NATIONAL INSURANCE CO. LTD vs LAJWANTI VADHVANI & ANR

Delay in filing the Appeals is condoned.

Challenge in these four First Appeals, under Section 19 of the Consumer Protection Act, 1986 (for short "the Act"), by National Insurance Company Ltd., (for short "the Insurance Company"), the sole Opposite Party in the Complaint is to the orders, both dated 11.07.2014 passed by the State Consumer Disputes Redressal Commission, Gujarat at Ahmedabad in Consumer Complaints No. 39, 40, 41 and 44 of 1999 respectively. By the impugned orders, while accepting the Complaints filed by the Complainants, alleging deficiency in service on the part of the Insurance Company in repudiating their claims for indemnification of the loss suffered by them on account of the damage to the electronic goods stored in the insured go-down in a cellar, due to heavy rains on 17.06.1997, the State Commission has directed the Insurance Company to pay to the Complainants the compensation, as claimed in their respective complaints, (as revised), amounting to 14,40,901/-, 11,39,362/-,11,80,265/- & 8,05,706/- respectively. In addition to the said amounts, the State Commission has also directed the Insurance Company to pay to the Complainants interest @ 9% p.a. on the said amounts w.e.f. 17.01.1998 i.e. the date of filing of the Complaints, till the date of realization as also costs, quantified at 50,000/- in each of the Complaints.

Aggrieved, the Insurance Company is before us in these Appeals.

Since the factum of the heavy rains causing damage to the goods, stored in the insured premises, is not in dispute, we deem it unnecessary to burden the order by narration of the facts, leading to the present Appeals in extenso. It would suffice to note that on receipt of intimation about the said occurrence, the Insurance Company appointed a spot Surveyor to inspect the affected premises and submit his report with regard to the actual state of affairs at the site. The Surveyor, vide his report dated 17.06.1997, while recording that the details of the damaged stocks etc. had been furnished by the Complainants, as also the cause for the damage, did not however, quantify the actual loss suffered by the Complainants, on account of damage to the electrical and electronic goods stored in the insured premises. Later on, the Insurance Company appointed another Surveyor namely Upender R. Shah to assess the loss claimed to have been suffered by the Complainants. The said Surveyor, after obtaining necessary information from the Complainants, as desired by him, vide his detailed report dated 31.03.1998, assessed the total loss in respect of all the four policies in question viz. 96/3100371, 97/3100464, 96/3100381 and 96/3110619, in the assured sums of 25,00,000/-, 10,00,000/-, 17,00,000/- and 7,50,000/- respectively at 24,28,500/-. However, taking into consideration the documents submitted by the Complainants in support of their claims and the report of the Surveyor, vide its letter dated 24.05.1998 the Insurance Company repudiated all the claims in entirety on two grounds: (i) the Insured/Complainants had not adhered to the terms and conditions of the policy as condition No. 4 and 5 therein had been violated in as much as the insured had failed to produce the plans, specification books, vouchers, invoices in support of their claim and (ii) they had abandoned the insured property.

Being aggrieved, the Complainants filed Complaints before the State Commission, in which the afore-noted directions have been issued.

Having heard Learned Counsel for the parties at some length and perused the documents on record, including the afore-stated reports by the Surveyor of the Insurance Company, and other related documents, we are in complete agreement with the State Commission that the claims had been wrongly repudiated by the Insurance Company. In support of both the afore-noted grounds on which the claim preferred by the Complainants had been repudiated, the Insurance Company had failed to adduce any evidence. On the contrary, overwhelming evidence in the form of record by the Complainants, which included the cross-examination of certain witnesses, affidavit of an independent Surveyor and the cross-examination of the Complainant''s witnesses was adduced by the Complainants. In the light of the said evidence, in our opinion, the State Commission was fully justified in arriving at the conclusion that the Insurance Company was not justified in repudiating the claim on the afore-noted two grounds. Moreover, it is also evident from the report, dated 31.03.1998, of Upender R. Shah that complete information, as sought for by him, had been duly furnished by the Complainants to him. There is not even a whisper in the entire

report by the Surveyor that the Complainants had ever refused to furnish any information/document, which was demanded from them. In the light of the cogent evidence on record, we are unable to hold that the Complainants had failed to produce any document and thus, violated Conditions No. 4 & 5 of the policy Conditions. That being so, we do not find any illegality in the finding returned by the State Commission, to the effect that there was deficiency in service on the part of the Insurance Company in repudiating the claims made by the Complainants in entirety on the afore-noted two grounds. Accordingly, we affirm the said finding.

Having arrived at the said conclusion the next question for consideration is whether the compensation as awarded by the State Commission is justified or not?

Having carefully perused the orders impugned in these Appeals we are constrained to observe that on the question of quantification of the compensation, the orders are unsustainable on the short ground of being absolutely non-speaking. It is trite law that an authority in making an order in exercise of its quasi-judicial function must record reasons in support of the order it makes. In Charan Singh Vs. Healing Touch Hospital & Ors. (2000) 7 SCC 668, a three-Judge Bench of the Hon''ble Supreme Court, dealing with a grievance under the Act had observed that the Consumer Fora exercise quasi-judicial powers for redressal of consumer disputes and in such a situation its conclusions must be based on reasons. It was held that requirement of recording reasons is "too obvious" to be reiterated and needs no emphasising.

In the instant case, it is evident from a bare reading of the orders that the State Commission has awarded exactly the same amounts as were claimed by the Complainants in the Complaints. It is pertinent to note that the said amounts were comprised of interest @ 18% p.a., which was included subsequently, by way an amendment in the prayer clause, as also the costs quantified at 50,000/- in each of the Complaints. Interestingly, the State Commission has also awarded interest @ 9% p.a. on the afore-noted amounts claimed as interest and costs. In our opinion, the impugned orders stand vitiated on the short ground of non-application of mind by the State Commission on the question of quantification of the loss.

Having arrived at the said conclusion the next question for consideration is as to the methodology which needs to be adopted for determining the amount of compensation payable to the Complainants in each of the Complaints. In this regard the easiest course available to us would be to remand the case to the State Commission to undertake this exercise. Faced with that situation, Learned Counsel appearing for the Complainants, states on instructions from one of the Directors of the Complainants, who is present in person, that since the incident had taken place almost two decades ago, viz. as far back as June, 1997 and this being the second round of litigation between the parties, the Complainants would be satisfied if the loss assessed by the Surveyor appointed by the Insurance Company, in terms of his report dated 31.03.1998 is awarded to them along-with a reasonable rate of interest thereon. In our opinion, to cut short the life of litigation between the parties, the offer made on behalf of the Complainants, is reasonable and deserves to be accepted, more so, when the Insurance Company had not questioned the correctness of the loss assessed by their own Surveyor but had repudiated the claims on the afore-stated two grounds, which have not found favour with us.

Consequently, all the Four Appeals are partly allowed; the finding of the State Commission to the effect that there was deficiency in service on the part of the Insurance Company in repudiating the claims in entirety on the afore-noted two grounds are affirmed; the compensation as awarded by the State Commission vide the impugned orders, is set aside and it is directed that

the Insurance Company shall pay to the Complainants a total sum of 24,16,300/- (in Complaints No. 39 to 41) and 13,200/- in (Complaint No. 44 of 1999), as compensation for the loss suffered by the Complainants, along-with interest @ 9% p.a. from the date of filing of the Complaint till actual realization, within four weeks from the date of receipt of a copy of this order, failing which the interest on the said amounts shall stand enhanced to 12% p.a. for the said period. The costs awarded by the State Commission are maintained. It will be open to the Insurance Company to withdraw the amount(s) deposited by it in terms of the order dated 10.10.2014, along-with the accrued interest, if any, as well as the statutory amounts of 35,000/-, deposited by it at the time of filing of Appeals.

All the Appeals stand disposed of in the above terms with no order as to further costs.