Sri Shyamal Gupta, Member

The instant Appeal is directed against the Order dated 21-05-2015 passed by the Ld. District Forum, Siliguri in C.C. No. 125/2012.

In short, case of the Complainant before the Ld. District Forum was that he took a Standard Fire and Special Peril Policy with add on coverage for earthquake from the OP Insurance Company.  On 18-09-2011, during currency of the policy concerned, heavy earthquake affected the Siliguri town.  Due to said natural calamity, Complainant’s building suffered heavy damage.  Besides, on 25-10-2011, fire broke out in the ground floor of the Insured’s building. Accordingly, claims were lodged with the OP Insurance Company.  However, the OP Insurer repudiated both his claims by two separate letters dated 27-12-2011.  Hence, the complaint.

On the other hand, case of the OP No. 1 was that on receipt of due intimation from the Complainant, it deputed a Surveyor to cause due survey.  After discreet survey, the said Surveyor assessed the loss at Rs. 64,265/-.  The said Surveyor made some vital remarks in the survey report observing that the Insured violated the sanctioned building plan.  Also, during survey it came to surface that ground floor of the Insured’s house was used for storing cosmetics and stationery goods.  It is further stated that on receipt of another intimation of fire, it deputed another Surveyor who assessed the loss at Rs. 1,80,948/-.  During survey, the said Surveyor noted that the Insured rented a part of his ground floor to two C&F agents.  It is alleged that fire unfurled rapidly as inflammable articles were stored in the godown.  On due perusal of the survey reports and other available documents it was found that the claim of the Complainant was not admissible due to misrepresentation/non-disclosure/mis- description of material facts and violation of Point No. 3 of the general condition of the Policy concerned. 

Decision with reasons

We have heard the averments made by Ld. Advocates of both sides and perused the material on record, including the citations referred to by both sides. 

Ld. Advocate for the Appellant Insurance Company first argued that the Respondent/Complainant submitted two separate claims – one pertaining to the damage caused to his dwelling house due to earthquake on 18-09-2011 and the other in respect of a fire incident at his residential house on 25-10-2011.  Although both the claims were repudiated by issuing separate letters, the Respondent/Complainant filed a single complaint in respect of both the incidents.  According to the Ld. Advocate, the instant case is not maintainable for joinder of causes of action. 

The objection of the Appellant Insurance Company notwithstanding, we see no harm uniting twin causes of action in the same complaint given the fact that the same are covered under the same and identical insurance policy.  

It is further argued by the Ld. Advocate of the Appellant Insurance Company that in the proposal form, the nature of occupation of the property was mentioned as dwelling house.  Accordingly, one Standard Fire and Special Peril Policy was issued in favour of the Respondent/Complainant.  However, during survey, it revealed that the ground floor of the building was rented out to two companies.

In this regard, it is contended by the Ld. Advocate for the Respondent/Complainant that in the proposal form there was no provision for providing details of rented house.  Thus, he could not furnish necessary details to the Insurance Company.  We have also noted that in reply to the questionnaire put forth from the side of the Respondent/Complainant, whether the Appellant was/is not insuring hotels, chemical factories and/or manufacturing units, those are considered more risk prone, the Appellant ducked giving direct response to the said question merely stating that “as per rules and regulation of the company”. 

As regards the contention of the Ld. Advocate for the Appellant Insurance Company that due to storage of large quantity of highly inflammable articles in the ground floor fire broke out rapidly, Ld. Advocate for the Respondent/Complainant stated that in the proposal form, celluloid goods, methylated spirit, micro-cellulose plastics have been described as hazardous goods.  However, none of these goods have been identified and found by any of the Surveyors. In the fire brigade report also there was no mention of presence of such hazardous goods.  It is further argued that deodorant and after-shave lotion may contain alcohol, but these items have not been termed as hazardous goods by the Insurer.  Further, according to the Ld. Advocate for the Respondent/Complainant, homeopathic medicines though contain rectified spirit, but the same cannot be termed hazardous goods.  The Ld. Advocate for the Respondent/Complainant further contended that the Surveyors concerned did not make any endeavour to ascertain by sending samples to the appropriate laboratory as to whether the items stored in the godown could be termed as hazardous goods.  He also pointed out that nowhere in the fire brigade report, there was any mention of the fact that fire originated due to electrical short circuit in the godown situated at the ground floor and/or that fire spread due to storage of hazardous goods in the ground floor.  Be it mentioned here that the Appellant has not come up with any satisfactory reply to counter the averments of the Respondent/Complainant in this regard.

On going through the copy of reply given by the Appellant Insurance Company as to the questions raised from the side of the Respondent/Complainant we find that the Appellant Insurance Company has evaded giving any direct/specific reply to several pertinent questions merely by stating that the same were matter of record.

Similarly, in respect of the earthquake related claim also the Surveyor discharged his duty merely by floating the possibility of aggravation of the extent of damage due to alleged unauthorized construction of the building. One really wonders, what prevented the Surveyor from roping in competent authorities in order to determine with certainty whether such unauthorized extension indeed aggravated the damage or not. 

As long as the nature of peril falls within the ambit of insurance coverage, certainly, Insurer cannot abdicate its contractual liability under the policy concerned.  When a claim is repudiated on the basis of fanciful imagination of the Surveyor, it clearly points out mala fide intention on the part of the Insurance Company.  In case of any suspicion, while the Survey Reports were inconclusive, even the Appellant Insurer could refer the matter to the appropriate authorities to determine whether or not the apprehensions mooted by the Surveyors had any basis.  Insurance claim cannot be repudiated on the basis of surmises and conjecture.  The onus of justifying a decision rests with the decision maker.  That being not done, the Appellant cannot escape from indemnifying the Respondent/Complainant for the loss suffered by him.

The Surveyors assessed the loss at Rs. 64,265/- +  Rs. 1,80,948/- = 2,45,213/-.  The Ld. District Forum was fully justified awarding this amount in favour of the Respondent/ Complainant. However, we find that the Ld. District Forum has awarded both lump sum compensation and interest which is not permissible under the law.  Accordingly, the impugned order is duly modified.  Order for litigation cost is found to be in order and therefore, the same is retained.

The Appeal, thus, succeeds in part.

Hence,

O R D E R E D

that A/793/2015 be and the same is allowed on contest in part.  Appellant Insurance Company is directed to settle the insurance claims of the Respondent/Complainant at Rs. 2,45,213/- together with interest @ 9% p.a. from the date of filing the complaint before the Ld. District Forum till full and final payment is made and litigation cost for a sum of Rs. 5,000/-.  The Appellant Insurance Company shall pay the decreetal amount within 45 days hence.  The impugned order stands modified accordingly.