State Consumer Disputes Redressal Commission
United India Insurance Co.Ltd. vs Surendra Singh Dhami on 21 January, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
FIRST APPEAL NO. 77 / 2018
United India Insurance Company Limited
Branch Office Pithoragarh through
Regional Office, Ratan Palace
Kaulagarh Road, Dehradun through its Manager
...... Appellant / Opposite Party
Versus
Sh. Surendra Singh Dhami S/o Sh. Mohan Singh Dhami
R/o Dharchula Road, Pithoragarh
Tehsil and District Pithoragarh
...... Respondent / Complainant
Sh. Suresh Gautam, Learned Counsel for the Appellant
Sh. Pradeep Bartwal, Learned Counsel for Respondent
Coram: Hon'ble Mr. Justice D.S. Tripathi, President
Mr. Udai Singh Tolia, Member-II
Dated: 21/01/2022
ORDER
(Per: Justice D.S. Tripathi, President):
This appeal has been directed against the impugned judgment and order dated 19.04.2018 passed by the District Consumer Disputes Redressal Commission, Pithoragarh (in short "The District Commission") in consumer complaint No. 14 of 2008; Sh. Surendra Singh Dhami Vs. United India Insurance Company Limited, by which the consumer complaint has been allowed and the appellant has been directed to pay compensation of Rs. 50,000/- to the respondent - complainant on account of loss sustained by him due to fire in the insured shop together with interest @6% p.a. from the date of institution of the consumer complaint, besides Rs. 5,000/- towards costs of litigation and Rs. 5,000/- towards economic loss and mental 2 agony, within a period of two months' from the date of impugned judgment and order.
2. Facts giving rise to this appeal, in brief, are that as per the consumer complaint, the complainant's general store shop is situated at Gandhi Chowk, Pithoragarh. The shop was insured with the appellant - insurance company vide policy No. 080903/48/06/34/00000900 for the period from 25.03.2007 to 24.03.2008, for a sum of Rs. 50,000/-. Fire broke out in the insured shop on 22.03.2008 during the night hours between 11:30 p.m. to 12:00 a.m., in which goods kept in the shop were damaged and loss of Rs. 1,30,000/- was sustained by the complainant. The complainant informed the insurance company about the fire incident and asked for payment of insured amount, by letter dated 24.03.2008. When no action was taken by the insurance company, notice dated 24.07.2008 was sent by the complainant to the insurance company, but no heed was paid by the insurance company. Hence, the consumer complaint was filed.
3. The insurance company filed its written statement before the District Commission, in which it was pleaded that upon receipt of intimation of fire in the insured shop, surveyor was appointed by the insurance company. On the basis of the report of the surveyor, amount of Rs. 1,053/- was sent to the complainant through voucher dated 20.08.2008. The said voucher was not returned back by the complainant to the insurance company. The insurance company has not committed any deficiency in service. The consumer complaint filed by the complainant is baseless. Hence, the same is liable to be dismissed.
4. After giving opportunity of hearing to both the parties, the learned District Commission has allowed the consumer complaint and 3 directed the appellant for payment of aforesaid amount of compensation. Aggrieved, the insurance company has filed the instant appeal.
5. We have heard the arguments advanced by the learned counsel for both the parties and perused the record.
6. Learned counsel for the appellant submitted that learned District Commission has erred in discarding the report of the surveyor, in which he has evaluated the loss caused in the incident to the tune of Rs. 40,000/-. His further submission is that learned District Commission has also erred in not allowing the deduction admissible under average clause / Pro-rata formula as well as deduction under excess clause of the insurance policy.
7. Per contra, learned counsel for respondent has submitted that report of surveyor is not reliable and Pro-rata formula is not applicable to this case. He has also submitted that the excess clause of insurance policy will also not apply in this case. He has further submitted that the impugned judgment and order passed by the learned District Commission is well discussed and based on proper appreciation of evidence. Hence, the appeal has no merit and the same is liable to be dismissed.
8. Learned counsel for the appellant submitted that total loss of goods caused in the fire incident is said to be Rs. 1,30,000/-, as stated by the respondent - complainant, while the shop was insured for sum of Rs. 50,000/-. It is also admitted that the surveyor has made inspection of the shop in question and assessed the loss caused to the complainant in the fire incident to the tune of Rs. 40,000/-. Learned counsel for the appellant further submitted that the surveyor's report, according to which loss has been assessed to the tune of Rs. 40,000/-, is elaborate and speaking one. Purchase bills and vouchers of the 4 items stored in the shop were not produced by the complainant, when the surveyor had made the spot inspection. His further submission is that the complainant also failed to produce the ledger accounts of the items stored in the shop. He also submitted that the report of surveyor is a valuable piece of evidence, which has wrongly been discarded by the learned District Commission. On the other hand, learned counsel for respondent submitted that the surveyor's report is not reliable and the same has rightly been discarded by learned District Commission.
9. The learned District Commission has recorded finding on this score that the surveyor's report is not supported by affidavit of the surveyor, while the complainant has proved the averments made in his consumer complaint through affidavit and proved the loss suffered by him. In Revision Petition No. 3657 of 2011; National Insurance Company Limited Vs. Mohd. Ishaq and others, decided by Hon'ble National Commission vide order dated 28.02.2012, it has been laid down that if the survey report is not supported by affidavit of the surveyor, it can not be taken into consideration. Relevant portion of paragraph No. 6 of the said decision is reproduced below:
"Therefore, in our view, the District Forum as well as the State Commission have very rightly rejected the report of the surveyor on the ground that it is not supported by the affidavit of its author."
10. Considering the aforesaid facts and circumstances of this matter as well as the law laid down by Hon'ble National Commission in the aforesaid case of National Insurance Company Limited (supra), the learned District Commission has rightly discarded the report of the surveyor. Hence, the finding recorded by the learned District Commission that the complainant is entitled to compensation of 5 Rs. 50,000/- towards loss suffered by him in the fire incident, warrants no interference by this Commission.
11. Further submission of the learned counsel for the appellant is that a minimum amount of Rs. 10,000/- has to be deducted, as per condition of excess clause mentioned in the insurance policy. His further submission is that average clause / Pro-rata formula has to be applied in this case, while the learned District Commission has not allowed the deduction under Pro-rata formula. He has submitted that the learned District Commission has failed to consider the aforesaid aspects of the matter. Hence, the appeal should be allowed and impugned judgment and order passed by the learned District Commission should be set aside.
12. It is admitted fact that the shop in question was insured with the appellant - insurance company for a sum of Rs. 50,000/-. It is also admitted that the complainant has claimed a loss of Rs. 1,30,000/- for the damage caused to the goods stored in the shop in the fire incident.
13. Learned counsel for the appellant submitted that considering the facts and circumstances of this matter, the surveyor has deducted 25% amount using the formula of average clause / Pro-rata formula, which has not been allowed by the learned District Commission. He has relied upon the law laid down by Hon'ble Apex Court in Sikka Papers Limited Vs. National Insurance Company Ltd. and others reported in III (2009) CPJ 90 (SC). Relevant portion of paragraph No. 17 of the aforesaid case law reads as under:
"Apparently, therefore, there is an element of under-insurance. There is merit in the contention of learned Counsel for the insurer that the value of the item is always declared by the insured at the time of issuance of the 6 insurance policy while the element of under-insurance is calculated by the insurer at the time of assessment of loss. Although on behalf of the complainant, it was contended that under-insurance, if any, must be calculated at the time of issuance of policy and could not be deducted at the time of assessment of the loss but we find it difficult to accept the same. The policy provides that if the sum insured is less than the amount required to be insured, the insurer will pay only in such proportion as the sum insured bears to the amount insured. In accordance with the said provision in the policy if the surveyor applied the pro-rata formula and deducted 25.71% from the loss so assessed i.e. Rs. 3,71,509.50 from the sum payable as under-insurance, such deduction cannot be faulted."
14. Learned counsel for respondent has submitted that average clause will not apply in this matter, but he has not been able to cite any case law, against the aforesaid case law cited by the learned counsel for the appellant. In such circumstances, the learned District Commission ought to have allowed the aforesaid deduction of 25% by applying Pro-rata formula. Considering the aforesaid facts and circumstances of this matter as well as aforesaid law laid down by Hon'ble Apex Court, Pro-rata formula has to be applied in the present case for deduction of 25% amount from the amount of loss suffered by the complainant in the fire incident.
15. The next argument advanced by the learned counsel for the appellant is that an amount of Rs. 10,000/- should have been allowed to be deducted by the learned District Commission from the amount of loss suffered by the complainant, as per the terms and conditions of the insurance policy.
716. We have perused the insurance policy placed on record, according to which, a minimum amount of Rs. 10,000/- and maximum amount of Rs. 25,000/- has to be deducted towards excess clause mentioned in the insurance policy. Relevant portion of the insurance policy is reproduced below:
"Excess: a) The first 5% of each and every claim subject to a minimum of Rs. 10,000/- and maximum of Rs. 25,000/- in respect of each and every loss arising out of "AOG Perils"."
17. Learned counsel for respondent submits that excess clause, as mentioned in the insurance policy, is not applicable in this matter, but the learned counsel for the appellant has relied upon the law laid down by Hon'ble National Commission in Iffco-Tokio General insurance Co. Ltd. Vs. Parvatiya Vikas Sansthan reported in II (2018) CPJ 468 (NC). Paragraph No. 9 of the aforesaid case law reads as under:
"Bare reading of the above makes it clear that insurance policy does not cover 5% of each and every claim subject to minimum of Rs. 10,000 in respect of the loss arising out of the Act of God, lighting, STFI, Subsidence, Landslide and Rockslide. In the instant case, the total loss estimated by the surveyor is Rs. 19,94,221 against which under the above noted clause, the surveyor had suggested 5% amount i.e. Rs. 97,098. The said adjustment obviously is as per the terms of the contract.
Therefore, the State Commission has erred in not giving the benefit of said adjustment under condition No. 1 of General Exclusions to the Insurance Company."8
18. Considering the aforesaid terms and conditions of insurance policy and aforesaid law laid down by Hon'ble National Commission in the case of Iffco-Tokio General insurance Co. Ltd. (supra), the aforesaid amount of Rs. 10,000/- has to be deducted from the amount of loss suffered by the complainant. Accordingly, the learned District Commission has erred in not allowing the aforesaid deduction of Rs. 10,000/- towards excess clause mentioned in the insurance policy.
19. For the foregoing reasons, we are of the considered opinion that the appeal deserves to be partly allowed. After using the Pro-rata formula to deduct 25% amount from the amount of loss suffered by the complainant, which comes to Rs. 12,500/- (25% of Rs. 50,000/-) as well as deduction of Rs. 10,000/- towards excess clause as per the terms and conditions of the insurance policy, the complainant is entitled to compensation of Rs. 27,500/- towards loss suffered by him in the fire incident. Remaining part of the impugned judgment and order passed by the learned District Commission is fit to be maintained.
20. In view of above, appeal is partly allowed. Impugned judgment and order dated 19.04.2018 passed by the learned District Commission is modified to the extent that the amount of Rs. 50,000/- awarded by the learned District Commission towards compensation for loss suffered by the respondent - complainant due to fire in the insured shop, is reduced to Rs. 27,500/-. Remaining part of the impugned judgment and order passed by the learned District Commission is hereby maintained. Costs of the appeal made easy.
(U.S. TOLIA) (JUSTICE D.S. TRIPATHI)
Member-II President
K