State Consumer Disputes Redressal Commission
Gfc Hospital vs National Insurance Co. Ltd. & 2 Ors. on 7 April, 2026
Date of pronouncement:- 07.04.2026
IN THE NATIONAL CONSUMER DISPUTES REDRESSAL
COMMISSION NEW DELHI
CONSUMER COMPLAINT NO. 1772 OF 2018
GFC Hospital,
Through its Authorized Signatory,
Mr. Subrata Karmakar,
Kushpata,
P.O. Ghatal,
Midnapur (West),
Dist. Medinipur,
West Bengal,
Pin-721212,
P.S. Ghatal. ..... Complainant
Versus
1. National Insurance Company Limited,
3. Middleton Street,
Kolkata 700071.
2. The Regional Manager,
National Insurance Company Limited,
8, Indian Exchange Place,
Kolkata-700001.
3. The Branch Manager,
National Insurance Company Limited,
C.K. Road Branch,
Satbankura West,
Chandrakona Road,
Paschim Medinipur,
Pin-721253, West Bengal. ....... Opp. Parties
BEFORE:
HON'BLE AVM J. RAJENDRA, AVSM VSM (RETD.), PRESIDING
MEMBER
HON'BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER
CC1772/2018 Page 1 of 27
Appearance at the time of arguments:-
For the Complainant : Mr. Lakshay Sawhney, Mr. Aamir Husain,
Mohd. Huzaifa & Mohd. Noumaan,
Advocates
For the Opposite Parties : Mr. Niraj Singh & Naman Goyal,
Advocates
JUSTICE ANOOP KUMAR MENDIRATTA, MEMBER
ORDER
1. Present complaint has been preferred by complainant seeking following reliefs:-
"a. direct the Opposite Parties to make payment of the claim of the Complainant amounting to Rs.46,69,687.00 along with @18% interest thereon from the date of claim till realization.
b. direct the Opposite Parties to make payment of Rs.1,00,000.00 towards the cost of litigation.
c. direct the Opposite Parties to make payment of rs.5,00,000.00 towards the harassment and mental agony and Rs.10,00,000.00 towards the loss of business.
d. Any other relief deemed appropriate by his Hon'ble Commission."
2. In brief, complainant took a Standard & Special Perils Policy from the Opposite Party in the name of „GFC Hospital‟ for a premium of Rs.51,226/- for the period 29.07.2016 to 28.07.2017, for an assured sum of Rs.9,81,95,583/-. The policy was renewed for the period 29.07.2017 to 28.07.2018 against premium of Rs.60,603/-. Due to a devastating flood on 27.07.2017 at Ghatal, Midnapur caused by breach in Shilabati CC1772/2018 Page 2 of 27 River embankment, the flood water entered into the ground floor of the Hospital causing damage to assets, materials and properties within the Hospital. A certificate was issued by Councilor, Ghatal Municipality dated 12.08.2017, certifying the flooding of the Hospital. Complainant also informed the Manager of the Opposite Party vide e-mail dated 29.07.2017, whereupon, a Surveyor was appointed for inspection by OP. A claim dated 23.08.2017 was further submitted by the complainant claiming loss of Rs.48,79,992/-, whereupon another Surveyor, namely, Sh.Subhasish Das and, thereafter, Surveyor Souren Chatterjee was appointed to assess the loss. The Surveyor visited the Hospital situated at Kushpata, P.O. Ghatal, Midnapur (West), Dist. Medinipur, West Bengal. Also, joint minutes of the meeting of the Surveyor with complainant were prepared on 25.10.2017. Further, in response to letter issued by the Surveyor asking for some documents on 13.09.2017, a communication was addressed by the complainant on 14.09.2017. Also, documents as detailed were forwarded vide letter dated 14.11.2017. Getting no response from the Opposite Party complainant initiated repairing of damaged "C" Arm machine on his own. However, since it was advised to replace the machine due to extensive damage, an intimation was forwarded to the surveyor vide letter dated 25.11.2017. Having failed to get a favourable response from the Opposite Party despite several communications, present complaint has been preferred CC1772/2018 Page 3 of 27 claiming loss of Rs.46,69,687/- with interest @ 18% p.a. along with costs and compensation for harassment and mental agony.
3. During the course of proceedings since the Opposite Party relied upon repudiation of claim vide a letter dated 25.07.2018 as per the stand taken in the written version, the amended complaint was filed by the complainant in terms of Order dated 24.08.2018, passed by this Commission.
4. In the written version filed on behalf of the Opposite Party, apart from challenging maintainability of the complaint on the grounds of pecuniary jurisdiction it was submitted that the complaint needs to be relegated to Civil Courts for proper and detailed examination, since the matter is of complex nature requiring examination of records and evidence. Complaint is further stated to be not maintainable since complainant did not fall within definition of „consumer‟ as the services were availed for commercial purpose.
5. On merits, Opposite Party took a stand that on receiving the information regarding flooding of GFC Hospital on 29.07.2017, Sh. Subhasish Das was appointed as preliminary Surveyor and Investigator who submitted a preliminary survey report dated 03.08.2017. Further, on 02.08.2017 Sh. Souren Chatterjee was appointed to survey and investigate the cause and quantum of loss. Surveyor visited the unit of Insured on 07.08.2017. The documents required by the Surveyor were CC1772/2018 Page 4 of 27 not supplied despite communication dated 13.09.2017, 25.09.2017 and 26.09.2017. A detailed survey report dated 01.04.2018 was given by the surveyor assessing the loss at Rs. 2,06,791/- with the observations that the claim of the Insured may be avoided by treating it as „no claim‟. The comments/recommendations of the Surveyor may be reproduced for reference:
"Insured failed to provide any single purchase bill for any of the affected items at the time of inception, except stock of medicines and confirmed that all the affected machineries purchased from SBI as a mortgaged property sold under liquidation.
Stocks of all sorts of medicines are not covered by the particular policy.
It is well mentioned in the said deed of sale between SBI and Dr. T.K. Karmakar that all the movable assets had been sold by SBI on "as is where is basis (machineries are defunct due to flood and unused for longer period" i.e. all the machineries/equipments in question were defunct at the time of purchase as on 3rd day of July 2010 and Insured did not produce any valuation report done by the Registered Valuer immediately after the purchase and supporting evidence of repairing/ replacement done by the manufacturer/ authorized service provider of the said machineries/equipments.
It was observed from the respective license that at the time of purchasing the policy there was no valid license to run the hospital i.e. the policy purchased at illegal state.CC1772/2018 Page 5 of 27
Insured failed to proof the ownership of the reportedly affected items."
6. Consequently, taking into consideration the report of the Surveyor and the other facts and circumstances, the claim was repudiated by the Opposite Party vide letter dated 25.07.2018 on following grounds:-
"On perusal of the documents contained in the file the following non- compliance are observed.
Whether Surveyor's report is obtained:
1. It was observed from the respective licence that at the time of purchasing the policy there was no valid license to run the Hospital, i.e. the policy purchased at illegal state.
2. Insured failed to proof the ownership of the reportedly affected items.
In view of the reasons stated above, we are unable to find merit in your claim for settlement; hence necessitates repudiation/NO CLAIM."
7. In the rejoinder filed on behalf of the complainant, the stand taken on behalf of the Opposite Party was denied and contentions raised in the complaint were reiterated. The claim was stated to be within jurisdiction of this Commission since the policy was obtained for assured sum of Rs.9,81,95,583/- (Nine Crores Eighty One Lakhs Five Thousand Five Hundred & Eighty Three only) and reliance was placed upon Gurmukh Singh v. Greater Mohali Area Development in Revision Petition No. CC1772/2018 Page 6 of 27 3496 of 2017 decided on 09.02.2018. It was submitted that for the purpose of jurisdiction value of the goods or services, as the case may be, has to be considered and not the value for removing the deficiency in service. Relying upon CCI Chambers Co-op. Hsg. Society Ltd. v. Development Credit Bank Ltd., Civil Appeal No. 7228 of 2001, it was submitted that merely because recording of evidence is required or some questions of facts and law arise which need to be investigated and determined, the doors of consumer forum cannot be shut down. The objection raised by the Opposite Party claiming that the complainant did not fall within the definition of „consumer‟ within Section 2(1)(d) of the Consumer Protection Act was stated to be without any merits, since the services were not obtained to generate profit. Reliance was further placed upon M/s Harsolia Motors v. M/s National Insurance Co. Ltd., (2005) CPJ 27 (NC). Complainant further reiterated that necessary documents were supplied to the Surveyor and the repudiation by OP is contrary to established principles of law.
8. Complainant further clarified the passage of title of hospital along with validity of licence to run the hospital in the following terms :-
"In the report dated 01.04.2018, the Surveyor himself has mentioned that the property of the Complainant was mortgaged with the SBI Bank by Silabad Hospital and became NPA the earlier owner. Subsequently, SBI sold the property to Dr. Tushar Kanti Karmakar in the year 2010. Thereafter, Dr. Tushar Kanti Karmakar as the owner CC1772/2018 Page 7 of 27 operated the said Nursing Home in the name and style of Ghatal Fertility Centre in the same building as the owner till 2013. During 2013, Dr. Karmakar leased the whole premises including furnitures and fittings including medical instruments to Nanda Rekha Foundation as per agreement duly attested by notary. The said Nanda Rekha Foundation started a new hospital in the name and style of "GFC Hospital" since then. It is to mentioned herein that even after being aware of the same and that most of the documents including the purchased bills, receipts and other have been damaged by the flood, this contrary report submitted by the Surveyor is bad and malafide
9.6. The contents of Para 9.6 of the Preliminary Objections of the Written Statement are wrong and hence denied. It is submitted that the Opposite Parties have denied its liability on the ground that the Hospital was not having a valid license during the issuance of the Insurance Policy. It is submitted herein that the Complainant was having a valid license under the West Bengal Clinical Establishment Act 1950 dated 27.07.2016 and was valid till 17.05.2017. According to Annexure C-2 of the Complaint, it is mentioned that the Complainant was issued the Insurance Policy by the Opposite Party No.1 on 29.07.2016 and the Complainant was having a valid license under West Bengal Clinical Establishment Act, 1950 to run a hospital during that time, hence both the reasons showcased by the Opposite Parties falls short for the illegal repudiation of the claim of the Complainant herein. The Complainant has already dealt regarding the ownership of the affected items in Para 9.5 and not repeating herein for the sake of brevity."
9. In support of the complaint, complainant led evidence of CW Subrata Karmakar, Manager, GFC Hospital by way of affidavit and exhibited copy of licence under West Bengal Clinical Establishment Act, CC1772/2018 Page 8 of 27 1950 as Ex.CW-1; copies of policies no.153801/11/16/3300000156 and 153801/11/17/3300000152 as Ex.CW-2 (colly); copies of letters dated 06.08.2017 and certificate dated 12.08.2017 and 25.08.2017 as Ex.CW- 3; copy of mail dated 29.07.2017 as Ex.CW-4; copy of claim form as Ex.CW-5; copy of letter dated 03.09.2017 as Ex.CW-6; copy of statement of laws and joint minutes as Ex.CW-7 (colly); copy of letter dated 09.09.2017 as Ex.CW-8; copy of letter dated 12.09.2017 as Ex.CW-9; copy of letter dated 13.09.2017, reply letter dated 14.09.2017 and another letter dated 14.09.2017 as Ex.CW-10 (colly); copies of two letters dated 29.09.2017, 25.09.2017 and two letters dated 14.11.2017 Ex.CW-11 (colly); copies of letter dated 25.11.2017 and 13.12.2017 as Ex.CW-12 (colly); copy of letter dated 05.02.2018, 08.02.2018, 16.02.2018 and 10.03.2018 as Ex.CW-13 (colly); copies of letter dated 20.04.2018, 25.04.2018, 08.05.2018 and 09.06.2018 as Ex.CW-14 (colly); copy of legal notice as Ex.CW-15; copy of letter dated 25.07.2018 as Ex.CW-16; copy of licence under West Bengal Clinical Establishment Act, 1950 as Ex.CW-17 and copy of lease deed as Ex.CW-18.
10. OPs led evidence of RW1 Jaisurya Gupta, Assistant Manager, National Insurance Co. Ltd. and RW2 Sh. Souren Chatterjee, Surveyor.
RW1 exhibited copy of e-mail dated 29.07.2017 as Ex.R1/1; copy of preliminary survey report dated 03.08.2017 as Ex.R1/2; copy of sales CC1772/2018 Page 9 of 27 certificate dated 07.06.2010 as Ex.R1/3 and copy of deed of rectification of sales certificate dated 03.07.2010 as Ex.R1/4.
RW2 exhibited copy of a letter dated 13.09.2017 as Ex.R2/1; copy of letter dated 25.09.2017 as Ex.R2/2; copy of letter dated 26.09.2017 as Ex.R2/3 and copy of survey report dated 01.04.2018 as Ex. R2/4.
11. Learned counsel for the complainant contends that claim has been wrongly repudiated by the Insurance Company/OP on frivolous grounds despite the entire information being available with the Opposite Party from inception of policy, which was also renewed for the subsequent period. He reiterates that policy was originally issued from 29.07.2016 to 28.07.2017 and, was thereafter, renewed from 29.07.2017 to 28.07.2018. He further points out that factum of flooding is undisputed and the information was duly forwarded in time to the Opposite Party/Insurance Company. Further, all the necessary documents as available with the complainant are stated to have been provided to the Surveyor. Learned counsel further submits that in order to re-start the services in the hospital, the "C" Arm machine had to be repaired but on receiving the opinion regarding extensive damage to the machine, the same had to be replaced. The said fact is stated to have been intimated to the Surveyor vide letter dated 25.11.2017 with reminder dated 13.12.2017.
CC1772/2018 Page 10 of 27
12. Learned counsel further contends that the duty was cast on the Opposite Party to check the relevant documents and if it was dissatisfied with the grant or validity of licence on technical grounds, the same should have been informed in the first instance at the time of issuing the policy and extending the same for subsequent period. He points out that the licence was valid under the West Bengal Clinical Establishment Act, 1950, till 17.05.2017 and has been wrongly ignored by the Opposite Party for repudiating the claim. He further submits that considering the extensive nature of flood wherein the premises remained submerged for considerable period under water, most of the documents including the purchase bills had been damaged. He clarified that the property was initially mortgaged with SBI Bank by Silabad Hospital and became NPA. The property was, thereafter, sold by SBI to Dr. Tushar Kanti Karmakar in the year 2010 who operated the Nursing Home in the name and style of Ghatal Fertility Centre as owner till 2013. During 2013, Dr. Karmakar leased the whole premises including furniture and fittings as well as medical instruments to Nanda Rekha Foundation as per notarized agreement. Further Nanda Rekha Foundation started a new hospital in the name and style of "GFC Hospital". The afore-said facts are stated to have been duly informed to the surveyor appointed by the Opposite Party vide letter dated 08.02.2018. In support of the submissions reliance is further placed by the learned counsel on Order dated CC1772/2018 Page 11 of 27 01.01.2024 in CC No.3130 of 2017, M/s Shivam Wood Industries v. Oriental Insurance Co. Ltd.; DM, United India Insurance Co. Ltd. v. Amarjeet Singh, MANU/JK/0059/2011; New India Assurance Co. Ltd. & Ors. v. Mudit Roadways, MANU/SC/1262/2023; Sumit Kumar Saha v. Reliance General Insurance Co. Ltd., (2019) 16 SCC and Palanadu Cold Storage v. National Insurance Co. Ltd. & Ors., MANU/CF/0397/2023.
13. On the other hand, learned counsel for the Opposite Party vehemently opposed the contentions raised on behalf of the complainant and supported the repudiation of claim on the ground that complainant was not in possession of valid licence to run the Hospital and failed to prove the ownership of the affected items.
He further submitted that on receiving the intimation from the complainant Sh. Subhasish Das was appointed as preliminary Surveyor and Investigator. Further, on 02.08.2017 OP appointed Sh. Souren Chatterjee to survey and investigate the loss who visited the Hospital on 07.08.2017. He pointed out that after verification of the documents submitted by the complainant, the Surveyor requested for further documents vide various communications. He emphasizes that repudiation of the claim does not suffer from any infirmity and is based on the Surveyor‟s report. In support of the contentions, reliance was further placed upon AR Fuels Pvt. Ltd. v. National Insurance Co. Ltd., CC1772/2018 Page 12 of 27 (2013) CPJ 637 (NC) and Manager Legal Department NAI Co. Ltd. v. Oswal Plastic Industries, MANU/CF/0080/2019.
14. Learned counsel further urged that complainant while purchasing the policy did not disclose that the machinery/equipment was defunct at the time of purchase from SBI through auction in the year 2010 and did not produce any valuation report by the registered valuer after purchase. The Sale Certificate dated 07.06.2010 and Deed of Rectification of Sale Certificate dated 03.07.2010 were further relied. He further contended that the jurisdiction of this Commission is barred as the interest claimed cannot be added to determine the pecuniary jurisdiction. Reference was further made to Shahbad Cooperative Sugar Mills Ltd. v. National Insurance Co. Ltd. & Ors., II (2003) CPJ 81 (NC); Vikas Singh v. BMW India Pvt. Ltd., I (2016) CPJ 692 (NC); Sh. Sushil Gupta v. International Department (Master Vintage International) in CC No. 236 of 2013; Sri Venkateshwara Syndicate v. Oriental Insurance Co. Ltd., (2009) 8 SCC 507; United India Insurance Co. Ltd. & Ors. v. Roshan Lal Oil Mills Ltd. & Ors., (2000) 10 SCC 19; I.C. Sharma v. OIC Ltd., (2018) 2 SCC 76; Cholamandalam MS General Insurance Co. Ltd. v. Padma Rice Mill & Anr., 2025 SCC OnLine NCDRC 357 and Bombay Dyeing & Manufacturing v. Union of India, 2000 SCC OnLine NCDRC 3.
CC1772/2018 Page 13 of 27
15. We have given considered thought to the contentions raised and perused the record carefully.
Learned counsel for the Opposite Party has challenged the maintainability of the complaint on ground of pecuniary jurisdiction, urging that the loss claimed by the complainant to the tune of Rs.48,79,992/- with interest @ 18% p.a. is below the pecuniary jurisdiction of Rs.1,00,00,000/- (Rupees One Crore) of this Commission at the relevant time. In M/s Shivam Wood Industries v. Oriental Insurance Co. Ltd. (supra), an objection had been taken with regard to pecuniary jurisdiction after the parties had exchanged their pleadings. The complaint therein was initially filed before District Consumer Disputes Redressal Forum keeping in view the claim of the loss to the tune of Rs.18,20,550/-. An objection regarding jurisdiction was taken presumably because of the amount involved under the three policies was above Rs.1,00,00,000/-. Consequently, statement was made on behalf of the complainant to withdraw the complaint with liberty to file fresh complaint before appropriate authority. This Commission noticed the decision of a five Member Bench of this Commission in Consumer Case No.1703 of 2018, Renu Singh v. Experion Developers Private Limited along with other connected complaints decided on 26.10.2021 wherein in paragraph 14 and 15 it was observed as under:- CC1772/2018 Page 14 of 27
"14. However, the word "value" as used in this Section has not been defined in the Act. In the absence of statutory meaning, its dictionary meaning has to be taken into account. The dictionary meaning of the "value" is "worth of something, command to price paid or asked for it". The definition of "consumer" becomes relevant for deciding the value of the goods or services in numerical term. The word "consumer" has been defined under Section 2 (1) (d) as follows:
(d) "Consumer" means any person who-
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or (ії) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose.
Explanation- For the purposes of this clause, "commercial purpose"
does not include use by a person of goods bought and used by him and services availed by him exclusively for the purpose of earning his livelihood by means of self-employment"CC1772/2018 Page 15 of 27
15. For goods, the term "buys any goods for consideration which has been paid or promised or partly paid and promised, or any system of deferred payment" has been used. Similarly for services also term "hires or avails any services for consideration which has been paid or promised or partly paid or partly promised or under any system of deferred payment" has been used. A perusal of this definition leaves no doubt that this definition denotes the total consideration of the goods/services which is agreed between the parties for buying/availing it and not part of consideration paid. If the argument of the counsel for the opposite parties that consideration paid alone is the value of the goods/service is accepted, then "and promised" will be omitted from consideration. The value of goods or services as used under Section 11(1), Section 17(1)(a) (i) and Section 21(a) (i) respectively means the total consideration of the goods/services which has been agreed to between the consumer and the trader for buying/ availing it. The Full Bench used the word "aggregate" for consideration agreed between the parties for buying the goods or availing the services. By using "aggregate' meaning of "the value of the goods or services" neither been changed nor amounts to rewriting the legislation. There is no ambiguity in the term "the value goods or services" used in Section 11(1), Section 17 (1)(a)(i) and Section 21 (a)(i) of the Act. Accordingly, it was held that the total value of the services and goods which was agreed between the parties under the 1986 Act would determine the pecuniary jurisdiction of the Forum. Reference was further made to Ambrish Kumar Shukla & Ors. v. Ferrous Infrastructure Pvt. Ltd., (2017) CPJ 1 (NC).
16. In the present case, admittedly, the total assured value is Rs.9,81,95,583/- on which the premium was paid for a sum of CC1772/2018 Page 16 of 27 Rs.60,603/-. Merely because the loss claimed is Rs.48,70,992/-, the jurisdiction of this Commission cannot be said to be barred in view of observations in M/s Shivam Wood Industries v. Oriental Insurance Co. Ltd. (supra). The objection raised on behalf of the Opposite Party is accordingly dismissed.
17. On merits, the undisputed facts are that complainant took a Standard Fire and Special Perils Policy in the name of GFC Hospital initially for the period 29.07.2016 to 28.07.2017 which was further renewed for the period 29.07.2017 to 28.07.2018 for insured value of Rs.9,81,95,583/-. Due to floods, ground floor of the hospital was inundated for a long period causing damage to the assets, material and property of the establishment. A certificate in this regard was issued by the Councilor of Ghatal Municipality as well as by the Block Development Officer. Incident was diligently informed by the complainant to the Opposite Party whereupon initially Shri Subhasish Das was appointed as Surveyor followed by Shri Souren Chatterjee to assess the loss. The claim stands repudiated by OP on the ground that complainant did not hold a valid licence and further failed to prove the ownership of the affected items.
18. In order to prove that establishment was run under a valid licence issued under the West Bengal Clinical Establishment Act, 1950 complainant has relied upon licence dated 27.07.2016 which was valid CC1772/2018 Page 17 of 27 till 17.05.2017. Based upon the said licence Opposite Party had issued an insurance policy which was further renewed by the Opposite Party/Insurance Company. Complainant has also placed on record licence issued for the subsequent period from 25.04.2017 to 17.05.2020. A bare perusal of licence dated 27.07.2016 reflects that licence was issued to „Subrata Karmakar‟ in respect of „nursing-home, other, with ICU 6 beds‟, styled as GFC Hospital at GFC Building, Ghatal, Ghatal, 721212. The licence in the name of Subrata Karmakar was subsequently renewed on 25.04.2017 with validity till 17.05.2020 in respect of GFC Hospital.
The objection raised on behalf of the Insurance Company that complainant entity did not possess valid licence in the name of GFC Hospital is untenable on the face of record since the licence describes the name of establishment as GFC Hospital and the name of the licensee as „Subrata Karmakar‟. Having issued the policy in the name of GFC Hospital, after assessing the relevant licences, the Opposite Party/Insurance Company cannot take a stand to the contrary challenging the maintainability of complaint through Subrata Karmakar on the ground that policy is not issued in name of Subrata Karmakar but GFC Hospital. Apparently, there is no cogent evidence to presume misrepresentation or concealment by the complainant in regard to transferring of property from Dr. Tushar Kanti Karmakar to Nanda Rekha CC1772/2018 Page 18 of 27 Foundation as per notarized agreement which started a new hospital in the name of GFC Hospital. In the absence of any misrepresentation or concealment at the time of obtaining the policy which could have been verified by the Insurance Company it does not appear to be acceptable that the licensee would not be competent to maintain the present complaint. The complainant being the licensee is in no manner a stranger to the property and there has been no objection placed upon by any other person regarding the competency of the licensee to maintain the present complaint. The objection that complainant has no insurable interest in the property and is required to further prove the ownership of aforesaid items is without any merits.
19. The objection raised by the Opposite Party that the complaint is not maintainable since the complainant is a commercial organisation carrying on business for profit or gain and, as such, is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986, is also without any merit. Hon‟ble Apex Court in National Insurance Co. Ltd v. Harsolia Motors, (2023) 8 SCC 362, authoritatively held that the complaint filed by respondent insured had no close or direct nexus with the profit generating activity and the claim of insurance against the Insurance Company is to indemnify the losses which the respondent insured had suffered. The complainant therein was accordingly held to be a „consumer‟ under Section 2(1)(d) of the CC1772/2018 Page 19 of 27 Consumer Protection Act, 1986. The Surveyor besides raising objections to the competency of the complainant to file the claim, proceeded with the assessment of loss as under :-
CC1772/2018 Page 20 of 27 CC1772/2018 Page 21 of 27
20. On the face of record, the insurance policy was issued by the Opposite Party with open eyes wherein the sum assured in respect of building and stocks has been respectively assessed for Rs.7,05,00,000/- and Rs.2,78,95,583/-. The schedule to the policy further reflects the sub- heads wherein the plant, instruments and medical appliances have been assured to the tune of Rs.2,06,13,842/-. The assessed value of reported loss in respect of medical equipment largely pertains to Bi-pap machine "C" Arm, X-ray, Dental chair, Dental Compressor, Physio Machine with all attachments, Digital Weighing Scale, Colonoscopy machine, BP machine Digital, Gastroscope, Colonoscope listed at Sl. No. 12 to 18, 44, 51 etc. The remaining headings of loss largely pertain to loss of CC1772/2018 Page 22 of 27 other articles. The valuation of the medical instruments in the audited annual accounts for the year 2016-17 has been duly noticed to be increased and points out to the purchase of additional equipment in the hospital. However, an adverse inference appears to have been drawn by the Surveyor. It is further pertinent to note that the Surveyor after deducting the salvage value of Rs.45,000/- from the assessed, loss, further resorted to depreciation @ 50% thereby reducing the gross claim amount to Rs.20,09,541/-. However, there is nothing on record to show as to how the valuation of the articles could have reduced by 50% while the same were assessed for an increased assured sum while granting the policy. No basis for such depreciation to the extent of 50% has been provided for by the Surveyor and appears to be completely arbitrary.
The Surveyor has further observed that the property was purchased at Rs.2 crores in 2010 and, as such, Rs.1 crore should be the cost of the land. Further, Rs.70,00,000/- has been apportioned towards the construction of the building and Rs.30,00,000/- is stated to be the value of property in 2010. However, the Surveyor did not take into consideration the fact that after the transfer of property in 2010, there had been a passage of about 5-6 years over which the property prices may have substantively increased and the hospital had been running, which led to issuance of policy for assured sum of Rs.9,81,95,583/- along with plant and machinery. The application of average clause on CC1772/2018 Page 23 of 27 the ground of overvaluation of policy and thereby reducing the claim to Rs.2,06,791/- in our opinion is without any foundation.
We are further of the considered view that Opposite Party cannot be permitted to contend that the assured sum was overvalued, until and unless some cogent evidence is produced by the Opposite Party to reflect that there has been no increase in prices since 2010 and there had been no additions in the equipment in the hospital. In the absence of the same, the observations of the Surveyor thereby grossly undervaluing the property in 2017 and reducing the assessment of claim amount by applying average clause, is misplaced and erroneous. The Surveyor could have only validly deducted the amount of Rs.45,000/- towards salvage along with Rs.6,06,605/- towards stocks of all sorts of medicines, cooking materials, mandir renovation and puja as not being covered under the policy.
21. Reference may also be made to the observations of the Hon‟ble Apex Court in Sumit Kumar Saha v. Reliance General Insurance Co. Ltd., (2019) 16 SCC 370 wherein it was held that the assessment must start with the amount described as sum insured on the day when the contract was entered into and it is not open to the Surveyor or the Insurance Company to disregard the figure stipulated as sum insured except in cases of fraud, coercion or misrepresentation. The aforesaid CC1772/2018 Page 24 of 27 observations in para 16 and 17 may be further beneficially reproduced for reference :-
16. The relevant stipulation in the present case, namely, clause (b) of provision-basis of indemnity speaks of calculation of actual value by deducting "proper depreciation." The surveyor of the Insurance Company has worked the figure of depreciation by starting with the figure of Rs 51 lakhs as the cost of a new excavator and then deducting 32.5% by way of depreciation assuming the life of excavator to be 10 years. In his assessment, therefore, the stipulation of the figure of Rs.46,56,600 on the day the contract was entered into, had no significance. Was he right and justified and how could he assume the life of the excavator to be 10 years? If that was the understanding between the parties, the figure of sum insured could have been different. If the surveyor was calculating the depreciation from the day when the policy was entered into till the date when the accident occurred, such exercise could certainly be justified. But the exercise undertaken was in the nature of not only considering the depreciation post the policy but even including the period prior thereto. That exercise was already undertaken by the parties and in their assessment the real value of the excavator as on the day when the policy was taken out was Rs 46,56,600. In the face of such agreement and understanding, the surveyor could not have calculated depreciation for a period prior to the date of policy or contract. The purport of the aforesaid clause was to arrive at a proper valuation as on the day when there was total destruction. He could have undertaken the exercise post the date of policy to assess the real value of the insured property as on the date when the fire actually took place. And for such purposes, the assessment must start with the amount described as "sum insured" on the day when the contract was entered into. It was not open to the surveyor or to the Insurance Company to disregard the figure stipulated as "sum CC1772/2018 Page 25 of 27 insured". The loss had to be assessed in the present case, keeping the said figure in mind.
17. Having considered the entire matter, in our view, except in cases where the agreement on part of the Insurance Company is brought about by fraud, coercion or misrepresentation or cases where principle of uberrimae fidei is attracted, the parties are bound by stipulation of a particular figure as sum insured. Therefore, the surveyor and the Insurance Company were not justified in any way in questioning and disregarding the amount of "sum insured". Further depreciation, if any, can always be computed keeping the figure of "sum insured" in mind. The starting figure, therefore, in this case had to be the figure which was stipulated as "sum insured". Since excavator, after the policy was taken out was used for eleven months, there must be some reasonable depreciation which ought to be deducted from the "sum insured". The surveyor appointed by the insured was right in deducting 10% and in arriving at the figure of Rs.
41,90,940. The other issue which weighed with the surveyor appointed by the Insurance Company regarding deduction of salvage value was rightly answered by the National Commission and as such does not require any elaboration. We, thus, find that the assessment made by the State Commission was quite correct and that made by the National Commission was completely incorrect.
22. It also needs to be kept in perspective that since the premises had been completely flooded the complainant was not in a position to produce all the relevant records as the same had been destroyed.
In the facts and circumstances, we are of the opinion that repudiation of the claim by the Opposite Party is unjustified. The Opposite Party is accordingly directed to pay the claim of revised gross CC1772/2018 Page 26 of 27 loss amount of Rs.40,19,082/- as assessed by the Assessor after deducting the amount for salvage at Rs.45,000/- and Rs.6,05,605/- towards stocks of all sorts of medicines, cooking materials (50% of Rs.10,000/-), mandir renovation and puja as not being covered under the policy. The aforesaid amount shall be paid with simple interest @ 6% per annum from the date the amount became due till the date of its realization. If the Opposite Party fails to pay the amount within a period of eight weeks, the balance amount shall be payable with enhanced rate of interest @ 8% per annum till realization. Complaint is accordingly allowed with cost of Rs.25,000/-. Pending applications, if any also stand disposed of. A copy of this Order be provided to the concerned parties by the Registry.
................................................ (AVM J. RAJENDRA, AVSM VSM (RETD.) PRESIDING MEMBER ...........................................
(ANOOP KUMAR MENDIRATTA, J) MEMBER ar/sd/B-4/reserved matter CC1772/2018 Page 27 of 27