Dr. Sadhna Shanker, Member
1. This appeal has been filed under section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as the ‘Act’) in challenge to the Order dated 09.06.2014 of the State Commission in complaint no. 13 of 2010 whereby the complaint was partly allowed.
2. We have heard the learned counsel for the appellant (hereinafter referred to as the ‘insurance company’) and the learned counsel for the respondent No. 1 (hereinafter referred to as the ‘complainant firm’) and perused the record including inter alia the impugned Order dated 09.06.2014 and the memorandum of appeal.
The respondent no. 2, National Insurance Company Ltd. has been deleted vide this Commission’s order dated 17.01.2017.
3. The facts in brief are that the complainant firm had taken insurance policy for a sum insured of Rs. 3,00,00,000/- from the National Insurance Company Ltd. for the period from 11.12.2006 to 10.12.2007 and another insurance policy for a sum insured of Rs.7,00,00,000/- from the appellant insurance company for the period from 25.05.2007 to 24.05.2008 as also another insurance policy from Tata AIG General Insurance Company Limited for a sum insured of Rs. 3,00,00,000/- for the period from 30.08.2006 to 29.08.2007 towards the damages to the complainant firm’ goods, stock, plant, machinery etc. It is alleged that due to flood / inundation during the period between 06.08.2007 and 09.08.2007, the stock and plant and machinery of the complainant firm were damaged. The complainant firm intimated about the same to the insurance companies. The Tata AIG General Insurance Company appointed a surveyor to assess the loss. It is alleged that the Tata AIG has paid the claim but the appellant insurance company has not paid the claimed amount to the complainant firm.
4. Being aggrieved, the complainant firm filed a complaint before the State Commission with the following prayer:
“(A) Hon’ble Commission should direct the Opponents to pay Rs.1621964/- by opponent no. 1 and opponent no. 2 pay Rs.695127 as per report of D.T. Patel of Dt. 14.02.2008 with 12% interest from 14.04.2008 till realization after giving two months time for payment from D.T. Patel report.
(B) The Hon’ble Commission may be pleased to direct the Opponents to pay Rs. 1,00,000/- to the Complainant as a special compensation for the humiliation mental agony, hardship, harassment suffered by the Complainant.
(C) The cost of this complaint being Rs. 50,000/- which include Legal Notice Charges and the same to be awarded from the Opponents to the complainant
(D) The Hon’ble Commission may pleased to direct to opponents to grant any other relief deemed in fit just and proper by the Hon’ble Commission in the circumstances of the case.
5. The State Commission, vide its order dated 09.06.2014, partly allowed the complaint and directed the insurance company (New India Assurance Company) and National Insurance Company to pay amount of Rs. 16,21,964/- and Rs. 6,95,127/-, respectively, along with interest at the rate of 12% from 14.04.2008 and Rs. 25,000/- towards mental harassment and Rs. 15,000/- towards costs of the complaint.
6. Being aggrieved by the order dated 09.06.2014, the complainant firm has filed the instant appeal before this Commission.
7. The main issue before us is as to whether the repudiation made by the insurance company was correct or not.
8. Before this Commission, learned counsel for the insurance company has vehemently argued that the State Commission has accepted the valuation done by the surveyor appointed by Tata AIG General Insurance Co. Ltd. while the said surveyor did not physically verify the damaged goods in the premises and nor his affidavit was placed on record nor was Tata AIG made a party to the complaint, therefore, the surveyor’s report cannot be relied upon. He further argued that the complainant had breached the general condition of the policy by not informing the insurance company about the other policies taken from two other insurance company for different sum insured, therefore, the claim is not payable. He further argued that the final survey report of the surveyor appointed by New India Assurance Co. Ltd. had assessed the total loss at Rs.25,26,376/- and accordingly assessed the share of the insurance company at Rs.13,60,357/-. It was also argued that the insured had breached the policy by not providing the documents etc. called for by both, the surveyor and the investigator. It was argued that there was no deficiency of service on their part and the State Commission should not have entertained one complaint against two insurance companies.
9. Learned counsel for the complainant has argued that the State Commission has passed the order on the basis of report of the surveyor appointed by Tata AIG General Insurance Company Ltd., who has given the said report on the basis of documents and information that have been called for.
10. In the case at hand, the claim has been repudiated by the insurance company vide letter dated 27.08.2008, which is quoted below:
“Dear Sirs,
Kind Attn. Shri. Nadeem Keshodwala
Re : FLOOD LOSS ON 6/8/2007 & 9/8/2007 UNDER FIRE POLICY NO. 211304/11/06/11/00000081.
We refer to the Regd. A.D. letter dtd. 09/12/2007 sent by Rajdeep Consultant to you marking FINAL NOTICE and Registered A.D. letter dtd.08/12/207 and dtd. 29/2/2008 Ref. RN/NA/2007/2010 sent to you by Surveyor Rakesh Narula & Co. regarding submission of requisite documents, papers, pertaining to your claim.
We understand that in spite of their FINAL REGISTERED A.D. LETTER you have not complied with their requirements as asked by them. Under the circumstances we cannot keep the claim file open for indefinite period.
We therefore close the file as ‘NO CLAIM’ considering that you are not at all interested in the claim.
Thanking you and assuring you of our best service at all times.
Faithfully yours,
For The New India Assurance Co. Ltd.
Sd/-
Sr. Branch Manager”
11. It is seen that the final surveyor’s report was submitted on 08.03.2009 after the repudiation of the claim by the insurance company and therefore, no weightage can be given on the valuation etc. made by the surveyor appointed by the insurance company (New India Assurance Co. Ltd.) in a subsequent report. Further, one of the arguments that has been stated before the State Commission and before us was that the loss did not occur due to flooding but due to change in the temperature, which was not covered in the policy. However, it is seen that the claim has been repudiated only on the ground of non-submission of documents and therefore, at a later stage, the insurance company cannot enlarge the grounds of repudiation. Reliance is placed on Saurashtra Chemicals Ltd. vs. National Insurance Co. Ltd. (2019) SCC 70 wherein the Apex Court has held that ‘It is a settled position that an insurance company cannot travel beyond the grounds mentioned in the letter of repudiation.”
It is also seen that the other two policies are subsequent to the date of the policy of New India Assurance Co. Ltd. Therefore, there is no breach of the policy. Further, the said two other insurance companies have already paid the amount as determined by the surveyor of Tata AIG Insurance Company Ltd.
12. In the instant case, the cold storage is one, the date of incident of inundation is the same and the stocks affected are also the same. The only valid survey report available is of the surveyor appointed by the Tata AIG General Insurance Co. Ltd., who has assessed the loss and apportioned the same within three insurance companies. The only objection raised is that the surveyor did not physically visit the premises. On perusal of the report of Mr. D. T. Patel dated 14.02.2008, it is seen that he has categorically asserted that he visited the premises on 14.08.2007 and he has given detailed observation about the water level of the premises and has also observed that water level marks on the shutters of the cold storage chambers were clearly visible and photographs were also take by him. The insurance company’s main objection does not have any basis and the same is hereby rejected.
13. In view of the above discussion, we are of the view that the State Commission has rightly relied on the report of the surveyor of the Tata AIG General Insurance Co. Ltd., who was appointed under the Insurance Act, 1938 for the same occurrence.
14. As regards the interest at the rate of 12% per annum on the awarded amount is concerned, I am of the view that the interest at the rate of 9% per annum would be just and appropriate and commensurate with the loss and injury suffered by the complainant firm.
15. The Hon’ble Supreme Court in the case of DLF Homes Panchkula Pvt. Ltd. vs. D.S. Dhanda, in CA Nos. 4910-4941 of 2019 decided on 10.05.2019 has held that multiple compensations for singular deficiency is not justifiable. Therefore, the award of compensation of Rs.25,000/- for mental agony and harassment granted by the State Commission is found to be not tenable.
16. In view of the above discussion, the order dated 09.06.2014 of the State Commission is modified to the extent that the insurance company shall
i) pay a sum of Rs. 16,21,964.00 along with interest at the rate of 9% per annum from the date of repudiation i.e. 27.08.2008 till the date of its realisation.
ii) pay Rs. 15,000/-, as litigation expenses.
iii) the direction to pay Rs. 25,000/- towards mental harassment and inconvenience is set aside.
The order be complied with within a period of six weeks from the date of order, failing which the rate of interest shall be enhanced to 12% per annum.
17. Parties to bear their own cost. Pending application(s) if any, stand disposed of.
