SHYAM SUNDER NARANG vs United India Insurance Co. Ltd.

THE complainant was residing in the first floor of his brother Chaman Lal situated at Qazibagh Anantnag. He had insured his household goods for a sum of Rs. 1.00 lac with the opposite party. In militancy related event the house was set on fire on 23/24 October, 1991. THE matter came to be investigated by the Police and a claim was raised with the Insurance Company. One Mr. M.Q. Andrabi was appointed as a Surveyor and on his report claim was declared as No Claim.

THE complainant has made a grievance pursuant to which a notice was served on the opposite party. In its version the opposite party has taken the stand that according to the report of the Surveyor the complainant at the time of migration had removed his household goods and has not co-operated with the Surveyor in the removal of debris so as to enable him to assess the loss. THE Insurance Company considered the report of the Surveyor and rejected the claim. Apart from the legal question posted before us the only question involved in this case is as to whether the Insurance Company has at all applied its mind to the facts of the case and whether the order of rejection of claim is based on due application of mind. Before we deal with this matter we would like to address ourselves to be contention of Mr. Bhargava that after the declaration of the Insurance Company that it is a No Claim the Commission has no jurisdiction to entertain the same as will not amount to deficiency of service. In this regard he has placed reliance on Mis. Rajdeep Licence and Finance and Others v. United India Insurance Company decided by National Consumer Disputes Redressal Commission appearing at Consumer Law Cases page 226, wherein it is held that if it appears that the Insurance Company after application of its mind and after due investigation comes to the conclusion that the claim is to be repudiated the only course available to the complainant is to approach a Civil Court.

We may note that we are not subject to the jurisdiction of National Commission. The Union Consumers Protection Act is not applicable to the State of Jammu and Kashmir. Our Act creates a separate hierarchy and enlike the Union Act the appeal jurisdiction has been conferred over on the J&K High Court. However, there is no harm if a citation is taken into account for purposes of proper adjudication of the complaints. We do not agree with the proposition of law as contended by the learned Counsel as it would negate not only the jurisdiction of Consumers Foras but would distort the provisions of Consumers Act. Our reasons are very simple if such a state of law is allowed to have a sway it will enable the Insurance Companies to repudiate claims by simply appointing an Investigator and then saying that it has applied its mind and repudiated the claim. In that event naturally if this state of law is allowed to exist the jurisdiction of the Consumers Commission will be practically taken from it. The definition of service as given in the Consumers Protection Act is very wide and the deficiency in service would naturally mean even the lack of proper application of mind by the Insurance Company. In any case even a repudiation of claim by Insurance Company will amount to deficiency in service if this repudiation is not supported by any material. Even in the case cited supra the observations made by the National Commission are such that it must be shown to the satisfaction of the Commission that here has been proper application of mind by the Insurance Company. The proper application of mind would always mean that it must pass a reasonable order indicating the material on which the order has been passed. It is not entitled to say in one word ''Declared as no claim'' as this would neither show that there is application of mind nor would it indicate that the repudiation is based on some cogent and reliable material. It is not to suggest that the Insurance Companies cannot repudiate the claims but the repudiation in no case can be mechanical nor can it be capricious or arbitrary. Arbitrariness can never be a part of good administration. We, therefore, do not think that when the National Commission made these observations these were intending to be swooping in nature ipso facto depriving us of our jurisdiction in all matters whether the claim is repudiated. The argument of Mr. Bhargav therefore does not appeal to us.

NOW adverting to the facts of the case we have before us a final Police Report made by the S.P. of Anantnag in which it is clearly stated that in this incident the goods of the complainant were gutted. This report is based on an investigation in FIR No. 254 of 1991 of Police Station Anantnag dated 24.10.1991. NOW apart from this we have recorded the statements of Manzoor Ahmed, a neighbour of the complainant who has clearly stated that at the time of migration the complainant has not removed any goods from the house. Same of course is the version tendered to us by the complainant. There is no evidence to the contrary excepting a mere ipsi dixit of Mr. Andrabi, Surveyor who in his report has stated that the enquiries instituted at the site have revealed that the complainant had removed his goods. What were the kind and quality of enquiry and who were the persons from whom the enquiry is made has not been spelt out and has been kept a close guarded secret. He does not even state if he had examined any person. Strangely this gentleman while being examined before us totally negated these observations made in his report inasmuch as he has clearly stated that the whole report is based on the fact that the complainant did not co-operate with him in removing the debris so as to enable him to see if there was any rament of goods. In his second report he also says that even the representative deputed by the complainant for this purpose refused to remove the debris. This clearly goes to show that the complainant has co-operated to the extent of even sending representative to assist the Surveyor but it was the Surveyor who was negligent to conduct the survey. In his cross-examination Mr. Andrabi clearly states that the situation in the Valley at the time was such that nobody would come forward to assist. He has gone also to the extent of stating that the intensity of fire was such that if there were any goods in the house these would be naturally burnt. According to him since the whole debris had fallen in the first floor he did not go into the house to find out what had happened and that he inspected the house and took its photographs only at a distance from outside. He took no photographs from inside the house. In the light of this statement one really does not know as to how the Insurance Company came to the conclusion that the goods had been removed. As a matter of fact there was no material before the Insurance Company to come to this conclusion. The plea of the Surveyor that the insured did not co-operate is also baseless as according to his own statement the insured did made efforts to co-operate but this co-operation proved fruitless in view of the situation in the Valley. The Surveyor has no other grievances excepting that the complainant did not co-operate him in the removal of debris and this fact is sufficiently evidenced by his second report dated 14.6.1993 wherein he his clearly stated that the claim is being recommended for rejection for lack of assistance from the complainant in the removal of debris. Another aspect is akin to this is that the Insurance Company has failed to indicate to us a rule or a condition in the Insurance Contract under which the complainant is obliged to remove the debris to facilitate the Surveyor to conduct the enquiry. Assuming through not granting that this is a condition or it is ordains by rules, the Company is always to pay a cost of removal of debris. In this situation we are entitled to ask as to why the Company on its own did not make any effort to remove the debris and to find out as to whether there was any romance of goods. This the Company never intended to do and this fact is clearly indicated by the statement of Surveyor that at no stage he has even made an effort to enter the house. This goes to show that the approach of the Insurance Company in settling this claim has been highly unreasonable, unjust and arbitrary and the repudiation of claim is neither based on any material nor is it based on any application of mind. His approach obviously has been highly mechanical in violation of all principles of natural justice. Strangely before repudiation of the claim the Insurance Company has not even given a notice to the complainant to show cause against repudiation. In any case there was no material before it for repudiating the claim and on the basis of material now available before us it is clear that even the Surveyor has not discharged his duties in this case and the only thing done by him is to take a few photographs of the house from a distance. On the basis of the material now available before us we find that the repudiation has wrongly been done. It is devoid of any application of mind. There was no material before the opposite party to repudiate the claim and the material now brought before us clearly indicates that the damage which was covered was caused. This clearly amounts to deficiency of service. We, therefore, allow this claim and direct the Insurance Company to pay to the complainant a sum of Rs. 70,000/- under the policy with 18% interest per annum from the date of loss till the date of final payment. We are reducing an amount of Rs. 30,000/- in lump sum on account of depreciation. We are not inclined to agree with Mr. Bhargava that a fresh Surveyor should be appointed to assess the loss. This argument is fallacious inasmuch as the loss caused in 1991 cannot be assessed now. We direct that the entire amount awarded by us shall be paid within six weeks from the date of this order. A certified copy of this order be given to the parties free of cost to be collected by them on their own within a week''s time. Complaint allowed. ______________