State Consumer Disputes Redressal Commission
National Insurance Company Limited vs Arun Aggarwal on 7 September, 2017
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
CHANDIGARH.
First Appeal No.390 of 2017
Date of institution : 24.05.2017
Reserved on : 24.08.2017
Date of decision : 07.09.2017
National Insurance Company Limited through its Chairman-cum-
Managing Director/Principal Officer service through its Branch Office
at Batala Road, Amritsar through its Branch Manager/Principal
Officer, through authorized signatory, Regional Office, National
Insurance Company Limited, SCO 332-334, Sector 34-A,
Chandigarh.
.......Appellant-Opposite Party
Versus
Mr. Arun Aggarwal son of Shri Parmanand Aggarwal, resident of F-
7/50, Kashmir Avenue, Amritsar.
........Respondent/Complainant
First Appeal against the order dated
14.3.2017 of the District Consumer
Disputes Redressal Forum, Amritsar.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mrs. Kiran Sibal, Member
Present:-
For the appellant : Shri S.S. Sidhu, Advocate. For the respondent : Shri Sukhandeep Singh, Advocate. JUSTICE PARAMJEET SINGH DHALIWAL, PRESIDENT:
This appeal has been preferred by the appellant/opposite party against the order dated 14.3.2017 passed by District Consumer Disputes Redressal Forum, Amritsar (in short, "District Forum"), vide which the complaint filed by the respondent/complainant under First Appeal No.390 of 2017 2 Section 12 of the Consumer Protection Act, 1986, was allowed and the opposite party was directed to pay insurance claim to the tune of ₹6,02,351/- to the complainant along with interest @ 9% per annum from the date of filing of the claim until full and final recovery and cost of litigation of ₹2,000/-.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Forum. Facts of the complaint:
3. Brief facts, as averred in the complaint, are that the complainant got insured his house and other risks by obtaining two Insurance policies i.e. i) Standard Fire and Special Perils Policies bearing No.404402/11/13/3100000544 for the period from 23.7.2013 to 22.7.2014 for the building above plinth level situated at F/7-50, opposite Tikona Park, Kashmir Avenue, Amritsar for a sum of ₹50,00,000/-; and ii) Householders Insurance Policy bearing No.404402/48/13/3600000833 for the period from 22.7.2013 to 21.7.2014 for the sum assured of ₹10,00,000/-. Unfortunately fire broke down on 2.5.2014 in the said house of the complainant due to short circuit resulting into damage to the building as well as loss of various items. In this regard the complainant lodged the claim with the opposite party with reference to the insurance policies in question claiming a total sum of ₹7,63,951/-. The complainant also submitted his estimate prepared by M/s Raj Kumar Associate. Thereafter the Surveyor was appointed to assess the loss. However, he assessed the loss to the tune of ₹1,61,600/-. This amount was assessed during the pendency of the execution First Appeal No.390 of 2017 3 application as the complainant had also earlier filed Consumer Complaint No.451 of 2014, which was decided on 19.1.2016 wherein the District Forum had given direction to the complainant to submit the repair bills to the opposite party and the opposite party was directed to settle the claim. The bills were allegedly rejected by the Surveyor by saying that the same are not in order. Aggrieved against that the execution was filed by the complainant whereby the payment of ₹1,61,600/- was made and the assessment report was filed there. Feeling further aggrieved that the claim has not been appreciated properly, the complainant filed another complaint out of which this present appeal has arisen, which has been allowed by the District Forum, vide impugned order. In the second complaint, the complainant has specifically pleaded that the bills have been wrongly rejected whereby the claim was raised and the Insurance Company has intentionally paid less claim.
Defence of the Opposite Party:
4. In pursuance of the notice the opposite party appeared and filed written version claiming that second complaint is not maintainable. The complainant has earlier filed Consumer Complaint No.451 of 2014, which was decided on 19.1.2016.
Thereafter the Execution Application was also filed wherein an amount of ₹1,61,600/- has been paid to him. Now, the complainant cannot come to the District Forum for further relief. The estimate prepared by the complainant was through his brother i.e. M/s Raj Kumar Associate, which was exaggerated one. There was a basic difference with regard to the following six bills:- First Appeal No.390 of 2017 4
i) Balwinder Singh Generator Repair Bill No.226 = ₹2,01,730/-;
ii) Sunny Enterprises-Bill No.53 = ₹18,750/-;
iii) Modern Fert Works Bill No.4100 (not damaged)= ₹1,380/-;
iv) Sunny Enterprises Bill No.63 repeated
against Bill No.53 = ₹19,000/-
v) Baba Deep Singh Handloom Bill No.96 = ₹25,300/-
vi) Amrit Electric Co. Bill No.134 = ₹3,000/-
------------------------
Total: ₹2,69,160/-
------------------------
In fact the aforesaid bills are not covered and have rightly been rejected by the Surveyor i.e. M/s Ashwani Gupta & Co. and the claim was rightly assessed for ₹1,61,600/-, which has already been paid to the complainant during the pendency of the Execution Application.
On merits, the averments made in the complaint were denied. However, it was admitted that the fire broke down due to short circuit and it was also found by the Surveyor that the fire broke down due to short circuit and this fact has also been mentioned by the Surveyor in his report. The report of the Surveyor is binding as has been held by the Hon'ble Apex Court as well as Hon'ble National Commission. Denying any deficiency in service on the part of the opposite party a prayer for dismissal of the complaint has been made. Finding of the District Forum:
5. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, allowed the complaint, vide impugned order. Hence, this appeal. First Appeal No.390 of 2017 5
6. We have heard learned counsel for the parties and have carefully gone through the records of the case.
Contentions of the Parties:
7. It was vehemently argued by the learned counsel for the opposite party that second complaint is not maintainable specifically when the payment has already been made. It was further argued that the first bill with regard to the generator set has rightly been rejected as it is not a part of building and is not a permanent structure. No claim can be awarded with regard to the same. It was further argued that the other bills are also not covered under the insurance policies. The Household Insurance Policy is item-wise policy and as such, the Surveyor has rightly rejected the claim. The report of the Surveyor is binding and is to be given due weightage.
He relied upon the judgment of Hon'ble National Commission reported in III(2009) CPJ 93 (NC) (CHAMPALAL VERMA v. ORIENTAL INSURANCE CO. LTD.) and judgment of Hon'ble Supreme Court reported in III(2009) CPJ 90 (SC) (SIKKA PAPERS LIMITED v. NATIONAL INSURANCE COMPANY LTD. & ORS.).
8. Per contra, it was vehemently argued by the learned counsel for the complainant that in the earlier complaint the District Forum had only directed to submit the bills to the Insurance Company for perusal of the Surveyor and thereafter settlement of the claim. The claim has been settled only for ₹1,61,600/- and that too during the pendency of the execution proceedings, which was never accepted in full and final settlement of the claim. Since the complainant was aggrieved against the wrongful settlement of his complaint, First Appeal No.390 of 2017 6 therefore, the second complaint is very much maintainable as fresh cause of action has arisen only after the claim of the complainant was rejected during the pendency of the execution proceedings. It was further argued that the report of the surveyor is not the last and final word. It is not that sacrosanct that it cannot be departed from. It is not conclusive. Approved Surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured. He relied upon the judgment of Hon'ble Supreme Court reported in 2011(7) RCR (Civil) 395 (Civil) (New India Assurance Company Limited v. Pradeep Kumar). It was further argued that the complaint of the complainant was rightly accepted by the District Forum, vide impugned order, after carefully going through the averments and the evidence on record. There is no illegality or infirmity in the impugned order and the same is liable to be upheld.
Consideration of Contentions:
9. We have given our thoughtful consideration to the contentions raised by the learned counsel for the parties.
10. It would be appropriate to deal with the first contention whether second complaint is maintainable in the facts and circumstances of the present case. There is no dispute that earlier the complainant filed Consumer Complaint No.451 of 2014, which was decided on 19.1.2016 wherein it was held that the complainant had not submitted the bills, so the claim was rejected accordingly but the District Forum gave opportunity to the complainant to submit the First Appeal No.390 of 2017 7 original bills afresh and the Insurance Company was directed to decide the claim in the light of the same. The relevant part of the order dated 19.1.2016 passed by the District Forum in the earlier complaint reads as under:-
"9. Resultantly, the present complaint is disposed of with the directions to the complainant to submit the repair bills to the opposite party, within one month from the date of receipt of copy of this order and the opposite party is directed to settle the claim of the complainant as per procedure and as per the terms and conditions of the fire policy in question, within two months from the date of receipt of the documents i.e. repair bills from the complainant."
However, the claim was not decided by the Insurance Company; rather, a letter was sent that the bills were not in proper order. Feeling aggrieved against that act of the opposite party the complainant filed Execution Application wherein instead of settling the claim of the complainant finally, only payment of ₹1,61,600/- was made, which was not accepted by the complainant in full and final settlement of his claim. The complainant was aggrieved against the subsequent settlement of his claim of only ₹1,61,600/- against the total claim of ₹7,63,951/- i.e. less claim to the extent of ₹6,02,351/-. In our opinion once the claim has been settled which is on the lower side and the complainant feels that it is not in accordance with the claim set-up by him, then certainly he has a fresh cause of action and second complaint is very much maintainable. Merely deciding earlier complaint does not mean that the decision of the Insurance First Appeal No.390 of 2017 8 Company will be binding upon the complainant. So far as the settlement of the claim is concerned, since new cause of action has arisen and the complainant is aggrieved against inappropriate settlement of the claim, which is far less than the claim set-up by him, therefore, he can certainly file a fresh complaint. Only a direction was issued to the Insurance Company to re-consider the claim. In view of this we hold that the second complaint is maintainable on fresh cause of action.
11. So far as the Surveyor's report is concerned, the judgment relied upon by the learned counsel for the complainant in Pradeep Kumar's case (supra) is applicable and the same has rightly been applied by the District Forum.
12. Now coming to the merit of the complaint allowed by the District Forum. It would be appropriate to mention that in the second complaint the Insurance Company has itself stated that the dispute is only with regard to six bills totaling ₹2,69,160/-, reproduced above. The claim of the opposite party is that the same have been rightly rejected by the Surveyor. As such, no further claim is maintainable. A perusal of the Surveyor Report, Annexure A-7, reveals that the complainant has submitted his own estimate through M/s Raj Kumar Associates. Admittedly the complainant himself is a qualified Civil Architect and Government approved valuer and he may be having a Company along with his brother, which is known as M/s Raj Kumar Associates through which the estimate was submitted with regard to the damage/loss caused to the building and the other household items. The said claim in our opinion has been rejected without any First Appeal No.390 of 2017 9 justification for the reasons to follow. Firstly it would be appropriate to reproduce the valuation part as given in the report of Ashwani Gupta & Co., Chartered Accountants, the Surveyor appointed by the opposite party to assess the loss, Ex.OP-3, as under:-
"VALUATION The insured arranged for the valuation from Architect Mr. Raj Kumar Aggarwal. The copy of valuation report dated 6.5.2014 is attached. The report give detail of construction etc. As per the valuation report submitted, the total value of Building with permanent fittings as per valuation report is ₹48,90,495/-. The Generator which is damaged during fire has also been included in the above valuation. Though the same is not the part of Building Construction. Total covered area above the plinth level is 3504 sq. feet. With current rate of construction ₹1,500/- sq. ft. is reasonable on reinstatement basis. Hence the value of building comes to ₹52.56 Lacs which is more than the sum insured of ₹50 Lacs. Hence the pro-rata clause of average will apply to that extent."
The complainant has submitted the claim estimate of damage due to fire as per Estimate given by Mr. Raj Kumar Aggarwal, who is approved valuer and is also elder brother of the complainant. After taking into consideration the estimate submitted by the complainant the Surveyor assessed the loss in his report Ex.OP-3 as under:-
"EVALUATION We have assessed the loss on the basis of inspection conducted at the time of survey. Repair bills not submitted by the First Appeal No.390 of 2017 10 insured till date. Keeping in view the sum insured we have assessed the loss as under:-
S.No. Description Qty. Units Amount Loss
Claimed Assessed
1. Replacement of total burnt 110 Sq. ft. 35,000 15,000
wooden windows Three Nos.
and door one with molding
and Wooden chowkat, letter
box of deodar wood glass
aluminum Handles, hinges,
Fevicols, Mortise with labour
and materials. Only one
window was burnt measuring
6 x 6.5 sq. ft. total 39 sq. ft.
2. Replacement of Burnt LS LS 8,000 5,000
Electric wiring of Motors and
electric Points with labour
and materials.
3. Replacement of burnt ceiling 2 Nos. 4,800 N.A.
fans of Crompton company
with fittings.
4. Decorative ceiling LED lights 10 Nos. 7,000 3,000
with chock and brackets (8
pcs. Allowed)
5. Replacement of Changeover 1 No. 3,500/- N.A.
of Generator
First Appeal No.390 of 2017 11
6. Replacement of Reflector 3 Nos. 5,000 N.A.
type search Lights with
brackets
7. Replacement of total Burnt 1 No. 3,000 1,200
Tullu Pumps
8. Plastic paints to walls and 8400 Sq. ft. 1,10,000 27,970 under ceiling of total house.
Painting to main gates with
iron grills to boundary wall,
windows grills, Parapet grills,
stairs railing, collapsible
Gate with labour and
materials. Total Area 2797
sq. ft. @ Rs.10/- per sq. ft.
9. Polish work of total house to 4000 Sq. ft. 50,000 10,000
wooden windows and doors
with chowkets, cup-board,
office furniture etc. with
labour and materials
(allowed lump sum ₹10,000/-
to damaged area)
10. Scraping the old burnt POP 800 Sq. ft. 60,000 18,000
work with Decorative
molding works and replacing
into new work with labour
First Appeal No.390 of 2017 12
and materials (Only 400 sq.
ft.)
11. Removing of damaged 650 Sq. ft. 1,00,000 70,000
dholpur stone tiles and stone
from the front façade due to
fire and replacing with new
work (cladding) design work
with labour and materials
12. Removing of damaged 440 Sq. ft. 45,000 12,000
flooring of kota stone with
white marble strips design
work and replacing with new
stone flooring work with
labour and materials. (only
100 sq. ft. seems damaged)
13. Providing and fixing of fibre 100 Sq. ft. 35,000 6,500
glass sheets Shed rest over
angle iron frames to the car
porch with labour and
materials (65 sq. ft. @ ₹100)
14. Repair of gate and other LS 3,000
items etc.
Total:- 4,66,300 171670
Total Assessed Loss to 171670
Building before depreciation
First Appeal No.390 of 2017 13
and salvage
Salvage (Negligible) rather 670
cost of lifting is required
Net Loss assessed 1,71,000
Net Loss Assessed ₹1,71,000/-
Once the value of building is more than the sum insured as discussed in the VALUATION Para of the report, the average clause will apply. Loss after applying pro-rata clause of average 1,71,000x50,00,000/52,56,000=Rs.1,62,671/-.
Say ₹1,62,600.
We assess the loss at ₹1,62,600/- (Rupees One Lac Sixty Two Thousand Six Hundred only) to the underwriter for their consideration and discretion subject to the terms, conditions and limitation of the policy under which the claim has been preferred and subject to admission of liability by the insurer. The loss is subject to production of repair and replacement bills."
13. In the conclusion part it is mentioned that the repair bill has not been submitted. This report of the Surveyor Ex.OP-3 is dated 31.7.2014. It is not a fresh report prepared by the Surveyor of the Insurance Company. However, a letter dated 20.4.2016 was sent to the complainant whereby it was mentioned that they had already written letter dated 4.3.2016 vide bearing No.5836 which has also been placed on record as Ex.OP-4 that all the bills are not in order and the bill of generator etc. is not covered in the policy as it is not insured under the items of the Policy and is not a part of the building First Appeal No.390 of 2017 14 and fixtures etc. The generator set was of 5 KVA make Kirloskar with Canopy. Now, firstly we would prefer to deal with the status of the Generator Set, whether it is permanent structure and part of the building or it is a separate movable property?
14. Admittedly 5 KVA generator set is a big structure with canopy. Determining the nature of generator set of such a heavy capacity depends upon if it is trailer mounted on a skid not bolted down or bolted down in the earth. It also depends on the fuel tank location and configuration. The opposite party has not rebutted the contention of the complainant with any cogent evidence and even the Surveyor does not specify its nature. He only says that the generator set was with canopy and does not specifically say that it is bolted down with earth or it is permanently fixed. The case of the complainant is that the same is not being removed from one place to another neither it is portable generator set. In such circumstances, the benefit must go to the insured though the District Forum has not given any reasoning with regard to accepting the claim so far as the price and repair of generator set is concerned. In the Black's Law Dictionary the word "fixture" has been defined as under:-
"fixture" Personal property that is attached to land or a building and that is regarded as an irremovable part of the real property, such as a fireplace built into a home. Historically, personal property becomes a fixture when it is physically fastened to or connected with the land or building and the fastening or connection was done to enhance the utility of the land or building. If personal property has been attached to the First Appeal No.390 of 2017 15 land or building and enhances only the chattel's utility, it is not a fixture. For example, if bricks are purposely stacked to form a wall, a fixture results. But if the bricks are merely stacked for convenience until used for some purpose, they do not form a fixture. Also terms permanent fixture, immovable fixture. Cf. IMPROVEMENT. [Cases: Fixtures].
"A fixture can best be defined as a thing which, although originally a movable chattel, is by person of its annexation to or association in use with land, regarded as a part of the land.... The law of fixtures concerns those situations where the chattel annexed still retains a separate identity in site of annexation, for example a furnace or a light fixture. Where the chattel annexed loses such identity, as in the case of nails, boards etc., the problem becomes one of accession."
In the light of this definition, although originally the generator set may be a movable property but by reason of its annexation or attachment with the land it becomes the permanent fixture and acquired a separate identity. Once it is attached to earth, it will certainly amount to a part of the building and premises because ultimately it is also covered under the term "electrical fittings" which are to be included as per the terms and conditions of the Policy. So far as the bill of repairs of generator set is concerned, the same is annexed on page No.41 of the District Forum record dated 17.6.2016 issued by Balwinder Singh of Amritsar for ₹2,01,730/-.
15. The total claim of the complainant was of ₹7,63,951/- but he is only aggrieved against the rejected bills qua which he has filed the First Appeal No.390 of 2017 16 present complaint. The complainant has attached all the bills with the letter dated 20.2.2016 sent by him to the opposite party as Ex.C5. So far as the inverters and batteries are concerned, the same also come under electrical fittings because they also generate electricity and run fans, tubes etc. Similarly fan and tullu pump also come within electrical fittings. No reasons have been given for which the same were not covered under the electrical fittings. There are two separate insurance policies. Ex.C-2 is the Policy with regard to the building and permanent structure and permanent fittings of the building of first class. Ex.C-3 is the second Policy with regard to the Household Policy i.e. item-wise and the following items are covered:-
ITEM WISE SUM INSURED DETAILS Section Item Description (if any) Sum Insured 1B Miscellaneous DETAILS OF GOODS: ₹10,00,000/-
FURNITURE ₹1,50,000/-,
Items GOLD ₹2,00,000/-, THREE
A.C. ₹58,000/-, ONE FRIDGE
₹15,000/-, UTENSILS /
CROCKEY ₹50,000/-, THREE
CYL. ₹5000/-, CLOTH CUM
GARMENTS ₹2,00,000/-,
BEDDING CUM BLANKETS
₹1,49,000/-, OTHER MIS.
GOODS ₹2,00,000.
2. Miscellaneous DETAIL OF GOODS:- ₹10,00,000/-
FURNITURE ₹1,50,000/-,
Items GOLD ₹2,00,000/-, THREE
A.C. 58,000/-, ONE FRIDGE
₹15,000/-, UTENSILS /
CROCKERY ₹50,000/-,
THREE CYL. ₹5,000/-,
CLOTH CUM GARMENTS
₹2,00,000/-, BEDDING CUM
BLANKETS ₹1,49,000/-,
OTHER MIS GOODS
₹2,00,000/-.
5. Air- THREE AC OF VARIOUS ₹73,000/-
First Appeal No.390 of 2017 17
Conditioner KINDS & ONE FRIDGE
6. TV Set TWO LED, ONE WASHING ₹1,90,000/-
MACHINE, ONE FITT KING,
ONE MICRO WAVE
There is bill dated 15.6.2014 of Baba Deep Singh Handloom with regard to the curtain cloth amounting to ₹25,300/-, which is placed at page no.43 of the District Forum record. We have gone through the policy Ex.C-3 and we found that only clothes and garments are covered and curtain cloth is not specifically covered under the policy. Therefore, this bill amounting to ₹25,300/- for curtain cloth is not covered.
16. Otherwise also the report of the Surveyor cannot be taken into consideration for the reason that the opposite party has not annexed the report of any qualified Engineer, who may say about the electrical fittings, building structure and attachments etc. are permanent or movable. Ashwani Kumar Gupta of Ashwani Gupta & Company, Surveyor, who gave his report Ex.OP-3 is a B.Com and Chartered Accountant and he cannot be treated as a fit person that he could have given a report regarding entire building structure. His services can only be used for the purpose of calculation and evaluation because specialized services of Structural Engineer or Building Engineer have not been taken by him to prepare the report. In the absence of the same, the report cannot be submitted as has been given by him. Report of one expert in the field can be accepted or rejected and reasons for acceptance and rejection of the claim are the soul of every report and that too by the expert in the field. First Appeal No.390 of 2017 18
17. In view of our above discussion, this appeal is allowed partly and the opposite party is directed to pay ₹5,77,051/- (₹6,02,351/- minus ₹25,300/-) to the complainant. The impugned order passed by the District Forum is modified to that extent only. Rest of the impugned order is upheld.
18. The appellant/opposite party had deposited a sum of ₹25,000/- at the time of filing of the appeal. This amount, along with interest which has accrued thereon, if any, shall be remitted by the registry to the District Forum, after the expiry of 45 days of the sending of certified copy of the order to the parties. The complainant may approach the District Forum for the release of the above said amount and the District Forum may pass the appropriate order in this regard.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (MRS. KIRAN SIBAL) MEMBER September 07, 2017 Bansal