New India Assurance Co. Ltd. & Anr vs Shirish Goel

This Appeal is filed against the order dated 15.01.2013 of the Haryana State Consumer Disputes Redressal Commission, Commission, Panchkula (hereinafter referred to as “the State Commission) in CC/6/2012.

Case of the Complainant/Respondent is that on 31.10.2009 he took Fire and Special Perils Policy No.312700/11/09/11/00000204 from the Opposite Parties/Appellants. The Policy covered the building located at 21/31 and 22/31, Tatarpur Jatula Road, Village Jarula, District Palwal valid from 31.10.2009 to 29.10.2010. While issuing the Policy, the Opposite Party mentioned incorrect name of the Complainant which was later on corrected. The Complainant was not supplied with the completed copy of the Policy. The Complainant, however, obtained the same by an application under Right to Information Act, 2005. On 01.05.2010 fire broke out in the insured premises due to short circuit causing loss/damage to the stock and building. Intimation of fire was given to the Fire Brigade and the fire was extinguished. Police recorded a case, vide FDR No.4 dated 04.05.2010 at Police Station Gadpuri. Intimation of fire was also given to the Opposite Party, who appointed Shri Hans Chaudhary HRC Associates as Surveyor. On 02.05.2010, the Surveyor inspected the premises and asked the Complainant to submit certain documents which the Complainant supplied. According to the Complainant, the loss was to the extent of Rs.30 Lakhs. The Surveyor, however, assessed the loss at Rs.6,52,283/-. The Surveyor also observed that the Insured had increased the risk of loss by construction of additional building without permission of the Opposite Party. The liability of the Opposite Party was, therefore, nil. The Opposite Party repudiated the claim stating that the subject matter damaged in the fire was not covered under the Policy. Aggrieved by repudiation of the claim, the Complainant filed Consumer Complaint No.6/2012 before the State Commission with the following prayer: -

“It is, therefore, respectfully prayed that this complaint may kindly be allowed and the Opposite Parties may kindly be directed to pay compensation to the tune of Rs.35,25,000/-to the complainant on account of negligence and deficiency in service, in the interest of justice.”

The Complaint was contested by the Opposite Party by filing the written statement. It was stated that the portion of the building where damaged was caused was not in existence when the Policy was taken by the Complainant and the same was constructed later. The Complainant himself admitted that the new construction was made during September-October, 2009 to March, 2010 without intimation to the Opposite Party. This being the position, the Opposite Party was not liable to pay any claim.

After hearing the Learned Counsel for the Parties and perusing the record, the State Commission passed the following order: -

“Having considered the facts and circumstances of the case and the evidence available on record, we have arrived to the conclusion that the complainant is entitled to compensation of Rs.20,07,899/- on account of damage of his building due to fire which broke out in the insured premises during the subsistence of the Insurance Policy.

As a sequel to our aforesaid discussion, this complaint is accepted and direction is given to the opposite parties to pay Rs.20,07,899/- to the complainant alongwith interest @ 6% per annum from the d ate of repudiation of complainant’s claim till its realization. It is pertinent to mention here that the genuine claim of the complainant was denied by the opposite party-Company on flimsy grounds. It is the general practice of the issues, they always rely upon the reports of surveyors as well as the findings recorded therein and fail to verify the exact position of the incident i.e. fire, flood etc. It is not disputed that a very heavy responsibility lies on the shoulders of Manager of the Company but instead of examiner of the issue, he signs the repudiation letter on ditto lines. Therefore, in such a situation, we are of the view that the Branch Manager of Company cannot escape the liability to pay Rs.50,000/-(Rupees Fifty Thousands) as compensation to the complainant for rejecting his (complainant’s) genuine claim. This amount shall be recovered from the salary of the erring Branch Manager of the Company, who was working on the day of rejecting complainant’s claim. Cost of litigation is quantified at Rs.1,000/-”

Aggrieved by the order of the State Commission, the Opposite Party has filed present Appeal. Heard Learned Counsel for the Parties and carefully perused the record. Learned Counsel for the Appellant/Opposite Party submitted that after receiving the intimation of fire, the Opposite Party deputed M/s HRC Associates as Surveyors for assessment of loss. The Surveyor recorded that the portion of the building where damage occurred due to fire was not in existence when the Insurance Policy was taken by the Complainant. This fact was also admitted by the Complainant before the Surveyor. The State Commission failed to appreciate this fact and allowed the Complaint arbitrarily. He also submitted that in the Insurance Policy, the value of the building was shown at Rs.75,00,000/- whereas on the date of loss the value of the building was Rs.1,55,15,696/-. Hence under insurance @ 52% had been applied as per the settled norms. The Surveyor after applying 52% under insurance, assessed the loss at Rs.6,52,285/-. The State Commission also erred in fixing the liability of the Branch Manager to pay Rs.50,000/- as cost. The State Commission had not given any reason in negating the Survey Report. Learned Counsel further submitted that the impugned order be set aside and Appeal allowed.

Learned Counsel for the Respondent/Complainant submitted that the entire plot including the area where incident of fire occurred, was insured with the Opposite Party. In the Policy document the address mentioned is shown as 21/31 & 22/31 Tatarpur Jatola road Village Jatola, Palwal, District Faridabad, Haryana-121102 and the portion of the building where fire occurred is situated in the said insured plot. All supporting bills/invoices of construction/repair of the building were provided to the Surveyor. Learned Counsel also submitted that the Opposite Party had wrongly deducted under insurance of 52% without any basis. The impugned order of the State Commission is justified and the Appeal deserves to be dismisses.

It is admitted that the Complainant obtained Fire and Special Peril Policy No.312700/11/00000204 from the Opposite Party. The incident of fire is also admitted by the Parties. It is also not disputed that on the date of incident the Policy was valid. The dispute raised by the Opposite Party is that the building where loss was caused was not in existence on the date of purchase of Policy and it was constructed after inception of the Policy. The Opposite Party was, therefore, not liable to indemnify the loss. Regarding existence of the building on the date of purchase of the Policy, the observation of the State Commission is relevant which reads as follows: -

“We do not subscribe to the contention raised on behalf of the opposite parties for the reason that no cogent evidence has been produced by the opposite parties which could establish that the building stated to have been damaged in the fire in question was constructed after the inception of the Insurance Policy. Assumption and presumption cannot take place the shape of proof unless and until corroborated by any cogent and convincing evidence.”

From the above, it is clear that the Appellant/Opposite Party did not produce any evidence in support of the contention that the building in question was constructed after inception of the Insurance Policy. We also fail to find any evidence on record to support this contention of the Opposite Party. The argument of the Opposite Party that on the date of purchase of the Insurance Policy the building in question was not in existence is rejected.

Coming to assessment of loss, the Complainant had given item-wise details of calculation and assessed the loss at Rs.20,84,987.20. Surveyor observed that “the insured have furnished all the material/service/labour charges bill, which have been examined thoroughly and the work done physically verified.” The Surveyor, however, excluded the loss caused to the building on the ground that the said building was constructed after inception of the Policy. As observed in the preceding paragraph, the Opposite Party had not produced any evidence on record either before the State Commission or before this Commission that the building was constructed after inception of the Policy. The State Commission, thus, rightly included the claim also caused to the building. The State Commission, however, disallowed the claim of Rs.77,088/- (Rs.47,088/- on account of painting etc. and Rs.30,000/- for cleaning and removal of salvage). After deducting Rs.77,088/-, the State Commission directed the Opposite Party to pay an amount of Rs.20,07,899/- with 6% interest per annum to the Complainant from the date of repudiation of claim till realization. The State Commission also directed the Insurance Company to recover the amount from the salary of the erring Branch Manager, which we do not agree. The Branch Manager was working on behalf of the Insurance Company and not in his personal capacity. Moreover, the Branch Manager was not made a Party to the Complaint nor any relief was sought again him. The Branch Manager, therefore, cannot be made personally liable.

In view of the above, impugned order passed by the State Commission is modified. The Opposite Party is directed to pay Rs.20,07,899/- with 6% interest per annum to the Complainant. The order be complied within two months from the date of this order, failing which the Opposite Party shall pay 12% interest per annum. The Appeal stands disposed of. All the pending applications also stand disposed of. There will be no order as to costs.