State Consumer Disputes Redressal Commission
United India Insurance Company Limited vs R.P. Mahindra on 28 January, 2022
ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No.560 of 2019
Date of Institution : 27.08.2019
Date of Reserve : 16.12.2021
Date of Decision : 28.01.2022
1. United India Insurance Company Limited, Divisional Office 3,
Gulmohar Hotel Building, Ferozepur Road, Ludhiana, through
its Divisional Manager/Officer.
2. United India Insurance Company Ltd., Regd. and Head Office
24, Whites Road, Chennai-600014 through its Managing
Director.
3. United India Insurance Company Ltd., Regional Office, 136,
Feroze Gandhi Market, Ludhiana through its Regional
Manager.
Appellants No.1 to 3 are now represented through duly
authorized signatory Sh.Pankaj Mehra, Assistant Manager
(Legal) at Regional Office, 136, Feroze Gandhi Market,
Ludhiana.
....Appellants/Opposite Parties
Versus
1. R.P.Mahindra
2. K.P.Mahindra
Both residents of E-10, Housing Board Colony, Jaku Shimla
(HP) Presently residing at 16, Green Park, Civil Lines,
Ludhiana.
......Respondents/complainants
First Appeal under Section 15 of the
Consumer Protection Act, 1986 (as
amended upto date) against the order
dated 27.06.2019 of the District
Consumer Disputes Redressal Forum
(now 'Commission'), Ludhiana.
Quorum:-
Mr.Rajinder Kumar Goyal, Presiding Member
Mrs.Kiran Sibal, Member First Appeal No 560 of 2019 2 Argued by:-
For the appellants : Sh.Nitin Gupta, Advocate For the respondents : Sh.Liaqat Ali, Advocate RAJINDER KUMAR GOYAL, PRESIDING MEMBER This appeal has been preferred against the order dated 27.06.2019 passed by District Consumer Disputes Redressal Commission, Ludhiana (in short 'District Commission'), whereby the complaint of the complainant was allowed and opposite parties were directed to pay Rs.92,475/- along with interest at the rate of 8% per annum w.e.f. date of lodging of claim i.e. 26.04.2014 till payment. They were further directed to pay Rs.20,000/- as mental agony and harassment and Rs.10,000/- as litigation expenses.
It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
Facts of the Complaint
2. Brief facts, as averred in the complaint are that the complainants obtained an Insurance Policy No.200900/48/13/3200000385 dated 14.06.2013 insuring their flat E-10, Ground Floor, H.P.Housing Board Colony, Jakhu, Shimla decorated with wooden panels, floor, painting, furniture, electronic fittings etc. The policy was valid for the period 12.05.2013 to 11.05.2014. Sh.Rajesh Mehta, who was residing over the first floor informed the complainant on 26.04.2014 that on 24.04.2014 a theft took place in the flat of the complainants as well as in his own flat. Mr.Rajesh got registered an FIR No.53 dated 24.04.2014 under Section 380 IPC with the Police Station, Shimla (East). On First Appeal No 560 of 2019 3 26.04.2014, the complainants also informed the opposite parties about the loss suffered by them and lodged their claim. Thereafter, the opposite appointed Mr.Ashwani Kumar, Surveyor and Loss Assessor, who visited the spot and submitted his report dated 11.08.2014 and final report dated 28.06.2015. All the relevant documents were submitted to the opposite parties. Further averred that as per the instructions, the complainants got repaired the flat through Mr.Rajiv Verma Associates, and submitted all the bills, reports and receipts for Rs.4,75,000/- to the opposite parties for disbursement of the claim amount. The complainants wrote letters and reminders through email to the opposite parties but to no effect. Finally, on 26.08.2015, the opposite parties repudiated the claim of the complainants. Thereafter, the complainants served a registered notice dated 14.09.2015 upon the opposite parties with the request to settle the claim along with interest. They instead of settling the claim sent a false and evasive reply. Hence, the complainants filed the complaint before the District Commission and sought following reliefs against them:
i) to pay Rs.4,75,000/- along with interest at the rate of 24% per annum from the date of payment till realization;
ii) to pay Rs.2,00,000/- as compensation on account of mental pain and agony; and
iii) to pay Rs.22,000/- as costs of litigation.
3. Upon notice, opposite parties appeared and filed their joint reply taking preliminary objections that the complainants obtained First Appeal No 560 of 2019 4 insurance policy bearing policy No.200900/48/13/32/00000385 valid from 12.05.2013 to 11.05.2014. The policy is a contract and the parties are bound by the terms and conditions of the policy. The complainants got insurance for their building for sum insured of Rs.12 lakhs under Section 1A against risk of fire and allied perils and under Section IB & II the complainants have obtained the risk coverage of other contents against risk of fire and allied perils, burglary, house breaking in larceny for a sum insured of Rs.3,30,000/-. On receiving the intimation Shri Ashwani Kumar, was appointed for survey and assessment of loss, who inspected the premises, took photographs and prepared his report dated 28.06.2015 and submitted to the opposite parties. After receiving the report and scrutinizing the documents and enquiry from the surveyor, the opposites parties in terms of the insurance policy repudiated the claim of the complainant vide letter dated 26.08.2015 on the ground that the loss has not occurred due to insured's perils covered under the policy as taps are part of building and building is covered u/S 1A against fire and allied perils. The claim of the complainants was rightly repudiated. The complaint of the complainant is not maintainable as they have already approached Insurance Ombudsman by filing a complaint and the matter has already been decided. On merits, it was admitted that the complainants obtained the policy and paid the premium. It was submitted that the claim regarding the alleged damage was intimated. As per report of the surveyor, the flat of the complainants was unoccupied for 236 days and the person who is First Appeal No 560 of 2019 5 living on the first floor was also out of station from 02.01.2014 to 23.04.2014. It was submitted that opposite party had never called upon the complainants to get repaired the flat rather the flat was got repaired by the complainants of their own. The other submissions as detailed in the preliminary objections have been reiterated. Rest all the averments as averred by the complainants in their complaint have been denied and prayed for dismissal of the complaint with costs.
4. The parties produced the evidence in support of their respective averments before the District Commission. The District Commission after going through the complaint, written replies and the documents placed as evidence, allowed the complaint, vide impugned order. Hence, this appeal by the appellants/opposite parties No.2 & 3 for setting aside the impugned order.
5. We have heard the learned counsel for the parties and have also carefully gone through the record as well as written arguments filed by the parties.
6. Learned counsel for the appellants vehemently argued that the order passed by the District Commission is contrary to the terms and conditions of the Insurance Policy. The immediate cause of loss is burglary of taps at first floor and ground floor of building, due to which the water was flowing continuously for many days as the building was unoccupied, which caused seepage, dampness and fungus from roof of first floor as well as on the ground floor. The Insurance Policy specifically excludes consequential loss of any kind or description. However, the District Commission First Appeal No 560 of 2019 6 overlooked the policy conditions and wrongly and illegally allowed the complaint. The District Commission on the basis of conjectures and surmises allowed the complaint and overlooked the pleadings and evidence on record. There is no deficiency in service on the part of the appellants/opposite parties. Finally, it is prayed to allow the appeal by setting aside the impugned order passed by the District Commission.
7. On the other hand, learned counsel for the respondents/complainants argued that as per the survey report dated 11.08.2014 and 28.06.2015, the main door latch uprooted of ground floor, washbasin uprooted and mixer tap stolen etc. and due to stolen taps, water was flowing. The report clearly proves that the theft has occurred. The repudiation of the claim is done illegally. The District Commission after thoroughly gone through the evidence and hearing learned counsel of both the sides passed a reasoned and well justified award. There is no need of interference in it. The appellants have failed to point out any arguable point. Finally, it is prayed to dismiss the appeal and upheld the order passed by the District Commission.
8. We have given our thoughtful consideration to the contentions raised by learned counsel for the parties.
9. Brief facts as per the documents placed in evidence that the respondent/complainant obtained a Householders Insurance Policy bearing No.200900/48/13/32/00000385 for their flat E-10 (G.F.), H.P. Housing Board Colony, Jakhu, Shimla for the period 12.05.2013 to 11.05.2014 and paid a premium of Rs.3,116/- vide First Appeal No 560 of 2019 7 Ex.C-1. The sum insured under Section 1A-Fire and Allied Perils (Building of Class A Construction) was Rs.12,00,000/-, 1.B.-All Types of House Hold Goods was Rs.3,30,000/- and U/S II- Rs.3,30,000/- for Burglary, housebreaking and Larceny or Theft. On 24.04.2014, a theft took place in the flat, in question, and the flat at 1st floor. FIR No.53 dated 24.04.2014 and G.D. Entry No.22(A) dated 26.04.2014 was lodged at P.S. Shimla East, vide Ex.C-3. It was submitted that unknown person has stolen the taps and sinks of 1st and Ground Floor which caused seepage in both the floors, resulting in damages to the household goods due to seepage and dampness. A claim was lodged with the appellant/opposite party on 26.04.2014, Ex.C-15 and accordingly the appellant/opposite party deputed Ashwani Kumar, Surveyor and Loss Assessor. The surveyor submitted his preliminary survey report, Ex.C-4 dated 11.08.2014 and final survey report dated 28.06.2015 wherein the loss amounting to Rs.92,475/- was assessed on account of damage to curtains, wall paintings, electrical shades, sofa, cubboards etc. The surveyor recommended to settle the claim for Rs.92,475/-, subject to accomplishment of terms and conditions of the policy. However, the appellant/opposite party repudiated the claim vide its letter dated 26.08.2015, Ex.C-2 with the following observations:
"As per observations of surveyor, your flats was unoccupied for 236 days and person who is living on 1st Floor was also out of station from 2/1/2014 to 23/4/2014. Loss has occurred due to theft of water taps. Due to seepage, dampness & fungus because of water seepage from room of 1st Floor as well as water from taps stolen/broken from your flat. As per First Appeal No 560 of 2019 8 survey report, you have started repair on 23/4/2015 and completed repair work on 21/5/2015.
Surveyor has confirmed in his mail dated 18/8/2015 that Taps are part of building which were stolen & damaged. The immediate cause of loss of building is theft of taps of ground floor & first floor as per police report lodged at police station. Further surveyor has confirmed in his mail dated 18/8/2015 that immediate cause of loss is due to burglary of taps and immediate cause of damages of building is theft of taps. Taps are part of building and building is covered under section 1A against FIRE & ALLIED PERILS. So loss has not occurred due to insured's perils covered under the policy. In the light of observations of surveyor, we have repudiated your claim.
10. Now the issue is to decide whether the above repudiation of claim is in order or not?
11. The above repudiation of claim is coverage against Section 1A of the policy. The surveyor in his final report recommended to settle the claim for Rs.92,475/-, subject to terms and conditions of the policy. The plea of the Insurance Company that it is a consequential loss and as per clause (k) under the head Special Exceptions in Point No.11 (Observation of the Terms and Conditions) it is not payable. Clause (k) is reproduced as under:
"Loss, destruction or damage caused by or arising from the leakage spilling or exploding of liquids, oils or materials, nature or article of a dangerous or damaging nature."
The above exception clause is in three fold:
Loss, distinction or damage caused by or arising from the; First Appeal No 560 of 2019 9
i) Leakage spilling or exploding of liquids, oils.
ii) Or material nature;
iii) Or article of a dangerous or damaging nature.
As the water falls under (i) which refers to leakage, spilling or exploding of liquids of any nature. The word dangerous or damaging nature refers to an article only.
12. The District Commission wrongly concluded that water flowing through the burgled taps does not fall under any of the exclusions listed in (k).
13. The Insurance is a contract between the parties and is governed by its policy terms and conditions. As per law laid down by the Hon'ble Supreme Court in the case titled as "Export Credit Guarantee Corporation of India Vs. M/s Garg Sons International" reported in 2013(1) CPC 192, held that courts are excepted to given paramount importance to the terms of insurance contract into between the parties - terms of insurance policy must be strictly construed in order to determine the extent of liability of the insurer" and further in case titled "Vikram Greentech (I) Ltd. and another Vs. New India Assurance Co. Ltd. 2009(4) CLT 313" and further in case titled "Deokar Exports Pvt. Ltd. Vs. New India Assurance Co. Ltd. 2009(2) CLT 15" held that in a contract of insurance, rights and obligations are strictly governed by the policies of insurance-No exception of relaxation can be made on the ground of equity. The Hon'ble National Commission in case titled "LIC of India and others Vs. Mahendra Singh" reported as 2011(4) CLT 39, also held that "The terms of policy are in the First Appeal No 560 of 2019 10 nature of a contract and their interpretation has to be made in accordance with the strict construction of the contract - Thus, the words in an insurance contract must be given paramount importance and interpreted as expressed without any addition, deletion or substitute."
14. Sequel to the above discussions, the appeal is allowed and the order passed by the District Commission is set aside as well as the complaint filed by the complainant before the District Commission is also dismissed.
15. The appellants had deposited a sum of Rs.25,000/- at the time of filing of the appeal. They deposited another sum of Rs.75,000/- in compliance of the order dated 27.09.2019. Both these sums, along with interest which has accrued thereon, if any shall be remitted by the Registry to the appellants, after the expiry of 45 days of the sending of certified copy of the order to them. The Registry is further directed to remit the amount of Rs.1,700/- deposited as costs, to the respondents/complainants, in equal shares, if not already remitted, in pursuance to the interim order dated 29.08.2019.
16. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(RAJINDER KUMAR GOYAL) PRESIDING MEMBER (KIRAN SIBAL) MEMBER January 28th,2022 parmod