State Consumer Disputes Redressal Commission
Prem Dutt Bhatt vs National Insurance Company Limited on 25 March, 2009
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRA DUN
FIRST APPEAL NO. 227 / 2007
Prem Dutt Bhatt S/o Sh. Uma Dutt Bhatt
R/o Dharasu Road, Chamba
District Tehri Garhwal
......Appellant / Complainant
Versus
1. Branch Manager, National Insurance Company Limited
Main Chowk, Chamba
District Tehri Garhwal
2. Branch Manager, Ganga Yamuna Gramin Bank
Dharkot (Maniyaar), P.O. Dharkot
District Tehri Garhwal
.....Respondents / Opposite Parties
Sh. V.S. Kathait, Learned Counsel for the Appellant
Sh. Avi Nanda, Learned Counsel for Respondent No. 1
None for Respondent No. 2
Coram: Hon'ble Justice Irshad Hussain, President
Smt. Kusum Lata Sharma, Member
Dated: 25.03.2009
ORDER
(Per: Justice Irshad Hussain, President):
This is complainant's appeal against the order dated 12.06.2007 passed by the District Forum, Tehri Garhwal, dismissing the consumer complaint No. 40 / 2006, filed for seeking indemnification of the loss occasioned to him due to damage of his insured house from incessant rain from 23.09.2005 to 26.09.2005 and as a result of which, back wall of the house, got damaged and cracks developed in the entire house, making the house incapable of residential use. Claim preferred had been repudiated by the insurance company, on the ground that the Standard Fire and Special Perils Policy was procured by the complainant by misrepresenting the facts and also by concealing the poor construction work of the building and inferior 2 material used in its construction, as a result of which, cracks were developed in it in due course of time. Defence taken in the case was, thus, that the claim of the complainant did not fall within the purview of the policy of insurance procured by him for the period from 01.06.2005 to 31.05.2015 for sum of Rs. 1,00,000/-.
2. The District Forum, on appreciation of the facts of the case, observed that the policy in question, has coverage against damage to the residential building from earthquake, fire and shock and since the complainant has not made any such averment leading to the damage of the house, the insurance company was not liable to pay any compensation to the complainant. The District Forum, on this premise, dismissed the complaint by the impugned order.
3. None appeared on behalf of respondent No. 2. We have heard the learned counsel for the complainant - appellant and respondent No. 1 - insurer and have considered their submissions in the light of the facts, circumstances and legal aspects of the case. Learned counsel for the complainant submitted that the District Forum took an erroneous view that under the policy of insurance in question, the risk was covered only against the damage to the house by earthquake, fire and shock and in making such an observation, it overlooked the important fact that the insurance company in paragraph No. 2 of its written statement, categorically pleaded that the policy issued was fire claim policy, keeping in view the fact that the policy obtained by the complainant, was Standard Fire and Special Perils Policy and, as such, it covered the damage to the residential house of the complainant on the happening of any of the 12 events described in the policy, which included damage to the property from storm, cyclone, typhoon, hurricane, tornado, flood and inundation among other events and, as such, the District Forum was not at all justified in making the observation that the claim did not fall within the purview of the 3 policy. On the other hand, learned counsel for the insurance company, would submit that the allegation of the complainant tantamount to damage to the building by subsidence of part of the site and by reason of the exclusions of the various events, as defined in the policy, the claim preferred by the complainant, did not fall under any of the terms and conditions of the policy and that the claim was rightly repudiated by the insurance company and also rightly rejected by the District Forum.
4. Copy of the policy (Paper Nos. 33 to 34) as well as its warranties and clauses (Paper Nos. 39 to 40), would reveal that the risk covered pertain to the building situated at Dharasu Road, Chamba, District Tehri Garhwal of the complainant under the Standard Fire and Special Perils Policy and it was immaterial if, by brief description, earthquake, fire and shock were the perils mentioned in one of the columns of the policy, when the Standard Fire and Special Perils Policy pertain to coverage of risk from 12 events causing damage to the property and detailed as such in the warranties and clauses of the policy (Paper Nos. 39 to 40). It is of significance that earthquake, as one of the perils and shock as such, briefly described in the policy, did not find place in the 12 events, happening of any of which, result in the damage of the property and it would, thus, indicate that mere brief description of the perils in this way in the policy, would not exclude the various events described in the clauses of the policy, happening of any of which, would be the cause of damage to the property and, as such, we are convinced that the District Forum fell in error in coming to the conclusion that it being a case of damage of the house by incessant rain, the claim did not fall within the purview of the policy of insurance. We would, thus, subscribe to the argument of the learned counsel for the complainant in that regard.4
5. With reference to the allegation of the complainant, it is of significance that the insurance company has nowhere seriously refuted the allegation that there has been incessant rain for a period of four days from 23.09.2005 to 26.09.2005, resulting which, the damage to the back wall of the house of the complainant was caused and cracks also developed in the entire house of the complainant and by reason of such damage, the house was made incapable of use for residential purposes. The incessant rain for continuous period of four days, would naturally cause flood and inundation, the terms which have, as such been mentioned in the warranties and clauses of the policy of insurance and precisely the events, happening of which, would cause damage to the insured property and, as such, we would have no hesitation in accepting the argument of the learned counsel for the complainant that the claim resulting from the damage to the house in this way, fall within the purview of the policy. To controvert the arguments, learned counsel for the insurance company, would refer to the surveyor's report dated 04.01.2006 (Paper Nos. 58 to 60), to bring home his point of view that road side retaining wall (pushta), which was built for the road, had no cracks and, as such, cracks in the walls of the house adjoining to the portion of the retaining wall, have not been occurred due to damage of retaining wall, but the damage was probably caused due to poor construction work or damage of the foundation of the building. Learned counsel also submitted that from the factual position, it would appear that damage to the property of the complainant, was not by reason of subsidence of part of the site or retaining wall of the road, by the side of which, the house was built, but by reason of defective design or workmanship or use of defective material, which fall under the exclusions and, therefore, the claim of the complainant did not fall within the purview of the policy of insurance. The argument of the learned counsel, could not be taken to assail the stand taken by the complainant and the submissions made 5 by his counsel, mainly on account of the fact that the damage to the house, was caused due to flood and inundation on account of incessant rain for continuous four days and we would not subscribe to the view that the damage was caused due to defective design of workmanship or use of defective material. In this connection, it shall not be out of place to mention that the surveyor himself clearly mentioned in his report that the building insured was of Class - I construction.
Moreover, the surveyor has not given any reason whatsoever, as may have guided him to suggest that probably the damage to the insured building, was caused due to either poor construction work or damage of the foundation of the building. On that basis, we would also subscribe to the submission made on behalf of the complainant that the stand of the insurer that the policy of insurance was obtained by the complainant by misrepresentation of the facts and by concealment of the nature of the construction etc. of the building, was not sustainable and the obligation and liability under the contract of insurance, could not have been avoided by the insurer.
6. For the reasons aforesaid, we are of the view that the damage to the insured building, was covered by the perils described under the Standard Fire and Special Perils Policy obtained by the complainant and that the complainant was entitled to be reimbursed for the loss occasioned to him by reason of damage to his house.
7. In regard to the assessment of loss, we may advantageously refer to the surveyor's report and scrutinize it for determining the amount of compensation, to be awarded to the complainant. In his report, surveyor has mentioned that total sum of Rs. 41,100/- would be required to repair the roof of the building and also the cracks etc., which had developed in it. Surveyor observed that it was a case of under insurance, because the built-up area of the building was 6 approximately 1260 sq. ft. at a cost of Rs. 3,15,000/-, whereas the policy of insurance is of Rs. 1,00,000/- only. By this reasoning, after applying the factor of under insurance, the liability of the insurer was assessed at Rs. 12,494.40. It would not be safe to subscribe to the recommendation of the surveyor, mainly on account of the fact that no detail of the construction as well as the material used in it, had been given, so as to indicate that the total cost of the house was to the tune of more than Rs. 3,00,000/-. Therefore, we have no hesitation in coming to the conclusion that the liability of the insurer has to be determined on the basis of assessment of loss at Rs. 41,100/-, determined by the surveyor. As against this, we are not convinced that the complainant has suffered loss of Rs. 1,00,000/-, the amount for which, the risk was covered and in the totality of the circumstances of the case, the compensation can legitimately be confined only to said sum of Rs. 41,100/-.
8. For the reasons aforesaid, the appeal succeed and the complaint is to be allowed for award of compensation of Rs. 41,100/- to the complainant with reasonable interest @6% p.a. from the date of filing of the complaint till payment.
9. Appeal is allowed. Order impugned dated 12.06.2007 of the District Forum is set aside. Consumer complaint is partly allowed and the respondent No. 1 - insurer is directed to pay sum of Rs. 41,100 (Rupees Forty One Thousand One Hundred Only) to the complainant together with interest @6% p.a. from the date of filing of the complaint till payment. No order as to costs.
(SMT. KUSUM LATA SHARMA) (JUSTICE IRSHAD HUSSAIN) K