State Consumer Disputes Redressal Commission
Ms. Manorma Anand vs M/S United India Insurance Co.Ltd. on 29 September, 2010
H
H.P.
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA
Appeal No. 307/2009.
Reserved at Solan on 22.9.2010.
Date of
Decision 29.9.2010.
In the matter of:
1. Ms. Manorma Anand W/o
Sh. Satish Anand, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Appellant.
Versus
M/s
United India Insurance Company Ltd.,
The
Mall Solan, Distt. Solan, H.P. through its Branch Manager.
Respondent.
Appeal No. 308/2009.
2. Ashok Bhasin S/o Sh.
Dwarka Nath, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Appellant.
Versus
M/s United India Insurance Company
Ltd.,
The
Mall Solan, Distt. Solan, H.P. through its Branch Manager.
Respondent.
Appeal No. 309/2009.
3. Bharti Shani W/o Sh.
Madan Lal Sahni, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Appellant.
Versus
M/s
United India Insurance Company Ltd.,
The
Mall Solan, Distt. Solan, H.P. through its Branch Manager.
Respondent.
Appeal No. 310/2009.
4. Rita Anand W/o Sh. Ashok
Anand, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Appellant.
Versus
M/s
United India Insurance Company Ltd.,
The
Mall Solan, Distt. Solan, H.P. through its Branch Manager.
Respondent.
For the Appellant: Mr. P.S. Goverdhan, Advocate in all these appeals.
For the Respondent. Mr.
P.S. Chandel, Advocate in all these appeals.
Appeal No.
318/2009.
5. United India Insurance
Company Limited, through its Divisional
Manager, Shimla
Division, Timber House, Card Road,
Shimla-1
Appellant.
Versus
Rita Anand W/o
Sh. Ashok Anand, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
The
Mall Solan, Distt. Solan, H.P. through its Branch Manager.
Respondent.
Appeal No. 319/2009.
6. United India Insurance
Company Limited, through its Divisional
Manager, Shimla
Division, Timber House, Card Road,
Shimla-1
Appellant.
Versus
Ms. Manorma Anand W/o
Sh. Satish Anand, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Respondent.
Appeal No. 320/2009.
7. United India Insurance
Company Limited, through its Divisional
Manager, Shimla
Division, Timber House, Card Road,
Shimla-1
Appellant.
Versus
Ashok Bhasin
S/o Sh. Dwarka Nath, R/o Hari Bhawan
near ITI Solan,
Tehsil & Distt. Solan, HP.
Respondent.
Appeal No. 321/2009.
8. United India Insurance
Company Limited, through its Divisional
Manager, Shimla
Division, Timber House, Card Road,
Shimla-1
Appellant.
Versus
Bharti Shani
W/o Sh. Madan Lal Sahni, R/o Hari Bhawan
near ITI Solan, Tehsil &
Distt. Solan, HP.
Respondent.
For the Appellant: Mr. P.S. Chandel, Advocate in all these appeals.
For the Respondent. Mr.
P.S. Goverdhan, Advocate in all these appeals.
Honble
Mr. Justice Arun Kumar Goel (Retd.), President.
Honble
Mrs. Saroj Sharma, Member.
Honble
Mr. Chander Shekher Sharma, Member.
Whether approved for reporting? Yes.
O R D E R
Per Mr. Chander Shekher Sharma, Member.
All these appeals have arisen out of a common order passed by District Forum, Solan while disposing of Consumer Complaint Nos. 66/2005, 67/2005, 68/2005 and 74/2005, dated 30.7.2009 as such they were heard together and are being disposed of by this common order.
2. Appeal Nos. 318/2009 to 321/2009 have been filed by the Insurance Company against the impugned order as it is aggrieved from the said order allowing the complaints in the following terms:-
i) In complaint bearing No. 66/2005, Bharti Sahni Vs. United India Insurance Company, the OP-Company shall indemnify the complainant to the extent of Rs. 1,24,994/-;
ii) In complaint bearing No. 67/2005, Rita Anand Vs. United India Insurance Company, the OP-Company shall indemnify the complainant to the extent of Rs. 84,199/-;
iii) In complaint bearing No. 68/205, Ashok Bhasin Vs. United India Insurance Company, the OP-Company shall indemnify the complainant to the extent of Rs. 1,24,994/-;
iv) In complaint bearing No. 74/2005, Manorma Anand Vs. United India Insurance Company, the OP-Company shall indemnify the complainant to the extent of Rs. 84,199/-;
v) Insurance company has been directed in each case to pay interest at the rate of 9% per annum, with effect from the date of filing of the complaint till actual payment is made, besides cost of Rs. 6,000/- to each one of the complainants in equal share.
3. All the complaints were consolidated by the District Forum below, vide order dated 22.9.2006 passed in Complaint No. 66/2005.
4. Appeal Nos. 307/2009 to 310/2009 has been filed by the complainants namely, Ms. Manorma Anand, Ashok Bhasin, Bharti Shani and Rita Anand for enhancement of the compensation awarded by the District Forum below.
5. Facts of the case as they emerge from the case file are, that the appellants in Appeal Nos. 307/2009 to 310/2009 are the owner in possession of multi storied building and had jointly constructed the building on the land as detailed in paragraph 1 of the complaint. They had insured their premises by obtaining insurance policy from the insurance company. Complete detail of the appeal, complaint number, name of the insured, policy number and the sum insured is given in the following table.
Sr. No. Appeal No. Complaint No. Name of the insured Policy No. Sum insured
1. 318/2009 67/2005 Rita Anand 111301/11/03/00435 Rs.25 lacs
2. 319/2009 74/2005 Manorma Anand 111301/11/03/00434 Rs. 25 lacs
3. 320/2009 68/2005 Ashok Bhasin 111301/11/03/00436 Rs. 10 lacs
4. 321/2009 66/2005 Bharti Sahni 111301/11/03/00437 Rs. 10 lacs.
6. Further averments in the complaints were to the effect, that the aforesaid building was constructed jointly as per lay out/construction plan by them as they are the member of the same family. During the subsistence of the said policy, their building suffered substantial damage due to the subsidence and sinking of the road, named Solan Rajgarh Road which adjoins and abuts their building. They noticed the damage in the month of May, 2004 which was initially mild in nature, but gradually it started aggravating thereby posing threat to the existence of the building/structure. Damage/cracks which appeared in the building and its pillars suffered due to the sinking and subsidence of the adjoining road, as such intimation was given to the insurance company by them. It was also requested to take up the matter in view of the insurance policy obtained with respect to the aforesaid building to indemnify them. But the insurance company on one pretext or the other, dilly dallied the matter. Finally their claim was repudiated on the ground of suppression of material facts and also on the ground that the designing of the structure was defective. In this background, the present complaints U/S 12 of the Consumer Protection Act, 1986 for alleging deficiency in service on the part of insurance company were filed. They claimed an amount of Rs. 12 lacs alongwith interest @ 18% per annum, besides cost of the complaint and damages to the tune of Rs 1 lacs.
7. Insurance company contested and resisted the complaints on the ground, that the respondents has deliberately and purposely concealed the material facts from it at the time of obtaining insurance because as per report of the Investigator/Loss Assessor, it was found that the tilt in the building in question had started much prior to the purchase of insurance which came to its notice after investigator/loss assessors report. The insured had been carrying on precautionary and preventive measures by making necessary repairs in parts of the building even prior to 23.9.2003 when they got the insurance cover, and this fact was purposely concealed by all of them. As such they had clandestinely got their entire building covered for a heavy sum of Rs. 70 lacs collectively on 23.9.2003.
Further plea of the insurer was, that it was conclusively found by the surveyor, that the tilting of the building and minor damages caused to it were due to deficient design and faulty construction. As the tilt of the building was not due to subsidence soil, as such the claim of the insured had been rightly repudiated and there was no deficiency of service on its part.
8. Brief resume of evidence led by the parties in the present case in nutshell is being noted now. Insured in the present case placed on record their own affidavits Ext. C-1 to C-4 and affidavits of S/Sh. R.P. Swami Retd. Civil Engineer, Praveen Bansal, Prop of M/s Shivalik Agency Solan, Karam Chand Govt./ Private contractor, Trilochan Singh building material contractor, Rattan Singh, Lal Singh, Nitin Goel, Prop of M/s Goel Brothers, Pawan Kumar Prop of Shani Traders, Mohan Lal, Ganga Ram, Dila Ram, Ashraf Khan, Ram Lal, Bashir Chand and Ram Singh, Exts. C-5 to C-20. Documents viz. Tatima, Jamabandies, certificate of District Revenue Officer, letters exchanged between the Executive Officer Municipal Council Solan and the insured as well as the letters exchanged between them and the insurer, besides correspondence exchanged between the Chartered Engineer/ Surveyor Annexures C-21 to C-24. Letter addressed to Executive Engineer (B &R) Solan by the insured, Annexure C-25 letter addressed to the insured by the Executive Officer Annexure C-26 and Annexure C-27 copy of the notice served upon the insurer by the insured through their Advocate P.S. Goverdhan and letters exchanged between appellant Manorama and the Branch Manager Annexures C-28 to C-31, sale deed Annexure C-32, jamabandi Annexure C-33, insurance cover note Annexure C-34 and various bills/receipts Annexures C-35 to C-117, photographs Annexures C-118 to C-126, report of the Expert Engineer R.P. Swami Annexures C-127 to C-128 and building plan Annexure C-129.
9. Insurer in support of its claim had filed affidavits of its Branch Manager Sh. Pradeep Annexure RA, affidavits of surveyor S/Sh. H.N. Ghandi, Sumant Sood and K.S. Baweja Annexures RB to RD respectively. It has also relied upon documents, Annexures R-1 to R-19. These are original proposal form, claim form, copy of insurance policy, copy of correspondence exchanged between the parties to these appeals. Preliminary survey report of Sh. H.N. Ghandi dated 13.7.2004, investigation report of Sh. K.S. Baweja surveyor, statement of shopkeepers/occupants of Anand Niwas, photographs abd original report of surveyor Sh. Sumant Sood dated 26.11.2004, Annexure R-17.
10. We have heard learned counsel for the parties at length and have also gone through the record file minutely.
11. Mr. P.S. Chandel learned counsel for the insurer argued, that the order of the District Forum below is erroneous being contrary to law and has been passed without proper appraisal of material on record. It also reflects non application of mind, as his client was justified in repudiating the claim of the insured on the ground that they had suppressed material facts relating to the damage caused to the building in question prior to taking of the policy also by ignoring the statements of the tenants of the building, who had stated that damage to the building was already in existence at the time of taking policy. This particular aspect the District Forum below had illegally not taken into consideration the said fact, only because of non filing of affidavits of the tenants. Other ground on which much stress was laid by Mr. Chandel was, that the damage to the building was caused due to faulty design and construction and acts of any subsidence of the land below the foundation of the building, and the technical survey report placed on record clearly established this aspect, as such the claim of the insured did not fall under the terms and conditions of the insurance policy, as such it was rightly rejected. Consequently there was no deficiency of service on the part of his client per Mr. Chandel. He has also placed reliance upon the documents referred to hereinabove for allowing the appeals of the insurer and dismissing those filed by the insured, and consequently dismissing all the four complaints with cost.
12. Mr. P.S. Goverdhan, learned counsel for the insured argued that the repudiation of the claim vide Annexure R-18 on the alleged grounds is not justified at all in view of the oral/documentary evidence on record placed by the insured.
The report of Sh. R.P. Swami, Civil Engineer submitted by his clients in its evidence is duly supported by his affidavit proved their case. District Forum below, has awarded compensation on lower side by placing reliance on the report of surveyor, Sh. Sumant Sood Annexure R-17. As per him there was no suppression of material facts by his clients. Thus as per evidence on record, no reliance should have been placed on the report of the surveyor relating to the fact of non disclosure of material facts by the insured, as no affidavits of the tenants in the premises were placed on record.
13. Further per Mr. Goverdhan, even the report Annexure C-17 is not supported by any reason, when the surveyor concluded that the cause of damage to the building was due to deficient designing, coupled with extensively poor workmanship and the fact that the building had tilted due to deficient design in construction, had also placed reliance on the opinion of Mr. Dhillon who had also attributed damage on the building because no provision for the drainage of soil water was kept while constructing the retaining wall, and thus it wrongly concluded that building had tilted without subsidence of base soil below foundation, but due to the inadequate construction is also not legally warranted as per evidence on record.
14. He laid stress upon the report of the surveyor Sh. H.N. Gandhi, Annexure R-8 who had given various probable factors for damage to the building in question.
15. He also argued that legally the second surveyor could not be appointed in the present case under the Insurance Act, 1938, as no case is shown to have been made out as per provisions of Section 64 UM of the said Act. At the same time evidence on record does not depict justifiable reasons for the appointment of second surveyor in the present case. It also does not appear from the record that the sanction of the competent authority had also been obtained while appointing the second surveyor. Further per learned counsel at no point of time insurance policy was revoked by the insured.
16. Lastly Mr. P.S. Goverdhan argued that since the entire repair work was carried out in basement bay 2 and 5 of the building which exclusively belongs to the appellants named Smt. Rita Anand, Ashok Bhasin and Bharti Sahni as such the deduction made by the District Forum below while basing its order on item No. 14 of the report of Sumant Sood Annexure R-17 was wrong and liable to be rejected. As such the insured were entitled to the sum claimed in the complaints. Other owners viz., S/Sh. Gagan Anand & Vishal Anand whose portion of building had not suffered any damage nor any repair was undertaken by them have no concern, nor were they entitled to any claim, as such the order of District Forum below was not legally sustainable. He also placed reliance upon the judgment of Apex Court given in case United India Insurance Co. Ltd. Vs. Pushpalaya Printers, (2004) 3 Supreme Court Cases 694 and judgment of this Commission given in case Kamal Raj Malhotra and Anr. Vs. The Oriental Insurance Co. Ltd. 2008 (2) CPR 82.
17. After hearing the learned counsel for the parties and having going through the record of the complaint files, we are of the considered view that there is no force in Appeal Nos. 318/2009 to 321/2009 filed by the Insurance Company since there is no iota of evidence on record to prove their plea to the effect, that there is material suppression of facts by the insured. Likewise plea taken by the appellant with reference to the reports of S/Sh. K.S. Baweja, A.J. Dhillon and Sumant Sood, that the tilt in the building in question had started/taking place much prior to the purchase of insurance policy by the insured and conclusions drawn by the surveyors was based upon the statements of tenants. But no affidavits of tenants were placed on record. On this particular aspect reports of these person need to be rejected and we order accordingly. As such we cant draw the conclusion that there was material suppression of fact on the part of the insured. Thus we cannot concur with the plea of the insurer, that the building of the insured had developed defects prior to taking of the policy by them. Resultantly repudiation of the claim by the insurer on this score is not legally justified, as it amounts to deficiency of service on its part.
18. There is also no force in the plea of the appellants that the damage to the building had been caused due to the faulty workmanship or faulty designing, or due to non providing of proper drainage by the respondents regarding which much reliance was placed by the insurer on the reports of S/Sh. A.J. Dhillon, R-7, H.N Gandhi R-8, K.S. Baweja R-11 and of Sumant Sood R-17. A perusal of all these reports suggests that those are not supported by any reason. As none gives the details of the faulty design/workmanship. Likewise another vital aspect to make these reports acceptable, these reports are slient.
19. On the basis of the material on record, we are inclined to conclude that for want of elucidation/discernment of the structural design of the RCC columns/retaining wall no faulty design or workmanship could be the reason for tilting the insured building as claimed by insurer. Even the reports Annexures R-7 and R-8 do not give details of the columns on which the building of the insured stood had been given way or that columns were not raised on the hard strata. Like the reports do not reveal how the RCC and tie beams were of faulty design or were of substandard material. As such the conclusion drawn by the surveyors in the absence of such investigation were not sustainable. Therefore those need to be rejected. Ordered accordingly. What were the shortcoming for want of proper drainage of the water are not mentioned in any of the reports. In fact all observations about faulty design, poor construction lack of drainage and defects being already at the time of obtaining insurance are general in nature without further elaboration.
20. It is clear from the report of Sh.
H.N. Gandhi Annexure R-8, wherein he had given various probable factors involved in the damage to the building at page 88 thereof in para 4 (i) to the effect, that this building is located just on Solan Rajgarh road which is a very busy road and heavy traffic passes over it. The fact of heavy traffic can be assumed to effect the above building. That the traffic pressure, impact on R/walls and columns tilt could be possible. Even from the report of surveyor it is clearly depicted that the insured building had been found tilted as such the tilting of the building cannot be said to be due to normal cracking or the settlement of the building so as to make out a case falling within the exclusionary clause 8(a), but it does fall within the inclusionary clause 7 of the insurance policy. Condition No. 7 and 8 of the insurance policy have been reproduced in detail by the District Forum below in para 7 of the impugned order which need not be repeated for the sake of brevity.
21. There appears to be force in the plea of Mr. P.S. Goverdhan that the appointment of second surveyor in the present case is not legally justified in view of the provisions contained in Section 64UM of the Insurance Act, 1938. No cause was shown within the meaning of this section to have appointed second surveyor by the insurer.
22. In view of the detailed discussion above, it is clear that the second surveyor Sh. Sumant Sood could not have been appointed. Thus his report, Annexure R-7 need not be looked into as was urged by Mr. Chandel to allow insurers appeals. Likewise there is no iota of evidence on record to prove that the approval of the competent authority for the appointment of second surveyor in the present was obtained as per law. For taking this view we rely on the decision of National Commission, in the case of National Insurance Company Versus Sindhi Sweets and others, 2008 (1)CLT-22.
23. What falls from the above discussions is that the insurance company had illegally rejected the claim of the insured. Their cases are covered by judgment of the Apex Court given in case Dharmendra Goel Vs. Oriental Insurance Company Ltd., III (2008) CPJ 63 (SC). This decision is fully applicably on the conduct of the insurance company, wherein it was observed that insurance company being in a dominant position, cannot act in an unreasonable manner, and after having accepted the value of the insure goods disown that very figure on one pretext or the other when they are called upon to pay compensation. Its take it or leave it, attitude was not warranted not only as being bad in law, but ethically indefensible.
24. Hence in the alight of the above discussion and the facts and circumstances of this case, there is no force in the appeals of the insurer as the claim of the insured was wrongly repudiated which action of the insurer was not legally justifiable. Consequently repudiation of the claim cannot be upheld.
25. In the present case there is also complete violation of Regulation 3 of Insurance Regulatory and Development Authority (Protection of Policy Holders Interest) Regulations, 2002. As there is no iota of evidence to show whether nature of insurance, exceptions, exclusions, benefits etc. and condition of insurance cover were explained to the insured. This caused prejudice to the insured and we are also supported by this view taken by the Apex Curt in case of National Insurance Co. Ltd. Vs. D.P. Jain, III (2007) CPJ 34 (NC). There is no dispute about the settled legal proposition in the matter in cases relied upon by Mr. Goverdhan learned counsel for the appellant.
26. There appears to be force in the plea of insured in appeals filed by them for enhancement of the compensation detail thereof is already given hereinabove. Reason being that the District Forum below had not taken into consideration the detailed report submitted by Sh. R.P. Swami, Assistant Engineer retired Civil Engineer who had given the estimated cost to be incurred for restoring the building in its original position which have been estimated to Rs. 8.50 lacs and also had not taken into consideration the various bills and receipts submitted by the appellants Annexures C-35 to C-117 and damage to the building is clearly supported by the photographs annexed with the complaints by the appellants Annexures C-118 to 126. Thus the compensation awarded to each one of the appellants vide impugned order needs to be enhanced as follows:-
Sr. No. Appeal No. Complaint No. Compensation awarded by Enhanced compensation DistrictForum below. Awarded in appeal Mentioned at Sr. 1 to 4.
1. 308/2009 66/2005 Rs. 1,24,994/- Rs.
2,10,000/-
2. 309/2009 68/2005 Rs. 1,24,994/- Rs.
2,10,000/-
3. 307/2009 74/2005 Rs. 84,199/- Rs.
1,75,000/-
4. 310/2009 67/2005 Rs. 84,1999/- Rs.
1,75,000/-
27. From the report of Sh. Sumant Sood Annexures R-17 and C-131 it is evident that the entire repair work was carried out in basement 1 and 2 and bay 5 and 6 of the building which exclusively belongs to the insured, namely Smt. Ritta Anand, Ashok Bhasin and Bharti Sahni and Manorma Anand. In the face of stand of each one of the insured no deduction could have been ordered for owners S/Sh. Vishal Anand and Gagan Anand whose portion of building neither suffered any damage, nor any repair was taken by them, so they had no concern with the said building, therefore they were not entitled for any claim and by including them the deduction were unwarranted.
28. No other point was urged.
In view of the aforesaid discussion and keeping in view the facts and circumstances of the case, we dismiss Appeal Nos. 318/2009 to 321/2009 filed by the Insurance Company, and partly allow the Appeal Nos. 307/2009 to 310/2009 filed by the insured by enhancing compensation as detailed in preceding para. Rest of the order regarding awarding interest and cost is upheld. It is further directed that in case the enhanced amount is not deposited by the insurance company within a period of 45 days from the date of this order appellant would be entitled to interest at the rate of 9% per annum from that date until the deposit of such amount.
All interim orders passed from time to time in Appeal Nos. 318/2009 to 321/2009 shall stand vacated forthwith.
Office is directed to place authenticated copy of this order on the file of Appeal Nos. 308/2009 to 310/2009 and 318/2009 to 321/2009.
Learned counsel for the insurer has undertaken to collect copy of this order from the Court Secretary free of cost as per rules, and office is directed to send the same to Mr. P.S. Goverdhan, Advocate at his address District Courts, Solan.
Office is directed to do the needful in accordance with rules.
Shimla.
September 29, 2010. ( Justice Arun Kumar Goel ) (Retd.) /KGuleria/ President.
(Saroj Sharma) Member.
(Chander Shekher Sharma) Member.