1.       Initially the present First Appeal ( FA) has been filed by the Appellant against the Respondent under Section 21 (a) (ii) of the Consumer Protection Act, 1986 ( in short, the Act) read with section 58 (1)  (a) (iii) of the Act.  However, on 12.10.2023, the Appellant was directed to state whether he is filing the First Appeal under the old Act or the new Act.  During the hearing, learned counsel for the Appellant stated that he wishes to pursue his FA under the Old Act.  Accordingly, he was granted two weeks time to modify the FA to bring it in conformity with the old Act. 

2.       The present First Appeal (FA) has been filed by the Appellant against Respondent as detailed above, under section 21 (a) (ii) of Consumer Protection Act 1986, against the order dated 19.05.2023 of the State Consumer Disputes Redressal Commission Delhi (hereinafter referred to as the ‘State Commission’), in Consumer Complaint (CC) no. 397 of 2015 inter alia praying for setting aside the order dated 19.05.2023 of the State Commission.

3.       The Appellant was Opposite Party and the respondent was  Complainant before the State Commission in the said CC No. 397 of 2015 before the State Commission.

4.       Notice  on Caveat was issued to the Respondent on 20.09.2023.  Parties filed Written Arguments/Synopsis   on 19.01.2023 ( Appellant) and 08.01.2024 respectively.  Parties also filed revised  arguments   on  15.05.2024  ( Appellant)  and  16.05.2024 ( Respondent ) respectively.

5.       Brief facts of the case, as emerged from the FA, Order of the State Commission and other case records are that Complainant took a Standard Fire and Special Perils Policy ( Policy ) from the OP in respect of property No 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon, Haryana w.e.f. 20.05.2013 to 19.05.2014.  The said property was allotted to the Complainant by HSIIDC and was approved for carrying out the business of Clinical Research and Data Management.

6.       It is the case of the Complainant that M/s Bioinnovat Research Services Pvt. Ltd. ( Bioinnovat) was tenant on the ground, first and part of the third floor of the above said property at the time of incident i.e. 20.01.2014.  A rent agreement was entered into between the complainant and Bioinnovat in respect of said property.  The complainant was the Founder and Managing Director as well as shareholder of 50% equity shares with her daughter, namely, Ms. Sukrita Sethi, who was also shareholder of 50%of the equity shares.  The Complainant also purchased a similar policy in respect of her property bearing no. 774, Phase-IV, Udyog Vihar, Industrial Area, Gurgaon, Haryana and was having seven concurrent policies till May 2015.

7.       It is further the case of the complainant that on 20.01.2014, a fire broke out on the first floor of the property no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon, which got severely damaged in the fire, while the rest of the property was damaged by smoke and water during rescue operations.  The first floor was under the tenancy of Bioinnovat.  The fire could be extinguished by mid night and almost everything on the first floor was burnt and irretrievably and there was no loss of life.  The incident was reported to the police and FIR was registered.  The complainant informed the insurance company of the incident and provided all the relevant documents to the OP for processing of claim.  The premises was inspected by the surveyor duly appointed by the OP.

8.       It is further the case of the complainant that on asking of the OP, complainant provided a tentative assessment of the claim on 21.01.2015 which was based on assumptions made without actually investigating the damaged premises as the entry on the first floor was completely blocked by the debris and there was no electricity.  A revised estimate of Rs.90.00 lacs was given by her to the OP for complete restoration of the damaged premises but the OP did not offer any claim to her and delayed the claim to such an extent that she got complete restoration of the damaged premises, while her claim was not settled by the OP.  However, the actual cost of restoration of the damaged premises was Rs.55,01,161/-.  The OP was duly informed by the complainant about the actual restoration  cost vide email and copies of the bills alongwith details were also provided to the OP.  The OP did not offer any claim to the complainant and OP and the surveyor continued to harass her by demanding one document after the other and did not settle the claim even despite paying several visits to the surveyor and regional offices of the OP.  

9.       On 27.08.2014, the surveyor sent an incorrect / wrong / biased draft of claim, which was protested by the complainant as the surveyor failed to consider the actual cost borne by the complainant in restoration of the damaged premises in restoration of the damaged premises.  The surveyor also miscalculated the losses and did not consider several items for calculation of the loss and thereby reduced the assessment to only 8.9% of the actual cost of restoration.

10.     In the meeting held in the office of Divisional Manager of the OP in the presence of Surveyor, Divisional Manager agreed that draft estimate sent by the surveyor was not accurate and needed revision in consultation with complainant.  The complainant made several visits to the surveyor and requested to expedite her claim but OP did not settle her claim.  After 14 months of filing of her claim, surveyor sent an email on 12.04.2015 and demanded the original rent agreement between the complainant and M/s Bioinnovat despite the fact that copy of rent agreement was already provided to him om 29.08.2014.   Despite showing original rent agreement to the surveyor, the claim of the complainant was not settled and the OP caused delay to expedite her claim.   Being aggrieved of this act of delay on the part of the OP, the Complainant filed CC before the State Commission and State Commission vide order dated 19.05.2023 allowed the Complaint of the complainant.  Therefore, the OP is before this Commission now in the present FA.

11.     Appellant(s) have challenged the Order dated 19.05.2023  of the State Commission mainly on following grounds:

(i)      The State Commission failed to appreciate that policy of insurance was obtained by the respondent / complainant in her individual name whereas the business in the premises was being carried on by M/s Bioinnovat. There was no policy of insurance obtained by Bioinnovat

(ii)      State Commission failed to appreciate that it is the case of the respondent that respondent is the owner / allottee of industrial property bearing no. 465, Phase V, Udyog Vihar, Industrial Area, Gurgaon and that said plot was approved for carrying out the business of clinical research and data management.

(iii)     State Commission failed to appreciate that Bioinnovat was the tenant on the ground, first floor and part of third floor of the said property and Bioinnovat is into the business of clinical research and data management, which is company under the Companies Act and is a separate legal entity and loss of fittings and fixtures belonging to Bioinnovat reflected in the books of accounts and balance sheet of the company could not have been claimed by the respondent under the insurance policy.

(iv)     State Commission failed to appreciate the survey report submitted by Surveyor Cunningham Lindsey International Insurance Surveyor and Loss Assessors Pvt. Ltd, which was part of the record of the State Commission.

v.       State Commission failed to appreciate that surveyor had noted in the survey report that insured was engaged in the business of research and development and data management of drugs in the name of the Company ‘Bioinnovat Research Services Pvt. Ltd.’ from the said premises and said company had its registered office at A-1/17, Safdarjung Enclave, New Delhi.

vi.      State Commission failed to appreciate that Surveyor had also noted that address mentioned as risk location in the policy is ‘774, Pocket V, Udyog Vihar, Gurgaon, whereas the actual loss location was Plot No. 465, Pocket-V, Udyog Vihar, Gurgaon.

vii      State Commission failed to appreciate that Surveyor had noted that insured had 50% interest in the said company as shareholder and surveyor without prejudice, assessed the net assessed loss at Rs.22,47,648/- to the Company ( Rs.21,81,191/- to the Company Bioinnovat and Rs.66,457/- to the insured) and net adjusted loss at Rs.21,89,041/-( Rs.21,24,139/- to the Company Bioinnovat and Rs.64,902/- to the insured).   Further, the said assessment of loss was in full share of the company except building.

viii.    State Commission failed to appreciate that respondent had breached the fundamental principle of insurance and there was complete violation and disregard of the same and contract of insurance has to be construed strictly with terms and conditions of the policy. Further, several repeated requests were made by Surveyor to the respondent to submit the requisite documents to settle the claim.

ix.      State Commission failed to appreciate that as per final survey report dated 13.01.2013, it was observed by the Surveyor that major loss was suffered by Bioinnovat. Further, the happening of the event against which the insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy but it is only upon proof of actual loss that the assured can claim the reimbursement of the loss to the extent it is established.  

x.       State Commission has failed to consider the material on record and committed material irregularity and exceeded the jurisdiction vested in  it.

xi.      Reliance has  been placed on the following judgments of the Hon’ble Supreme Court :

1. United India Insurance Co. Ltd. Vs. Kantika Color Lab and Ors. (2010) 6 SCC 449
2. Export Credit Guarantee Corporation of India Ltd. Vs. Garg Sons International (2014) 1 SCC 686

3. Suraj Mal Ram Niwas Oil Mills Pvt. Ltd. Vs. United India Insurance Co. Ltd. (2010) 10 SCC 567, United India Insurance Co. Ltd. Vs. Harchand Rai (2004) 8 SCC 644.

12.     Heard learned counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the FA, based on their FA/Reply  Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

12.1.  Learned counsel for the Appellant apart from repeating the points which have  been stated in para 11, argued that at the initial instance, the respondent preferred a claim amounting to Rs.36 lacs and subsequently, the said claim underwent a revision, elevating it to Rs.90 lacs       .  Vide letter dated 12.04.2024, the respondent ultimately tendered the final claim quantified at Rs.55.02 lacs. Further, the rent lease deed submitted by the respondent was not registered and also the details of the vendor regarding the issuance of the stamp paper were not clear and in order to verify the authenticity of the same, the Appellant sought documents from the respondent.

12.2.  Learned counsel for the Respondent argued that amount sought by the respondent in the complaint was Rs.55,01,161/- which was the actual expenditure by the respondent for restoration of the insured building that suffered destruction by fire.   Further, the respondent had placed on record original bills for spending the said amount and the bills were in the name of the respondent.  Further, the Appellant had mentioned in their written statement that respondent is entitled to compensation of Rs.35,60,066/-, although it was only an assessment and less than the actual loss.  Therefore, the Appellant is now estopped from refusing to give the claim. 

12.3.  It is further the argument of the learned counsel for the respondent that appellant inspected the insured property before giving insurance and also charged a high premium because of incidences of fluctuation in electricity making the building prone to fire.  After having inspected the building and insuring for almost 7 years, the Appellant is now estopped from refusing the claim.   The appellant did not pay heed  to the fact that Bioinnovat was respondent’s close ownership and respondent deposed that onus of ensuring the building as well as its fixutures, furniture, fittings etc. dwelled upon her.  Further, it is argued that it is settled law that even an unregistered sale deed can be used for collateral purpose, for which an objection against the lease deed executed between the respondent and Bioinovat was raised. Ms. Sukrita Sethi, director of Bioinnovat in her evidence deposed that it was the respondent who was responsible for insuring the insured property, fixtures, furniture etc.  Therefore, insurance policy was rightly obtained.   Even the details of the vendor were clearly identified on the stamp paper and the rent agreement has been proved by the signatories.

12.4.  It is further argued by learned counsel for the respondent that appellant has raised an objection that insurance policy mentions the address as ‘774, Phase-V, Udyog Vihar, Industrial Area, Gurgaon whereas, the insured property is 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon.  Learned counsel has argued that appellant has not raised this objection during survey, assessment or even in the written statement.  The insurance policy mentioned the correct address of the insured building at the top where address of the respondent is mentioned.   The Appellant has itself given an insurance policy for the property bearing no. 774 couple of days prior to the insured property and thus it cannot issue two same policies for the same building in such a span time.  The Appellant has not raised any objection against insurance policy anywhere before and thus they are estopped from raising this objection.   The Appellant has not processed the claim of the respondent despite having submitted all the documents and original bills. 

12.5.  In the revised written arguments filed by the Appellant on 14.05.2024, it is stated that respondent obtained Standard Fire and Special Perils Policy being policy no. 361800/11/14/3100000047 covering building for a sum of Rs.2,07,50,000/- and fittings furniture and fixtures with office equipment, AC, Get Set, False Ceiling and Hall glass etc for sum  for a sum of Rs.1,06,50,000/- at the premises 774, Pocket-V, Udyog Vihar for the period from 20.05.2014 to 19.05.2014 and this policy was issued after the incident of loss and has no relevant so far as the present claim is concerned.  It is further stated that it is the contention of the respondent that there is a typographical error in the policy as the same was meant for premises at 465 and not for the premises at 774.  At no point of time, the respondent raised any grievance with regard to the premises insured under the said policy and never sought any endorsement for modification or change of location of the premises as mentioned in the policy nor ever approached the company for any correction in the details of the premises covered under the policy.  The insured cannot be permitted to seek modification of policy after the incident  of loss.   It is further stated that survey report noted that claim for fittings, fixtures and furniture was the major part of the claim and that all these fittings, fixtures and furniture etc belonged to the company.  The said fittings etc did not belong to the insured and it is well established in law that a company is a separate legal entity distinct from its directors, shareholders and officers.  The property of the company vest with the company and the directors or shareholders cannot claim their rights on the property of the company.  Reliance has been placed by the learned counsel on the judgment of the Hon’ble Supreme Court in Tata Engineering and Locomotive Co.Ltd. and Ors. Vs. State of Bihar and Ors. 1964 SCC Online SC 111.  It is further the case of the learned counsel for the Appellant that there was no policy of insurance obtained by Bioinnovat and complainant does not have insurable interest.  Even no lease agreement was ever disclosed to the Appellant when the policy was taken. 

12.6.  Further, it is submitted by learned counsel for the Appellant that assessment made by the surveyor was in full share of the company Bioinnovate except building and the insured / respondent at best had 50% share or interest.  In such circumstances, even it is assumed for the sake of arguments that the respondent / insured could claim as shareholder of the said company, the same could not exceed her share i.e. 50% share of such loss towards fittings, fixtures and furniture.

12.7.  It is further submitted that under Section 64UM of the Insurance Act, 1938, the insurance company is to appoint surveyors when the total loss exceeds the threshold of Rs.20,000/-.  It is well settled that survey report is an important piece of evidence and same cannot be brushed aside in the absence of any cogent evidence.  Reliance has been placed on the following judgments of the Hon’ble Supreme Court:

a.       United India Insurance Co. Ltd. Vs. Roshal Lal Oil Mills Ltd and Ors. (2000) 10 SCC 19

b.       Sikka Papers Vs. National Insurance Co. Ltd. (2009) 7 SCC 777

c.       New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787

d.       Sri Venkateswara Syndicate Vs. Oriental Ins. Co. Ltd. (2009) 8 SCC 507

e.       National Insurance Co. Ltd. Vs. Hareshwar Enterprises Pvt. Ltd. and Ors. 2021 SCC Online SC 628.

12.8.  In the revised written arguments filed by the respondent on 16.05.2024, it is submitted that Appellant continued to demand documents from the respondent, surveyed the premises and continued to assess the losses for the premises no. 465.  The Appellant did not raise any objection at any point of time that said premises was not insured.  Vide letter dated 30.07.2015, the Appellant demanded vendor’s details and proof of any payment towards maintenance charges of the premises to HSIIDC and those were duly submitted, which clearly show that Appellant know that the policy is in respect of the premises no. 465 and not 774 as another policy in respect of premises no. 774 was concurrently taken.  The respondent purchased insurance policies for two different buildings, both in the name of the respondent and both the buildings have been insured with furniture, fixtures and other items from the Appellant on the same day and for the same period from 20.05.2013 to 19.05.2014.  In the policy document, the property no.774 has been mentioned as typographical error as it pertains to 465 only and Appellant never raised the said issue before. Further, it is submitted that on the same day, the Respondent has obtained another policy for the same period with respect to the building and furniture and fixtures and other items for building no.774 and the address etc are correct in that policy.  Since the respondent obtained a policy for premises no. 774 on the same day for the same period and for the same building and items from the Appellant, there is no reason why respondent will obtain second policy on the same day for the same building i.e. 774.  Thus, it is only a typo error and insured building is 465. 

12.9.  It is further submitted by learned counsel for the respondent that it was the responsibility of the respondent to insure the building as well as furniture,fixtures and other items in premises no. 465 under the lease deed signed between the respondent and Bioinnovat, of which she is the Managing Director.   The respondent has kept tenants in the said premises and the rent agreement clearly mentions that lessor i.e. the respondent shall be responsible for the insurance cover. The lease deed has been submitted with the surveyor. It is further submitted that appellant has not disputed the insurance policy taken by the respondent for the insured building. 

12.10. Further, it is submitted that whole premises of the insured property is owned by the respondent as the said  property was allotted to her by HSIIDC for the purpose of Clinical Research and Data management project.  Further, the Appellant kept their decision on the respondent’s claim in abeyance for over 17 months. 

13.     The State Commission has allowed the complaint filed by respondent – complainant with following directions to the OP-Insurance Company

24. The opposite party is directed to pay a sum of Rs.55,01,161/- to the complainant, for the losses incurred by her on account of the fire that broke out in the insured property i.e. premises no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon on 20.01.2014 along with 6% interest from the date of filing the complaint till realization of the amount.

25. Further, a sum of Rs.2,00,000/- is also awarded as compensation in favour of complainant for suffering mental harassment and agony and a sum of Rs. 50,000/- towards litigation cost.

26. The opposite party is directed to pay the said sum within a period of 2 months.

14.     Extract of the relevant paras of order of the State Commission are reproduced below :

11.       The only question for consideration is whether the complainant is entitled to the reliefs as prayed for.

12. In support of her claim, the complainant has placed on record a copy of the insurance policy Annexure-A. It is worth noting that the said policy has been obtained by the complainant for Office Premises of property no. 465 Phase-V, Udyog Vihar, Industrial Area, Gurgaon. Further, the said policy covered the risk pertaining to building, office equipment, AC, Gen sets, false ceiling and Hall glass. It is note-worthy that the said policy is not disputed by the opposite party in its written statement. The only objection taken by the insurance company is that the first floor of the property no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon was occupied by M/s Bioinnovat and no policy was issued by the opposite party in favour of 'Bioinnovat' and thus no claim can be paid to the complainant, for the goods and articles owned by the 'Bioinnovat'. On the other hand, it is the case of the complainant that the whole Premises no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon is owned by the complainant as the said property was allotted to the complainant by Haryana State Industrial And Infrastructure Development Corporation Limited (HSIIDC) vide allotment letter dated 18.06.2009 Annexure-2 for the purpose of Clinical Research And Data Management Project. She has also enclosed the Certificate Of Incorporation (page 33) of the complaint, which also shows that 'Bioinnovat' Research Services Pvt. Ltd was registered with the Registrar Of Company in the year 2005 and the main object of the company was to provide bio-technology contract research, products, services and consultancy, including training, search, staffing, auditing, from India to global life science industries including pharma, bio pharma and health care customers as per Memorandum Of Association of 'Bioinnovat' Annexure A-3. She has further placed on record the lease deed Annexure A-1, which shows that the lease deed was executed by the complainant and 'Bioinnovat' on 01.07.2009 in respect of property bearing no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon for operating the business of Clinical Research And Data Management Project. This lease deed comprised of ground, first, second and partly third floor of Premises no.465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon.

13.       Further, the said lease deed was executed between the complainant and the 'Bioinnovat' for a period of 10 years. It is note-worthy that as per the lease deed, the lesser was bound to keep the premises adequately ensured against the loss and damages by fire, flood or all other usual risks and was responsible at its cost, to carry out all major or structural repairs in the premises. It is further significant to note that the said lease deed was executed between the complainant and her daughter Ms. Sukrita Sethi, who is the Authorized Signatory of 'Bioinnovat'. Further, Ms. Sukrita Sethi has categorically deposed in her affidavit of evidence that she is one of the directors of M/s 'Bioinnovat', which was having the tenancy in respect of ground, first, third and fourth floor of Property no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon. She has further deposed in her affidavit that she signed the lease deed on behalf of the company. The complainant is the Managing Director and shareholder of 50% shares in the 'Bioinnovat' and she is the owner of the rest of the 50% shares of the company. The entire property was allotted by the HSIIDC to the complainant, who is her mother, and exclusive owner thereof. Since, the lease deed in question was executed between the complainant and her daughter Ms Sukrita Sethi, who is the authorized signatory of 'Bioinnovat', we are of the considered view that the opposite party was not right in raising suspicion on the genuineness of the lease deed on the grounds taken by it in its written statement.

14.       It is further worth noting that the complainant has also categorically deposed in her affidavit of evidence that the property no. 465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon had continuously been insured and annually renewed by the opposite party since 2007. It is significant to note that it is not the case of the opposite party the policy was not renewed by it after 2007. Further, the complainant has further deposed that she is a distinguished Pharmaceutical Industry Expert in Clinical Research and is also on Expert Industry panel of Ministry of Health, Govt. of India. The business of Clinical Research inevitably requires the formation of Private Limited Company, therefore, the said company was formed and a formal arrangement of tenancy was executed between her and the company. Since, the said ‘Bioinnovat’ was under her close ownership, the onus of insuring the building as well as its fixtures furniture, fittings, appliances, etc. in the said property, dwelled upon her. She has also deposed that the property in question is located and is prone to massive electrical fluctuation causing several incidents of fire in the area. Due the high incidence of fire, in the area, the opposite party charged a very high premium of this building after 2009.

15.        Further, this fact cannot be ignored by us that before issuance of the insurance policy Annexure A, the premises must have been thoroughly inspected by the officials of opposite party. Further, it is nowhere the case of the opposite party that at the time of issuance of policy in favour of the complainant, the ‘Bioinnovat’ was not in existence and was not running its business from the insured premises. It is further worth noting that as per the documents placed on record by the complainant, the company ‘Bioinnovat’ was in existence Since 2005, as per the Certificate Of Registration, Page 33 of the complaint. Further, the complainant has been taking the insurance policy from the opposite party in respect of the said premises since 2007 and the policy was renewed thereafter, from time to time. In these circumstances, we find no force in the contention of the opposite party that the lease deed was not genuine and was fabricated by the complainant only to get the insurance claim from the opposite party.

16. Further, we also find no force in the contention of the opposite party that 'Bioinnovat' is not a consumer, being a company and no claim can be filed for the benefit of the company.

17. To meet out this contention, we would like to refer the judgment of National Commission in Modi Dyeing & Bleaching Works Vs. National Insurance Company Ltd. 2021(4) CPR 453; MANU/CF/0297/2021, wherein it was inter-alia held as under:

"We have considered the arguments of the counsel for the parties and examined the record. Supreme Court in Paramount Digital Colour Lab Vs. Agfa India Pvt. Ltd. MANU/SC/0245/2018 : (2018) 14 SCC 81 and Lilavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developer, MANU/SC/1574/2019 : (2020) 2 SCC 265, has held that a person engaged in commercial activities can buy goods or avail services for his personal use and is within the scope of Consumer Protection Act, 1986. The insurance service falls within inclusion clause of the "service" as defined under Section 2 (1) (o) of the Act, 1986".

18. In the present case, the complainant is carrying on the commercial activities along with her daughter in the premises no.465, Phase-V, Udyog Vihar, Industrial Area, Gurgaon. She has availed the services of the opposite party and purchased the insurance policy to protect the premises from fire and Special Perils. Moreover, the contract of Insurance is a contract of Indemnity and, therefore, there is no question of commercial purpose in obtaining insurance coverage. Hence, this contention of opposite party is also answered in Negative. Thus, we are of the view that complainant is a 'consumer' as per the judgment of National Commission in Harsolia Motors Vs National Insurance Company ltd, MANU/CE/0083/2004.

19. Further, we find no force in the arguments of the opposite party the policy, Annexure-A was taken by the complainant in respect of premises no. 774, Phase-V, Udyog Vihar, Industrial Area, Gurgaon as no such objection was taken by the opposite party in its written statement. Moreover, the complainant had taken a separate policy, Annexure-B in respect of premises no. 774, Phase-V, Udyog Vihar, Industrial Area, Gurgaon.

20. Further, we are of the considered view that the insurance company should not have accepted the premium when they had no intention to give benefit to the public, as per the judgment of National Commission in Praveen Damini‟s case Volume IV (2006) CPJ 189.

21.       Further, Hon’ble Supreme Court in Oriental Insurance Co. Ltd. vs M/S Ozma Shipping Company & Anr Civil appeal no.6289 of 2001 decided on 25.08.2009, it was inter-alia held as under:

"The insurance companies in genuine and bona fide claims of the insurers, should            not adopt the attitude of avoiding payments on one pretext or the other. This attitude puts a serious question mark on their credibility and trustworthiness of the insurance companies. Incidentally by adopting honest approach and attitude, the insurance companies would be able to save enormous litigation costs and the interest liability."

22. In the present case, the opposite party has not processed the claim of complainant despite having been submitted all the documents and original bills by the complainant. It is apparent from the original bills placed on record by the complainant that she had spent a sum of Rs. 55,01,161/-, on restoration of the damaged property. Further, it is not the case of the opposite party that the bills placed on record by the complainant, are not genuine and are fabricated. In these circumstances, we are of the considered view that complainant is entitled to the reliefs claimed for.

15.     While reserving the judgment after hearing both sides on 02.05.2024, this Commission observed as follows :

1. Heard counsels of both sides. Challenge is to the order dated 19.5.2023 of the State Commission vide which the complaint filed by the respondent herein was allowed with directions to OP Insurance Company to pay Rs.55.01 lakh to the complainant for losses incurred on account of fire that broke out in the insured property premises no.465 , Phase-V, Udyog Vihar on 20.1.2014 alongwith 6% interest, compensation and litigation cost etc.

2.  The date of fire instant is 20.1.2014, intimation of the same was given to the insurance company on the next date i.e. 21.1.2014, a surveyor was appointed by the insurance company on 21.1.2014 itself and final claim was filed on 12.4.2014. The surveyor submitted a final report on 13.1.2015, the complaint before the State Commission was filed on 11.6.2015.  It is admitted by the insurance company that till the filing of the complaint before the State Commission, the insurance company has not taken a final decision on the claim, either accepting or rejecting, and the same was still under process before them.  In view of the complaint having been filed, they contested the complaint by filing the written version/evidence etc. and in view of the pendency of the case, no formal communication/repudiation letter  etc. was issued by the insurance company, either during the pendency of the consumer complaint before the State Commission or any time, thereafter till date.  Hence, the case of the insurance company is built on the stand they took before the State Commission and stand they are taking before this Commission.

3. The policy in question covered period from 20.5.2013 to 19.5.2014 and was issued on 15.5.2013.  The policy is issued in the name of  Ms.Guljit Chaudhri  with address given as 465, Pocket-V, Udyog Vihar, District Gurgaon, Haryana. The main contention of the insurance policy in this case is that the fire took place in Building 465, as stated above, but the said policy in question, the property at 774, Pocket- V, Udyog Vihar was insured and not the property at building 465.

4.  The second main contention of the insurance company is that though the building is in the name of complainant Ms.Guljit Chaudhri, the furniture/fixture etc. items covered under the insurance policy were not in her name but in the name of Company and she is only 50% shareholder of the company with her daughter namely Ms.Sukrita Sethi, being the other Director with 50% shareholding. During the hearing, it was clarified that it is the Private Ltd.Company by the name  “Bioinnovat’ Research Company with only two Directors viz. Ms.Guljit Chaudhri and Ms.Sukrita Sethi, with Ms.Guljit Chaudhri  being Managing Director and both having 50% shareholder each.

5.  It was contended by the complainant that there are two different buildings both in the name of Ms.Guljit Chaudhri i.e. building 465 and 774 both located at the same address i.e. Pocket-V, Udyog Vihar, Gurugram and both these buildings have been insured alongwith the furniture, fixture and other items in these buildings from the same insurance company on the same day for the same period i.e. on 15.5.2023 from 20.5.2013 to 19.5.2014. It is the contention of the counsel for complainant that mention of 774 in the policy under question is a typo error and this insurance pertain to building no.465 only. In support of his contention, he has stated that on the same day, they have obtained another policy for the same period with respect to building and its  furniture/fixture and other items etc. at 774 in which  both the places, i.e. insured’s address and location of the property is correctly shown as building no.774 but in the policy in question while the address of the insured is correctly shown as 465, the location of the property contained a typo error of 774 instead of 465.  He further contends that if they have obtained a policy for 774 on the same day for the same period for the same building and items, there is no reason why they will obtain second policy on the same day for the same period.  Hence, according to their case, in the policy in question, 774 is to be treated as typo error and to be read as 465 and in their complaint before the State Commission, they have categorically stated that the policy in question with respect to building no.465.  While the counsel for insurance company objected to copy  of other policy with respect to building no.774, being placed on record today on the ground that it was not placed on record earlier before the lower fora, we are of the view that in view of the specific contention of the complainant, this is a relevant documents and take the same on record.  Complainant will file clearly readable copy of this document and similarly give  a copy of the same to the counsel for insurance company.

6. With respect to ownership of the furniture fixture and other items insured within the building,  it is the contention of the insurance company as they do not belong to the complainant but to the Company and Company independent legal entity, they cannot claim for the damage occurred to those items of furniture/fixture which belong to the company, but can make claim only with respect to building which is in the name of the insured. In this regard, the complainant has stated that in both buildings, are in the name of Ms.Guljit Chaudhri, certain portions of these buildings have been rented out to (a) the Company of which she is the Managing Director   (b) some other tenants as well, and as per lease deed signed with the tenants, it is the responsibility of building owner i.e. Ms.Guljit Chaudhri not only to ensure the building but also furniture, fixture, office equipment computer etc. in these building. He has drawn our attention to the lease deed 1.7.2009) signed between Ms.Guljit Chaudhri and the Company ‘Bioinnovat’ Research P.Ltd. of which she is the Managing Director.  The extract of clause 6 is reproduced below

“6.  Lessor’s Covenants

6.1.1 The Lessor, to the intent that such obligations may continue throughout the terms of this lease, hereby covenant with Lessee as under :

6.1.2 To keep building furniture, furnishings, office equipments, computers, generator, electrical panels, air conditioners and all fittings etc. in the demised premises insured against loss or damages by fire, flood and all other usual risks;

6.1.3 The Lessor shall be responsible at its cost, to carry out all major or structural repairs on the demised premises.”

 The complainant further contended that similar clauses were there in the lease deed signed with other tenements as well as and hence,  it was the land owner, who was under obligation to ensure not only the building  but also other furniture, fittings other equipments items. The complainant further states that these two buildings are the commercial/industrial buildings allottees by HSIDC. In this case, the final claim submitted was for Rs.55 lakh against which the surveyor assessed the gross loss at Rs.35.60 lakh and after certain deduction assessed the net loss at Rs.21.25 lakh.

 8.  It is contended by the complainant that they have regularly taking the insurance policy for both the building for the same insurance company since 2007 in the name of building owner Ms.Guljit Chaudhri and such issues have never been raised earlier.   Under the policy in question, the sum insured was Rs.6.28 crore while under other policy, i.e. one pertaining to 774 issued on the same day and the sum insured was Rs.3.14 crore.  With respect to delay in processing the claim, the counsel for insurance company has stated that it was on account of the complainant not furnishing the requisite documents to the  surveyor due to which surveyor report got delayed.

16.     As regards inaction / delay on the part of the insurance company in not settling the claim, it is contrary to the Insurance Regulatory and Development Authority ( Protection of Policyholders’ Interests) Regulations, 2002. Clause 9 of the said Regulation is extracted hereinunder :

9. Claim procedure in respect of a general insurance policy

(1) An insured or the claimant shall give notice to the insurer of any loss arising under contract of insurance at the earliest or within such extended time as may be allowed by the insurer. On receipt of such a communication, a general insurer shall respond immediately and give clear indication to the insured on the procedures that he should follow. In cases where a surveyor has to be appointed for assessing a loss/ claim, it shall be so done within 72 hours of the receipt of intimation from the insured.

(2) Where the insured is unable to furnish all the particulars required by the surveyor or where the surveyor does not receive the full cooperation of the insured, the insurer or the surveyor as the case may be, shall inform in writing the insured about the delay that may result in the assessment of the claim. The surveyor shall be subjected to the code of conduct laid down by the Authority while assessing the loss, and shall communicate his findings to the insurer within 30 days of his appointment with a copy of the report being furnished to the insured, if he so desires. Where, in special circumstances of the case, either due to its special and complicated nature, the surveyor shall under intimation to the insured, seek an extension from the insurer for submission of his report. In no case shall a surveyor take more than six months from the date of his appointment to furnish his report.

(3) If an insurer, on the receipt of a survey report, finds that it is incomplete in any respect, he shall require the surveyor under intimation to the insured, to furnish an additional report on certain specific issues as may be required by the insurer. Such a request may be made by the insurer within 15 days of the receipt of the original survey report.

Provided that the facility of calling for an additional report by the insurer shall not be resorted to more than once in the case of a claim.

(4) The surveyor on receipt of this communication shall furnish an additional report within three weeks of the date of receipt of communication from the insurer.

(5) On receipt of the survey report or the additional survey report, as the case may be, an insurer shall within a period of 30 days offer a settlement of the claim to the insured. If the insurer, for any reasons to be recorded in writing and communicated to the insured, decides to reject a claim under the policy, it shall do so within a period of 30 days from the receipt of the survey report or the additional survey report, as the case may be.

(6) Upon acceptance of an offer of settlement as stated in sub-regulation (5) by the insured, the payment of the amount due shall be made within 7 days from the date of acceptance of the offer by the insured. In the cases of delay in the payment, the insurer shall be liable to pay interest at a rate which is 2% above the bank rate prevalent at the beginning of the financial year in which the claim is reviewed by it.

17.     From the above, it is clear that Insurance Company is mandated to take a final decision on the claim within a maximum of about 7 months.  These provisions being statutory in nature, non-observance of these time-lines itself amount to deficiency in service on the part of Insurance Company.  In the absence of any orders / injunction from the Commission or any other legal impediment there was no bar on the Insurance Company to take a final decision on the claim.  In case of any doubt, it could have moved an application before the Commission seeking any clarification and/or permission in this regard, which was not done.  Hence, we are of the considered view that on this count also, the Insurance Company is guilty of deficiency in service, entitling the Insured compensation on account of such inordinate delay/deficiency in service to decide/settle their claim, over and over the eligible claim on merits along with interest as per provisions of Insurance Regulations. 

18.     After careful consideration of the order of the State Commission, other relevant facts and circumstances of the case and rival contentions of the parties, we are of the considered view that State Commission has given a well reasoned order duly addressing all the contentions of the parties and we are in agreement with its observations and findings and find no reason to interfere with the same.  Accordingly, order of the State Commission is upheld and First Appeal No. 916 of 2023 is dismissed.

19.     The pending IAs in the case, if any, also stand disposed off.