UNITED INDIA INSURANCE CO. LTD. vs HASAN SULTAN NADAF

THIS is an appeal directed against the order of the 22nd October, 1991 of the State Commission, Maharashtra in Complaint No. 51/91. The State Commission had awarded a sum of Rs. 50,396/- as the amount payable under the policy of insurance with interest at 18% per annum from the date of the order till the amount awarded is paid to the Insured. In addition, it awarded a sum of Rs. 25,000/- as compensation to the complainant for the loss of business on account of delay in the settlement of the claim and Rs. 1,000/- as costs.

AFTER going through the memorandum of appeal and hearing the counsel for the appellant we have no doubt in our mind that the order of the State Commissioner deserves to be confirmed in toto. The State Commission has recorded a very elaborate order after examining the defence of the appellant in not settling the claim of the Insured under the policy of insurance.

THE State Commission has observed that the contention of the Insurer that the Respondent-Complainant had not produced any evidence that the shed of the factory was owned by him, is untenable and seems to us to be a mere lame excuse put forward by the Insurer to improperly reject the Insured''s claim. Even in the appeal the appellant Insurance Company has maintained that the Respondent-Insured did not have any insurable interest in the shed. It is the duty of the insurer to satisfy himself, before issuing a policy of insurance, that the insured has an insurable interest. Only if the insured has furnished wrong or false information it is open to the insurer to repudiate an insurance claim on the policy. But it is not open to raise the question of absence of insurable interest after the policy has been issued. We can only endorse the observations of the State Commission that insurance policy has been issued by the Insurer after inspecting the shed of the complainant and that if the factum of insurable interest is not verified then "we have only to infer that the administration of the Insurance Company is not only to gain the business but to issue the reckless insurance policies without ascertaining the existence of a property before it is entered into insurance policy". No wonder that the State Commission observed that the objection as regards to the ownership of the complainant is not only malicious but atrocious and detrimental to the interest of the consumer.

THE second objection taken by the Insurer was that the Respondent-Complainant had not co-operated with the surveyors in furnishing the necessary information and documents for assessment of the loss. The Complainant had lost all his original Books of Account in the fire and hence could rely only on secondary evidence. The State Commission was pertinently constrained to observe "considering the facts of this case, we are at a loss to know as to what kind of co-operation the Surveryors expected from the Complainant?" Regarding the quantum of loss under the policy of insurance, against the claim of Rs. 4 lakhs the Surveyors assessed the loss at Rs. 50,396/- only. In the opinion of the State Commission, this estimate of loss by the Surveyors was ridiculously low but they reluctantly accepted the Surveyors'' report on the ground that the State Commission had no mechanism to reassess the loss. We concur with the decision of the State Commission.

THE fire took place of the 8th November, 1990 and the Respondent-Complainant has been out of business from the date of incident of fire. It has, therefore, awarded a sum of Rs. 25,000/- as compensation for the loss of business due to delay in the settlement of the claim. We are fully in agreement with these conclusions of the State Commission.

IN addition to the payment of sum of Rs. 50,396/- as payable under the policy of insurance, Rs. 25,000 as compensation and Rs. 1000/- as costs awarded by the State Commission, we award a sum of Rs. 3,000 as costs as payable by the appellant to the respondent. The amounts as awarded above should be paid within a period of one month from the date of this order failing which interest will accrue on all the amounts at 18% per annum till the date of payment.