Haryana

StateCommission

A/1250/2014

United India Insurance Company Limited - Complainant(s)

Versus

M/s Sanjay rice Mill - Opp.Party(s)

14 Dec 2016

ORDER

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

                                                         First Appeal No.1250 of 2014  

Date of Institution: 29.12.2014

                                                               Date of Decision: 14.12.2016

 

United India Insurance Company Limited,  Regional Office, SCO No.123-124, Sector 17-B Chandigarh through its duly constituted attorney Smt. Sunita Sharma, Dy. Manager.

…..Appellant

Versus

 

M/s Sanjay rice Mill, Punhana Road, Hodal through its partner Sh.Rajesh Nagpal S/o Sh.Krishan Murari Nagpal, r/o Hodal Tehsil Hodal, Distt. Palwal (Haryana).

                                      …..Respondent

 

CORAM:             Mr. R.K.Bishnoi, Judicial Member.

                             Mrs. Urvashi Agnihotri, Member.                                                                                                                                        

Present:              Shri P.S.Saini, Advocate counsel for the appellant.

Shri Sachin Mittal, Advocate counsel for the respondent.

                                                   O R D E R

R.K.BISHNOI, JUDICIAL MEMBER:

          As per complainant  insurance policy was obtained from opposite party (O.P.) for the period 09.11.2010 to 08.11.2011 for the generator besides other property.  On 22.05.2011 there was heavy storm due to which roof of the building fell down and generator and other property were damaged.  On 22.05.2011 surveyor visited spot to assess the loss. On 27.05.2011 it got the building inspected from Nand Kumar Nagpal and he assessed loss to the tune of Rs.15,69,000/-, whereas actually Rs.15,04,838.15 were spent on the repairs. Claim was submitted accordingly with the O.P. alongwith all the relevant documents, but, that was rejected as ‘no claim’. Written notice was also sent to O.P., but, without any result.  Resultantly this complaint.

2.      O.P. filed reply controverting his averments and alleged that loss of building was to the extent of
Rs.83354/- and plant and machinery as Rs.36598/- less 10,000/-.  As per assessed loss net payable was Rs.26,598/-. The building was in the name of Anita Rani and not complainant, so it was not entitled for any compensation qua the same. The complainant procured false and exaggerated  report from  Nagpal & Associates. The complainant failed to supply relevant documents despite letters dated 25.01.2012, 12.03.2012, 13.04.2012 and 31.05.2012.  The loss assessed by M/s Taarani Associates  could only  be granted to complainant.  Objections  about maintainability of complaint, accruing cause of action, jurisdiction, concealment of facts etc. were also raised and requested to dismiss the complaint.

3.      After hearing both the parties, learned District Consumer Disputes Redressal Forum, Palwal (In short “District Forum”) allowed the complaint vide order dated 27.10.2014 and directed as under:-

“Hence the complaint is allowed and opposite party is directed to pay Rs.15,04,838/- spent on repair works alongwith interest realization and further Rs.5,000/- for compensation towards mental tension agony and harassment and Rs.2200/- as litigation expenses within 45 days from the receipt of copy of this order failing which opposite party would liable to pay Rs.25,000/- towards compensation instead of Rs.5,000/- ordered as above.”

4.      Feeling aggrieved therefrom O.P.-appellant has preferred this appeal.

5.      Arguments heard.  File perused.

6.      Learned counsel for appellant vehemently argued that building was in the name of Anita Rani which is clear from the perusal of rent notes Ex.C-32 and C-33, so complainant cannot ask for compensation qua the same.  He placed reliance upon the opinion of Hon’ble Supreme Court expressed in Complete Insulations (p) Ltd. Vs. New India Assurance Co. Ltd. 1996 ACJ 65.

7.      This argument is devoid of any force. From the perusal of insurance policy Ex.O-6 it is clear that building including boundary wall was insured for Rs.20/- lakhs. When the insurance company has insured the building of the complainant, wherein complainant is running business, it cannot be alleged that insured is not entitled for compensation.   It was for the insurance company to verify at the time of insurance that whether insured is having any insurable interest therein or not. If insured is running a business in any premises  and that is damaged then insurance company cannot reject the claim. These views are also fortified by the opinion of Hon’ble  National Commission expressed in UIIC Vs. Hasan Sultan Nadaf III (1992) CPJ 64 (NC) and Haji Daud Haji Haran Abu Vs. UIIC II (1995) CPJ 1 (NC) (case law cited by the complainant’s counsel). Relevant portion of  UIIC Vs. Hasan’s case (supra) is reproduced as under:-

“Consumer Protection Act, 1986-Section 21-Appeal-Insurable interest-Insurance-Policy issued by O.P.-Claim-Contending complainant not having insurable interest-Whether company can raise the question of absence of insurable interest?- (No)

It is the duty of the insurer to satisfy himself before  issuing a policy of insurance, that the insured has an insurable interest. Only if the insured has furnished wrong or false information it is open to the insurer to repudiate an insurance claim on the policy. But it is not open to raise the question of absence of insurable interest after the policy has been issued.”

Hon’ble Madras High Court has also expressed in General Assurance society Ltd. Vs. Sitarama rice Mill Co., and others that insurance company cannot reject the claim when the building is insured. (case law cited by complainant’s counsel). So these argument are of no avail. The appellant cannot derive any benefit from the cited case laws because i.e. pertaining to the vehicle which was transferred to other person.

8.      Now the question comes about quantum of compensation.  Learned counsel for complainant vehemently argued that there is no reason to disbelieve report of M/s Nagpal and Associates Ex.CW1/C dated 27.05.2011 vide which loss was to extent of Rs.15,69,000/-.  He has given all the details in his report whereas assessment by M/s Taarani Associates is on lower side and is given under the pressure of insurance company to lower the relief of the complainant.  Learned District Forum has rightly granted compensation to the tune of Rs.15,04,838/-.

9.      This argument cannot be accepted. Nagpal Associates has reported about entire re-construction whereas from the perusal of photographs Ex.C6/D to C-6/N it is clear that the building was not totally damaged and it can be easily repaired. So cost of total new construction cannot be allowed. M/s Taarani Associates have assessed the proper loss as mentioned in report Ex.O-2. The relevant portion of that report qua loss of building is as under:-

                   “Assessment of loss:-

In view of the verifications as above, the assessment of loss has been worked out as under:-

                    In respect of building:-

                    Cost of repair to the building         as discussed

above as per Annexure A-2                    Rs.370266.14   

Less depreciation @ 18% on

building as the same is constructed

in 2001 on the 70% of the total cost

being the cost of material

i.e. Rs.370266.14 x 70%=259186.18% Rs.46653.53

Total                                                           Rs.323612.61

Less salvage                                            Rs.60000.00

Total                                                           Rs.263612.61

Less under insurance @ 68.38% as

Discussed above                                               Rs.180258.30

Total                                                           Rs.83354.31”

As per this report the actual cost of repair is Rs.3,70,267/-, but, he has deducted depreciation to bring it to the lowest web. He has deducted 68.38% qua under insurance, but, there is no evidence on the file to show that cost of building at the time of insurance was  61,70,000/-.  When it was insured in the year 2010, it’s value was assessed as Rs.20.00 lacks and that is why it was insured to this extent. As per report of M/s Taarani Associates
Ex.O-2 the cost of repairs is Rs.3,70,267/- and salvage is Rs.60,000/-. At the most this amount can be deducted from the cost of repairs if the complainant does not return salvage and keep the same. Report of surveyor is on the higher pedestal and cannot be brushed aside by any cogent reason as per opinion of Hon’ble National Commission expressed in National Insurance Co. Ltd. Vs. Jyothi tobacco Traders IV (2012) CPJ 103 (NC) and Puranmal Vs. Shri Ram General Insurance Company Ltd. 1 (2016) CPJ 280 (NC). Report of M/s Nagpal and Associates does not find any support qua loss to the extent of Rs.15,69,000/-, so the same cannot be relied upon.  Hence impugned order cannot be sustained.  As a sequel to above discussion impugned order dated 27.10.2014 is modified to the extent that complainant is entitled for compensation of cost of repair to the building to the tune of Rs.3,70,267/-. The insurance company can deduct salvage of Rs.60,000/- if retained by complainant.  With this modification, appeal stands disposed off.

10.    The statutory amount of Rs.25,000/- deposited at the time of filing of the appeal be refunded to the appellant against proper receipt and identification.

 

December 14th, 2016 Urvashi Agnihotri                                R.K.Bishnoi,                                                               Member                                              Judicial Member                                                         Addl. Bench                                        Addl.Bench                

S.K.