P.S.Mani vs UNITED INDIA INSURANCE CO.LTD

THE complainant is a Rubber Planter of Thotathady Village in Belthangadi Taluk of South Kanara District. He had insured his rubber plants in Sy. No. 131/2B of Charmady village against fire among other calamities: (a) for the replantation cost of Rs. 50/- per plant in respect of plants which were up to 3 years in age; and (b) for the replantation cost of Rs. 100/- per plant in respect of plants which were above 3 years in age.

HE had paid premium as consideration for a period commencing from 19.12.1988 to 16.12.1989 under Policy No. 70805/097/76/1/00019 of 1988 issued by the respondents. On 6.2.1989 1424 Rubber Plants which were upto three years in age and 353 rubber plants which were above three years in age were destroyed by fire. HE made a claim for the replantation cost of the said trees. The respondents offered to pay Rs. 28,988/- on 27.6.1989. The said offer was not acceptable to the complainant HE failed a review petition on 5.7.1989 and requested the respondents to pay Rs. 1,06,500/- as per the policy. The respondents refused to pay the same by letter dated 17.10.1989. The respondents offered to pay Rs. 60,024/- by letter dated 20.4.1990. The complainant refused to accept the same. HEnce he has filed this complaint for recovery of Rs. 1,06,500/- together with interest at the rate of 12% per annum on the said sum from 6.5.1989 upto the date of actual payment and for damages of an equal sum or such other sum as the Commission deems fit and costs. The complaint is resisted by the respondents by contending inter-alia that they have assessed the damage/loss suffered by the complainant at Rs. 60,024/- as against his claim of Rs. 1,06,500/- that the issue between the parties is not one that can be adjudged by this Commission; that even according to the complainant there has been breach of contract by the respondents and the said matter cannot be adjudicated by this Commission; that this is not a case of deficiency in service to be rendered by the respondents to the complainant; that the complainant has not suffered the loss of Rs. 1,06,500/- and that he is not entitled to the said amount.

The Development Officer, Rubber Board, Mangalore has been examined as CW1 and exhibit CI has been produced on behalf of the complainant. The Assistant Manager of the United India Insurance Co. Ltd., has been examined as RW1 and exhibits R1 to R8 have been produced on behalf of the respondents.

THE first point that arises for determination in this case is as to whether this Commission has jurisdiction to entertain this complaint. Mr. V.B. Shivakumar, Learned Counsel for the respondents urged that as the dispute between the parties in this case is in regard to the quantum of damages suffered by the complainant, the Commission has no jurisdiction to decide the said point. In support of his contention, he relied upon the decision in Janata Machine Tools v. Oriental Insurance Co. Ltd., I (1991) CPJ 234 (NC). In the said case, the allegation of the complainant was that there had been deficiency in the service of the Insurance Company. The Insurance Company after due investigation came to the conclusion that the claim put forward by the complainant was false. Under those circumstances, it was held by the National Commission that the said controversy between the parties cannot be decided by the Consumer Forum. In this case, the Insurer has assessed the damages at Rs. 60,024/- as against the claim of the complainant at Rs. 1,06,500/-. The Insurrer has not come to the conclusion that the claim made by the complainant is false. Hence the decision relied upon by Mr. V.B. Shivakumar is not applicable to the facts of the present case. It is clear from the decision of the National Commission in Shri Umedilal Aggarwal v. United India Assurance Co. Ltd., I (1991) CPJ 3 (NC) that a fault or negligence in regard to settlement of an insurance claim constitutes a ''deficiency'' in service within the meaning of the Consumer Protection Act, 1986 (for short the ''Act''). In that decision, the National Commission was pleased to observe that it is not possible to hold that the settlement of a disputed insurance claim will not be covered by the expression "service" occurring in Section 2(d) of the Act. In view of die said decision of the National Commission, we have no hesitation in holding that this Commission has jurisdiction to entertain this complaint.

THE next point that arises for determination in this case is as to what is the amount payable by the Insurer to the Insured under the terms of the policy. THE following facts are no longer in dispute before us: (a) that the complainant had insured the rubber plants in Sy. No. 131/2B of Charmady Village against fire among other calamities: (1) for the replanatation cost of Rs. 50/- per plant in respect of 1500 trees which were upto three years in ages standing in 3 hectares of that land; (2) for the replantation cost of Rs. 100/- per plant in respect of 500 plants which were above three years old, in One hectare of that land. (b) that he had insured the said plants for a total sum of Rs. 1,25,000/- from 17.12.1988 to 16.12.1989 under Policy No. 70805/ 097/76/1/00019/88 issued by the United India Insurance Co. Ltd. (Respondent). (c) that on 6.2.1989 due to fire, 1424 rubber plants which were upto three years in age and 353 rubber plants which were above three years in age were destroyed.

The Insurance Company has assessed the loss caused to the complainant in the basis of the report of the Surveyor appointed by it (Reports: Exhibits R-3 & R-5). According to Clause 3 of the policy issued by the respondents, it is a requirement of the insurance that the sum insured thereunder shall be equal to the cost of replantation of the rubber plants mentioned in the schedule and that the replantation cost declared shall be on the basis of Rubber Board assessment of replantation cost of rubber plants of various age groups from time to time. In view of the said clause, the insurer could not have determined the amount payable to the complainant on the basis of the Surveyor''s report. The complainant has been examined, CW1 who is the Development Officer of the Rubber Board, Mangalore has also produced Exhibit C-1 which has been issued by the National Insurance Co. Ltd., through the Rubber Board (Ministry of Commerce, Government of India). CW1 has clearly stated that in determining the question of compensation, the rates mentioned in Exhibit C-1 supercede all other rates and the insurer has to adopt the rates mentioned in it while determining the amount of compensation payable to the insured. It is not disputed that 1424 rubber trees which were destroyed in me fire were of 1 years old and that 353 trees were of 4 years old at the time of the fire. RW1 who is the Asst. Manager of the Respondent Company has admitted in cross-examination that the rates fixed by the Rubber Board are applicable to all Insurance Companies and that the said rates have to be adopted by all the Insurance Companies. In view of die said admission in cross examination, his assertion in examination-in-chief that their company is not bound by die rates given in Exhibit C-1 cannot have any value. According to Exhibit C-1, die scale of compensation payable to the trees between 1 & 2 years of age is Rs. 41/- per tree. At that rate, the value of 1424 trees will be Rs. 58,384/-. According to exhibit C-1, the scale of compensation payable to the trees aged between 4 & 5 years is Rs. 123/- per tree. So the compensation payable in respect of the said 353 trees at die rate of Rs. 123/- per tree will be Rs. 43,419/-. That is also the evidence given by CW1. CW-1 is an independent Officer of the Rubber Board and he has no reason to give false evidence against the respondent. Nothing is elicited in his cross-examination which would cost doubt on his testimony. Hence, we accept his evidence and Exhibit C-1 which has been issued by the National Insurance Co. Ltd., through the Rubber Board (Ministry of Commerce, Government of India), we assess the amount payable by the respondent to the complainant at Rs. 1,01,803/-. This brings us to the question as to what is the rate of interest and from what date it should be paid to the complainant on the said sum. The Insurance Company has to be given a reasonable time for deciding the claim and according to us a period of about six months would be the reasonable time for the insurer to decide the claim. The trees were destroyed in this case on 6.2.1989 and Claim No. 511 of 1989 was filed by the complainant immediately thereafter. Allowing a margin of about six months from the date of that claim, we think it reasonable to award interest to the complainant by way of damages for the delay caused by the Insurer in settling his claim from 1.9.1989. We also hold that the rate of interest of 12% per annum claimed by the complainant is proper.

IN the result, the complaint is allowed and the respondent, United INdia INsurance Co. Ltd., is directed to pay Rs. 1,01,803/- together with interest at the rate of 12% p.a. on the said sum from 1.9.1989 till the date of payment and costs of Rs. 1,000/- to the complainant within one month from today. Complaint allowed.