New India Assurance Co. Ltd. vs NORTHERN AUTOMOBILES LTD.

IT is the opposite party-Insurance Company who is the appellant before us. On a complaint filed by the respondent-complainant for damage to its factory premises on account of storm etc., the State Commission held that repudiation of the claim by the appellant was wrong and on the basis of evidence on record it directed the appellant to arrive at the amount of compensation to be paid to the complainant after due enquiry and giving reasonable opportunity to the complainant to represent its case.

COMPLAINANT had taken a policy cover of its building, plant and machinery, stock, stock in-process and stock of raw materials for an amount of Rs. 85.00 lakhs. Premium amount of Rs. 71,759/- was paid. The policy was for a period of 27.2.1999 to 26.2.2000. It so happened that on 9.9.1999 at 4.30 p.m. there was a storm accompanied by rain which caused considerable damage to the building, plant and stock of the complainant. It, therefore, lodged a claim with the appellant immediately on the following day.

A Surveyor was appointed by the Insurance Company who submitted his report on 24.3.2000 assessing the loss at Rs. 28,555/- and after deducting policy clause amount his report was that loss would not be more than Rs. 18,455/-. A copy of the report of the Surveyor was not given to the complainant and by letter dated 31.3.2000 appellant repudiated the claim on the ground that the factory had been closed for about one year and no maintenance was carried out and due to wrong usage, rusting, corrosion, the joints of the chimney and stay wire holding chimney had weakened and thereby chimney fell down, damage was caused. The fact that there was a storm etc. was not accepted; State Commission after going through the affidavits of the parties, the report of Patwari of the area and also considering the fact that the Surveyor did not specifically deny the factum of storm etc. held that there was in fact storm accompanied by rain which caused damage to the factory premises of the complainant. The claim of damage was estimated by the complainant at Rs. 20,53,028.01 but it limited its claim to Rs. 20.00 lakhs to come within the jurisdiction of the State Commission.

STATE Commission took serious note of the fact that the report of the Surveyor was not given to the complainant. It also criticised the appellant on the ground that if its case was that the factory remained closed for about one year whether the Insurance Company was justified to insure the factory for such a high amount and to get a premium of over Rs. 71,000/-. The plea of the Insurance Company-appellant that the damage was caused because the factory remained closed etc. was not accepted. STATE Commission also found that the evidence regarding loss occasioned to the factory premises led by the complainant was credible and at the same time observed that the repudiation of the claim on the part of the Insurance Company was wrongful. STATE Commission also held that appellant did not settle the claim of the complainant within a reasonable period and had repudiated the claim for no valid reasons. It, therefore, held that the appellant was deficient in not properly processing the claim of the complainant. The report of the Surveyor also did not show that the complainant participated while preparing the report. STATE Commission, therefore, held that it was just and proper and in the interest of justice to direct the appellant to supply copy of the report of Surveyor to the complainant who would file its representation, if any, against the report when appellant shall allow reasonable opportunity to the complainant to place on record the relevant material regarding compensation. It would be for the Insurance Company then to determine the amount of compensation and to communicate the same to the complainant. It was also ordered that in case the compensation awarded was acceptable to the complainant that should be paid to it and if it is not to the satisfaction of the complainant, it would be free to challenge the same by filing an appropriate petition before an appropriate Forum. The complaint was thus disposed of with these directions. Aggrieved by the impugned order of the State Commission appellant has filed this appeal. After hearing Mr. P.K. Seth, learned Counsel for the appellant and after going through the record filed before us, we agree with the State Commission that it would not be correct on the part of the appellant to repudiate the claim altogether. The appellant had taken a stand that there was no storm accompanied by the rain and that the loss was occasioned on account of fall of the chimney which was not kept in a proper state of repair and the factory had been closed over a year. This has not been accepted by the State Commission. In any case State Commission in its impugned order has given an opportunity to the complainant to again present its case and the appellant to decide the same. We, therefore, find no ground for us to interfere with the impugned order of the State Commission. This appeal is dismissed. Appeal dismissed.