D.O.F:14/09/2021
D.O.O:10/04/2023
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KASARAGOD
CC.154/2021
Dated this, the 10th day of April 2023
PRESENT:
SRI.KRISHNAN.K : PRESIDENT
SRI.RADHAKRISHNAN NAIR.M : MEMBER
SMT.BEENA.K.G : MEMBER
Mr. Mohammed, aged 55 years,
S/o Ibrahim
Moosodi Kadapuram House,
Uppala, Manjeshwaram Taluk
(Adv: Kishan Tindu) : Complainant
And
The Manager
National Insurance Company Ltd. : Opposite Party
High Plaza, P B 39, M G Road
Kasaragod.
(Adv: S. Mammu & Jayachandran)
ORDER
SRI.KRISHNAN.K :PRESIDENT
The case of the Complainant is as follows:
The Complainant is the owner of house door No.1/108 of Mangalpady Grama Panchayath. The Opposite Party company representatives approached complainant with a promise that insurance coverage will be provided to house owner in case they suffer damage to their house due to natural calamity including fire, storm etc. Insurance policy is obtained by paying a premium of Rs.853/- coverage for Rs.17,00,000/- for the period from 29/03/2019 to 28/03/2020. On 14/06/2019 due to heavy storm, house and articles inside it is completely taken away by sea. Claim is submitted on 07/09/2019. Surveyor visited, assessed damages but prolonged, so sent a lawyer notice, then the Opposite Party sent a reply repudiating liability on 19/02/2021 on the ground that damage to building was caused due to sand erosion and thus no coverage, there is deficiency in service, claimed compensation, insurance benefits of Rs. 17,00,000/- (Rupees Seventeen Thousand only).
2. The Opposite Party filed written version. Opposite Party admitted in the insurance policy its terms and validity and coverage; but repudiated for reason building is situated right prone area nearer to Arabian sea, where sea erosion is frequent, it is a costal regulation zone, construction of building is violation of rules and regulations, this fact is suppressed by the Complainant, soil erosion is excluded, that claim is delayed thus clear violation of condition of policy thus repudiation is justified. Further liability may be fixed limited to report by authorized surveyor.
3. The complainant filed chief affidavit and was cross examined as PW1. Ext.A1 to A6 documents marked from their side. Ext.A1 is the policy, Ext.A2 is copy of claim, Ext.A3 is copy of lawyer notice, Ext.A4 is copy of report of Tahasildar, Ext.A5 is repudiation letter, Ext.A6 series are photos.
4. The Opposite Party filed chief affidavit and DW1 and DW2 examined and Ext.B1 is true copy of policy, Ext.B2 is surveyor report, Ext.B3 is certificate issued by revenue authority.
Based on rival contentions following points arise for consideration:
- Whether repudiation of insurance claim for damage to house is justifiable in the ground that damage is caused due to soil erosion?
- Whether there is deficiency in service from Opposite Party?
- Whether complainant is entitled for compensation? If so what is the relief?
5. Objective of insurance is to provide insurance coverage to policy holders. Insurance helps to eliminate uncertainties. Damage to building is unforeseen and sudden physical situation one can’t control. They are unfortunate but a very real part of every life.
The complainant denied suggestion that damage is caused due to soil erosion. But due to damage is due to heavy waves. Manager of Opposite Party is examined as DW1, says she cannot say whether policy is issued after inspection of house or not and admits the house is damaged in full.
Ext.B2 surveyor report indicates that, he visited twice. He denies suggestion house is damaged due to heavy waves and winds. In his report he says, on second inspection building was collapsed fully due to erosion of land under foundation of building by violent sea and says incident is due to coastal erosion. He reports actual market value of building is Rs.12,00,000/-.
The Opposite Party got a case that the Complainant suppressed the fact that it is a coastal area prone to damages during rainy season.
6. The Apex court in 1996, 6 SCC 428 (supra) has held that the meaning of the word conceal (non-disclosure) pertains to the insured privately knows to draw the other into a bargain from his ignorance of that fact and his believing the contrary. Therefore any fact which is of public knowledge cannot be constructed as within one’s private knowledge. The insured premises is close to the sea and is damaged by sea water from time to time, is within public knowledge. If that is so, it is not proper for the insurance company to argue that the insured has concealed this information.
7. The Supreme Court of India in United Insurance Co.Ltd Vs KiranCombers and Spinners has held that it is an admitted position that the client was covered from 11.01.1993 to 10.01.1994 and the flood took place on 24/07/1993 and caused extensive damage to the building. It is submitted that as per the policy, fire policy is covered for flood, storm and tempest on payment of extra 20 percent premium that is Rs.500/-. Therefore there is no dispute that the incident has taken place during the coverage of the policy and cause of damage is flooding of water in to the building. On account of the water flooding in to the premises of the climate respondent’s factory from Kohinoor Wooden Mills, the land coved as a result of which one column of the building collapsed. The question is whether subsidence was covered in the policy or not. In this connection, a reference may be made to the terms of the policy. Clause 8 of the policy deals with exclusion that if any loss is occasioned on account of these events this policy shall not cover. A perusal of the aforesaid clause would clearly shows that there is no exclusion clause. Clause 8(b) only takes of typhoon, cyclone, tempest, hurricane, tornado, flood and inundation. The policy is covered for flood and inundation for which the claimant 5 covered by paying extra premium, therefore, now to say that the policy has not covered subsidence, which is not a clause in the present policy cannot be sustained. Therefore, on the basis of this ground, repudiation of the claim of the claimant by the appellant does not appear to be justified. Had this been the clause, that if damage is caused on account of sinking and caving of the building that is subsidence then perhaps this would have come to the rescue of the company but since in the exclusion clause there is no mention of subsidence, therefore, this ground taken by the appellant company and the surveyor to defect the claim, is absolutely unwarranted. The ratio of the above case is squarely applicable to the case under consideration.
8. There is no exclusion clause in the policy to exclude erosion by sea. The insured had not violated any of the condition of warranties of the policy. Risk of rain water damage (either normal or heavy rain) is not specifically covered under the policy and the heavy rain would have come within the meaning of “storm” on the ground that the rain water damages are not covered under the policy.
9. Looking to the above report of the surveyor it is crystal clear that the loss to the building of the insured was occurred due to soil erosion not supported by any other detailed information. It is the averment of the opponent insurance company that destruction has occurred due to the land erosion.
10. As far as storm is concerned storm means “a violent disturbance of the atmosphere with strong winds and heavy rain, thunder, lightning or snow”. In the various judgments of Apex courts it has been decided that damages caused by rain water followed by cyclone/ storm covered under the policy comes under the definition of “storm” and hence any damages occurred by storm. The complainant is entitled to get claim amount. As per facts evidence brought on record. In the present case due to “direct cause” of storm insured building was damaged and the destruction to the insured building was due to heavy rain and therefore when continues heavy rain comes under the definition of storm then Opposite Party liable to pay the claim amount.
11. Before issuing policy, insurer may have inspected the building and hence the Opposite Party cannot raise the point of consideration of building near seashore at later stage. The Complainant is of the opinion that the destruction/ damage to the insured building was caused directly by the ‘storm’ and therefore the claim was wrongly repudiated by the opponent insurance company and therefore complainant is entitled to get claim amount assessed by surveyor.
12. “Soil erosion is a gradual process that occurs when the impact of water or wind detaches and removes soil particulars, causing the soil to deteriorate”. Coastal floods to water from a sea or an ocean flows in to nearby areas. They are caused either by extreme tidal activity (high tides) or by a storm surge- strong wind from a hurricane or other storms forcing the water on shore or by the simultaneous occurrence of both these phenomena.
13. In the particular case no details or data is available whether damages is caused due to storm or tide of waves or soil erosion, due to the heavy wind or storm, since storm is covered under the policy, there is no specific exclusion of soil or land erosion, it is formed that damages caused to the house is covered by policy and repudiation of claim is against the term of policy and hence unsustainable.
14. In the result complaint is partly allowed the Opposite Party directed to pay Rs.12,00,000/- (Rupees Twelve Lakhs only) towards insurance benefits of damage to the house as shown in Ext.B2 surveyor report with interest 6% per annum from the date of filing complaint till payment there off and also compensation of Rs.15,000/- (Rupees Fifteen thousand only) towards deficiency in service by wrongful repudiation of claim with litigation cost of Rs.5,000/- (Rupees Five thousand only) to complainant payable within 30 days of the receipt of the order.
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exhibits
A1- Policy
A2- Insurance Claim Form
A3- Lawyer notice
A4- Report of Tahasildar
A5- Repudiation letter
A6- Photographs
B1- Copy of policy
B2- Final survey report
B3- Certificate issued by revenue authority
Witness Examined
Pw1- Mohammed
Dw1- Ratheeshan.C.M
Dw2- Thamban Nambiar. M.P
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Forwarded by Order
Assistant Registrar
Ps/
