RASHID KHAN vs NATIONAL INSURANCE CO LTD

THE present complaint has been filed by Rashid Khan claiming a sum of Rs. 1,55,906.43 with interest @ 24% alongwith Rs. 10 lakhs as compensation for harassment and mental torture from the National Insurance Company Ltd.

THE facts of the case in short are described as under: The complainant had got his double storeyed market complex, Rajdhani Market fitted with all amenities insured against fire for a period of one year from 10.12.1992 to 9.12.1993 for a sum of Rs. 15.00 lakhs with National Insurance Company Ltd. Severe fire broke out in the market premises on 20.12.1992 at 1.00 p.m. causing extensive damage to the building and its amenities. The fire tenders of Fire Brigade on immediate information could extinguish the fire after struggling for hours. Branch Manager, National Insurance Company, City Branch office was informed about the fire accident on 21.12.1992. Shri S.K. Sinha of Pataliputra was appointed as Surveyor to assess the damage and loss who inspected the site. All papers required by him were made available to him except Fire Brigade report which was available with Fire Brigade office. The complainant also handed over the estimated cost of civil work and electrification work destroyed in the fire prepared by a civil engineer and electrical engineer. Loss according to the above estimate was of Rs. 59,350.86 in civil work and Rs. 1,00,220.85 in electrical work. The complainant however filed a claim of Rs. 1,55,906.43 on 27.5.1993 which was the amount spent by him for renovation work. But the opposite parties took no action to settle his claim for a long time. Ultimately he sent Pleaders notice on 24.10.1994 with a copy to the Regional Manager. The Divisional Manager thereupon woke up to inform the complainant that settlement of his claim for Rs. 38,170/ - has already been made and he sent the loss vouchers to the complainant to be returned after due execution. The complainant kept on protesting against unilateral decision about the claim amount at various levels without any result. The complainant ultimately filed the complaint petition on 30.1.1996. The opposite parties filed written statement on 26.7.1996 stating therein that the complaint case is time -barred. They further contended that the total amount claimed by the complainant comes to Rs. 24,19,388/ - including interest besides cost of litigation which is not within the pecuniary jurisdiction of this Commission. The opposite parties had appointed Shri S.K. Sinha as Surveyor who called for valuation report of the Rajdhani Market building by a Government Valuer. According to the Surveyor the Government Valuer assessed the valuation of the said building at Rs. 15,96,565/ - as on 24.5.1993 after allowing for depreciation. The Surveyor, after considering the valuation report, the estimated cost of repair and loss incurred finally assessed the loss as Rs. 38,170/ -. The complainant was asked time and again to sign the discharge vouchers and take the amount settled by the opposite parties. But lie never did that for which the opposite parties may not be responsible. The opposite parties referred to a number of decisions of National Commission in this regard (which will be discussed hereinafter). The complainant thereupon filed rejoinder to the written statement on oath refuting the points raised in the writ statement.

THE complainant filed petition on 3.4.1997 under Section 24(A)(2) of the Consumer Protection Act, 1986 for condoning the delay in filing complaint petition. The Commission condoned the delay after hearing both the parties and admitted the complaint for hearing on 2.6.1997.

THE opposite parties have raised the point regarding pecuniary jurisdiction also. Various components of total claim of the complainant is as under: 1. Claim of insured amount Rs. 1,55,906.43 2. Compensation claimed Rs. 10,00,000.00 Section 17 of the Consumer Protection Act, 1986 clearly stipulates that the State Commission has jurisdiction to entertain the complaint where the value of goods or services and compensation, if any, claimed does not exceed Rs. 20.00 1akhs. The interest part and cost, as prayed for by the complainant, cannot be taken into consideration for determining the question of jurisdiction as no specific amount has been claimed as interest or cost. The amount claimed as insurance amount and the compensation together as per provision of the Act, comes to Rs. 11,55,906.85 only which is well within the jurisdiction of this Commission. We therefore hold that the present complaint case is well within the jurisdiction of this Commission. We are supported in our view by the decision of State Commission, H.P. in Shimla Watch Co. v. The New India Assurance Co. Ltd. and Anr., (1997) 5 CTJ (CP) (SCDRC).

On perusal of record it is found that it is not in dispute that the complainant had got Rajdhani Market building insured from 10.2.1992 to 9.2.1993 by the opposite parties after paying necessary premium for a sum of Rs. 15.00 lakhs. It is also not disputed that fire broke out in the insured building on 20.2.1992. A Surveyor had been appointed by the opposite parties to assess the quantum of loss to the complainant. The complainant fully co -operated with the Surveyor and made all papers available to him including insurance claim of Rs. 1,55,906.43. But the opposite parties inexplicably remained indifferent inspite of several request letters of the complainant for early settlement of the claim. They woke up only when Pleaders notice was sent in mis regard on 24.10.1994. It was only on 7.11.1994 that the Divisional Manager of the Company intimated the complainant that his claim has been settled for Rs. 38,170/ - and that he should execute the loss voucher for receiving the payment of the amount. On insistence of the complainant to furnish the Surveyors report and also bifurcated amount allowed for civil work and electrical works, the opposite parties never furnished the survey report till 28.2.1995. They however made available a copy of the Surveyors report with assessment of loss worked out by him as Rs. 38,170/ -. Details of losses as worked out by the complainant has been shown as Rs. 16,684.71 in civil works, Rs. 44,334.95 in mechanical works and Rs. 1,00,220.00 in electrical works. The Surveyor has allowed Rs. 14,998.28, Rs. 31,344.00 and Rs. 14,886.80 respectively. The estimate of loss in civil works was prepared on 1991 -92 P.W.D. schedule of rate and the repair was carried out in 1993. There cannot, therefore, be any justification of deduction of 10% in the amount. No justification for slashing down the loss in mechanical part has been given by the Survey or which may not be acceptable. In respect of electrical wiring and fitting, the Surveyor stated that the fittings inside the shops like fans and tube lights etc. were not covered under the present insurance policy. A sum of Rs. 14,886.80 however was allowed for electric lining and fitting in common passage which appears reasonable. There is justification of depreciation of 1.65% per year for 22 years. The amount of loss thus allowable head wise may be summed up as under: A. (a) Loss in civil Works Rs. 16,684.71 (b) Loss in mechanical works Rs. 44,334.95 (B) Loss in electrical works Rs. 14,886.80 Rs. 75,906.46 Less depreciation amount @ 1.65% for 22 years ( -) Rs. 27,284.00 Rs. 48,622.46 Less salvage value ( -) Rs. 1,895.00 Rs. 46,727.46 Less the amount already paid by the Insurance Company on 14.3.1997 to the complainant ( -) Rs. 38,170.00 Rs. 8,557.46

IT is seen that the complainant very promptly had informed about the fire incident and made all papers available to the opposite parties, the opposite party made inordinate delay in settling the claim. Intimation regarding settlement of claim was given to him on 7.11.1994 only on service of Pleaders notice after lapse of about two years from the date of accident. The National Commission in a number of decisions has held that insurance claim normally should be disposed of in about six months time. In this case the complainant had fully co -operated with the opposite parties and all papers were made available to them as and when asked for. He kept on pursuing settlement of his claim. The delay in disposal of claim has not been explained by the opposite parties. The opposite parties, therefore, are held liable for deficiency in service.

BASED on the above discussion we allow a sum of Rs. 46,727/ - as insurance claim minus the amount of Rs. 38,170/ - already paid by the Insurance Company to the complainant towards the insurance claim. We also allow interest @ 12% from the date of institution of the complaint case on 30.1.1996 till the date of payment. A sum of Rs. 5,000/ - is also allowed as compensation for harassment. The above decretal amount shall be paid by the opposite parties within one month from the date of receipt of copy of this order. The complaint case is partly allowed. The opposite parties shall pay a sum of Rs. 1,000/ - as cost of litigation to the complainant. Complaint partly allowed.