Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi

                               Complaint Case No. 70/2021

M/s Chemitech Engineers Private Limited

D-87, Lower Ground Floor,  Lajpat Nagar,

New Delhi-110024                                                                  …Complainant

                                      Versus

The New India Assurance Company Limited

Chana Complex, 4^th Floor, Gurudwara Road,

Karol Bagh, Delhi-110005                                             ...Opposite Party

                                                                   Date of filing:             06.07.2021

Coram:                                                        Date of Order:            12.09.2024

Shri Inder Jeet Singh, President

Ms Rashmi Bansal, Member -Female

                                      FINAL ORDER

Rashmi Bansal, Member

The Commission disposes of the present complaint, which alleges deficiency in service on the part of the Opposite Party (OP) for repudiating the insurance claim made by the complainant, resulting in financial loss and mental harassment.

1. The complainant, a private limited firm involved in civil, electrical, mechanical, and turnkey projects, had insured its building for a sum of Rs. 35 lakhs under a Standard Fire and Special Peril Insurance Policy with OP for the period 2020-2021. On 01.07.2020, a fire broke out on the insured premises, causing substantial damage to the stock, machinery and building. The fire was controlled within two hours and the incident was immediately reported to local fire brigade and also to OP. The complainant estimated the loss to be between Rs. 15 to 20 lakhs and filed its claim before OP.
   1. OP appointed a surveyor who inspected the site on 02.07.2020, collected details and requested further documentations, which were duly provided by the complainant. An estimate cost of Rs.10,24,500/- for the repairs of the building was also submitted by the complainant to the surveyor on 15.07.2020. Despite this, the complainant's claim remained unsettled. Numerous follow-ups, including emails and registered letters, were sent to OP, but no response was received from OP, leading the complainant to allege that OP acted in violation of IRDA Regulations and that due to careless, callous and negligent act of the OP, he has suffered not only the financial loss but also great mental shock, mental tension and set back in its business, reputation in market and prays for claimed amount of Rs. 10,24,500/- along with interest @ 24% p.a. from the date of loss till its realization, a sum of Rs. 2 lakhs as compensation for mental pain and agony and Rs. 2 lakhs towards cost of litigation.
2. Upon notice OP has filed reply raising a preliminary objection claiming that the complaint was not filed by a duly authorized person, hence, the same is  liable to be dismissed. Additionally, OP submitted that the complainant failed to provide necessary documentation to establish ownership of the building, citing a discrepancy with the electricity bill which are in the name of ‘Industrial Moulding’ instead being in the name of the complainant and the absence of the building in the complainant’s balance sheet as proof of assets, hence due to non-compliance of documents, it has recommended for no claim, though the loss assessed by the surveyor due to alleged fire to the tune of Rs. 2,25,351/-. It is submitted that the ownership of the building has not been proved by the complainant and it is required to establish that the property, where the fire broke and the damage occurred belong to the complainant for the purpose of processing the claim as per the terms and condition of the policy.
   1. OP further stated that the quotations for repairs submitted by the complainant were fabricated and the complainant failed to provide ownership proof in its name, leading to the closure of the claim. It is further submitted that the complainant was negligent in pursuing its claim and failed to provide the required document, because of which OP was constraint to close the claim as it cannot be kept open for unlimited period, therefore, there is no deficiency in services on the part of OP and the complainant is not entitled for any claim and compensation from OP.  It is prayed for dismissal of the complaint with heavy cost as there is no deficiency in service on its part.
3. The complainant refuted OP's claims in its rejoinder, reiterated the contentions of the complaint stating that all documents, including ownership proof (transfer and sale deeds), had been submitted and that OP never provided the terms and conditions of the policy to the complainant neither at the time of entering into the contract or nor at the time of filing the reply, therefore, the same are not applicable to it.
4. The complainant and the OP have filed their affidavit/evidence and endorsed the documents filed with the complaint and the written statement respectively. The complainant submitted copies of the insurance policy, fire report, emails exchanged with OP, and estimates of the repair costs. OP submitted the repudiation letter and the surveyor’s report recommending "no claim" based on the absence of ownership proof.
5. The arguments are heard on behalf of both the sides and documents on record are perused.
   1. The preliminary objection of OP regarding authorization in filing the complaint is to be dealt first. It is noted that the complaint was signed, filed and verified by Shri N.K. Gupta, director of the complainant firm on 08.07.2021, but it was not supported by any authority letter in favour of Shri N.K. Gupta at that stage, however, vide application dated 29.11.2021, the complainant placed on record its board resolution dated 11.11.2021 authorising Sh. N. K. Gupta, one of the Directors of the company, to sign and to take all necessary action in connection with the present complaint. This was done before admission of the complaint on 22.02.2022 and notice to the OP, therefore, the objection of OP is dismissed as the complaint is properly signed and verified by the complainant's director.
   2. The issuance of the above stated insurance policy in the complainant's name, the incidence of fire and subsequent loss by fire are not in dispute. The surveyor’s assessment of the loss at Rs. 2,25,351/- also confirms damage to the insured premises, though the complainant assessed its loss to the tune of Rs.10,24,500/-.
   3. OP closed the claim of the complainant as ‘no – claim’ in pursuance of the surveyor report dated 19.11.2020 citing reasons that complainant could not establish the ownership of the premises, where fire broke and that the electricity connection was not in the name of the complainant instead it is in the name of “Industrial Moulding”, as shown in the electricity bills dated 13.06.2020 and 09.07.2020 and further, the building insured was not shown in the balance sheet of the complainant as asset.
   4. Perusal of the surveyor report, as filed by OP shows that it contains transfer memorandum dated 09.03.2000 bearing number 915/Noida/DM/(IND) /2000, location number C – 39/Sec 8, issued by New Okhla Industrial Development Authority declaring that the said property was transferred in the name of complainant from M/s Supreme Industries Ltd, C- 39, Sector -8, Noida, plot number 39, Block - C, Sector – 8 subject to certain terms and conditions like payment of fees, clearance of any dues/arrears etc. The survey report also consist of transfer deed-cum- sale deed with respect to the property in question bearing number 0JCCJJ5862, executed between M/s Supreme Industries Limited (transferor) and the complainant (transferee) dated 30.03.2000, whereby the leasehold right in the above stated property was transferred in favour of the complainant through office memorandum number 915/Noida/GM (IND) /2000 dated 09.03.2000 (mention in above para), in consideration of Rs. 13,00,000/-.It is also mentioned that the transferor (the Supreme Industries Limited) has acquired the said property by virtue of a transfer deed executed by M/s Industrial Moulding and Combines (partners) through their special power of attorney, registered in the office of sub-registrar, vide book number one, as document number 9446, Musanna no. 6447 dated 26.12.89.These two documents establish the ownership rights of the complainant over the building in question. Further, it also stands clarified that the name of ‘Industrial Moulding’ mentioned in the electricity bill as the original owner of the property which was not transferred/changed in the name of the subsequent occupier of the said property. The complainant had provided a valid transfer and sale deed, establishing ownership of the building.
   5. Further, so far as the objection of OP that the building has not been shown as the assets in the balance sheet is concerned, it is noticed that the balance sheet of the assessment year 2019–20 shows fixed assets 5 in number of the value of Rs. 2,09,02,268/- without specifying the names of the assets and to which 5 assets it is referring. However, considering the fact that the complainant has taken the said property for a consideration of 15 lakh, the same qualifies the value of assets shown in balance sheet, therefore, this can be safely inferred that the building in question is declared in balance sheet, however, not named as such. Therefore, the objection the OP with respect to the mentioning of the property as asset in the balance sheet also stands adjudicated against OP.
   6. The surveyor in its report under column no.4.2 (6) has stated list of documents collected, which mention about land registration papers but simultaneously in the same report vide column no. 6 gives his recommendations that claim may be settled only after receiving ownership proof. Further, vide para 5.2, the surveyor while commenting on sum insured adequacy, formed opinion about the NRV of the property as Rs. 75,00,000/- and showed under insurance by 80.46%, however, the OP or the surveyor have not provided any formula or method based on which such NRV is calculated, in contrast with the valuation report dated 28.07.2020 as submitted by the Government approved valuer. Even otherwise, the OP must have valued the property before providing insurance cover to the complainant. Moreover, the property documents filed in the surveyor report are the proof of the valuation of the property. Such anomalies discredit opinion of surveyor in his report and the observation/opinion of the surveyor are held without any basis and unjustified.
   7. Further, the objection of OP with respect to the electricity connection holds no water, as firstly it is not the case of OP that the said electricity connection is an unauthorised connection or that energy is supplied to the premises illegally. Since the complainant is occupier/owner of property and is having authorised electricity connection and is consumer of electricity may be in the name of the original owner of the premises, but OP cannot derive benefit of said fact that electricity connection is not in complainant’s name. Moreover, if it was the requirement of the OP that the electricity connection has to be in the name of the complainant, then the same should have been  asked from the complainant while underwriting insurance policy. Further, OP failed to show that the terms & conditions were supplied to the complainant and it was having knowledge of the same, therefore, those terms and conditions cannot be invoked  to apply to the complainant and the OP cannot be allowed to take shelter of those terms & conditions which were never brought to the knowledge of the complainant nor agreed upon. OP has also not brought on record the proposal form filled in by the complainant prior to grant of insurance cover wherein the said query, with respect to the electricity connection as well as the ownership of the property, if asked for by the OP, as same being pre–requirement for policy by OP and also failed to carry out its obligation to ensure the fulfilment of the terms & conditions of the policy before issuing the same to the complainant. It is also apparent that OP did not take cognizance of ownership documents of the property annexed with report of surveyor but closed the claim of the complainant under wrong assumption of non-compliance of seeking of the documents, such careless and lackadaisical attitude of the OP amounts to deficiency in services on its part. The fact regarding the electricity bill being in the name of a previous owner becomes irrelevant since the building had been duly transferred to the complainant and it is authorized connection.
   8. The fire report, submitted by chief fire officer, clearly mentions the details of fire occurred at ground and first floor of the property and resulted in loss of furniture, cloth, raw material, electric cable panel, tools, solar inverter and building structure burnt and effected due to fire. The reports as submitted by the surveyor mentions the reason of fire by short circuit after inspecting the premises and no where it is alleged that the fire at the premises of the complainant is attributable to, or any negligent act of, the complainant.
   9. Considering above facts and circumstances, this Commission is of the view that OP is liable for deficient services in rejecting claim of the complainant as well as for unfair trade practice that has caused undue delay and financial loss to the complainant.
   10. Having decided this, now the quantum of loss is to be decided. Since the surveyor’s opinion is without corroboration by any independent evidence or material, it cannot be accepted as against the reports, costs etc proved by the complainant is to be accepted. Therefore, considering the estimate of Rs.10,24,500/- proved by the complainant and the assessment of loss as detailed in the fire report, the OP is held liable to pay the claim amount of Rs. 10,24,500/- to the complainant as on the date of closure of claim of the complainant, i.e.08.02.2021. Since OP has deprived the complainant from using its money for which it is legitimately entitled,  the OP is liable to pay the interest on the said amount, till the payment is made, which is deemed appropriate @6% p.a. Further, the OP is also held liable to pay a compensation of Rs.30,000/- to the complainant for causing deficiency in services in not paying/settling the insurance claim of the complainant despite having the complete documents with it and also have been careless in pursuing the documents filed by the surveyor which caused delay in settlement of the claim of the complainant, thus has caused harassment, mental agony and financial loss to the complainant and Rs.20,000/- towards the litigation cost to the complainant, since complainant has to file complaint for seeking its redressal of its claim.
6. Accordingly, the complaint is allowed in favour of the complainant and against OP with the following directions to the OP to pay to the complainant:
   1. Rs. 10,24,500/- as the assessed loss, along with interest at 6% per annum from the date of closure of the claim till realisation of amount.
   2. Rs. 30,000/- as compensation
   3. Rs. 20,000/- towards litigation costs.
7. The payment is to be made within 45 days from the date of the order, failing which the interest on the claim amount, Rs. 10,24,500/- will increase to 9% per annum until final realization.The OP is at liberty to deposit the above stated amount by way of valid instrument in the Registry of this Commission.
8. The copy of the order be given to the party free of cost as per CPA, 2019. The file be consigned to record room after uploading order on web site.

    Announce on 12/09/2024.