National Consumer Disputes Redressal
M/S. Dunera Hills vs National Insurance Company Limited on 9 December, 2022
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3784 OF 2013 (Against the Order dated 10/04/2013 in Appeal No. 270/2010 of the State Commission Punjab) 1. M/S. DUNERA HILLS THROUGH ITS PROPRIEOTR, SMT.JASWINDER KAUR, DALHOUSIE ROAD, DISTRICT : GURDASPUR PUNJAB ...........Petitioner(s) Versus 1. NATIONAL INSURANCE COMPANY LIMITED REGIONAL OFFICE SCO NO-332-334,SECTOR- 34-A, CHANDIGARH ...........Respondent(s)
BEFORE: HON'BLE MR. C. VISWANATH,PRESIDING MEMBER HON'BLE MR. SUBHASH CHANDRA,MEMBER For the Petitioner : Mr Salil Paul, Advocate with Mr Sahil Paul, Advocate For the Respondent : Ms Meenakshi Midha, Advocate with Ms Pritika Juneja, Advocate Dated : 09 Dec 2022 ORDER PER MR SUBHASH CHANDRA
1. This revision petition under section 21 (b) of the Consumer Protection Act, 1986 (in short, the 'Act') assails order dated 10.04.2013 of the State Consumer Dispute Redressal Commission, Punjab, Chandigarh (in short, 'State Commission') against the order in First Appeal No. 270 of 2010 filed against order of the District Consumer Disputes Redressal Forum, Gurdaspur (in short, 'District Forum') dated 04.12.2009 in complaint no. 610 of 2008.
2. In brief, the facts of the case are that the petitioner is the proprietor of a petrol pump at Dalhousie Road, Dunera, district Gurdaspur who obtained an insurance policy from the respondent for the period 07.09.2007 to 06.09.2008 covering the building of the petrol pump for Rs.10,00,000/- and other stocks insured for Rs.20,00,000/- on 07.09.2007 by paying a premium of Rs.10,264/-. The policy was sanctioned after inspection of the premises by the representative of the respondent. At the time of the policy being approved, only the retaining walls on three sides, two bathrooms/toilets and pillars were in existence. On 11.10.2007, due to very heavy rains, the retaining walls and the bathrooms/toilets collapsed. On intimation to the respondent, a loss assessor, Surjit Singh, and surveyor, M/s Hi Tech, were appointed to assess the loss. The surveyor assessed the loss on 23.04.2008 as Rs.1,73,613/-. According to the petitioner, on the advice of the loss assessor, the loss was evaluated by an approved valuer, one V.P. Saini of Pathankot for Rs.2,52,000/- vide his report dated 12.10.2007. However, despite the completion of all formalities the claim was kept pending for a long time and finally repudiated it on 09.06.2008 on the ground that the policy did not cover retaining walls. The repudiation letter mentioned that though the assessed loss was Rs.1,73,613/- including the retaining wall, the amount payable is only for the toilet as the retaining wall was not covered in the policy and after deducting the policy excess clause for loss to toilet building, only Rs.7,500/- was payable. The petitioner approached the District Forum though a consumer complaint no.610 of 2008. The respondent argued that the District Forum lacked jurisdiction and that the remedy for the petitioner lay in an appropriate civil court as evidence and cross-examination was involved; the averments were denied for want of knowledge and subject to production of the policy in original and no evidence was produced.
3. The District Forum came to the finding that the repudiation of the claim was illegal, null and void and cannot sustain since there was sufficient evidence on record to prove that the risk on the retaining wall was also covered in the insurance policy for building and stocks. The District Forum held the respondent to be deficient in service and ordered as under:
For the reasons recorded above, this complaint is allowed and the Insurance Co. is hereby directed to pay Rs.2,52,000/- as compensation along with interest @ 9% p.a. from the date of filing of the complaint till realization to the complainant. It is further directed to pay Rs 5,000/- as compensation for the mental agony, harassment and inconvenience it suffered and also as litigation expenses. Compliance of the order be made within a month from the date of receipt of the copy of the order.
4. The respondent filed First Appeal No. 270 of 2010 before the State Commission on the ground that only the building above the plinth level was insured by it for a sum of Rs.10,00,000/- and the retaining walls were excluded. Therefore, it was liable to pay for the damage caused to the building above the plinth level. It was argued that the order of the District Forum was erroneous in ordering the payment of the full amount as per the Surveyor's report. The petitioner argued that the term 'building' covers retaining walls and that the insurance for just two toilet rooms for Rs.10,00,000/- was an absurdity and cannot be considered. The State Commission considered the issue whether the retaining walls were covered under the term 'building' and came to the finding on the basis of this Commission's order in Pandi Devi Oil Industries Vs. Branch Manager, National Insurance Co. Ltd. & Anr. III (2002) CPJ 71 (NC) that while boundary wall was covered under the term 'building' as mentioned in an insurance policy, a 'boundary wall' and a 'retaining wall' were different and as the retaining wall in the present case was qualified by the words "above plinth level" and as retaining walls are always below plinth level, the claim of damage for the same could not be considered. Further, it also held that a petrol pump could not be run only with two bathrooms and pillars as there are stocks that are to be secured and it could not be believed that the requirements of the oil companies permitted this. It thus held that the petrol pump comprised of a building also which justified the insurance amount of Rs.10,00,000/-. As the valuation of the retaining walls was estimated by the petitioner himself as Rs.8,64,000/- and the total loss at Rs.9,21,000/-, the State Commission concluded that the difference between these two figures i.e. Rs.57,000/- was the loss value by way of insurance. The State Commission has held that:
13. The appeal is allowed accordingly and that part of the order of the District Forum vide which the OP was directed to pay Rs.2,52,000/- along with interest at the rate of 18% per annum from 11.10.2007 till the final payment is modified to the extent that it is directed to pay Rs.57,000/- along with interest at the rate of 9% per annum from the date of the submission of the claim by the complainant till the date of that payment.
14. The sum of Rs.25,000/- deposited at the time of filing of the appeal along with interest which has accrued thereon, if any, shall be remitted by the registry to the respondent/ complainant by way of a crossed cheque/ demand draft after the expiry of 45 days under intimation to the District Forum and the appellant.
5. The petitioner is before us challenging the order of the State Commission on the grounds that retaining walls are part of the building in hilly areas such as Dalhousie and the interpretation of the State Commission that retaining walls are not part of the building is completely erroneous. It is an essential requirement in hills based on the terrain to provide protection from rain and falling boulders. It is also submitted that the petrol pump was commenced on 31.01.2006 as a B Class category Petrol Pump of the Indian Oil Corporation for which there is no requirement of a permanent building for the first 4 years and that a cabin and periphery walls on three sides are adequate. On behalf of the respondent it is argued that as per United India Insurance Co. Vs. Harchand Rai Chandan Lal, CPC 2004 (2) 686 (SC) the Hon'ble Supreme Court laid down that an insurance policy represents a contract between the parties and that the insured cannot claim anything more than what is covered by the insurance policy. It is accordingly denied that there was any deficiency in service.
6. We have heard the submissions of both the learned counsels for the parties and perused the records carefully.
7. From the records it is clear that there was an insurance policy bought by the petitioner from the respondent covering risk to her petrol pump, including the building and stocks separately. It is not disputed that the policy was approved after due inspection of the premises. It is also not disputed that there was damage due to heavy rains on 11.10.2007. The moot issue is whether the retaining walls which were also damaged are part of the building insured for which the insurance claim is to be allowed. The petitioner has contended that the retaining wall is an essential element of buildings in hilly terrains such as Dunera on Dalhousie Road which is 960 m above sea level and the damage to it should therefore be allowed. The respondent has contended otherwise, on the ground that the policy specifically mentioned the insurance to be applicable to the building "above plinth level" and has relied on the rulings that insurance represents a contract the terms of which cannot be altered. The petitioner has argued that the insurance of just two toilets and pillars for a sum of Rs 10,00,000/- under the category of 'building' after due inspection by the respondent was excessive.
8. During the course of arguments, the respondent has relied upon the order of this Commission in K.P. Bushara Vs. The Regional Manager, Bajaj Allianz General Insurance Co. Ltd. in RP No 3255 of 2011 dated 12.09.2013 which held that a retaining wall was not part of the building insured and was therefore not covered for under the policy.
9. The limited point, therefore, is whether the 'retaining walls' fall within the ambit of 'building'. It cannot be disputed that the insured building is in Dunera which is a hilly terrain near Dalhousie. It cannot also be disputed that civil construction in such undulating environment requires special construction to provide for protection of buildings from run-off of rain water and falling stones/rocks. It is moot to consider whether construction in hilly locations would be stable and safe in the absence of such structures to support and protect it. It is also pertinent to consider whether an insurance company is justified in sanctioning a proposal for insurance of a building that requires such protection for a value of Rs.10,00,000/- after due inspection by its representative, only to limit it to 'above the plinth level' knowing fully well that the 'building' comprises only two toilets and two pillars. Such an approach would tantamount to being an unfair trade practice since it leads the insured to conclude that his structure stands covered against natural perils for which he/she pays the premium. The respondent while being explicit in mentioning "above plinth level" in respect of the building should have been more transparent in either mentioning that retaining walls are excluded considering that it was insuring the building for Rs.10,00,000/-which far exceeds the cost of the two toilets. The inclusion of a retaining wall as part of a building in such a location is as justifiable as a boundary wall as held in Pandi Devi Oil Industries (supra) by this Commission.
10. The State Commission has based its findings regarding the requirements for a petrol pump on the surmise that the oil companies mandate the construction of a permanent structure for the petrol pump. No document has been produced by the respondent/insurance company. On the contrary, the inspection of the premises before the insurance proposal was approved by the representative of the respondent indicates that there were only two toilets and pillars by way of a building. The finding of the State Commission is not supported by any documentary evidence and is liable to be set aside. The action of the respondent insurance company in insuring two toilets and pillars for such a large sum does not appear justifiable, especially since it has itself assessed the cost of reconstruction of Rs.17,500/-. It is inconceivable that a building assessed at such a high value at the time of insurance could be repaired for such an amount barely a few months afterwards. We are, therefore, unable to be persuaded by the grounds urged by the respondent.
11. In view of the foregoing, it is seen that the District Forum had appreciated the facts of the case better. We find merit in the arguments of the petitioner and allow the review petition. The order of the State Commission is set aside. The loss assessed by the respondent on the basis of the surveyor appointed by it of Rs.1,73,613/- inclusive of the damage to the retaining walls is allowed as a realistic assessment of loss over that assessed by the valuer appointed by the petitioner on the advice of the loss assessor. The respondent is directed to settle the claim for an amount of Rs.1,73,613/- along with interest at 6% from the date of filing of the claim, i.e. 09.06.2008 till realization.
...................... C. VISWANATH PRESIDING MEMBER ...................... SUBHASH CHANDRA MEMBER