Insured Failed To Verify Damaged Material, Insurance Company Not Liable; NCDRC

Commission found that, the insured has failed to prove his claim. He neither could show any fully damaged stock nor could explain how huge quantity of water can enter inside the mill.

In this case, the complainant (respondent-1) was engaged in the business of running dal mill. The Insured obtained Standard Fire and Special Perils Policy from the National Insurance Company Limited (the appellant). There was heavy storm with rain due to which, southern wall of mill premises collapsed and walls of other two sides cracked. The machineries, building materials and raw materials kept in the mill became useless. The opposite parties kept the claim of the complainant pending till the date. The complainant, who was in financial crisis, was being harassed mentally and physically. The dal mill of the complainant was closed due to aforesaid incident and due to delay in settlement of the claim by the opposite party, the burden of payment of interest on the loan taken by the complainant was increasing day by day. Aggrieved by the act of insurance company the complainant filed an appeal before the State Commission. The State Commission allowed the appeal and directed the appellants to reimburse the loss of respondent-1 along with interest @12% per annum.

Aggrieved by the decision of State Commission Uttar Pradesh the appellants (Insurance Company) filed an appeal before the National Commission under Section 19 of the Consumer Protection Act, 1986.

Analysis:

The issue for consideration before the National Commission was whether the Insurance Company is liable for the loss suffered by the complainant or not.

Commission found that, State Commission did not record any finding that the claim of respondent-1 was proved from any documentary evidence nor give any reason to ignore the report of surveyor.

Commission relied upon the case of Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd., where SC held that although surveyor's report is not a sacrosanct but strong evidence is required to rebut it.

Commission further relied upon the case of Khatima Fibres Ltd. Vs. New India Insurance Company Ltd., where it was held that in the absence of malafide and misconduct on the part of surveyor, its report cannot be ignored. Commission stated that the Impugned order of State Commission is arbitrary and devoid of any reason.

Commission noted that, the Insured alleged that incident of heavy storm and rain occurred on 11.05.2007 which caused damage. The Insured informed the incident to the Insurer on 04.06.2007, to the local police on 08.06.2007 and Sub-Divisional Officer, Sultanpur on 29.06.2009.

The bench stated that, there is absolutely no explanation of this inordinate delay in giving information to the Insurer. State Commission has wrongly noted that claim form was submitted on 11.05.2007 to the Insurer although it was submitted on 05.06.2007 and the claim form does not mention any date.

Commission observed that, as per the surveyor, near the mill machine portion, there was no stocking of raw material. The surveyor visited the mill after 23-24 days from the date of loss. The Insured neither could show any fully damaged stock nor could explain how huge quantity of water can enter inside the mill. The surveyor did not find any sign/marking of water accumulation on the walls.

The bench noted that, the complainant failed to verify the damaged material to the surveyor on the spot. The complainant did not produce any material to show that in what manner, he had disposed of the damaged materials.

After examining the insurance policy, the commission noted that, only stocks of dal and raw materials were insured but the complainant has wrongly claimed loss of machinery and building also. The surveyor found that whatever damage was caused, it was cause to machinery and building and not to the stock of pulse and raw materials.

The bench stated that, the complainant has failed to prove his claim, in the complaint by any reliable evidence. He failed to rebut various observations of the surveyor in his reports, showing that entire claim was not genuine. In such circumstance, deficiency in service on the part of the appellant is not proved. The order of State Commission is thoroughly illegal and liable to be set aside.

National Commission allowed the appeal and set aside the order of Uttar Pradesh State Consumer Disputes Redressal Commission, Lucknow dated 14.03.2016.

Case Name: Manager, National Insurance Co. Ltd. & 2 Ors. v. M/S. Agrahari Dal & Anr.

Case No.: FIRST APPEAL NO. 479 OF 2016

Corum: Justice C. Viswanath, Presiding Member and Ram Surat Ram Maurya, Member

Decided on: 1^st June, 2022

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