Punjab

Ludhiana

CC/21/448

M/s Mishm International - Complainant(s)

Versus

SBI General Insurance Co.Ltd - Opp.Party(s)

Nitin Kapila Adv.

16 Dec 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No:  448 dated 30.09.2021.                                       Date of decision: 16.12.2024. 

 

M/s. Mishm International, C-116, Phase-5, Ludhiana through its Prop. Mohit Mittal.                                                                                                                                                                                           ..…Complainant

                                                Versus

SBI General Insurance Pvt. Ltd., B-XIX, Mall Road, Adjoining Golden Plaza, Second Floor, Takkar Tower, Civil Lines, Near Fountain Chowk, Ludhiana through its Authorized Person.                                                                                                                                                             …..Opposite party 

Complaint U/s. 35 of the Consumer Protect Act.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Nitin Kapila, Advocate.

For OP                           :         Sh. Vyom Bansal, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that the complainant is proprietor of M/s. Mishm International and doing business to earn livelihood. The complainant in order to cover the risk of its unit, availed the insurance policy from the OP vide policy No.0000000007736348-03 w.e.f. 02.12.2020 to 01.12.2021 for sum assured of Rs.2,10,00,000/- having coverage of unit, industrial shed and lenter area of the building. The complainant stated that on night of 10.06.2021there was storm and high speed wind covered the region due to which the ACC roof and lenter installed at the premises of the complainant got damaged causing huge loss to the building and shed. Intimation of loss was given to the OP upon which the OP appointed surveyor to access the loss. The complainant supplied all the documents required by the surveyor but the OP failed to make the payment of claim amount despite repeated requests. However, the complainant was constrained to get the repair work done at his own expenses by spending Rs.2,11,182/- and also supplied the bills of repair to the OP but the OP failed to make such payment. However, the OP transferred an amount of Rs.56,894/- directly in account of the complainant without his consent to which the complainant raised his protest. The complainant further requested the OP to make payment of balance amount of Rs.1,54,288/- but needful was not done. The complainant further stated that he had suffered mental pain, physical harassment, tension etc. due to deficiency in service on account of the OP for which he is entitled to compensation. In the end, the complainant has prayed for issuing direction to the OP to make payment of claim of Rs.1,54,288/- along with interest @18% per annum as well as compensation of Rs.50,000/-.

2.                Upon notice, the OP appeared and filed written statement and assailed the complaint by taking preliminary objections on the grounds of maintainability; lack of jurisdiction; the complainant has not come with clean hands; suppression of material facts etc. The OP stated that there is no consumer dispute between the parties. The complainant is frivolous, vague and vexations in nature and has been filed to injure the interest and reputation of the OP.

                   On merits, the OP reiterated the crux of averments made in column brief facts of the case. However, the OP admitted the issuance of SBI Standard Fire & Special Perils Policy (Material Damage) for Rs.2,10,00,000/- w.e.f. 02.12.2020 to 01.12.2021 to the complainant. The OP further admitted that a claim under the policy for loss of the insured premises due to storm on 10.06.2021 was submitted by the complainant vide claim No.1099025. They appointed Mr. Rohti Gupta, an IRDA registered independent Surveyor to assess the loss to the building who visited the insured and collected the claim form along with documents and photographs of the building. The surveyor submitted report dated 12.07.2021 vide which the surveyor assessed the loss due to storm net at Rs.56,920/- on indemnity basis and Rs.95,125/- on reinstatement basis subject to fulfillment of reinstatement clause conditions by the Insured. The OP further stated that their authorized officials applied their mind to survey report and authorized the payment of Rs.56,894/-which was paid directly to the insured vide UTR No.SBIN421105897342 dated 14.07.2021. However, the amount of Rs.1,54,288/ was neither due nor payable under the policy conditions. According to the OP, the claim of the complainant was rightly allowed after thorough application of mind and in terms of the coverage under the policy. The OP has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

3.                In evidence, Sh. Mohit Mittal, Proprietor of the complainant tendered his affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents i.e. Ex. C1 is the copy of welcome letter and policy documents, Ex. C2 is the copy of intimation of loss Email dated 22.06.2021 and Email correspondences, Ex. C3 is the copy of Format of Valuation Report, Ex. C4 is the copy of  repair estimate of Hikil Attri, Civil Contractor Ex. C5 to Ex. C14 are the copies of bills/invoices, Ex. C15 is the copy of payment voucher, Ex. C16 is the copy of Tentative Assessment Summary  and closed the evidence.

4.                On the other hand, the counsel for the OP tendered affidavit Ex. RA of Sh. Jitendera Dhabhai, Deputy Manager – Consumer Litigation of the OP branch at New Delhi along with documents i.e. Ex. R1 is the copy of policy schedule, Ex. R2 is the copy of survey report dated 12.07.2021 and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by both parties.

6.                Admittedly, the complainant firm was insured under SBI Standard Fire & Special Perils Policy (Material Damage) for a period from 02.12.2020 to 01.02.2021 for a maximum sum of Rs.2.10 Crore. Needless to say that the reimbursement under the policy was subject to terms and conditions contained in the policy schedule to which the OP claimed that these conditions were fully explained to the complainant at the time of issuing the policy. Reinstatement Value Clause as contained under clause 2 and detailed at page No.7 of 21 of the policy schedule Ex. C1 = Ex. R1 was applicable.

7.                CA Mr. Rohit Gupta of Rohit Ramesh & Associates, Surveyors  while furnishing its report dated 12.07.2021 Ex. R2 assessed the valuation, loss adjustment  and conclusion which is reproduced as under:-

                   “XII VALUATION

As per the valuation report of Er. Daljit Raheja dt. 29.05.2018, reinstatement value of the building is computed at Rs.1,59,89,074/- Therefore, the sum insured of Rs.2.10 Crores is adequate enough for present reinstatement value of the building. Therefore, average clause is not applicable.

XIII   LOSS ADJUSTMENT

                  

	Particulars	Reinstatement basis	Indemnity basis
Less:	Assessed less net of salvage Excess as per policy Net adjusted Loss	Amt.(Rs.) 105125 10000	Amt. (Rs.) 66920 10000
		95125	56920

 

                   CONCLUSION AND REMARKS

The loss is observed to be due to storm and is assessed net at Rs.56,920/- on indemnity basis, and at Rs.95,125/- on reinstatement basis subject to fulfillment of reinstatement clause conditions by the insured. This report is issued independently, as explained the report supra.

This report is issued without prejudice and is an opinion formed on the basis of documents & information made available and our own observations made during the proceedings of survey. We reserve our right to rectify or amend any bona fide error or omission which might have crept in either inadvertently or ignorantly or by way of any wrong interpretation/impression.”

 

After scrutinizing the report, OP on 14.07.2021 paid an amount of Rs. 56,894/- as assessed by the surveyor on indemnity basis. Now the complainant has raised a grievance regarding short payment and rendering of deficient services by the OP..

8.                Now the point of consideration arises before this Commission for consideration is whether the payment of Rs.56,894/- was made by the OP to the complainant is in violation of terms and conditions of the policy or not?

9.                In Canara Bank Vs United India Insurance Company Limited and others; 2020 (3) SCC 455, it has been observed and held by the Hon’ble Supreme Court of India that the provisions of the policy must be read and interpreted in such a manner so as to give effect to the reasonable expectations of all the parties. It has been further held that coverage provisions should be interpreted broadly and if there is any ambiguity, the same should be resolved in favour of the insured. 

10.              The Hon’ble National Consumer Disputes Redressal Commission, New Delhi in  Consumer Case No.1887 of 2019 M/s. Jagdish Woollen’s (P) Ltd. Vs New India Assurance Company Ltd. vide its order dated 11.11.2024, while relying the case titled as M/s. Oswal Plastic Industries Vs Manager, Legal. Deptt. N.A.I.C.O. Ltd. (2023) 1 SCR 985 has held as under:-

“18.     The pertinent question of whether the application of depreciation in the survey report of the surveyor appointed by the Respondent insurance company is contrary to the terms and conditions of the insurance policy is dealt with further. The said policy was issued on Reinstatement Value Basis, as mentioned in the policy proposal form. In the case of "Oswal Plastic Industries v. Manager, Legal Deptt. N.A.I.C.O Ltd. Civil Appeal No. 83 of 2023" it was held by the Hon'ble Supreme Court that "as per second part of Clause 9 of Section 2 of the policy, the complainant shall be entitled to the reinstatement value and not the depreciated value." The order passed by the NCDRC in the above-mentioned case (Civil Appeal No. 83 of 2023) awarding the depreciated value and not the reinstatement value was set aside by the Supreme Court in that case. In the instant case also, the insurance policy was issued on Reinstatement Value Basis and hence the Complainant is entitled to the claim based on the same and not based on depreciated value basis.”

 

11.              Now coming back to the merits of the present case, it is crystal clear that the surveyor has assessed the loss of Rs.56,920/- on indemnity basis and the OP insurance company was quick to accept the recommendation of the surveyor which was beneficial to it. The terms and conditions particularly rigor of Reinstatement Value Clause was breached with impunity. It is settled law as mentioned hereinbefore what whenever there is  reinstatement value clause, the claim has to be settled on reinstatement value basis and not on indemnity basis or market value basis. The act and conduct of the OP amounts to adoption of unfair trade practice and rendering of deficient services. In the present case, the surveyor has assessed the loss of Rs.95,125/- out of which the OP has paid Rs.56,920/- has already been paid to the complainant. As such, after applying ratio of above cited case law and in view of the above said facts and circumstances, it would be just and appropriate if the OP is directed to pay the remaining amount of Rs.38,205/- (i.e. Rs.95125-56,920) loss assessed by the loss assessor vide report Ex. R2 along with composite costs of Rs.10,000/-.      

12.              As a result of above discussion, the complaint is partly allowed with an order that OP shall pay the remaining amount of Rs.38,205/- (i.e. Rs.95125-Rs.56,920) loss assessed by the loss assessor vide report Ex. R2 within 30 days from the date of receipt of copy of order, failing which the complainant shall be held entitled to interest @8% per annum on the said amount from the date of filing of complaint till date of its actual payment. The OP shall further pay a composite cost of Rs.10,000/- (Rupees Ten Thousand only) to the complainant. Compliance of the order be made within 30 days from the date of receipt of copy of order. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

13.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

 

Announced in Open Commission.

Dated:16.12.2024.

Gobind Ram.