National Consumer Disputes Redressal
Shambhunath Balmukund vs New India Insurance Co. Ltd. on 31 May, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 225 OF 2004 (Against the order dated 15.04.2004 in Complaint No. 184 of 2001 of the State Commission Uttar Pradesh, Lucknow) Shambhunath Balmukund ........ Appellant Haridwar Road, Shanpur Nazibabad District, Bijnore ( Through Rajul Randhar, Partner) Vs. The New India Insurance Co. Ltd. ........ Respondent Cort Dwar Road, Nazibabad Distt. Bijnore ( U.P.) Through its Branch Manager BEFORE: HON'BLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER HONBLE MR. ANUPAM DASGUPTA, MEMBER For the Appellant : Shri Tanmaya Mehta, Advocate For the Respondent : Ms. Minakshi Midha, Advocate Dated : 31st May, 2011 ORDER
PER JUSTICE R.C.JAIN, PRESIDING MEMBER This appeal was earlier decided by this Commission vide an order dated 09.07.2009 thereby directing the respondent-insurance company to make the payment of the balance amount (i) after deducting 1/3rd of the amount from the net liability of Rs.15,40,814/- as assessed by the surveyor and (ii) after adjusting the amount already paid to the complainant, with interest @ 9% p.a., within six weeks from the date of the said order. Aggrieved by the said order, the appellant / original complainant filed Civil Appeal No.8526 of 2010 arising from SLP (C) No.27947 of 2009 in the Supreme Court. The Supreme Court, vide order dated 04.10.2010 allowed the appeal, set aside the order passed by this Commission and remanded back the appeal to this Commission to decide the same afresh in accordance with law taking into account the terms of the insurance policy and other material on record. Parties were left to urge all contentions available to them before this Commission. It is under these circumstances that the appeal is again before this Commission. The facts and circumstances which gave rise to the filing of the complaint have been amply noted in the order of the State Commission and also in our order dated 09.07.2009 and need no repetition in this order.
2. In this case, there is no dispute in regard to the complainants having taken the insurance covering any loss to the stock of molasses and rab stored in the cemented underground pits and the loss having been actually caused on account of the water seeping in the pits due to heavy rains between 30.08.2000 to 02.09.2000.
3. On being intimated about the said loss, the insurance company appointed Premier Consultancy Services, surveyors and loss assessors for assessing the loss caused to the complainant due to damage to its stock of mollases / rab. Though the said surveyor assessed the net loss suffered by the complainant at Rs.15,40,814/- as against the loss of Rs.25,47,450/- claimed by the complainant, by taking into account certain aspects termed as cause factors, the surveyor in its wisdom recommended the payment of only 1/3rd of the said assessed loss of Rs.15,40,814/-, i.e., a sum of Rs.5,13,605/- only as the valid and payable portion of the loss covered under the fire and special perils policy taken by the complainant. The insurance company settled the claim of the complainant in the said sum and paid a sum of Rs.4,67,434/- to the complainant.
According to the insurance company, this was in full and final settlement of the claim of the complainant.
However, according to the complainant, the said amount was received under protest and was not in full and final settlement. Therefore, it filed the complaint, without prejudice to its right to claim the balance amount. Accordingly, the complaint was filed claiming the following reliefs:
a. Being balance amount of claim being amount claimed less salvage & amount paid.
Rs.25,47,450 minus 4,99,500 salvage minus Rs.15,80,316 Rs.4,67,634/- (paid) b. For testing fee paid Rs. 10,000 c. Plus interest at the rate of 18% per annum on Rs.80,47,950/- from 6.12.2000 (3 months from the date of loss) till 27.04.2001 Rs.1,43,412 d. Plus interest at the rate of 18% per annum from 27.04.2011 till 9th Nov.01 the date of complaint.
Rs.15,80,316/- Rs.1,60,441.00 e. Plus cost of complaint 10,000,00 ________________ Total 19,04,169
4. The complaint was resisted by the insurance company denying any deficiency in service on its part and maintaining that the claim of the complainant was finally settled and amount paid as per the assessment made by the surveyor in full and final settlement and, therefore, the complainant was not entitled to any further amount. The State Commission, on consideration of the respective pleas and evidence and material brought on record, however, dismissed the complaint. Aggrieved by the said order, the complainant filed First Appeal No. 225 of 2004 which was decided by this Commission on 09.07.20090 in the above manner.
5. We have heard Mr.Tanmaya Mehta, Advocate, learned counsel representing the appellant and Ms. Minakshi Midha, Advocate, learned counsel representing the respondent and have considered their respective submissions.
6. There is no dispute about the insurance company having issued a fire and special peril policy and the peril having actually taken place resulting in loss to the complainant. Learned counsel for the complainant has not seriously challenged the report of the surveyor insofar as the net loss at Rs.15,40,814/- after deducting 5% towards excess of policy as per the insurance policy. However, a strong challenge has been made to the finding of the surveyor appearing in the said report by which the surveyor had recommended deduction of 2/3rd of the assessed amount of loss by taking into account aspects of the cause factors and recommending payment of only 1/3rd of the said loss. According to the learned counsel, there was no sound basis for making any deduction from the said assessed loss and the so-called reasons given by the surveyor were non-existent and can be said to be extraneous to the matter. The reasons which prompted the surveyor to make such and finding and recommendations are spelt out in para 10 under the heading Cause of Damage and Conclusion appearing in para 10 of the report, which read as under:
CAUSE OF DAMAGE This is established taking into account our site observations, confirmed facts and various aspects of the case as follows:
(a) Contents of Rab-III in Pits 1, 2 & 8 to 13 were contaminated with dirty water.
(b) Dirty water of inundation of surrounding terrain had entered the affected pits through gaps / cracks in the side walls after the water had penetrated through the soft/soggy earth outside the parapit walls of the pit.
(c ) Water had not overflowed from the top of the parapit walls of the pits because the water level reached maximum of around 3-4 over gr. Level whereas the parapit walls are a least 18 high.
(d) The side walls of pits including parapit walls were not plastered either inside or outside as can be clearly seen from photographs. The walls were not even adequately protected against water proofing. At some places the walls had even cracked and had sagged inwards.
(e) Water did not penetrate in may pits ( like 2, 3,4, 5,6 etc) where hardly 9 Rab was present which made it very prone for outside water to enter due to differential between outside high level of water in earth and low level inside the pits. [ We do not agree with Insureds contention that inundation affected these pits. Had any water penetration taken place, then the liquid level would have been quite high and certainly not as low as 9 only and that too of thick viscous Rab.] CONCLUSION Damage to the Rab stored in pits were caused as a result of contamination with inundated surface water which entered the pits from weak walls and un-plastered surface not having suitable protection. Had the walls been adequately strong and properly water-proofed such damages would have been avoided. Also on the other hand, had there been no flooding the contamination damage would not have taken place. It was the combination of two factors viz. (1) Flooding of terrain and (ii) structural failure which combined to cause the damage in present case.
7. From a perusal of the said observations and findings, it would appear that what weighed with the surveyor in recommending payment of the claim only to the extent of 1/3rd of the net assessed loss is that it was the structural failure of pits which led the water to seep from weak walls and un-plastered surface having unsuitable protection. Whether these findings can be relied and acted upon is the question which needs to be considered.
We are informed and even otherwise it is not disputed that before issuing the policy, the opposite party had inspected the plant of the complainant including the pits where damage to rab was caused and it was only after satisfying the nature of the structure of these pits that the insurance company had agreed to issue the insurance policy. That being the position, it was not open for the surveyor to have gone into the question whether the pits had been suitably built.
8. Counsel for the opposite party has, however, supported the line of reasoning given by the surveyor so as to reduce the assessed claim by 2/3rd. In our view, having regard to the entirety of the facts and circumstances and the fact that damage to the molasses contained in the pits is not disputed and the extent of loss caused to the complainant is also not being in dispute, the surveyor was not justified in making any deduction from the net assessed loss on the strength of Cause Factors. The insurance company ought to have settled the claim of the complainant at Rs.15,40,814/- as per the assessment. Since it was not done, the opposite party is considered deficient in service. As it is not disputed that the complainant has already received a sum of Rs. 4,67,434/- from the opposite party, the opposite party is liable to pay balance sum of Rs.10,73,380/- and also compensation by way of interest for the delay in settling the total claim of the complainant.
9. In the result, appeal is allowed and order of the State Commission is set aside. As a consequence, the complaint is allowed with direction to the opposite party insurance company to pay the balance sum of Rs.10,73,380/- with interest @ 9% p.a. w.e.f. date of complaint till payment.
Payment shall be made within six weeks from the date of this order failing which the rate of interest shall enhance to 12% p.a. from the date of default. Costs are made easy throughout.
Sd/-J (R.C. JAIN) ( PRESIDING MEMBER) Sd/-
(ANUPAM DASGUPTA) MEMBER Am/