State Consumer Disputes Redressal Commission
Ansuya Prasad Sharma vs The Oriental Insurance Co.Ltd. And ... on 6 September, 2018
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND
DEHRADUN
CONSUMER COMPLAINT NO. 28 / 2014
Sh. Anusuya Prasad Sharma S/o Sh. Jagdamba Prasad
R/o Village Semi, Post Guptkashi
District Rudraprayag
through his General Attorney
Sh. Pramod Kumar Sharma S/o Sh. Anusuya Prasad Sharma
R/o Village Semi, Post Guptkashi
District Rudraprayag
......Complainant
Versus
1. The Oriental Insurance Company Limited
through its Branch Manager
Opposite Garhwal Vishwavidyalaya
Srinagar, Garhwal
2. State Bank of India
through Branch Manager
Branch Guptkashi, District Rudraprayag
......Opposite Parties
Sh. R.K. Garg, Learned Counsel for the Complainant
Sh. Suresh Gautam, Learned Counsel for Opposite Party No. 1
None for Opposite Party No. 2
Coram: Hon'ble Mr. Justice B.S. Verma, President
Mrs. Veena Sharma, Member
Dated: 06/09/2018
ORDER
(Per: Justice B.S. Verma, President):
This consumer complaint under Section 12 read with Section 18 of the Consumer Protection Act, 1986 has been filed by Sh. Anusuya Prasad Sharma (hereinafter referred to as "complainant") through his General Attorney Sh. Pramod Kumar Sharma against the opposite parties - The Oriental Insurance Company Limited and State Bank of India, alleging deficiency in service on account of repudiation of his claim by the insurance company.2
2. Briefly stated the facts of the case are that the complainant had got his hotel known as "Hotel Devbhoomi" situated at Village Semi, Post Guptkashi, District Rudraprayag insured with the opposite party No. 1 - The Oriental Insurance Company Limited under Standard Fire & Special Perils Policy for the period from 09.07.2013 to 08.07.2014 for total sum insured of Rs. 40,00,000/-, i.e., Rs. 35,00,000/- towards building; Rs. 3,50,000/- towards other contents and Rs. 1,50,000/- towards furniture, fixtures and fittings. Before issuing the insurance policy, spot inspection was made by the officials of the insurance company in presence of bank officials. Due to incessant rain and landslide on 25.08.2013, the insured building of the hotel was completely damaged and the goods lying inside the hotel including furniture etc. also got fully damaged. The complainant gave the intimation of loss to the local administration. The complainant had taken loan of Rs. 20,00,000/- from opposite party No. 2 - State Bank of India for construction of building. The complainant gave the intimation of damage of insured property to the opposite parties on 29.08.2013 and submitted the claim with the insurance company. The insurance company, however, repudiated the claim vide letter dated 12.08.2014 on incorrect grounds. The complainant is entitled to the entire insured amount. Therefore, alleging deficiency in service on the part of the insurance company, the complainant filed the present consumer complaint and prayed for the reliefs, as mentioned in para 18 of the consumer complaint.
3. The opposite party No. 1 - insurance company filed written statement (Paper Nos. 31 to 35) and pleaded that as per the report of the Patwari, the loss / damage to the insured building has started w.e.f. 16/17.06.2013, whereas the policy was issued on 09.07.2013; that the building was already in damaged condition before the insurance; that 3 the complainant has concealed the material facts; that the surveyor appointed by the insurance company has found that the insured premises was damaged prior to the insurance coverage; that the claim was rightly repudiated by the insurance company vide letter dated 12.08.2014 and that there is no deficiency in service on their part.
4. The opposite party No. 2 - bank filed written statement (Paper Nos. 40 to 43) and pleaded that the bank has sanctioned a loan of Rs. 20,00,000/- on 08.10.2011 in favour of the complainant for construction of a lodge and restaurant named as Hotel Devbhoomi Palace; that the complainant got the hotel insured on 09.07.2013 after the natural disaster struck the region on 16/17.06.2013; that the hotel got completed much before the date of insurance; that the inspection report dated 19.12.2013 of the bank official states that the hotel was functioning for the last 10 months'; that the complainant has violated the terms and conditions of the loan and that there is no deficiency in service on their part.
5. In evidence, the complainant has filed the affidavit dated 13.03.2018 of Sh. Pramod Kumar Sharma (Paper Nos. 54 to 57). The opposite party No. 1 has filed the affidavit dated 21.05.2018 of Sh. S.P. Singh, Regional Manager (Paper Nos. 61 to 64) in evidence together with certain documents including the report of the surveyor. The complainant has also filed the affidavit dated 02.07.2018 of Sh. Pramod Kumar Sharma (Paper Nos. 89 to 90) in rebuttal to the evidence filed by the insurance company.
6. None appeared on behalf of opposite party No. 2 - bank. We have heard the learned counsel for the complainant as well as opposite party No. 1 - insurance company and gone through the record. On 02.07.2018, none was present on behalf of opposite party No. 2 -
4bank and it was ordered that in case the opposite party No. 2 would not be present on the next date fixed, the consumer complaint shall proceed ex-parte against opposite party No. 2.
7. The insurance company has repudiated the claim of the complainant through letter dated 12.08.2014 (Paper Nos. 18 to 19) on the ground that the damage to the insured property had started on 16/17.06.2013, on which date, the natural calamity took place, which fact was concealed by the complainant at the time of obtaining the insurance policy on 09.07.2013 and hence on account of close proximity, the claim is not payable by the insurance company.
8. We do not find any force in the above defence taken by the insurance company. The reason being that if the insured property was already in damaged condition on the date of issuance of insurance policy, i.e., on 09.07.2013, the insurance company ought to have declined / refused the proposal of insurance of proposed property. It is very funny on the part of the insurance company to say after getting the property insured and receiving the requisite premium that the insured property was already in damaged condition on the date of insurance. Had it been so, there was no compulsion on the part of the insurance company to undertake the insurance of the proposed property and they could have rejected the proposal of insurance. This apart, in para 3 of the consumer complaint, the complainant has specifically stated that before insuring the property, spot inspection was made by the officials of the insurance company in presence of the bank officials. However, the said averment had been denied by the insurance company in para 3 of their written statement and it has been stated that they have not inspected the complainant's premises before the insurance, but the fact remains that the property was insured and if the spot inspection was not made by the insurance company before issuing the insurance policy and getting the property insured, it is the 5 insurance company who has to bear the consequences thereof and not the complainant. Even otherwise, the above defence taken by the insurance company is belied by the letter dated 21.02.2014 (Paper Nos. 14 to 15) issued by the opposite party No. 2 to the surveyor of the insurance company, wherein it has been clearly stated that the Patwari was asked to clarify the reason of mentioning 16 th / 17th June in his certificate and the Patwari has justified the actual cause that there is no connection of 16th / 17th June with the 25th August, 2013 landsliding and the incident had happened all of a sudden and there is no resemblance of the date. The bank has made a request to process the claim as soon as possible.
9. Thus, it is clear that there was clear-cut deficiency in service on the part of the insurance company in repudiating the legitimate and genuine claim of the complainant and the claim of the complainant was repudiated by the insurance company on unwanted grounds, which do not find favour with the material on record.
10. So far as quantum is concerned, the total sum insured under the insurance policy was Rs. 40,00,000/-, i.e., Rs. 35,00,000/- towards building; Rs. 3,50,000/- towards other contents and Rs. 1,50,000/- towards furniture, fixtures and fittings. The complainant has alleged that in the incident in question, the entire insured property has been damaged. There is no specific denial of this fact from the side of the insurance company. The insurance company has appointed Sh. Rajeev Kumar Gupta, surveyor and loss assessor for assessment of the loss. The said surveyor has submitted his report dated 10.02.2014 (Paper Nos. 80 to 88) to the insurance company. The surveyor has assessed the loss to the tune of Rs. 34,29,896.47/-, but has stated that the sum insured of the hotel building is not adequate and hence average clause is to be applied. The surveyor has further stated that the current value of the hotel building as per BOQ submitted by the 6 insured is Rs. 1,13,26,135/- and by applying the average clause, the surveyor has assessed the loss to the tune of Rs. 10,59,905.93/- and after deducting 25% towards value of salvage and 5% towards excess clause, the net loss has been assessed by the surveyor as Rs. 30,936.99/-, say Rs. 30,937/-. We do not find any justification on the part of the surveyor for applying the average clause. It is a settled law that the insurance company is bound by the amount mentioned in the insurance policy. Thus, the complainant was entitled to compensation of Rs. 34,29,896.47/- after the deductions admissible under the insurance policy. We find ourselves in agreement with deduction @25% made by the surveyor towards salvage value and deduction @5% towards excess clause. This way, sum of Rs. 8,57,474.12/- towards value of the salvage and Rs. 1,71,494.82/- towards excess clause need to be deduced from the assessed loss of Rs. 34,29,896.47/- and after deducting both the above sums, the net compensation payable to the complainant comes to Rs. 24,00,927.53/-, say Rs. 24,00,928/-. Since there has been deficiency in service on the part of the insurance company by not settling the genuine and legitimate claim of the complainant and hence the complainant is entitled to interest @7% p.a. on the above amount from the date of filing of the consumer complaint till payment and Rs. 10,000/- towards litigation expenses.
11. For the reasons aforesaid, consumer complaint is allowed and the opposite party No. 1 - insurance company is directed to pay compensation of Rs. 24,00,928/- to the complainant together with interest @7% p.a. from 27.12.2014, the date of filing of the consumer complaint till payment and Rs. 10,000/- towards litigation expenses.
(MRS. VEENA SHARMA) (JUSTICE B.S. VERMA) K