National Consumer Disputes Redressal Commission: In an appeal filed under Section 19 of Consumer Protection Act, 1986 challenging order passed by the State Commission on 1-11-2013 wherein, the Insurance Company was directed to pay Rs 17,63,265 with other costs, Subhash Chandra, Presiding Member and Dr. Sadhna Shanker, Member upheld the Insurance Company’s liability to indemnify the loss to the complainant.
Factual Background
The complainant obtained a ‘Standard Fire and Special Peril Policy’ for a shack/restaurant by paying a premium of Rs 26,031 for an insured sum of Rs 40 lakhs. The said policy was valid from 11-01-2012 to 10-01-2013. On 15-05-2012, a major fire occurred, and the shack/restaurant got damaged in its entirety. The incident was informed to the police, State’s Fire and Emergency services as well as the insurance company. An independent surveyor and an investigator were appointed by the insurance company and a loss was assessed at Rs.17,63,265 with the conclusion that the fire brigade and the police authorities were unable to identify the cause of fire. When the complainant submitted an insurance claim form, the same was repudiated for misrepresentation and non-disclosure of material facts.
When the matter approached the State Commission through consumer complaint, the Insurance Company was directed to pay Rs 17,63,265 along with pending + future interest @9+2% with compensation of Rs 50,000 towards harassment, mental pain and agony and cost of Rs 10,000. The same was appealed against by the Insurance Company in the instant matter.
Reason for Appeal
The Insurance Company contended that while obtaining the policy, the complainant concealed the fact of property in question being illegal for illegal construction of temporary structure, having received Panchayat’s show cause notice for demolition of the temporary shack. Absence of NOC from Department of Tourism for erecting a temporary shack was also highlighted to submit that in case of otherwise, the insurance policy would not have been issued.
NCDRC’s Analysis of Material Facts
The Commission noted that the NOC from the Department of Tourism and Village Panchayat for erecting Temporary Shack were obtained by the complainant in advance, thereby completing all the formalities before obtaining insurance policy. The Commission further hinted towards the State Commission’s findings of the Insurance Officers having perused the said documents and inspected the premises/shack before issuing the policy. The Commission also highlighted that the alleged show-cause notice was not ensured to have been in the knowledge of the complainant for being addressed to the Deputy Collector. It further said that “All these communications are subsequent developments and could not have been brought to the knowledge of the insurance company at the time of obtaining the insurance policy.”
Conclusion
The Commission concluded that the Insurance Company failed to establish any misrepresentation or non-disclosure of material facts while obtaining the insurance policy. It also acknowledged the said policy being issued after due perusal of documents and inspection of the premises, and thus, further objections could not be raised regarding coverage under policy or nature of property as a stage when such structure was gutted in fire. The Commission confirmed that the Insurance Company was liable to indemnify the loss to the complainant.
[Bajaj Allianz General Insurance Co. Ltd v. Bhupender Gahlawat, First Appeal No. 70 of 2014, Order dated 10-11-2023]
Advocates who appeared in this case :
For Appellant: Advocate Suman Bagga
For Respondent: Advocate Tanishq Mehta
