IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI
BEFORE Hon’ble Thiru Justice R. SUBBIAH PRESIDENT
Tmt. Dr. S.M.LATHA MAHESWARI MEMBER
CC.NO. 101/2014
DATED THIS THE 5th DAY OF OCTOBER 2021
M. Thambidurai
No.23, Kutchery Road
Mylapore, Chennai - 4 ....Complainant
Vs
1. The General Manager
The HDFC Ergo
General Insurance Company Ltd.,
No.110, HM Geneva House
1st Floor, Cunningham Road
Bangalore – 560 052
2. The Branch Manager
The HDFC Ergo
General Insurance Co. Ltd.,
Branch Office,
New No.528/ Old No.559
IInd Floor, Anna Salai, Teynampet
Chennai – 600 018 ....Opposite parties
Counsel for complainant : M/s V. Varges Amal Raja
Counsel for opposite party : M/s. Michael Marie Antony
This complaint coming before us for hearing finally on 22.9.2021 and on hearing the arguments of counsel appearing for bothsides and upon perusing the material records this Commission made the following order:
ORDER
Justice R. SUBBIAH, PRESIDENT
1. This complaint has been filed under Sec.17 of Consumer Protection Act 1986, against the opposite parties claiming a sum of Rs.22,00,000/- alongwtih interest @ 18% p.a., from the date of accident till payment alongwith compensation of Rs.5,00,000/- and cost.
2. The averments in the complaint reads as follows:
The complainant has got commercial property at Door No.4, Survey No.518/1A, GNT Road, Sholavaram, Thiruvallur, Chennai- 67. The property is used as godown/ warehouse. The complainant has got the property insured with the respondent company for Standard Fire and Special Perils Insurance (material damage) in Policy No.2111200379149000000 in respect of the above said commercial property. The sum insured was Rs.22 lakhs. Every year the policy is being renewed by the complainant on payment of premium. In the policy it has been clearly stated that the property is being occupied for commercial purpose. Initially the policy was insured for the period from 1.10.2011 to 30.9.2012. After expiry of policy period, the petitioner again renewed the policy on 16.11.2012. While so, on 26.5.2012 there was a fire accident in the premises and the fire destroyed the whole building and there was extensive damage for the building as well as for the materials in the property. The said accident was informed to the insurance company, and the surveyor was appointed and he surveyed the damage caused to the building. Thereafter the complainant made a claim for insurance payment and loss caused to the building. On 18.10.2013 the 1st opposite party had issued a reply stating that the policy was issued covering the residential building only. In fact at the time of renewal of the policy, the complainant had never stated anywhere that the property insured is a residential building. The property is insured only as a commercial building, and it was used as a commercial godown. Moreover, for a residential building it is rare for a person to take insurance policy. Only because the property is being utilized as a commercial property for the valuable materials being stacked in the property/godown, the insurance was taken for the property. Otherwise there was no necessity for the complainant to go for insurance. Though the policy was renewed on 16.11.2012, the policy copy was sent to the complainant only on 17.7.2013 by the opposite party company i.e., after the date of fire accident. The opposite parties ought to have delivered the insurance details and the policy immediately on the payment of premium for the period from 16.11.2012 to 15.11.2013. Had the policy been sent to the complainant immediately after payment of the premium amount, the mistake committed by the opposite parties would have been found out and the same would have been rectified. But unfortunately, the opposite parties had not sent the policy immediately. Therefore, the conduct of the opposite party would show that the opposite parties company is not transparent in its dealings. On 18.10.2013, the 1st opposite party had issued a reply stating that the insurance amount cannot be granted as the policy was issued covering residential building, and the premises insured was used as a godown for storing dry leaves on the date of loss. The denial of the opposite parties is totally illegal. Thus the act of the opposite parties amounts to deficiency in service. Hence the complaint filed by the complainant praying for a direction to the opposite parties to pay a sum of Rs.22 lakhs alongwith 18% interest, and Rs.5 lakhs towards damages for deficiency in service alongwith cost.
3. The said complaint was resisted by the opposite parties by filing version as follows:
The complainant had submitted the proposal dt.15.11.2012 to insure his property situated at Door No.4, Survey No.578/1 A, GNT Road, Sholavaram, Thiruvallur, Chennai – 600 067 with them under the Standard Fire and Special Perils Insurance Policy. In the proposal form duly filled in by the complainant, it was the occupancy was declared as ‘Residential Building’. The building was insured for the period from 16.11.2012 to 15.11.2013 for a sum of Rs.22,00,000/-. The policy provides coverage against standard fire and special perils and earthquake, subject to terms and conditions as stipulated in the policy. In fact the policy was despatched to the complainant through courier on 3.12.2012. However the same was returned as ‘Not available’ on 19.12.2012. Thereafter, on 21.12.2012, once again the policy was forwarded alongwith terms and conditions to the complainant through business post, which was promptly delivered. When a fire accident on the insured premises was informed to the insurance company, the surveyor was appointed, and had assessed the value of damage to the residential flat due to fire. The policy was issued covering only the residential building, however the premises was used as a godown, which was against the terms and conditions of the policy. Since the insured premises was used as a commercial godown, the policy condition was deviated. It is denied that only after the inspection of the premises, the policy was issued. As per the survey report, the liability of the insurance company after considering under insurance, the policy excess works out to Rs.921968/- only as against the total loss claim made by the complainant to the tune of Rs.22,00,000/-. Thus prayed for dismissal of the complaint.
4. In order to prove their claim proof affidavits were filed by both parties, alongwith five documents on the side of the complainant, which are marked as Ex.A1 to A5 and 3 documents on the side of the opposite parties, which are marked as Ex.B1 to B3.
5. Since we have dealt with the factual aspects of the matter in detail, we are not traversing into the same once again, and only the facts which are germane to the case alone are reiterated hereunder.
6. The learned counsel for the complainant submitted that initially the complainant had taken insurance for the subject property viz. Door No.4, Survey No.518/1A, GNT Road. Sholavaram, Thiruvallur, Chennai – 600 067 for commercial purpose. In this regard the learned counsel also invited our attention to the previous policy covering the period from 1.10.2011 to 30.9.2012, and demonstrated that in the said policy under Ex.A1, as against the column occupancy, it has been clearly stated as ‘commercial’. When a policy was taken for commercial purpose, for the period from 1.10.2011to 30.9.2012, absolutely there is no need for the complainant to renew the said policy for residential purpose for subsequent years. In fact the complainant had never stated anywhere that the property insured is for residential purpose. The insurance policy exists for several years, and every year it was declared that the property is for commercial purpose. On 26.5.2013, when the fire accident burnt down the property, and the fire destroyed the building completely, there was an extensive damage caused to the building. When this was intimated, a surveyor was appointed by the insurance company, and he had surveyed the extent of damage. The complainant immediately made a claim for policy amount. At this juncture the 1st opposite party had issued a reply stating that the policy was issued covering residential building only. Whereas the said building was used for storing a dried leaves, thus they denied the liability to pay the claim amount. The learned counsel for complainant also submitted that for the wrong entry made by the opposite party in the policy as ‘residential purpose’, the complainant may not be made to suffer. Moreover the policy that was renewed for the period from 16.11.2012 to 15.11.2013 was made available to the complainant only in the month of July 2013. The copy of policy was sent only after the fire accident. Had the policy been sent immediately, atleast the complainant would have the chance of informing the insurance company, with regard to the wrong entry made in the policy and rectified the same. Therefore, the complainant is entitled for the claim.
7. Countering the same, the learned counsel or the opposite parties submitted that in the proposal form filled by the complainant, he had categorically stated in the column occupancy as ‘residential building’ and the same was marked as Ex.B1. Hence only based on the proposal given by the complainant, the policy was issued as ‘residential building’. Whereas, he had used the building for commercial purpose for storing dried leaves, which is against the terms and conditions of the policy issued to the complainant. In this regard, the learned counsel for the opposite party had also invited our attention to General Condition No.3, attached to the policy, which reads as
“Under any of the following circumstances the insurance ceases to attach as regards the property affected unless the insured before the occurrence of any loss or damage, obtains the sanction of company signified by endorsement upon the policy by or on behalf of the company:
- If the trade or manufacture carried on be altered, or if the nature of the occupation of or other circumstances affecting the building insured or containing the insured property be changed in such a way as to increase the risk of loss or damage by insured perils.
- If the building insured or containing the insured property becomes unoccupied and so remains for a period of more than 30 days
- If the interest in the property from the insured otherwise than by will or operation of law.
Therefore the insured had used the godown for storing dry leaves on the date of loss as against the insurance coverage for residential building and the same has increased the risk of loss or damage by insured perils. The complainant had not obtained the sanction from the insurance company for change in occupation from residential building to godown prior to the occurrence of loss as required under the condition. Therefore, the claim was denied and there is no deficiency in service on the part of the insurance company. The denial is well in accordance with law. However, without prejudice to the liability of the insurance company after considering the under insurance the policy excess worksout to Rs.9,21,968/- only as against the total loss claim made by the complainant to the tune of Rs.22,00,000/-. Therefore, there is no deficiency in service on the part of the opposite parties, and thus prayed for dismissal of the complaint.
8. Keeping the submissions in mind, perusing the documents filed in support of the complaint, on careful evaluation of the merits, this commission has raised the following points for consideration
1. Whether the rejection of the claim made by the complainant is justifiable?
2. Whether there is deficiency in service on the part of the opposite parties?
9. POINT NO.1 & 2:
As submitted by the learned counsel for the complainant, the policy was earlier taken for the period from 16.11.2012 to 15.11.2013. The said policy was issued for residential building. Now it is the submission of the complainant that when he had insured the building for commercial purpose on earlier occasion, absolutely there is no need for him to renew it for residential purpose for subsequent years. Therefore it was the mistake committed by the insurance company. It is the further case of the complainant that policy copy was sent to him only on 17.7.2013 i.e., much after the accident. Had the policy been sent earlier, the mistake committed in the policy would have been rectified. Therefore, on this point there is negligence on the part of the opposite parties.
10. Per contra, the opposite parties would contend that having signed the proposal form, now the complainant cannot say that he had signed only the proposal form, and he had not noticed the contents filled therein. Opposite parties also would submit that the policy was sent to the complainant by courier on 3.12.2012, which was returned with postal endorsement not available on 19.12.2012. Thereafter on 21.12.2012 once again the policy was sent alongwith terms and conditions through business post, which was delivered.
11. Be it as it may, we find from the policy that at the time of taking the earlier policy for the period from 1.10.2011 to 30.9.2012, the complainant had paid a sum of Rs.2502/- towards the total premium, which was made for commercial purpose. But subsequently, at the time of renewal the premium was collected @Rs.1631/-. Had it been for a commercial purpose, he would have paid the same premium, which was paid previously. Therefore, it is only a common knowledge that he insured the building for residential purpose, and having paid the premium amount for residential purpose, he cannot insist the opposite parties to pay the entire claim at Rs.22,00,000/-. When the proposal form was signed by the complainant, the presumption is that after accepting the terms and conditions and the contents of the proposal only he had availed the policy. Therefore, the contention of the complainant that had the policy been received in time, the mistake would have been rectified; cannot be accepted. More over it was the contention of the opposite parties that the policy had been dispatched in time, and also received by the complainant. Having insured the building for residential purpose, and paid premium for the same, the act of the complainant in having a godown to preserve dry leaves in that building is definitely unbecoming on the part of the complainant. If the complainant proposed to have a godown to store the dry leaves, he ought to have mentioned the same in the proposal form. Since the opposite parties are doing their services on basis of the phrase ‘uberrima fide’, the policy would have been issued based on the faith on the complainant. Therefore we do not find any deficiency in service on the part of the insurance company in rejecting the claim of the complainant. Hence the complaint is liable to be dismissed.
12. In the result the complaint is dismissed. No order as to cost.
S.M.LATHAMAHESWARI R SUBBIAH
MEMBER PRESIDENT
Exhibits filed on the side of complainant
A1 01.10.2011 Policy for the period year ending 30.9.2012
A2 17.07.2013 Policy for the year commencing from 16.11.2012 to 15.11.2013
A3 18.10.2013 Reply by the Respondent
A4 05.06.2013 Quotation issued by the civil engineer
A5 17.02.2014 Legal notice with acknowledgement
Exhibits filed on the side of Opposite parties
B1 Insurance proposal form
B2 Insurance policy with terms and conditions
B3 Survey Report/ Final Adjustment Report
S.M.LATHAMAHESWARI R SUBBIAH
MEMBER PRESIDENT
