SMT. RAVI SUSHA: PRESIDENT

   Complainant filed  this complaint under Consumer Protection Act, for getting an  order directing opposite parties to  pay Rs.36,00,000/- as insurance claim  to the complainant and Rs.5 lakhs as compensation  together with cost of the proceedings.

  Complainant’s case is that  he availed a  housing loan from  the 2^nd OP in the year 2016 for a total sum of  Rs.40 lakhs for the completion for his newly constructed house. The said amount have been disbursed by the 2^nd OP by way of 3 instalments.  Accordingly the construction was completed.  The 2^nd OP insisted the complainant to  take  an insurance policy for covering the risk  of fire and other damages caused to the building, the complainant started a policy covering a period from 29/7/2018 to 28/7/2048, the Home sureksha  plus  policy and Rs.50670/- was collected  as premium .  Further the 1^st OP issued the special perils insurance policy,Rs.60,339/-  as premium . As per the policies the OPs assured a coverage  to the building  as Rs.15,69,941/- and Rs.39,77,081/- respectively by collecting a total premium of Rs.1,11,000/-.  So the total coverage under both [policies have been covered to Rs.55,47,122/-.  On 18/8/2019 the complainant made a claim before the 1^st OP through 2^nd OP that earthquake was occurred due to flood and allied peril affected the insured house on 8/8/2019.  So the wall of the house was cracked and the plastering as broken.  As a  result some gapes was developed between the wall and lintel and a term was inspected the affected house and noticed the intense crack occurred on the house.  Thereafter no reply has been sent  from the OPs.  Ultimately the complainant compelled to send registered lawyer notice to the OPs demanding settlement of insurance claim and to pay compensation to the  complaint.  Though the OPs   did not  issue any reply notice or settled  the claim.  Hence the complaint.

   After receiving notices OP.NO.1 Insurance company filed version denied the above contentions and  admitted the  Home suraksha policy and  standard and  special perils  insurance policies.  It is submitted that on 24/12/2019 1^st OP has received an intimation of the claim  of the complainant to the effect that on 8/8/2019 there was earth quake in the insured property area and damages caused to  insured property.  Immediately the 1^st OP deputed  IRDAI licensed  surveyor and loss assessor  to ascertain exact cause and extend of loss and assess  the liability  in the terms of policy stipulations.   The  surveyor specifically observed that the building was constructed in 2 floors  with an area of 1800sq.ft.  The foundation was constructed with laterite stone, as reported.  Walls were also made with laterite stones. Cracks were observed on the walls at various places. Insured could not point out exact reason for damages.  It is understood that. This area was not affected by floods occurred n 2018 and 2019.  No symptoms of  lightening, earthquake, land slide etc was noticed in the locality.  The building  was constructed in original land .  It was also reported that the cracks  are developing day by day.  The cracks on the walls occurred probably due to settlement of foundation , walls, as the laterite stones absorb rain water and lost load bearing capacity.  The surveyor further submitted his final report to  quantifying the loss to the damages to the property of complainants to the tune of Rs.4,36,095/-.  However the surveyor mentioned in his remark that the said loss are not payable as .  No perils under standard fire and special perils policy found to be operated, to cause the damages.  As such insurers are not liable for the loss  as per the  terms and conditions of the policy.  As such the claim of the complainant for the damages to building walls  due to settlement false is outside the purview of the policy.  As such the  claim of the complainant is repudiated vide repudiation letter dtd.27/2/2020.  Hence prayed for the  dismissal of the complaint .

     2^nd OP filed their version stating that the complainants  approached  the 2^nd OP for a housing loan of Rs.30,00,000/- for constructing a residential house  for own occupation., the loan application was appraised under HDFC reach method of appraisal and KVAT sales figures from  June 2015-Nov.2015 is taken as per KVAT and 15% of the turnover was taken as income for sanctioning the loan.  Since the loan is  appraised as per the policy contained in Reach Norms  the quantum of loan amount disbursed need to be mitigated through insurance policies being taken in the name of either borrower or co-borrower.  The said loan was disbursed in three tranches.  The complainants sought for an insurance coverage on his property according to  his wish and we have not solicited any kind of insurance with the complainants.  Once the outstanding loan amount  has been  paid, the insurance term  expires.  Home loan insurance is not compulsory while availing a home loan.  However , as a means of securing the finances and assets, an insurance of this nature becomes important.  While availing the housing loan of Rs.30 lakhs, the complainants availed a property insurance by the product  name Home suraksha plus.  The total premium for the said policy was Rs.50,870/- and accordingly  this OP has sanctioned a disbursed a  loan of Rs.50,871/- to the complainant for enabling him to avail this policy. The loan of Rs.60,539/- was availed for  purchasing a policy  Standard Fire and Special Perils insurance , the policy premium  of Rs.60539/- was  disbursed to 1^st OP  on 25/7/2018  and the policy came into existence on 26/7/18.  The 2^nd submitted that the complainant’s house has developed some cracks due to sinkage of building and  he has approached  1^st OP for raising a claim under the insurance policies availed  from them. Since the OPs have not been served with a copy of the claim repudiation details  we are not in a position to comment on the same. It is submitted that the role of the 2^nd OP is confined to the role of a lender who  has advanced amount to the complainant for purchasing the insurance policies chosen by him to protect his property from unforeseen incidents and  mishaps.  The OPs have not issued any insurance policies to the complainants.  There is no deficiency in service or unfair trade practice on their part, so the complainant is not entitled to  get any relief from this OP.

     On the basis of the version of 2^nd OP, complainant impleaded HDFC Limited as supplemental 3^rd  OP as  per IA .No.61/2022 and the wife of complainant as supplemental complainant No.2.

      On receiving notice additional 3^rd OP filed separate version stating that the complaint is not maintainable either in facts or in law and is liable to be dismissed in limine.  3^rd OP denies the entire allegations and  averments in the complaint except  to the extent  as are expressly admitted hereunder.  The 2^nd OP has already filed a detailed version  and this OP  is adopting the very same contentions of the said version.

    While pendency of this case,  complainant has taken steps to appoint an Advocate commissioner to inspect the house in dispute  of complainant and to prepare report with the  assistance of an Expert commissioner. As per that Advocate Lavanya is appointed as Advocate commissioner and Nayanan.K, Civil Engineering consultant as expert commissioner.  After the inspection,detailed reports were filed by the Advocate commissioner and expert commissioner.

   At the evidence stage complainant and OPs 1&2 led their evidence.  Complainant No.1 filed chief affidavit and documents.

   Complainant was examined as PW1 marked Exts.A1 to A5 and Ext.C1&C2.  From the side of  complainant, 3 more witness were examined PWs 2 to 4.  Exts.X1 and X2 were marked.  PWs 1 to 4 were subjected to cross examined by OPs 1 to 3.  On the side of OPs  also 4 witnesses were examined as DWs 1 to 4 ,marked  Exts.B1 to B4.

     The undisputed facts in this case are (a) complainant had taken a housing  loan of Rs.40 lakhs from 2^nd OP in the year 2016 for constructing  a new house in his property.  The said loan amount has been disbursed by 2^nd OP.(b) complainant availed  a policy covering a period  from 29/2/2016 to 28/2/2022 namely Home Suraksha plus policy to cover the risk against the building, contents major medical illness and procedures and personal accident(c) complainant again took another policy covering period from 29/7/2018 to 28/7/2048 namely special perils insurance policy. (d) complainant had paid Rs.50670/-  towards premium for  Home suraksha plus and Rs.60339/- as premium for special perils insurance policy to 1^st OP through  2^nd OP (e) As per the policies the OPs assured a coverage to the building  as  Rs.1569941/- and Rs.3977081/-(f) on  18/8/2019 the complainant made a claim before the 1^st OP through 2^nd OP that earth quake was occurred due to flood and allied peril affected the insured house on 8/8/2019.(g) 1^st OP Insurance company appointed an IRDAI  licensed independent surveyor and loss assessor to ascertain exact cause and extent of loss and assess the liability of the insurance company(h) The surveyor submitted  his final report quantifying the adjusted loss to the building as Rs.436095/- (i) surveyor observed cracks on the walls of the building at various places.(j) The claim of the complainant was repudiated by 1^st OP vide letter stating that damages to building walls was due to settlement, falls is outside the purview of the policy.

    Complainant alleged that the insured house of the complainants is damaged due to subsidence  of land due to  caving  and the same is covered under the policy.  Hence 1^st OP is liable to indemnify  the complainants  under the policy.  According to complainants, they have established the said facts  through  material evidence.  It is argued by the learned counsel of complainant that the complainant availed a  housing loan from  the 2^nd OP in the year 2016 for a total sum of  Rs.40 lakhs for the completion of the  construction of a new house. The said amount has been disbursed by the 2^nd OP in 3 instalments.    The 2^nd OP insisted the complainant to  take  an insurance policy for covering the risk  of fire and other damages caused to the building, the complainant take, the 1^st OP issued  1^st policy Home suraksha  plus   , the premium  Rs.50670/-    collected  through 2^nd OP. The 1^st OP issued the special perils insurance policy, 2^nd OP collected Rs.60,339/-  as premium . As per the policies the OPs assured a coverage  to the building  as Rs.15,69,941/- and Rs.39,77,081/- respectively by collecting a total premium of Rs.1,11,000/-.  So the total coverage under both the policies is Rs.55,47,122/-.  On 18/8/2019 the complainant made a claim before the 1^st OP through 2^nd OP that earthquake was occurred due to flood and allied peril affected the insured house on 8/8/2019.  So the wall of the house was cracked and the plastering was broken.  As a  result some gapes was developed between the wall and lintel.  The Complainant made a claim to  OPs .  According to  complainant  , he is entitled to get  claim amount as per the policy taken by him for  special peril policy.

       The submissions of learned counsel of complainants are vehemently opposed by the  learned counsels of OPs.  Both learned counsels appearing for OPs 1 to 3 argued that the complainant’s claim was rightfully repudiated by the 1^st OP.  The survey conducted by the 1^st OP revealed that the alleged damages to the building  were not due to perils covered by the policy but were caused by settlement of foundations/walls, which is outside the policy’s coverage.  Further submitted that as per  surveyor’s report it is understood that, this area was not  affected by floods occurred in 2018 and 2019.  No symptoms of lightning , earthquake, land slide etc was noticed in the locality.  The cracks on the walls occurred probably due to settlement of foundation/walls as the laterite stones absorb rain water  and lost load bearing capacity.   It is  submitted that   the damages  to the building are not due to any peril covered under the policy, hence this OP has no alternative  but to repudiate the claim of the complainant.

   From the evidence, we can clearly reveal that the house was constructed about in 2016 and was a   two storied, cracks were developed on both sides of the wall and  damages were severe  at left side of the building.(Exts.B7, Ext.C1&C2).  The surveyor and loss  Assessor observed , the  cost of rectification of cracks on walls is assessed as Rs.10,00,000/-.  In Ext.B7 report the  surveyor opined that the cracks on the walls occurred probably due to  settlement of foundation /walls, as the literate stones absorb rain water and lost load bearing capacity.

    In the  report he has also observed that he could understand  the area in dispute was not affected by flood.  No symptoms of lightening , earth quake, land slid etc, was notice in the locality.  The building was constructed in original land.  During examination  of the surveyor as DW3, he has given evidence in tune of his report.  In his report he opined that damages(cracks) on the walls was due to absorption of rain  water by the  literate stones, which clearly  means  heavy rain happened on that area at particular period.  During cross-examination he has deposed that in page 6 last  and  page 7 ” ഒരു ചെങ്കൽ പ്രദേശത്ത് മഴക്കാലത്ത് ചെങ്കൽ പ്രദേശത്തെ മണ്ണ് ഒഴുകിപോയാൽ അവിടെ വീട് സ്ഥിതിചെയ്യുന്നുണ്ടെങ്കിൽ വീട് അമർന്നു പോകാൻ സാധ്യതയുണ്ട്? ഉണ്ട്. അങ്ങനെ സംഭവിച്ചാൽ ഈ വീടിന് നിങ്ങൾ കണ്ടതിലുള്ള വിള്ളലുകൾ ഉണ്ടാവാൻ സാധ്യതയുണ്ടോ? ഉണ്ടാവാം.”  Without examining the quality of materials used for the construction of building, his  above said opinion  ie, constructed with low quality  materials, cannot be accepted.  Moreover he deposed  that it is only his  assumption .  On perusal of  his report Ext.B7, no single word can be  found  neither in his opinion portion nor other portion about the quality of material used for the construction purpose of the building.  So we can come to a point  that the evidence tendered by DW3 at the cross-examination time about the low quality materials, is an afterthought to help OPs.  Ext.C1 &C2 are the reports submitted by the Advocate commissioner and Expert commissioner as per the directions given by this commission.  On perusal of Ext.C1” the area is on a higher position where the house is situated.  There is no chance for the water to log in this particular area.  The cracks which  are developed on the wall and ceiling of the house that may be occurred due to earth quake, or may be due to flood or may be due to poor workmanship.  The severe cracks which has been developed only on one side of the house that can be  due to inner movements or variations inside the earth.  To check the present condition of the house, the rooms in the ground floor are in a highly dangerous condition as huge cracks have developed all over the rooms, especially the room on the north western corner.  The particular area was not subjected to any flood.  The area is covered with hard soil.  The corrections which are pointed out by the civil engineer may be taken into account as he is well  versed in the material aspect.  The amount of Rs.15,00,000/- will be appropriate for the correction of defects of the house.

    In Ext.C2 ”  expert have noticed long crack on the north western corner of the house in bed room below the lintel level extending towards south and western side 3.60&3.40 meters. It was also visible from inside and  outside of the room.  There are 3 other cracks one on sill level and the other on the parapet level of the south western side of the house.   He also noticed the window glass  was broken on the southern side of the house on the same place.  The width of the lager rack will come to 0.05 cm and also noted 0.05 cm fall on the south western corner of the house evident from the main slab of the roof.  He also noted crack on all aroused the house, there is the foundation itself was seen broken in about 5 places.  The parapet of the house on all 3 sides (north, south and western )were seen broken. The crack on the house was occurred due to natural calamity like flood  and earth quack.  He could not seen any  poor workmanship in the structure. The soil in which the house was constructed is a  hard soil naturally and normally a fall will not be occurred.  So the possibility to cause crack by the natural calamity cannot be ruled out. Cost of the construction  work will come to Rs.15,00,000/-.

     From the side of complainant PW3 District  Geologist Kannur and PW4 Deputy Collector  (Disaster Management) were examined and marked  as Ext.X1 report issued by PW3 and the District Collector, Kannur  about  the disaster, Ext.X2 report issued to the complainant by PW4 for getting insurance claim from 1^st OP .  On analyzing the evidence of PW3 it is seen that he has deposed ”സ്ഥലം ധാരാളം ചെങ്കല്ല് നിയോഗമുള്ള സ്ഥലം  ആണ്. അത്തരം സ്ഥലത്ത് സാധാരണകാണുന്ന  carving പ്രതിഭാസത്തിന്ർറെ ലയണങ്ങൾ ഈ പ്രദേശത്ത്   പരിശോധനയിൽ കണ്ടിരുന്നു. കൂടാതെ വീടിന്ർറെ വടക്കുഭാഗം അമർന്നതായി കാണുന്നു. അത്തരത്തിലുള്ള caving ഈ തറയുടെ അടിയിലൂടെ പാസ് ചെയ്തുകൊണ്ടാവാം വീടിന് crack വന്നിട്ടുണ്ടായത് എന്നുള്ള റിപ്പോർട്ട് നൽകിയത്. അങ്ങനെ caving ഉണ്ടാവുമ്പോൾ വീട് അമർന്നുപോകും. അതൊരു slow process ആണ്. ചെങ്കല്ലിലുണ്ടാകുന്ന മണ്ണുകൾ അലിഞ്ഞുപോകുന്നതുകൊണ്ടാണ് caving  സംഭവിക്കുന്നത്. അത് ഒരു പ്രദേശത്ത് മൊത്തത്തിൽ ഉണ്ടാവുമോ ഉണ്ടാവണമെന്നില്ല. അത്കൊണ്ട് മറ്റുവീടുകൾക്ക് ഉണ്ടാവുമോ സാധ്യതയില്ല. 

   Here though OPs have taken a contention  after filing version and Ext.B7 report that  cracks to the walls of the house were caused due  to construction defects.  According to complainants, no concrete evidence has been submitted from the side of  OPs for the said contention .  Moreover it is to be noted that the housing loan of Rs.40 lakhs were disbursed by bank on three instalments.  Each instalments will be given after verifying  the construction work. If the construction of the building was of poor quality material, they would not disburse the next instalment.  Moreover, the insurance company are also duty bound to  inspect the construction work.  Without doing those factors and after receiving premium amount, raising this type of contentions are not fair from the part of OPs.  It is evident from Ext.X1 that the cave formed under the ground and the house was damaged due to subsidence.  Though OPs strongly objecting the reports  Ext.X1 and Ext.X2 and the evidence of PWs 3&4, we are of the view that both witnesses are official witness ie, Govt. employees and the documents are also official documents.  Hence the evidence of those documents and the witnesses carry more value.  So we also accept Exts.X1, X2 and their evidence.

    Hence from the available evidence there was perils happened to the region of complainant and  the house of the complainant became damaged.  Since it is a natural calamity ie inundation  1^st OP should have indemnify the  insurance claim to the complainant.

   Next point to assess the quantum of insurance claim. 

    Here the complainant’s claim is Rs.36,00,000/- as the insurance claim.  According to complainant as the inspection done by a team of experts assessed the loss of the house as total  loss and estimated Rs.36 lakhs as damages to the building.  The said report is not submitted before us. In Ext.C2, the  expert engineer  civil engineering consultant assessed the cost of work of the house will come to Rs.15,00,000/-.  The expert has  submitted photos of the damaged portions of the  house.  The insurance surveyor and loss assessor deputed by 1^st OP company assessed total cost of repairs as Rs.10,00,000/-.  In Ext.B7 surveyors report he has assessed each points  ie re-construction  of damaged wall re-plastering , cost  for painting , cost of rectification of cracks on foundation etc.  It is a settled  position that the assessment made by insurance surveyor, has to give due importance than assessment made by other experts.  Here we are also of the view that the assessment of total cost of repairs made by the insurance surveyor is just and an acceptable one.   So we are allowing Rs.10,00,000/- towards the insurance claim to be given by 1^st OP to the complainants.

   Here  2^nd OP raised a  contention that policy is assigned in their favour.  The said  contention is not raised  in their version.  In the version 2^nd OP contended that “although it is essential to buy an insurance cover while  taking a loan, there is no obligation to do so, not from any bank nor non-banking  finance company.  Neither the law nor the regulatory bodies such as RBI or IRDAI have made the purchase  of  home loan protection  plan with a loan mandatory. Home loan insurance is similar to a term insurance”. 

   After raising such a  pleading in the version, how OPs can take a contention that the insurance  was assigned   in their favour.  Moreover, the learned counsel of complainant submitted that whether the OPs can adduce any evidence to prove anything  which is not pleaded by them in their version. Further submitted that the Hon’ble Supreme court has held in innumerable decisions that the parties cannot go beyond their pleadings.  Hence evidence tendered by the  OPs  which not pleaded by them in the version cannot be  accepted or looked into as per the  ruling reported in 2021(1)KHC 214(SC) Biraji@Brijraji  and Anr. Vs. Surya Pratap and Ors wherein it is held in paragraph 7 that “ it is fairly well settled that in the absence  of pleading, any amount  of evidence will not help the party”. A similar view is also taken by the Hon’ble  High Court of Kerala reported  in 2023(6)KHC 216 (saji M.N.V.K.R Krishnakumar) It was held that: in the  absence of pleadings, evidence, if any produced by the parties cannot be considered.  No party should be permitted to travel beyond  his pleading.  In order to have a  fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise”.  In para 20 of the  judgment  it is further  held that  “ one could be permitted  to let in evidence only in tune with the  pleadings- Basic rule governing  pleadings in founded on the principle of secundum allegeta  et probate, that a party is not allowed to succeed where he has not set up the  case which  he wants to establish”.  In a very recent judgment reported in 2024(3)KLT SN 24(C.No.14) SC (Manisha Mahendra Gala vs Shalini Bhagwan Avatramani), the Hon’ble Supreme Court has again held that  “ it is settled in law that a fact which is not specifically pleaded cannot be proved by  evidence as evidence cannot travel beyond the pleadings”.

    The learned counsel of complainant submitted another decision of Hon’ble supreme court about the point of liability of 1^st OP in indemnifying the insured if any insured peril happens which cannot be permitted the Hon’ble Supreme Court  reported in 2022(7)KHCSN 14(page No.57)(SC)-M/s Texco Marketing Pvt Ltd vs TATA Aig General Insurance company Ltd. Wherein the Hon’ble Supreme Court  has held that “insurance contracts are special contracts premised  on the  notion  of good faith.  Hence, it is to be  interpreted differently.  Not only the onus but also the burden lies with insurer when reliance is made on such a clause.  Exclusion clause can never be understood to mean to be in conflict with the main purpose for which  the contract is made.  It has been further  held that exclusion  clause is an unfair  term, going against the very object of the  contract, making it otherwise un-executable from its inception.  Thus exclusion clause destroying the very contract knowingly entered cannot be permitted to be used by a party who introduced it who becomes a beneficiary and then to avoid its liability.

  Considering the facts and circumstances, evidence(oral and documentary) of this case and also from the view taken by the Hon’ble Supreme court in the above  quoted judgments, we are of the view that the  1^st OP is liable to indemnify the insurance claim and  awarded amount is entitled to the complainants.  Here it is an admitted fact that by SARFACEI proceedings 2^nd OP already take over the property and building.  2^nd OP intentionally not produced the loan agreement not to ascertain,  how much is the value of the mortgaged property.  So considering the said facts, we are of the considered view that the 2^nd OP is not entitled to receive the awarded amount.

    In the result, complaint is allowed in part.  1^st opposite party is directed to pay Rs.10,00,000/-( the loss assessed  by the Insurance surveyor) to the complainants 1&2 together with Rs.50,000/- towards compensation and Rs.15,000/- towards cost of the proceedings of this case within one month from the date of receipt of the  certified copy of this order.  Failing which Rs.10,00,000/-+Rs.50,000/- carries interest@9% per annum from the date of order till realization.  Complainants are at  liberty to execute the order as per the provision of Consumer Protection Act 2019.

Exts:

A17A2- copy of insurance policy dtd.29/2/16,26/7/18

A3-Copy of lawyer notice

A4-Poste receipts(2 in Nos.)

A5-Acknowledgment card (2 in Nos.)

C1- commission report

C2- Expert report(subject to proof)

X1&X2- Disaster  report submitted by PWs 3&4

B1-possession receipt

B2-Inventory list

B3-Certified copy of  order in MC72/22 in CMP No.1126/22 CJM court Thalassery

B4- Commission report

B5-copy of policy with conditions

B6-claim form

B7-survey report(subject to proof)

B8-repudiation letter

PW1-Noufal.T.P- 1^st complainant

PW2-Narayanan.K- witness of complainant

PW3- Jagadeesan.K.R- witness of complainant

PW4- Ahesh.K -witness of complainant

DW1-Agil V Joseph-2^nd  OP

DW2-Amal Jose Vrghese-OP witness

DW3- A.P.Sajeev-  OP witness

DW4- Lavanya Sekharan- OP witness

Sd/                                                   Sd/                                                     Sd/

PRESIDENT                                             MEMBER                                               MEMBER

Ravi Susha                                       Molykutty Mathew                                    Sajeesh K.P

eva           

                                                                        /Forwarded by Order/

                                              ASSISTANT REGISTRAR