State Consumer Disputes Redressal Commission
Surinder Mohan & Ors vs Oriental Insurance Company Ltd. & Ors. on 27 October, 2014
H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
SHIMLA.
Consumer Complaint No: 09/2014.
Date of Presentation: 21.04.2014.
Date of Decision: 27.10.2014.
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1. Surinder Mohan, S/o Shri Hari Krishan Dass,
2. Kailash Chand, S/o Shri Hari Krishan Dass,
3. Smt. Brij Bala, D/o Shri Hari Krishan Dass,
All R/o Mohalla Charpot, P.O. Chamba,
Tehsil & District Chamba, H.P.
... Complainants.
Versus
1. The Oriental Insurance Company Ltd.,
Oriental House, A 26-27, Asaf Ali Road,
New Delhi - 110 002,
Through its Manager.
2. The Regional Manager,
Oriental Insurance Company Ltd.,
SCO 109, 110, 111, Surendra Building,
Sector 17-D, Chandigarh - 160 017.
3. The Branch Manager,
Oriental Insurance Company Ltd.,
Chamba, District Chamba, H.P.
... Opposite parties.
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Coram
Hon'ble Mr. Justice (Retd.) Surjit Singh, President
Hon'ble Mrs. Prem Chauhan, Member.
Hon'ble Mr. Vijay Pal Khachi, Member.
Whether approved for reporting?1
For the Complainants: Mr. Manoj Chauhan, Advocate.
For Opposite Parties: Mr. Bhupinder Pathania, Advocate.
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O R D E R:
Justice (Retd.) Surjit Singh, President (Oral) Complainants-Surinder Mohan, Kailash Chand & Smt. Brij Bala, have filed the present 1 Whether reporters of the local papers may be allowed to see the order? Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) complaint, under Section 17 of the Consumer Protection Act, 1986, seeking directions to the opposite parties to pay insurance claim, in respect of the insured building and the household goods, which were gutted in a fire and also to pay compensation for wrongfully reducing the quantum of insurance claim, which caused mental tension and harassment, besides seeking litigation expenses.
2. Admitted facts are that the complainants had a three-storeyed building, comprising of a shop and residential accommodation. The building and the household goods were insured with the opposite parties, through two separate policies. The policies were effective from 13.09.2011. The building was insured in the sum of `15.00 lacs, against policy, Annexure R-2, while the household goods were insured in the sum of `4.50 lacs, vide policy, Annexure R-1. On 18.03.2012, or say about six months after the policies were purchased, a devastating fire broke out in the locality, in which the building was situated. Several buildings, including that of the complainants, which was 2 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) insured with the opposite parties, were gutted in that fire.
3. Complainants' building together with household goods was completely destroyed. Intimation of the fire incident was given to the opposite parties promptly. They deputed a preliminary Surveyor, who confirmed that the building had been completely gutted in the fire. Investigation was also got done by the opposite parties. Investigator reported, vide report, Annexures R-8 & R-9, that the fire broke out in the locality, in which several buildings were destroyed. According to him, no mischief had been played by the complainants and for that matter any other person, to cause the fire. A final Surveyor deputed by the opposite parties submitted reports, Annexures R-12 & R-13, per which the building had been completely destroyed. The Surveyor, however, observed that the building, as per investigation conducted, was about sixty years' old and with this observation, he reduced the amount of claim for the loss of building to 1/3rd and recommended payment of `6,40,079/-. As regards household goods, the 3 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) Surveyor though noticed that all the insured household goods had been completely destroyed, he recommended payment of a sum of `1,99,642/- only with the observation that the vouchers of the goods having not been produced, their value was required to be reduced to 50%, because of depreciation. He further reduced the figure arrived at after reducing it by 50%, by 5%, on account of salvage value.
4. Opposite parties offered to pay to the complainants a sum of `1,99,642/-, on account of loss of insured goods, and a sum of `6,40,079/-, on account of loss of insured building. Complainants refused to accept the aforesaid amounts of money, as, according to them, they were entitled to the full amounts of money, for which the building and the household goods had been insured. Therefore, they filed the present complaint seeking the aforesaid directions to the opposite parties.
5. Complaint was contested by the opposite parties and it was pleaded that though the building had been completely gutted in the fire and all the household goods too had been 4 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) completely destroyed, yet the complainants were not entitled to the sums assured for the building and the household goods for the reason that the building was about sixty years' old and the complainants had not produced the vouchers of the household goods, showing the dates of their purchase, and, therefore, the value of the household goods had been reduced by 50%, on account of depreciation in value.
6. Parties have tendered in evidence the insurance policies, reports of the preliminary Surveyor, Investigator and final Surveyor, as also the affidavits of the Surveyors and the Investigator. Affidavit of one of the complainants, namely Surinder Mohan, has also been tendered in evidence.
7. We have heard learned counsel for the parties and gone through the record.
8. We find on record an evaluation report, Annexure C-9, alongwith plan of the building submitted by the complainants. As per this evaluation report and the plan, the covered area of each of the three floors of the building was 137.40 sq. meters and the estimated cost of 5 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) construction is `10,500/- per sq. meter in respect of ground floor, `10,000/- in respect of first floor and `8,000/- for the second floor. Also, we find from the report of the Surveyor, Annexure R-14, per its Annexure-2, (statement of calculation of assessed loss) that the built-up area on the ground floor was 1399 sq. ft., on the first floor 1176,50 sq. ft. and on the top floor 753 sq. ft. According to the Surveyor, the present day cost of construction is `8,000/- per sq. meter and at this rate, according to him, the cost of re-erection of the building would be `21,85,191/-. He has reduced this figure to 1/3rd on account of depreciation and further reduced the resultant figure by 2.5%, on account of salvage value, and has assessed the net loss at `6,73,717/-.
9. It is only too well known that these days the cost of construction of residential-cum- commercial buildings in urban areas and particularly in urban areas of hill States, where manual carriage of building material is always involved, is not less than `1,200/- per sq. ft. Therefore, the cost of construction at the rate of `8,000/- per sq. meter, which comes to around 6 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) `800/- per sq. ft., as assumed by the Surveyor, is not realistic.
10. We see no reason to disbelieve the evaluation report submitted by the complainants that the cost of re-erection of the building would be `39,15,900/- (the figure shown in Annexure C-
9) and if we reduce this figure on account of depreciation of 60%, which, in our considered view, should the percentage of depreciation, the value of the building at the time of insurance comes to `15,66,360/-. The building was insured for a sum of `15.00 lacs by the opposite parties themselves only six months before mishap took place. The opposite parties at the time of insuring the building are supposed to have satisfied themselves about the age and the depreciated value of the building. The fact that they themselves insured the building in the sum of `15.00 lacs, leads to legitimate inference that they were satisfied that the value of the building was not less than `15.00 lacs. Therefore, the opposite parties were not justified in reducing the value of the building, on account of depreciation. The estimate, Annexure C-1, shows that the 7 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) building had been got insured by the complainants at its depreciated value.
11. As regards the value of the household goods, admittedly the value of the goods, as per policy, Annexure R-1, was `4.50 lacs. Insurance had been got done by the complainants only six months before the occurrence of the fire incident. Opposite parties were supposed to have verified the value of the household goods and their condition at the time of insurance. Complainants claim that they could not produce the vouchers of the household goods, when demanded by the Surveyor, because the same were also kept in the house that was gutted in the fire. Under these circumstances, opposite parties, or their Surveyor, were not justified in reducing the value of the household goods by 50%. At the most, the value could have been reduced by 10% and when so reduced, the amount of money payable comes to `4,05,000/-. In the case of the building, the claim is required to be reduced by `10,000/- on account of 'excess clause'.
12. As a result of the above stated position, we allow the complaint and direct the 8 Surinder Mohan & Ors. vs. Oriental Insurance Co. Ltd. & Ors..
(C.C. No.09/2014) opposite parties to pay a sum of `18,95,000/- (`14,90,000/- on account of the claim for building plus `4,05,000/- on account of claim for household goods) to the complainants, with interest at the rate of 9% per annum, from the date of filing of the complaint to the date of payment of the aforesaid amount of money, and also to pay `50,000/- on account for compensation for mental tension & harassment and `10,000/- on account of litigation expenses.
13. A copy of the order be sent to each of the parties, free of cost, as per Rules.
(Justice Surjit Singh) President (Prem Chauhan) Member (Vijay Pal Khachi) Member October 27, 2014.
DC Dhiman) 9