1.       These two appeals arise out of the impugned order dated 31.07.2018, passed by the Jharkhand State Consumer Disputes Redressal Commission, Ranchi, whereby the complainants claim for indemnification to the tune of Rs.24,11,694.88/- has been allowed on the ground that the complainant had established the loss suffered by him that was covered under the risk of a fire insurance policy. The policy was for the period from 11.09.2011 to 10.09.2012 and the sum insured was Rs.1,70,00,000/-.

2.       The insurance was in respect of stocks and buildings of a business run by the complainant for sale and purchase of books.

3.       A fire occurred at 9:30 p.m. on 22.05.2012 and the stock of books kept in the basement was destroyed. A fire brigade was called for help and after extinguishing the fire, a fire report was given that was made available to the Insurance Company. A claim form was submitted and the Insurance Company appointed one Mr. Ajit Kumar Sahu, a surveyor, who inspected the premises on 27.05.2012. The surveyor’s report admitted the occurrence of fire due to short circuit in the basement, where the stocks of books were kept. The surveyor however assessed the loss to the tune of Rs.2,21,488/-. However, the said claim was also not accepted by the Insurance Company and vide letter 25.02.2015, the claim was repudiated on the ground that since the destruction had occurred in the basement, the same was not a part of the insured premises and the stocks kept therein were not stocks as per the risk covered under the policy. The Insurance Company took a stand that the destruction had not taken place in the shop of the complainant and the basement had a different entrance, as such no claim was admissible.

4.       The complainant instituted a complaint before the State Commission claiming an amount of rupees Rs.24,11,694.88/- together with interest thereon and other additional ancillary benefits for a total amount of Rs.26,61,694.88/-.

5.       The complaint has been allowed accepting the claim after recording a finding that the entire building including the basement was covered under the policy and as such the repudiation was on erroneous ground. The State Commission after perusing the proposal form also observed that the column of “Multiple Storeys” had been ticked and therefore the basement was also covered under the policy.

6.       The Insurance Company has come up assailing the order contending that the proposal form and the policy has been misread and misconstrued by the State Commission and even otherwise on quantum, the State Commission could not have ignored the report of the surveyor, that had assessed the loss and was creditworthy. It is submitted that the discussion by the State Commission is erroneous, in as much as, the valuation computed by the surveyor was based on a rationale criteria.

7.       The complainant on the other hand while resisting this appeal has filed FA/402/2019 praying that the State Commission has failed to award interest to the complainant, which ought to have been granted after having recorded a finding on the loss suffered from the date of loss and it has also been prayed that the interest should be over and above the bank rate. The Insurance Company has resisted this appeal filed by the complainant raising the same pleas as in FA/1964/2018 and has also urged that no interest is liable to be paid. The appeal by the complainant therefore deserves to be dismissed.

8.       Having considered the submissions raised and perused the impugned order, the proposal form seems to have been stamped by the Bank and there is nothing to demonstrate that the said proposal form has been signed by the insured/complainant. It appears that on account of the hypothecation agreement with the Bank, namely, the State Bank of India, RASECC-SARC-Dhanbad, the said proposal form has been sent by the Bank, which quite possibly may have been done directly. The premium has been paid by the complainant as admitted by them. This is to be mentioned as the State Commission, while dealing with column 14 of the proposal form, has recorded that the “number of storeys” column has been ticked. The question is as to whether the ticking of this column would also include the basement or not.

9.       This also has to be a ascertained as to whether the complainant had filled up the proposal form, as the same has not been signed by him but seems to have been sent by the Bank directly under its stamp. This issue has not been examined by the State Commission. Colum 14 of the proposal form contains another block with the heading “basement if any – Yes/ No”. This column has been left blank. The incident has occurred in the basement. The question therefore is as to whether the basement part of the building was covered under the risk policy or not.

10.     The State Commission has come to conclusion that the policy covers the entire building. As observed above, the proposal form which does not seem to have been signed by the complainant and has been sent by the Bank mentions multiple stories, but the column of “basement- ïf any” has been left blank. The policy issued as against this proposal mentions the description of property including stocks of books and related products and then the building of M/s. Gyan Bharti at Kamdhenu Complex, Jora Phatak Road, Dhanbad was insured for Rs.30,00,000/-. The State Commission while pointing out towards the page two of the policy on record has indicated the risk coverage as if the total sum included the compound wall, plinth and foundation. This does not seem to match with the column of sum insured, in as much as, the description contains, item number 1 on building and super structure, sum insured is Rs.30,00,000/-. Item number 2 on building and plinth and foundation is nil (0).  Item number 3 of plant machinery and accessories is also nil (0). Item number 4 on furniture, fittings and fixtures and other contents is Rs.5,00,000/-. This is followed by item number 5 on stocks and stocks in process is Rs.1,35,00,000/-. Item number 6 on stocks held in trust is nil (0). Item number 7 on building compound wall is also nil (0). Item number 8 on other properties specifically required to be covered is also nil (0). The total sum insured is Rs.1,70,00,000/- only which has also been correctly recorded by the State Commission. The total of Rs.1,70,00,000/- includes Rs.1,35,00,000/- for stocks and stocks in progress, Rs.5,00,000/- for furniture, fittings, fixtures and Rs.30,00,000/- for building super structure. Added together, it is this total amount of Rs.1,70,00,000/- which is reflected in the policy. This calculation therefore excludes building plinth and foundation, compound wall and any other property specifically required to be covered. The State Commission appears to have therefore treated compound wall and building plinth and foundation to be included erroneously as the columns against compound wall and building plinth and foundation are shown as ‘nil’ and no such item seems to have been insured. The total amount therefore is only for the items mentioned above and not for the compound wall and building, plinth and foundation, or any other constructions.

11.     In the light of the above facts, to treat the entire building to be covered under the policy, does not appear to be correct. The question as to whether the basement part was covered under the heading of entire building seems to have been erroneously proceeded by the State Commission without delving  into the details of each head as mentioned in the policy.

11.     But at the same time, the State Commission has also overlooked the fact that the proposal form does not appear to have been signed by the complainant. The findings therefore to that extent cannot be sustained as the State Commission has to proceed to analyse the evidence as it is, as contracts of insurance are bilateral and the terms thereof are binding. The factual analysis of the correct status of the coverage of the building, keeping in view of the description given in the policy as M/s. Gyan Bharti at Kamdhenu Complex, Jora Phatak Road, Dhanbad has also to be taken into account.

12.     The question as to whether the complainant is entitled to any higher rate of interest, may have to be gone into, if it is found that the complainant is entitled to the indemnification after assessing the entire evidence once again in the light of the observations made hereinabove.

13.     For all the reasons stated and discussed both the appeals are disposed off. Accordingly, the impugned order dated 31.07.2018 is set aside and the matter is remanded back to the State Commission for decision afresh in the light of the observations made hereinabove as expeditiously as possible.