State Consumer Disputes Redressal Commission
United India Insurance Company ... vs Sangrur Sales Corporation, Gaushala ... on 5 May, 2016
Daily Order FIRST ADDITIONAL BENCH STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH. First Appeal No.57 of 2014 Date of Institution: 20.01.2014 Date of Decision: 05.05.2016 United India Insurance Company Limited, Branch Office Piranwala Gate, Sunam, Tehsil Sunam District Sangrur through Smt. Sunita Sharma, Deputy Manager, United India Insurance Company Limited, Regional Office, SCO No.123-124, Sector 17-B, Chandigarh. Appellant/Opposite party no.1 Versus 1. Sangrur Sales Corporation, Gaushala Road, Sangrur through its partner Sanjeev Kaumar S/o Sh. Tarsem Lal r/o Street No.3, Agar Nagar, Sangrur. Respondent/Complainant 2. State Bank of Patiala, new Grain Market, Sangrur, through its Branch Manager. Appellant/Opposite party no.2 First Appeal against order dated 06.12.2013 passed by the District Consumer Disputes Redressal Forum, Sangrur. Quorum:- Shri J. S. Klar, Presiding Judicial Member.
Shri.J.S Gill, Member Present:-
For the appellant : Sh.D.P Gupta, Advocate For the respondent no.1 : Sh.Sanjeev Goyal, Advocate For the respondent no.2 : None. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J.S KLAR, PRESIDING JUDICIAL MEMBER :-
The appellant of this appeal (opposite party no.1 in the complaint) has directed this appeal against order dated 06.12.2013 of District Consumer Forum Sangrur directing appellant of this appeal to pay sum of Rs.18 lac to respondent no.1 of this appeal along with interest @ 9% per annum from the date of filing the complaint till its realization, besides Rs.5500/- as costs of litigation. The respondent no.1 of this appeal is the complainant in the complaint, respondent no.2 of this appeal is opposite party no.2 in the complaint and appellant of this appeal is opposite party no.1 in the complaint and they be referred as such hereinafter for the sake of convenience
2. The complainant/firm has filed the complaint U/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that it obtained the insurance policy for its shops situated at Gaushala Road Sangrur for insured amount of Rs.18 lac, vide policy no.111700/11/11//11/00000193 under the category of Standard Fire and Special Perils Policy for the period from 21.06.2011 to 20.06.2012. The said shops were mortgaged with OP no.2. The complainant has been running business of sanitary in the said premises with the assistance of three partners namely Rakesh Kumar, Sanjeev Kumar and Sunil Bansal for earning their livelihood. The building was insured under the said policy, in case any damage was caused to the building due to any unforeseen incident, then OP no.1 was bound to pay the insured amount to the complainant, as per 'Contract of Insurance'. OP no.1 issued the policy schedule without any detailed separate terms and conditions thereof to the complainant. On 29.03.2012 at about 2.20 PM, while people were standing outside the showroom, some hue and cry was made and showroom was started crumbling and persons ran out from the showroom to save their lives. The showroom fell down accidently and shortly due to subsidence of land sliding due to digging work being carried out by the adjacent neighbourers. DDR No.54 dated 30.03.2012 was lodged about this matter at police station Sangrur. The insured premises fell down accidently due to unforeseen accident. The insurance claim was lodged with OP no.1 by the complainant. OP no.1 appointed Savdesh Pal & Company Surveyor & Loss Assessor to assess the loss. He visited the spot and verified the facts regarding falling down of showroom accidently due to subsidence by land-sliding due to digging work of the basement being carried out by neighbourers. The requisite documents were supplied to the surveyor The said surveyor obtained the signatures of Sunil Kumar partner of complainant firm on blank proforma and on letter head of the firm with the assurance that signatures were required for settling the claim and claim would be settled within one month. OPs repudiated the insurance claim of the complainant-firm, vide letter dated 11.05.2012. The complainant wrote protest letter dated 12.09.2012 to OPs with regard to withdrawal of repudiation letter. The complainant has, thus, filed the complaint directing the OPs to pay the insured amount of Rs.18 lac along with interest @ 12% per annum from the date of incident i.e. 29.03.2012 till actual payment, besides compensation of Rs.50,000/- for mental harassment and Rs.33,000/- as litigation expenses.
3. Upon notice, OP No.1 filed its separate written reply and contested the complaint of the complainant. It was averred in written reply by OP no.1 that policy no. 111700/11/10/11/00000317 of Standard Fire and Special Perils Policy was obtained. It was denied that complainant has been running business through partners namely Rakesh Kumar, Sanjiv Kumar and Sunil Kumar for earning their livelihood. It was averred that complainant has concocted a false story in this case for self-serving interest. In fact, the showroom was fallen due to digging work, which was carried out by the adjacent neighbourers. Surveyor Savdesh Pal & Company was appointed to look into the matter and it was submitted that showroom fell down due to act of persons and it is not covered by Contract of Insurance. The claim of the complainant is not covered under the terms and conditions of the insurance policy. OP no.1 prayed for dismissal of the complaint.
4. OP No.2 filed separate reply without raising any objection. This written reply was short reply to the effect that complainant mortgaged the property with OP no.2 and it was insured with OP no.1 for Rs.18 lac as per policy in question.
5. The complainant tendered in evidence, copies of documents Ex.C-1 to Ex.C-6, affidavit of Sanjeev Kumar partner of complainant-firm Ex.C-7, affidavit of Engineer Raj Kumar Garg approved valuer Sangrur Ex.C-22, affidavit of Sunil Kumar partner of complainant-firm Ex.C-23, affidavit of Sanjeev Kumar partner of complainant-firm Ex.C-24, along with copies of documents Ex.C-8 to Ex.C-21. As against it; OPs tendered in evidence copies of documents Ex.R-1 to Ex.R-4, affidavit of Savdesh Pal Surveyor United India Insurance Company Limited Divisional Office Sangrur Ex.R-5, affidavit of H.S Chahal Branch Manager United India Insurance Company Co. Ltd Branch office Sangur Ex.R-6. On conclusion of evidence and arguments, the District Forum Sangur accepted the complaint of the complainant by virtue of order dated 06.12.2013. Dissatisfied with the order of the District Forum Sangrur dated 06.12.2013, the OP no.1 present appellant, carried this appeal against the same.
6. We have heard learned counsel for the parties and have also examined the evidence on the record in this case.
7. The sole point taken up in the written reply by OP no.1 now appellant is that the showroom fell down due to man-made act of digging the adjoining properties and not due to any unforeseen accident. The emphatic written reply by OP no.1 now appellant is that showroom fell down due to digging out by adjoining neighbourers and it is not covered by the terms and conditions of the insurance policy. Only one objection has been taken by OP no.1, the present appellant that falling down of showroom is outside the purview of terms and conditions of the 'Contract of Insurance'. We have to examine the evidence on the record to settle the dispute between the parties. The terms and conditions of the policy Ex.C-1 are on the record, in which Description of Risk: is given on insurance of two shops buildings above plinth level built of 1st class construction details given in the name of Rakesh Kumar son of Raghbir Chand situated at Gaushala Road Sangrur as Rs.10 lac and second in the name of Sanjiv Kuamr son of Tarsem Lal situated at Gaushala Road Sangrur as Rs.8 lac. Two shops were insured for total amount of Rs.18 lac, as per policy terms and conditions Ex.C-1 on the record. This is Standard Fire and Special Perils Policy covering the risk of earthquake (fire and shock). Copy of DDR No.54 dated 30.30.2012 Ex.C-2 is on the record with regard to falling down of shops regarding excavation of the basement. The newspaper report is Ex.C-3 on the record. Ex.C-4 is letter dated 06.04.2012 sent to M/s Sangrur Sales Corporation. Ex.C-5 is letter addressed by authorized signatory of OP no.1 regarding repudiation of claim on the ground that the building was damaged due to construction. The damage of the building due to construction is alleged to be outside the purview of Contract of Insurance and hence claim was repudiated. Ex.C-6 is letter addressed by authorized signatory of OP no.1 the present appellant on the record. Affidavit of Sanjeev Kumar partner of complainant-firm is on the record. This witness stated in his affidavit that the insured building fell down accidentally due to subsidence and land sliding due to digging work being carried out by adjacent neighbourers. This witness stated that the surveyor obtained the signatures of Sunil Kumar partner on blank printed proformas and letterhead of the firm with the assurance that signatures were required for settling the claim. He further stated that showroom fell down accidently on account of subsidence and land- sliding due to digging work of the basement being carried out by the neighbourer. The complainant also placed on record report of Raj Kumar Garg Architect Ex.C-8 to the effect that loss of the building to complainant-firm was in total of Rs.22,46,000/-. Ex.C-9 is letter dated 12.09.2012 sent to OPs by complainant-firm for deciding the claim and Ex.C-10 is reminder of the same. Ex.C-11 is letter addressed by Deputy Manager Grievance Department to OP no.1 regarding non-approval of claim. Ex.C-12 to Ex.C-15 are photographs of building on the record. Ex.C-16 is State Board of Technical Education Haryana of Raj Kumar Garg, who submitted report of loss of building of complainant-firm to the extent of Rs.22,46,000/-. Ex.C-18 is letter addressed to Raj Kumar Architect from office of Municipal Committee Sangrur. Ex.C-19 is letter dated 12.08.2006 of State Bank of Patiala entrusting the case to Raj Kumar for evaluating the loss to building. Ex.C-21 is authority letter-cum-resolution. Affidavit of Engineer Raj Kumar Garg approved valuer is Ex.C-22 with regard to correctness of his report submitted by him to the effect that loss to the building was of Rs.22,46,000/-. Affidavit of Sunil Kumar partner is Ex.C-23 and affidavit of Sanjeev Kumar partner is Ex.C-24 on the record to the extent that building fell down accidentally due to subsidence of land-sliding on account of digging work being carried out by the adjacent neighbourers and loss suffered by complainant was sought to be claimed from the insurer.
8. To counter this evidence on the record, OPs placed on record certificate Ex.R-1 in respect of compliance of Section 64 VB of Insurance Act 1938. The premium of Rs.29,096/- was received from the complainant for the policy in hand. Ex.R-2 is letter addressed to Branch Manager United India Insurance Co. Ltd submitted by the Surveyor Savdesh Pal Goyal to the effect that on his visit; he found that shop/building is in collapsed condition and badly damaged. He further observed that loss occurred due to excavating of side plot situated on the right side of the shop for basement/foundations and there was no support for the shop. As the sand was drawn out beneath the shop walls, these walls collapsed resulting in this loss. He further submitted in the report that insured has not submitted any documents, as such; he is unable to ascertain the liability. However, as per verifications, the estimated loss was Rs.5 to 6 lac in respect of building, subject to terms and conditions of the policy. Ex.R-3 is letter written by Sunil Kumar partner of complainant-firm that building fell down due to excavating of side plot situated on the right side of the shop for basement/foundations and there was no support for the shop. Sunil Kumar admitted that scheme is not covered under the policy and hence they did not want to submit further papers. This writing Ex.R-3 is sheet anchor of the case of the OP no.1, vide which the complainant admitted this fact that loss is not covered under the policy terms and conditions. Affidavit of Savdesh Pal Surveyor & Loss Assessor is Ex.R-5 on the record. Affidavit of H.S Chahal Branch Manager United India Insurance Company Co. Ltd Ex.R-6 on the record.
9. The District Forum found that the case of the complainant-firm was covered under the terms and conditions of the policy and as such, it accepted the complaint of the complainant by directing OP No.1 to pay entire amount to complainant for loss of the building. The District Forum observed that the definition of earthquake means "sudden, violent shaking of earth's surface". The District Forum found that violent shaking of earth was done by the neighbourers by carrying out the digging work. We are of this view that the word earthquake is used to describe any seismic event -- whether natural or caused by humans -- that generates seismic waves. Earthquakes are caused mostly by rupture of geological faults, but also by other events such as volcanic activity, landslides, mine blasts, and nuclear tests are also covered under the definition of earthquake in our view. The land-sliding is occasionally done due to excavating of the adjoining land by the neighbourers without any fault of the complainant and hence this land sliding, which collapsed the building of the complainant would tantamount to shaking surface of the building by above land-sliding brought out by the act of the neighbourer. It would be covered with in the comprehensive meaning of earthquake in our opinion. The finding of the District Forum on this point is affirmed that the claim is covered by the terms and conditions of the policy in question.
10. On the point of loss to the building, there is ample evidence adduced on record by the complainant in the shape of photographs Ex.C-12 to Ex.C-15 regarding razing of the building. The report of Raj Kumar Garg valuer is Ex.C-8 on the record proving total loss to the building as Rs.22,46,000/-. He swore his affidavit on the record Ex.C-22 to prove that he is a qualified Architect and reference in this regard has been made to Ex.C-16 and Ex.C-22 on the record. OPs relied upon report of surveyor Savdesh Pal Goyal Ex.R-2 on the record. The surveyor observed that requisite documents were not submitted by the complainant and hence he made observation of estimated loss of Rs.5 lac to 6 lac, as per his visual verification only. There is no mention in his report on what basis he has verified quantum of the loss. Undoubtedly, the report of surveyor is a valuable piece of evidence and it cannot be departed, unless there is contrary evidence on the record. The complainant received corroboration from the report of Raj Kumar Garg Ex.C-8 on the record. Photographs Ex.C-12 to Ex.C-15 has also lent corroboration to the case of the complainant. In addition to that, affidavits of Raj Kumar Garg valuer Ex.C-22, affidavit of Sunil Kumar partner of complainant-firm Ex.C-23 and affidavit of Sanjeev Kumar partner Ex.C-24 have also been referred. Sunil Kumar partner of complainant-firm categorically stated on oath in his affidavit Ex.C-23 that his signatures were taken on the printed blank proforma and letterhead of the firm by surveyor, which was later on converted into document Ex.R-3 on the record. We find that Sunil Kumar has categorically deposed in his affidavit Ex.C-23 that he has not signed the above-said document willingly with his free consent and it was obtained by surveyor by obtaining his signatures on the blank printed document only under pretext of settling the claim. The evidence has been produced on the record that damage to the building was caused, which is covered by the terms and conditions of the policy and police report is Ex.C-2 on the record and photographs Ex.C-12 to Ex.C-15 have also corroborated this fact besides newspaper report Ex.C-3. The surveyor has not quantified any loss to the building and merely observed visual loss Rs.5 to 6 lac without any basis thereto. Consequently, we rely upon report of the Raj Kumar, which is corroborated by the photographs Ex.C-12 to Ex.C-16 and police report Ex.C-2 on the record and hold that the complainant is entitled to recover the insurance claim from the OPs for the loss to the building, which has been caused on account of land sliding, which is covered within the definition of earthquake or shock and hence it would be covered within the definition of shock, as defined in the terms and conditions of the policy. We rely upon report of Raj Kumar Civil Engineer. Reference in this regard is made to law laid down by National Commission in New India Assurance Company Ltd ..versus.. Bhudi Singh Parmar, reported in IV (2006) CPJ 30 (NC), where report of Civil Engineer was relied upon vis-a-vis report of surveyor by the National Commission. It is immaterial whether complainant is carrying on the business of commercial activity for earning their livelihood because Contract of Insurance is for reimbursement of loss and Insurance Company is bound to reimburse the loss to the insured. The Hon'ble National Commission has also examined this point in M/s Harsolia Motors Vs. M/s National Insurance Co. Ltd reported in First Appeal No.159 of 2004 decided on 03.12.2004, wherein it has been held that hiring of services of the insurance company by taking insurance policy, the complainants were carrying commercial activities cannot be held to be a commercial purpose. The insurance policy is taken for reimbursement or for indemnity for the loss, which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. It was authoritatively held in the above authority that taking of insurance policy is for protection of the interest of the assured in the articles or goods and is not for making any profit, trading, or carrying on for commercial purpose.
11. As a result of our above discussion, we, thus, affirm the order of the District Forum Sangrur dated 06.12.2013 under challenge in this case. Resultantly, the appeal filed by the appellant/opposite party no.1 is ordered to be dismissed.
12. The appellant had deposited an amount of Rs.25,000/- with this Commission at the time of filing the appeal. This amount with interest, if any, accrued thereon, be refunded by the registry to the complainant by way of crossed cheque/demand draft after the expiry of 45 days. Remaining amount shall also be paid to complainant by the appellants, as per order of District Forum within 45 days from receipt of the copy of this order
13. Arguments in this appeal were heard on 02.05.2016 and the order was reserved. Copies of the order be communicated to the parties as per rules.
14. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (J.S.Gill) MEMBER May 5, 2016 (ravi)