall Developers Private Limited obtained an insurance policy from the appellant in respect of its Shopping Mall, including Cinema Theatre, situated at G.E. Road, NH-6, Raipur. The insurance policy covered building, plant & machinery including electrical fittings and installations. The building was insured to the extent of Rs.72,91,42,454/- whereas the plant & machinery was insured to the extent of Rs.16,30,00,000/-. The insurance policy covered the loss on account of earthquake to the extent of Rs.89,21,42,454/-.
On 25.04.2015, there was an earthquake in Raipur area as a result of which, the dome of the auditorium in the mall was blown away and badly damaged. As a result, rain water entered the auditorium causing severe damage.
A claim for Rs.76,65,776/- was submitted by the complainant for re-imbursement in terms of the insurance policy.
M/s Cunningham Lindsey International Insurance Surveyors And Loss Assessors Private Limited were appointed by the appellant to inspect the site and assess the loss. After inspecting the site, the surveyor assesses the loss at Rs.38,57,000/-. The insurer however, chose to repudiate the claim vide its letter dated 07.11.2006 which to the extent, it is relevant, reads as under:
It was reported that there was thunder storm reported on 26.4.2015 at around 18.30 Hrs.However, we did not find any support from your end, submitted to surveyors to substantiate the statement.
At the time of survey it was observed by surveyors that Dome was covered with polythene sheet and it was conveyed to surveyors that this is done to provide temporary protection to the customer.Sheets were removed and observed that few polycarbonate sheets were uprooted / blown away and some sheet have been bent.
AC sheets were also reported damage in auditorium roof of INOX.
Without prejudicing to the admissibility of claim, surveyor has assessed the loss for Rs.38,57,000/- and recommended for non-payment of same for the reasons stated below:
Following surveyor's remarks on verification of loss as per surveyor's report:
"The insured was observed to have carried out the repairs to the dome sheets, auditorium roof, tar layering and other repairs to parapet without getting the same verified and / or informing us prior to proceeding with repairs.This left the verification incomplete in regard to the extent of damage that required such repairs."
On examining the above methodology and on discussions with the Insured's vendors, we explained them very clearly that the work that they were planning / indicating to execute i.e. the cited cost of repairs / retrofitting methodology explained by their vendors, was observed to be modification to the building that was intended to be carried out by them, with the help of new technology and material in place of the already installed / used material."
It was clearly highlighted to the insured that despite our specific advice to them, they had not facilitated the surveyor verification of the estimates prior to proceeding for repairs and thus rendered the repairs and basis of extent of loss claimed, unverified for the items already repairs."
In regard to the auditorium roofing, the insured did not provide us a copy of the lease agreement between them and INOX to whom the auditoriums were leased out.
This was necessary to see the terms of agreement in regard to aspect of insurable interest under the policy for loss claimed for auditorium area."
Apart from above non-submission of repair bills to substantiate the claimed loss against reported already repaired work and few other points of concern already shared with you on mails on different dates and meetings.
Further surveyors view on liability under claim is as:
"As per the facts stated above, there was a clear breach of General Condition No.1 and 6 of the SFSP policy issued to the insured.
We observed non-disclosure of material facts on part of the insured, withholding and not providing the supporting documents and information required for verification of the claim lodged with the insurers and reportedly proceeding unilaterally and unauthorized with the repairs / reinstatement of the affected / damaged areas and items without facilitating the required prior verification.
Thus the insured did not provide any opportunity to us / insurers to assess the justification of the extent of loss claimed by them.
In view of the same the claim of the insured was rendered non payable under the policy due to breach of policy conditions, in our opinion."
Please find below policy condition No.1, which states as THIS POLICY shall be voidable in the event of mis-representation, mis-description, and non-disclosure of any material particular"
We would also like to draw your attention towards policy condition No.6
On happening of any loss or damage the insured shall forthwith give notice thereof to the company and shall within fifteen days after the loss or damage, or such further time as the company may in writing allow in that behalf, deliver to the company.
A claim in writing for the loss or damage containing as particular on account as may be reasonably practicable of all the several articles or items or property damaged or destroyed, and of the amount of loss or damage thereto respectively, having regard to their value at the time of loss or damage not including profit of any kind.
Particular of all other insurances, if any.
The insured shall also at times at his own expense, produce, procure and give to the company all such further particulars, plans, specifications books, vouchers, invoices, duplicate or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and the cause of loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of liability of the company as may be reasonably required by or on behalf of the company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith."
On the basis of above mentioned observations by surveyors and us, we are of the opinion that the assessed loss of Rs.38,57,000/- is not payable due to breach of policy condition 1 and 6 expressed condition on schedule."
Being aggrieved from the repudiation of the claim, the complainant approached the concerned State Commission by way of a Consumer Complaint.
The complaint was resisted by the appellant primarily on the ground on which the claim had been repudiated.
Vide order dated 25.04.2018, the State Commission, directed the appellant to pay a sum of Rs.38,57,000/- to the complainant alongwith interest @ 9% per annum from the date of the complaint and the cost of litigation quantified at Rs.10,000/-. Being aggrieved from the order passed by the State Commission, the appellant is before this Commission.
It is an admitted position that the surveyor had inspected the damaged site on the intimation of the damage having been given by the complainant to the insurer. It is also not in dispute that an estimate for repair of the said damage was also provided by the complainant to the surveyor. The said estimate forms part of the survey report.
Though the case of the appellant is that the complainant failed to provide several documents and information to the surveyor, the very fact that (i) the site was inspected by the surveyor who was in a position to assess the loss, (ii) estimates were made available to the surveyor and (iii) the surveyor actually assessed the loss to the complainant at Rs.38,57,000/-, based upon the market cost of carrying out the repairs, clearly shows that such documents as were necessary for making assessment of the loss to the complainant, were duly provided to the surveyor. Had it been otherwise, the surveyor would not have been able to assess the loss suffered by the complainant.
One of the grievances of the appellant is that the complainant has failed to provide to them a copy of the Rent Agreement between the complainant and INOX Theatre. The said agreement admittedly, has since been provided to the appellant and therefore, is available to it.
In these circumstances, there will be no justification for not re-imbursing the complainant for the loss suffered by it subject of course to the complainant proving the actual expenditure incurred by it on carrying out the necessary repairs.
The learned counsel for the complainant, on instructions, submits that only temporary repairs were carried out by the complainant at the relevant time, incurring an expenditure of Rs.10,00,000/- on such temporary repairs and the bills for such temporary repairs were submitted to the State Commission. It is open to the insurer to verify those bills. Since the remaining repair work, according to the complainant, is yet to be carried out, it would only be appropriate to re-imburse the complainant only after it carries out the remaining repair work and only to the extent the expenditure is incurred on such remaining repair work. However, there will be an upper cap of Rs.38,57,000/- on the total amount which would be payable to the complainant for carrying out the repairs including the temporary repairs already carried out at the cost of Rs.10,00,000/-. The appeal is therefore, disposed of in terms of the following directions:
(i) The surveyor shall immediately inspect the auditorium where the damage happened on 26.04.2015.
(ii) The complainant shall submit the estimate for carrying out the remaining repair work to the surveyor, after inspection is carried out by him in terms of this direction. The estimate would cover only such repairs which are necessary for repair of the damages which happened on 26.04.2015. The said damages are stated to have already been noted in the survey report.
(iii) After submitting the estimates for carrying out the remaining repair work to the surveyor, the complainant shall be entitled to go ahead with the repair work, to the extent it is required for repairing the damage caused on 26.04.2015.
(iv) After the repairs have been actually carried out, the surveyor shall be entitled to inspect the auditorium to verify the repair work carried out by the complainant pursuant to this order.
(v) After the insurer verifying the payment made by the complainant for carrying out the remaining repair work in terms of this order, the complainant shall be entitled to re-imbursement of the entire expenditure incurred on carrying out the repairs including the expenditure already incurred by it but the re-imbursement to the complainant shall not exceed Rs.38,57,000/-.
(vi) The complainant shall provide a complete copy of the agreement with INOX Theatres to the appellant within four weeks from today.
(vii) The payment in terms of this order shall be made to the complainant within four weeks of the surveyor carrying out the entire exercise required in terms of this order.
(viii) The complainant/respondent shall also be entitled to interest @ 9% per annum from the date of institution of the complaint on the amount of Rs.10,00,000/- and from the date of actual expenditure on the balance amount.
(ix) The statutory deposit as well as the amount deposited by the appellant with the State Commission in terms of the interim order of this Commission, shall be refunded to the appellant alongwith interest which may have accrued on that amount, after the appellant has complied with this order.