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Judgment
Deepa Sharma, Presiding Member
The present Appeal has been filed by the Complainant against the order dated 04.11.2011 of the State Consumer Disputes Redressal Commission, Rajasthan at Jaipur (for short “the State Commission”) whereby their Complaint No.3 of 2009 was dismissed by the State Commission.
The admitted facts of the case are that the machinery and material lying in the shop situated at M. I. Road were insured and that these machineries got damaged and the Complainant has assessed the total loss to the tune of ₹24,80,959/-. The damage had occurred due to inundation of water in the shop on account of heavy rain in the midnight of 16.06.2008 and 17.06.2008. As a result of the heavy rain, the basements no.1 and 2 of the shop were filled with water and the material and machinery lying therein were damaged. The Complainant had alleged that they had informed the Respondent about the loss due to heavy rain and had alleged that the said loss had been covered under the valid policy of the nature of Standard Fire and Special Perils Policy. They had filed the claim before the Respondent Insurance Company but the Insurance Company had repudiated the claim vide its letter dated 19.11.2008 on the ground that the cause of loss was not flood, subsidence or inundation for the reasons mentioned in the repudiation letter and that there was a breach of warranty which rendered the contract of insurance voidable as the footpaths/pavements were left uncovered which had increased the risk of loss in the rainy season. Another reason for rejection of the claim was that the basements no.1 and 2 were illegal/unauthorised construction and were not covered under the policy. After the claim was repudiated the Complaint was filed. The repudiation had been done by the Respondent Insurance Company on the basis of the surveyor report who had assessed the loss at ₹13,97,488/-.
Parties led their evidences before the State Commission. The State Commission after hearing the parties and perusing the record dismissed the Complaint:
While challenging the impugned order, the Complainant/Appellant has alleged that the machineries were being kept in the basements and this fact was within the knowledge of the Respondent Insurance Company and therefore, there was no misrepresentation/concealment or breach of warranty on behalf of the Appellant.
On this count, it is argued on behalf of the Insurance Company that the basements were unauthorised constructions and the policy had been issued for the shop and it does not cover the basements which were not insured.
I have heard the learned Counsel for the parties on this count and perused the record.
Copy of the policy is on file. The policy clearly covers the shop and the machineries and the stock lying in the shop. There is nothing in the insurance policy which could show that the basements were also covered by the said policy. The Complainant in their Complaint itself has stated that the machineries and the material were lying in the basements wherein the water had seeped due to heavy rain and caused damage. The admitted facts are that the basements were unauthorised construction and were not regularised till the filing of the claim. As per the Complainant/Appellant it was done only in the year 2001. The Complainant has also admitted that in the policy, the basements found no mention which shows that it is the fault of the Insurance Company who had not mentioned the basements in the policy, although it was within their knowledge. The Complainant however cannot take benefit of this argument because once they received the policy and found no mention of the goods lying in the basements in the policy, they ought to have reported it to the Insurance Company but that was not done. The policy covers only the lying machineries and the stocks lying in the shop. Since construction of basements No.1 and 2 was illegal, legally those were not part of the shop. The Complainant has relied on the findings in the case of Tata AIG General Insurance Company Limited vs. Texco marketing Pvt. Ltd. & Ors. [II (2018) CPJ 105 (NC)] wherein it has been so held by this Commission:
“18………
Before accepting the proposal form, the Insurance Company must have enquired or verified the address of the shop to be insured. In verification the fact that the shop being in basement must have come to the notice of the insurer…
…
Hence, the mentioning of the fact that the Insurance Company or its officers knew about the fact of the insured’s shop being at the basement cannot be ignored. Thus, I reach to the conclusion that even though this form was not applicable for the basement shop, however, the Insurance Company got the insurance proposal approved knowingly that this shop was not in the basement. The insured was not at fault since the insured had given the address of the shop as was required. There was no column to specifically answer whether the shop was at the basement or at which floor. In these circumstances, I find that the policy was wrongly issued by the Insurance Company and I find deficiency of service on the part of the Insurance Company in this regard.”
From the reading of the above finding of this Commission in Texco Marketing Pvt. Ltd. case (supra), it is apparent that what was insured was a shop which was situated in the basement. The facts of the case relied upon by the Complainant are, therefore, distinguishable from the facts of this case. The shop of the Complainant at the time of insurance was not situated in the basements but the basements, according to the Complainant, were part of the shop while this fact is not proved because the basements were unauthorised constructions.
From the evidence on record, it is also apparent that there were some holes left on the pavement which led to the gushing of the water in the basements which caused damage. Since the stock and the machinery lying in the basements were not insured in loss category, the machinery and stock lying in the basements are not covered under the policy. The State Commission, therefore, has rightly reached to this conclusion. It is apparent that the insurance policy is a contract and the terms of the contract need to be strictly construed while determining the rights of the parties under the said contract. Since the goods lying in the shop were insured, the policy does not cover the goods and the machinery lying in the basements which were unauthorisedly raised and were not part of the insurance policy.
As regards the entering of the water in the basements is concerned, there is no evidence on record that there was a flood in that area or there was any inundation of the water in that area, rather the photographs on record clearly show that the water had seeped into the basements through a hole near the ladder of the shop. It has been observed by the State Commission on this count as under:
“At last, the complainant has cited AIR 200 Supreme Court 1700 United India Insurance ltd. vs. Pushpalaya Printers of which facts are different at all and do not match with the present case; another citation AIR 2007 Supreme Court 393 United Insurance Co. Ltd. vs. Kiran Combers and Spinners has been cited and contended that according to the term of the policy, this insurance is covered by Subsidence and only on the ground that the construction was raw, denial of insurance cannot be made. In para 8 of this Judgment, the meaning of the Subsidence has been stated to be the gradual caving in or sinking of an area of land.
In the instant case, there was neither a caving nor the area of land was gone down and the land sliding was also not caused. Clearly, as per photographs taken at the time of inspection, the complainant left ventilator by displacing two stone slabs near to the ladder of ground floor of the shop, due to which the water of the road and drainage enters inside. This position cannot be regarded as Flood, Inundation & Subsidence; as such, the insurance company has not committed any deficiency in service by dismissing the claim.”
From the above, it is apparent that there is no perversity, illegality or infirmity in the impugned order. The present Appeal has no merit and the same is dismissed with no order as to costs.