RAMA AUTO CARS vs United India Insurance Co. Ltd.

M/s. Rama Auto Cars of Rohtak have invoked the original jurisdiction of this Commission by filing the present complaint against M/s. United India Insurance Company claiming a sum of Rs. 8 lacs with 24% interest thereon with effect from 4th September, 1995 on account of loss of the insured stocks on the basis of the insurance policy issued by the United India Insurance Company on 8th September, 1994.

ACCORDING to the complainants they got their stocks of automobile spare parts of various vehicles like DCM Toyota, Maruit, Trucks etc. insured for Rs. 9,50,000/- lying at showroom situated at Subhash Road and the godown at Gohana Road, Rohtak. The insurance was to cover fire, flood, riots, strikes and earthquake etc. In September, 1995 to be precised on 4th September to 25th, September, 1995 there were heavy floods in Rohtak and all the stocks lying in the show-room at Subhash Road and godown at Gohana Road, Rohtak were swept away. Since the stocks were mortgaged with the Oriental Bank of Commerce, Rohtak, intimation was sent to the Bank immediately on 11th September, 1995, who after making the necessary enquiries lodged a claim with the Insurance Company on 28th September, 1995. The Insurance Company appointed Mr. Rajan Sharda as Surveyor and Assessor, who after making the necessary investigation submitted their report. Since the report of the Surveyor was in favour of the complainants, the Insurance Company did not agree with the same and instead of releasing the amount claimed by the complainant intimated them that the insurance policy had been issued inadvertently or under mistaken impression. Meaning thereby, that the insurance policy was not in tended to cover the risk and loss against the natural calamities of floods etc. but was for burglary and fire etc. The complainants in their rejoinder filed the affidavit of Dharam Pal Singh, partner of the firm to support the allegations made in the complaint. The Insurance Company in rebuttal filed the affidavit of Mr. S.K. Bansal, Asstt. Manager of the United India Insurance Company to contend that as per the cover note dated 8th September, 1994 only fire risk was covered for show-room etc. and as such flood risks are not covered. However on merits, submissions of the survey report etc. were admitted.

After hearing the learned Counsel for the parties and having gone through the record we are of the considered view that the complainants have successfully established deficiency in service on the part of M/s. United India Insurance Company, in releasing the amount of compensation for indemnifying the loss suffered by the complainants. The plea raised by the Insurance Company that the fire policy had been inadvertently issued and the flood risk was not covered is neither made out in the record nor does it reflects the first attempt of the opposite party. It is just an after-thought in justification of the repudiation of the claim. In support of his arguments the learned Counsel for the complainants has placed firm reliance on the decision of the Hon''ble National Commission in the case of Jagdish Singh v. The National Insurance Company Ltd., I (1994) CPJ 172 (NC), in which exactly in similar situation the Hon''ble National Commission held that the Insurance Company could not repudiate the claim of the insured on the ground, that it had issued a wrong policy and the building collapsed on account of typhoon is not covered under the policy. Following the aforesaid binding precedent of the Hon''ble National Commission and keeping in view the report of Surveyor, we allow the complaint and direct the opposite party- Insurance Company to pay a sum of Rs. 4,46,048.78 paise as assessed by way of damage to stocks of spare parts and Rs. 2,000/- as damage to building, totalling Rs. 4,48,048/- as assessed by the Surveyor in their detailed survey report dated 27th June, 1996 alongwith interest @ 12% on the aforesaid amount w.e.f. 4th September, 1995. The complainants shall also be entitled to costs of litigation which are quantified as Rs. 2,000/-. Complaint allowed wit costs.