PER MR. PREM NARAIN, PRESIDING MEMBER

This appeal has been filed by the appellant/complainant namely Sangeeta Devi against the order dated 22.05.2014 of the State Consumer Disputes Redressal Commission, Shimla, Himachal Pradesh (in short ‘the State Commission’) in C.C. No. 07/2013.

2.   The brief facts relevant for the disposal of the present first appeal are that the appellant took the loan of Rs.20 lacs to purchase a plot alongwith the approved lay out plan for construction from the owner of the property and also got insured the house being built over the said plot. It was stated in the complaint that the house was being constructed for three storeys and after inspection of the house, the insurance company insured the said premises for Rs.25 lacs. Due to incessant rains, the house under construction collapsed and was raised to ground. In these circumstances the complainant submitted the claim for Rs. 25 lacs only, though alleged the loss was Rs.26.38 lacs. A surveyor was appointed by the insurance company who assessed the loss for Rs.6,39,381/-, and the insurance company paid this amount to the complainant which was accepted by the complainant under protest. The complainant then filed a consumer complaint before the State Commission for the remaining amount of insurance claim submitted by her. The complaint was resisted by the insurance company on the ground that the house collapsed due to negligence of the complainant herself as there was unauthorized construction of three storeys. It was also alleged that investigation conducted by the opposite parties and enquiries conducted by various governmental authorities showed that the complainant herself was to be blamed for the landslide, as she had employed an excavator for excavation work in connection with the retaining wall and had also raised the height of retaining wall to about fifteen meters in such a way that the natural flow of water behind the wall got blocked, resulting in the landslide.

3.     The State Commission, however, partly allowed the complaint as under:-

"19. As a result of the above discussion, the complaint is partly allowed and it is ordered that the opposite parties shall pay a sum of ₹10,96,790/- on account of insurance claim, instead of the amount of ₹6,39,381/- which has already been paid. In other words, the opposite parties shall pay an additional sum of ₹4,57,409/-, and the same shall be paid with interest at the rate of 9% per annum, from the date of presentation of the complaint, i.e. 29.07.2013, to the date of payment of aforesaid amount of money. In addition, the opposite parties shall pay a sum of ₹20,000/- on account of compensation and a sum of ₹7,000/- on account of litigation expenses."

4. Not satisfied with the order of the State Commission, the complainant has approached this Commission by way of the present appeal.

5. Heard the learned counsel for the parties and perused record.

6. The learned counsel for the appellant stated that though the State Commission has partly accepted the complaint and has increased the amount of insurance claim, the State Commission has not appreciated the correct facts of the case and has fallen prey to the report of the surveyor which itself is based on wrong facts and wrong assumptions. The State Commission has calculated the valuation admissible for each item based on certain assumptions or on certain facts given in the survey report as if the State Commission was working as an engineer or another surveyor itself. The State Commission should have rejected the report of the surveyor and should have accepted the claim submitted by the complainant as it was based on correct facts. The learned counsel for the appellant stated that the State Commission has particularly erred in disallowing the amount of claim for the electrical fittings and equipments. It was argued that the electrical fittings were already affixed inside the walls when the building collapsed. Hence, the State Commission should have allowed this claim. The State Commission also erred in allowing compensation only for a two storey building confining to only nine pillars whereas the building was clearly a three storey building and was based on twelve pillars. The State Commission has relied upon the loan agreement where only two storeys are mentioned, however, the loan agreement was not part of the insurance contract between the complainant and the insurance company. Moreover, the insurance company got inspected the building prior to consenting for the insurance. Insurance is a contract of utmost faith between the parties and parties are bound by the same. The insurance company had insured three storeyed building and the whole building has collapsed. Therefore, the insurance company is obliged to indemnify the total loss to the extent of the sum assured of Rs.25 lacs.

7. The learned counsel for the appellant has further stated that the contract of insurance is an independent contract between the insured and the insurer and the same is to be honoured by the insurer even if there is some legal aspect which has been violated. The counsel mentioned in this regard the decision of this Commission in M/s. Aroma Paints Ltd. Vs. The New India Assurance Company Ltd. & Ors. 2013 (3) CPR 494 (NC), wherein the insurance claim of a vehicle for accident of the vehicle was allowed though the vehicle was not registered and this was violation of the provisions of the Motor Vehicles Act. The counsel argued that on similar grounds the insurance claim for the third floor should have been approved by the State Commission.

8. On the other hand, the learned counsel for the respondent insurance company stated that the loss has been caused due to the negligence of the complainant herself and therefore, the appellant is not entitled to any further payment against the insurance claim. Surveyors are appointed under the Insurance Act, 1938 and their report plays an important role in settling the insurance claim. The report of the surveyor cannot be brushed aside without any cogent reasons. The complainant is wrongly claiming that the surveyor was appointed by the insurance company and has been paid by the insurance company, therefore, he has fiduciary relationship with the insurance company and his report is a biased report. The surveyors are independent loss assessors appointed by the insurance company from the list approved by IRDA and as they are appointed under the provisions of Insurance Act, 1938, no such aspersion can be cast against them until there is any clear proof for the same. The complainant has not submitted any proof, therefore, there is no basis for this allegation.

9. It was further contended by the learned counsel for the respondent – insurance company that the State Commission has considered all the aspects raised in the appeal and has calculated the amount for each item claimed by the complainant in the insurance claim. So far as disallowing of the electrical items is concerned, the State Commission has clearly observed that as the building was under construction and the structure which was on beams and pillars was still not completely constructed, so there was no question of electrical fittings having been affixed by that time and on this ground, this item has not been allowed. In respect of the consideration of only two storeys by the State Commission, the learned counsel stated that as per the approved plan only two storeyed building was to be constructed and the loan agreement also mentions only two storeyed building. Therefore, the State Commission has rightly not allowed any claim for the third storey which was totally illegal. No insurance claim can be approved for any activity which is against the law of the land. The case cited by the learned counsel for the appellant is related to motor insurance and the same cannot be applied to the present case.

10. Arguments advanced by both the parties have been considered carefully and records have been perused. Normally, surveyor report is the basis of settlement of insurance claim until there are cogent reasons for not accepting the report of the surveyor. The State Commission has meticulously analysed the surveyor’s report and has given its finding on each of the items of claim submitted by the complainant. Prima facie the report of the surveyor seems to be quite balanced however, as the State Commission has still enhanced the amounts under certain items of claim and the insurance company has not preferred any appeal against the order of the State Commission, I do not intend to nullify the order of the State Commission in order to give effect to the report of the surveyor. I do not find any merit in the submissions of the complainant that the State commission has not agreed on various amounts of claim and has been influenced by the report of the surveyor and the loan agreement. In fact, the State Commission has taken pains to analytically examine all the items of insurance claim as submitted by the complainant before deciding the amount under each item. The State Commission has rightly not considered the items relating to electrical fittings and appliances as in all probability these items could not have been installed when the house was under construction. Similarly, the State Commission has rightly considered the amounts spent upto second floor only because the approved plan was only upto second storey and the construction of third storey was totally illegal. That is why the State Commission has allowed the claim upto only two storeys to help the complainant instead of totally rejecting the claim. The learned counsel for the appellant has referred to the case of M/s Aroma Paints Ltd. Vs. New India Insurance Company Ltd. wherein this Commission has allowed insurance claim even though the vehicle was not having the permanent registration number at the time of accident. Clearly, this case relates to motor insurance. In the cited case, this Commission too has allowed the insurance claim but has not allowed the interest from the date of claim. Similarly, in the present case, the State Commission has allowed the claim for construction of two storey building and has not allowed expenses for the third storey. As the State Commission has not totally disallowed the claim, the cited case does not help the appellant for considering the claim of expenditure relating to the third storey.

11. Based on the above discussion, I do not find any merit in the present appeal and accordingly Appeal No. 371 of 2014 is dismissed with no order as to costs.