DR. SADHNA SHANKER, MEMBER

1.       This appeal has been filed under section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as the ‘Act’) in challenge to the Order dated 30.07.2014 of the State Commission in complaint no. 101 of 2003 whereby the complaint was allowed.

2.       We have heard the learned counsel for the appellant (hereinafter referred to as the ‘insurance company’) and the learned counsel for the respondent (hereinafter referred to as the ‘complainant’) and perused the record including inter alia the impugned Order dated 30.07.2014 and the memorandum of appeal.

3.       The facts in brief are that the complainant, who is involved in carrying the business of providing facilities in the shape of tent (Pandal) for holding marriage parties small and big functions of all natures, took Standard Fire & Special Perils Policy to cover its property lying and kept at 70/1/2 Mangol Pur Kalan, Delhi – 85 for a total sum of Rs.35,00,000/-. The premium was paid and the policy was valid for the period from 09.08.2002 to 08.08.2003. It is alleged that on 04.11.2002, there was a major fire at the aforesaid premises and the fire resulted in total loss of various furniture, decorative material, tent and other items etc. The complainant informed the police and the insurance company. The insurance company appointed a surveyor to assess the loss. The surveyor visited the premises on 09.11.2002 and several more times to carry out the necessary survey and inspection of the effected premises and immediately after the fire the Divisional Manager and other officials of the insurance company visited the effected premises of the complainant. It is alleged that the complainant provided copies of bills, cash memos, estimates, accounting record, income tax returns and certified final account as were required by the surveyor and had also provided complete details as asked by the insurance company from time to time. It is further alleged that the complainant received letter dated 27.02.2003 from the insurance company informing him that his claim is not tenable under the terms and conditions and does not fall within the coverage of the insurance policy and had repudiated the claim as NO CLAIM. In reply to the insurance company’s letter dated 27.02.2003 the complainant sent letter dated 14.04.2003 to the insurance company. In response to the letter dated 14.04.2003, the insurance company vide its letter dated 14.05.2003 informed the complainant that his claim had rightly been repudiated and the insurance company stood by their decision conveyed to you vide our letter Ref. No. 042500:AS:VK:2002; 480 DT. 27.2.2003.

4.       Being aggrieved, the complainant filed a complaint before the State Commission seeking compensation of Rs. 35,00,000/- towards the loss to the complainant along with compensation of Rs. 50,000/- towards mental agony, harassment and inconvenience and cost of litigation of Rs. 20,000/-.

5.       The State Commission, vide its order dated 30.04.2014, allowed the complaint and directed the insurance company to pay to the complainant a sum of Rs. 8,02,678/- towards the loss with interest @10% p.a. from the date of filing the complaint i.e. 09.07.2003 till realization and compensation of Rs. 35,000/- including cost of litigation.

6.       Being aggrieved by the order dated 30.04.2014, the insurance company has filed the instant appeal before this Commission.

7.       The main issue for consideration before us is as to whether the repudiation of the claim on the grounds spelt out in the letter dated 27.02.2003 is correct or not.

8.       Before this Commission, learned counsel for the insurance company has vehemently argued that, firstly, as per the cover note of the insurance policy, it has been mentioned that the insurance is taken “to the extent for Rs. 35 Lakh on Stock of Tents and allied items pertaining to insured lying and stored and kept on the shop First Class Construction” at the given address and the same description has been repeated in the policy also but the complainant did not object to the same and has accepted the policy. However the tents and other items were in an open area. Secondly, it was argued that the insured only owns the land on which the pandal was erected. While the pandal and all items within it were owned by Mr. Surinder Pal Narula, therefore, the complainant had no insurable interest in the subject goods. Lastly, it was submitted that the surveyor in his report has pointed out that there were various fictitious bills submitted by the complainant in support of his claim. It was further argued that the claim was rightly repudiated and the State Commission’s order is liable to be set aside.

9.       On behalf of the complainant, it was argued that in the proposal form, the complainant had written as regards the property under insurance as follows:

          “Stock of tents and allied items.”

      It was further submitted that the description of the items insured was unilaterally changed by the insurance company at the time of issuing the policy by adding the condition of the goods to be kept in the shop of ‘first class construction’. It was further argued that the insurance company had inspected the premises before issuing the policy and was aware that the pandal was in an open area and made of iron rods, bamboos and wood. It is also a common knowledge that pandals are erected in open areas. It was submitted that no consent of the insured was taken before changing the nature of the property insured in the policy document.

      As regards the second objection, it was argued that the surveyor had recorded that Narula Pandal had originally belonged to Shri Mr. Surinder Pal Narula and was erected on the land belonging to the insured. However as Mr. Surender Pal Narula could not pay the rent for 15 months to the complainant, he entered into a settlement agreement with the insured in December 2001 under which he surrendered the land back to the insured together with proprietary interest in Narula Pandal. An affidavit dated 02.02.2012 of said Mr. Surender Pal Narula confirming the same is part of the record. Further, due to bouncing of the cheque provided by Mr. Narula, a case against him under the Negotiable Instruments Act was also filed by the insured and copies of the proceedings of that case are part of the record. It was submitted that the State Commission had appreciated the evidence on record and correctly ordered the insurance company to pay the complainant the loss assessed by the surveyor. In support of the contention, he also relied on the case of  General Assurance Society Ltd. vs. Chandumull Jain and another AIR 1966 SC 1644 for the proposition that in case of ambiguity in a contract of insurance the ambiguity should be resolved in favour of the claimant and against the insurance company.

10.     It is seen from the record that the proposal form indeed did not specify any such stipulation towards ‘shop of first class construction’ which was, however, incorporated in the cover note and the policy document. The insurance company has not brought on record any evidence to show that the insured’s consent had been taken at any time to make the said change especially when the nature of business of the insured is such that is carried out necessarily in an open area and cannot be in a shop being a pandal. Further, the insurance company has not been able to disprove and has not even questioned the affidavit filed by Mr. Satender Pal Narula in the matter whereby the entire proprietary interest in Narula Pandal was transferred to the insured in December 2001. As regards, the fabrication of the bills pointed out by the surveyor, this ground does not form part of the repudiation letter of the insurance company and it is settled law that the insurance company cannot travel beyond the contents of the repudiation letter.

11.     In view of the above, we are of the opinion that the State Commission has passed a well-reasoned order and the same is upheld.

12.     The first appeal, being without merits, is dismissed.  All pending I.A.s stand disposed of.