Haryana

Karnal

CC/463/2021

Krishan Lal - Complainant(s)

Versus

The Oriental Insuarnce Company Limited - Opp.Party(s)

Vinod Kumar Gupta

13 Jun 2024

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

 

                                                        Complaint No.463 of 2021

                                                        Date of instt. 09.09.2021

                                                        Date of Decision: 13.06.2024

 

Krishan Lal son of Shri Om Parkash, resident of 47, Wazir Chand Colony, Karnal.

 

                                                                   …….Complainant.

                                              Versus

 

1. The Oriental Insurance Company Ltd. through its Branch Manager, near York Hotel, G.T. Road, Karnal.
2. Oriental Bank of Commerce, through its Branch Manager, Maharana Pratap Chand, Karnal.

                                                                     …..Opposite Parties.

 

Complaint under Section 35 of Consumer Protection Act, 2019.

 

Before   Sh. Jaswant Singh……President.      

      Sh. Vineet Kaushik…….Member

      Dr.  Suman Singh…..Member

 

 Argued by: Shri Yudhvir Singh Chauhan, counsel for the

    complainant.

    Shri Ramesh Chaudhary, counsel for the OP no.1.

                    Opposite Party no.2 exparte, (vide order dated

            13.05.2023)

 

                     (Jaswant Singh, President)

ORDER:   

                

                The complainant has filed the present complaint under Section 35 of the Consumer Protection Act, 2019 against the opposite parties (hereinafter referred to as ‘OPs’) on the averments that complainant is owner of a building bearing no.47, Wazir Chand Colony, Karnal. Complainant got constructed the said building after taking loan from the OP no.2 and the same was for commercial purpose. Prior to construction of the building, the complainant got the site plan sanctioned for commercial purpose from M.C. Karnal on 30.03.2009 and constructed Basement, Ground Floor, 1^st floor etc. and raised construction according to the site plan.  Since, the building was got constructed by the complainant after getting the site plan sanctioned from the officials of the Local Body, Karnal and after completing all the formalities. As per loan agreement, OP no.2 insured the said building from the OP no.1 and the amount of premium used to be debited in the loan account of complainant. At the time of sanctioning the loan against property, OPs no.1 and 2 well aware the fact that the building so financed and insured is being used for commercial purposes. OP no.1 never supplied the copy of policy to the complainant and as such, complainant had no knowledge about the contents of the policy. Even otherwise, the complainant had supplied the copy of site plan so sanctioned by Municipal Corporation, Karnal to OP no.1 and OP no.2 prior to financing of loan as well as issuance of insurance policy. OP no.2 while granting the loan duly admitted the factum of premises as commercial while preparing the valuation report. OP no.2, in continuation of previous policy, got issued the policy bearing no.261301/11/2016/199, for a period from 06.05.2015 to 05.05.2016 from OP no.1 whereby Fire Basic Cover of Rs.30,00,000/- and Earth Quake Cover of Rs.30,00,000/- was got done by the OP no.1 and the amount of premium so paid by OP no.2 to OP no.1 was debited to the account of the complainant, which was being maintained by the OP no.2 in usual and regular course of business. The complainant procured the copy of policy after the incident dated 04.12.2015 from the office of OP no.2. It is further alleged that son of complainant namely Lalit Madan is carrying on the business of Car Accessories under the name and style of M/s Car Expert in the building in question and the stocks of the same are/were also insured by OP no.1. The complainant is doing the work of sale and purchase of car accessories in the premises for earning his livelihood. On 04.12.2015, a fire broke out in the building, in which stocks, machinery of M/s Car expert, and some material of State Bank of India (which was also working in the building) was completely destroyed. The matter was intimated to the police, fire brigade and to the officials of OPs no.1 and 2. The incident of fire was duly recorded in the Rapat Roznamcha by the Fire Officials. Due to fire at the building, the Rolling Shutters in the Basement area were completely damaged. The Rolling Shutters of the 1^st Floor were badly heated up and were damaged. The plastering and bricks of the Basement Area was also damaged. The flooring, wiring, pipes, fall ceiling of the Basement and 1^st floor were damaged. Rolling Steel structure leading to the 1^st floor was badly damaged and the doors, windows and glass pans were damaged and the whole building was required to be re-constructed and complainant got it constructed and re-fabricated by spending huge amount of Rs.15,50,000/-. The claims qua the damages caused to the building as well as stocks belonging to complainant and Car Expert, was filed before the OP no.1. The OP no.1 made the payment of the amount of claim towards the loss of goods of Car Expert, to OP no.2 after a consideration delay. The survey was done by the Investigator/Loss Assessor/Surveyors. The complainant submitted the claim qua the damage caused to the building. The complainant is entitled for an amount of Rs.15,00,000/-. The surveyor and Loss Assessor submitted the report dated 28.05.2016 and stated that the complainant had suffered losses to the tune of Rs.4,68,448/- on account of the claim lodged against the loss due to fire at the premises on 04.12.2015. It is further alleged that OP no.1, vide letter dated 16.06.2016 sought the information from the OP no.2 to the effect that whether the status of the building is residential or commercial as per the bank record. OP no.2 vide its letter dated 04.07.2016 confirmed the status of the building as commercial property. OP no.2 confirmed that they have done the insurance of Rs.30,00,000/- for the building to be used as commercial property. OP no.2 further confirmed that they had insured the stock kept in the shop in the same building which was burnt. OP no.1 on 12.07.2017 issued a letter to the complainant and stated that after going through of record/policy and other documents the insurance company have observed that the policy was issued for residential building and if the complainant has any other policy covering commercial building the same be produced. After receiving the said letter, complainant met with the OP no.1 and submitted that the same shop was insured by the son of the complainant from the OP no.1 and OP no.1 granted the account of losses suffered in the same fire dated 04.12.2015. The building was being used by the complainant for commercial purpose since the date of construction. The complainant submitted the copy of insurance policy of the M/s Car Experts of the same period wherein the OP no.1 insured the stocks for an amount of Rs.9,00,000/-. Despite knowing the fact that the building as commercial yet the OP no.1 repudiated the claim of the complainant by passing a non-speaking order stating therein claim is not feasible as the insurance policy was obtained for residential building whereas the building is being used as commercial purpose and as such claim is not payable. The impugned order of repudiating the claim of complainant dated 09.11.2017 is illegal, null and void, as the OP no.1 very well aware that the building is being used for commercial purpose. Due to this act and conduct of OPs complainant has suffered mental pain, agony and harassment at the hands of the OPs. In this way there is deficiency in service and unfair trade practice on the part of the OPs. Hence complainant filed the present complaint seeking direction to the OPs to pay Rs.15,50,000/- towards the damages caused to the building in question, to pay Rs.9,00,000/- on account of mental pain, agony and harassment and towards the litigation expenses.

2.             On notice, OP no.1 appeared and filed its written version raising preliminary objections with regard to maintainability; cause of action; locus standi; limitation and concealment of true and material facts. On merits, it is pleaded that OP was not aware about the fact that the building insured was being used for commercial purposes. It was the OP no.2 who got insured the building in question as residential one to the reasons best known to the OP no.2 and the complainant. The copies of the insurance policy were duly supplied to the OP no.2 and the complainant at the time of issuing the policy. Hence there is no question arisen that the complainant has no knowledge regarding the nature of the policy. Moreover, it is paramount duty of the purchaser of the policy to verify the nature of the policy, as so far as the knowledge of OP no.2 about the building in question is commercial one, it is only upto the knowledge of the OP no.2 about the building in question is commercial one, OP no.1 has no knowledge about the same. It is further pleaded that the loss was assessed by the independent surveyor to the tune of Rs.4,68,448/-. The claim qua the damages caused to the stocks as alleged was duly processed promptly and paid at the earliest. It is further pleaded that the OP sought information, vide letter dated 16.06.2016 from the OP no.2 to the effect that whether the status of the building is commercial or residential as per the bank record and the OP no.2 confirmed the status of the building as commercial property according to their record, whereas in the record of OP no.1 the building in question is insured as residential one, hence the claim has been repudiated, vide letter dated 09.11.2017. There is no deficiency in service on the part of the OP. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

3.             On notice, OP No.2 did not appear despite service and opted to be proceeded against exparte, vide order dated 13.05.2022 of the Commission.

4.             Parties then led their respective evidence.

5.             Learned counsel for the complainant has tendered into evidence affidavit of complainant Ex.CW1/A, copy of order dated 30.07.2021 passed by Hon’ble State Commission, Haryana, Panchkula Ex.C1, copy of insurance police Ex.C2, copy of fire receipt Ex.C3, copy of Rojnamcha Ex.C4 and Ex.C5, copy of survey report Ex.C6, copy of survey fee bill Ex.C7, copy of letters dated 16.06.2016, 04.07.2016 and 12.01.2017 Ex.C8 to Ex.C10, copy of insurance policy Ex.C11, copy of claim lodged letter dated 19.03.2017 Ex.C12, copy of valuation report dated 26.10.2009 Ex.C13, copy of site plan Ex.C14, copy of policy Ex.C15, copy of newspaper cutting Ex.C16 and closed the evidence on 25.01.2023 by suffering separate statement.

6.             On the other hand, learned counsel for OP No.1 has tendered into evidence affidavit of R.S.Kaler, Incharge Legal Hub Ex.OP1/A, copy of policy Ex.OP1, copy of surveyor report Ex.OP2, copy of letter dated 16.06.2016 Ex.OP3, copy of letter dated 04.07.2016 Ex.OP4, copy of letter dated 12.01.2017 Ex.OP5, copy of repudiation letter Ex.OP6, copy of application for withdrawal of complaint Ex.OP7 and closed the evidence on 14.12.2023 by suffering separate statement.

7.             We have heard the learned counsel of the parties and perused the case file carefully and have also gone through the evidence led by the parties.

8.             Learned counsel for the complainant, while reiterating the contents of complaint, has vehemently argued that complainant got constructed a building No.47, Wazir Chand Colony, Karnal for commercial purpose on taking loan from the OP no.2 and OP No.1 got insured the said building from the OP no.2 and the amount of premium was debited as of commercial building. On 04.12.2015, a fire broke out in the building, in which stocks, machinery of M/s Car expert was completely destroyed. Intimation was given to OPs. The complainant got the building constructed and re-fabricated by spending huge amount of Rs.15,50,000/-. The complainant submitted the claim qua the damage caused to the building and OP appointed a surveyor and Loss Assessor who assessed the loss to the tune of Rs.4,68,448/- on account of the claim lodged against the damages to the building due to fire, which is less than the amount spent by the complainant. Thereafter, the OP repudiated the claim vide letter dated 09.11.2017, without any cogent and justified reason. OP no.1 was very well aware that the building is being used for commercial purpose. In this way there is deficiency in service and unfair trade practice on the part of the OP and lastly prayed for allowing the complaint.

9.             Per-contra, learned counsel for OP No.1 while reiterating the contents of written version, has vehemently argued that the building in question was got insured  for residential purpose and not for commercial purpose. The OP appointed a independent surveyor, who has assessed the loss to the tune of Rs.4,68,448/- for damage caused to the building. In the record of OP no.1 the building in question is insured as residential one, hence the claim has righlty been repudiated, vide letter dated 09.11.2017. Thus, there is no deficiency in service on the part of the OP. He further argued that present complaint is not maintainable before this Commission as the complainant admittedly carries the commercial business in the building in question and lastly prayed for dismissal of the complaint.

10.           Admittedly, complainant was/is owner of the building in question. It is also admitted that son of complainant was/is carrying the business of car accessories in the said building. It is also admitted that the said building was damaged due to fire. It is also admitted that the OP No.1 already disbursed the claim amount qua the stocks lying in the said building. 

11.           The claim of the complainant has been repudiated by the OP on the following grounds, which are reproduced as under:-

“With reference to above, a claim has been lodged on 05.12.2015 for loss due fire to stock on dated 04.12.2015 under Policy No.26130/11/2016/199. Accordingly competent authority had deputed Mr.Ajay Mahajan Surveyor to access the loss. On scrutinizing the claim paper alongwith survey report it has been observed that your claim is not tenable as per terms and conditions of the policy.

On going through our record we find that you have obtained insurance policy for residential building and this building is used as commercial purpose as such the claim is not payable which is please note.

                So we have closed the claim file as “No Claim”.

12.           The claim of the complainant has been repudiated by the OP on the abovesaid grounds.

13.           The OP has alleged that the complainant has obtained insurance policy for residential building and said building was being used for commercial purpose.  Thus, the complainant is not entitled for any claim. The complainant had taken loan for construction of the said building from the OP No.2 and at that time the complainant had submitted required documents i.e. site plan which was sanctioned by MC, Karnal, for commercial purpose and other documents showing the building in question as commercial one. The said building insured by the OP No.2 through OP No.1. The OP No.1 would have done verified the documents and also inspected the site/building at tthe time of insured the building. It is not possible that OP insured the building in question without spot inspection. Furthermore, the insurance company OP No.1 vide letter Ex.C9 dated 04.07.2016 has sought clarification from the OP No.2 with regard to the status of building in question and in response to the said letter, OP No.2 has clarified that “we confirm that the property mortgaged with us is a commercial property according to our record and we have done insurance of Rs.30,00,000/-  for the building to be used as commercial property. We have also got insured stock kept in the shop in the same building which was burnt in the fire that took place.” It has proved on record that OP No.2 got insured the building from OP No.1 as commercial one and not as residential building as alleged.

14.           In the said building Lalit Madan was carrying the business of car accessories under the name and style of M/s Car Expert and his stocks were also insured by OP No.1. On 04.12.2015, a fire broke out in the said building in which stocks of the said firm and building of complainant was badly damaged. Said firm has lodged the claim with regard to damage caused to its stocks and OP No.1 has already disbursed the claim amount without any objection. Hence, it has been proved that building in question is commercial one and OP No.1 has issued the insurance policy wrongly showing the building as residential building. Only alleged that OP was not aware about the fact that the building of insured was being used for commercial purpose has no excuse. Thus, the plea taken by the OP has no force.

15.           The OP has further alleged that present complaint is not maintainable before this Commission as admittedly, the building in question was being used for commercial purpose. In this regard, we are of the considered view that under Section 2 (7) of the Consumer Protection Act, 2019, a person is a consumer who hires or avails any services rendered by the OP for consideration and the question whether the services availed of were for commercial purpose or not are of no consequences. The insurance policy in the present case was taken for covering the risk of building and nothing else. The claim was filed for indemnifying the insured for the damaged caused in the fire incident at the insured premises. Thus, the present complaint is maintainable before this Commission. In this regard, we relied upon the judgment titled as M/s Kozyflex Mattresses Private Limited Versus SBI General Insurance Company Limited and another, 2024 (2) RCR (Civil) 375, wherein Hon’ble Supreme Court of India has held that insurance policy for commercial purpose was covering the risk of the elements only and nothing else. The claim was also filed for indemnifying the insured for the damage caused in a fire accident at the insured premises. It has been held that the objection taken by the appellant that policy has been taken for commercial purpose cannot invoke the jurisdiction of National Commission because the transaction leading to filing of the complaint cannot be termed to be lack of service or deficiency in service is unsustainable.

16. Further,  Hon’ble Punjab and Haryana High Court in case titled as New India Assurance Company Ltd. Versus Smt. Usha Yadav & others 2008 (3) RCR (Civil) 111, has held as under:-

“It seems that the Insurance Companies are only interested in earning the premiums which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance companies make the effected people to fight for getting their genuine claims. The Insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy”.

17.           Keeping in view, the ratio of the law laid down in aforesaid judgments, facts and circumstances of the present complaint, we are of the considered view that act of the OP no.1

 while repudiating the claim of the complainant amounts to deficiency, which is otherwise proved genuine one. 

18.           The complainant has claimed Rs.15,50,000/- with regard to damage caused to the building but the complainant has failed to place on file any evidence from which it can be ascertained that he has suffered the loss of the above said amount. On the other hand, the surveyor of the OP vide his report Ex.OP2 has assessed the loss to the tune of Rs.4,68,448 /-. Hence, the report of the surveyor will prevail. In this regard we are relying upon the authority 2(2008) CPJ paged 182 (NC), United India Insurance Co. Vs. Maya, wherein it has been held that a surveyor report should not be dismissed summarily as the surveyor is independent and qualified person under the relevant provision of Insurance Act, 1938. In view of this authority as well as the facts and circumstances of the case, we are of the considered view that the OP is liable to pay the loss assessed by the surveyor alongwith interest, compensation for mental agony and harassment and litigation expenses.

19.           In view of the above discussion, we partly allow the present complaint and direct the OP No.1 to pay Rs.4,68,448/- (Rs. Four lacs sixty eight thousand four hundred and forty eight only)  alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 09.11.2017 till its realization. We further direct the OP No.1 to pay Rs.25,000/- to the complainant on account of mental agony and harassment suffered by him and Rs.11,000/- for the litigation expenses. Complaint qua OP no.2 stands dismissed. This order shall be complied within 45 days from the receipt of copy of this order. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 13.06.2024                                                                   

                                                                President,

                                                    District Consumer Disputes

                                                    Redressal Commission, Karnal.

 

 (Vineet Kaushik)       (Dr. Suman Singh)

  Member                   Member