PER RAJESH K. ARYA, MEMBER
The case of the complainant, which is a reputed University of India and providing education to students in different spheres and disciplines, is that it had been availing the services of the opposite parties by taking General Insurance policy on yearly basis by paying the required consideration amount to opposite party No.1 covering the property of different departments, hostels and secretariat building (Administrative Block) of the University against the risk of Fire and Burglary, which included furniture, fixtures, books, periodical, fans, ACs computers, coolers, almirahs, UPS and printers etc. For past more than 20 years, the said policy was being renewed. However, in the year 2015-16, one new official, namely, Sunil Gandhi, Senior Branch Manager of Opposite Party No.1 came and simply renewed the earlier policy for the year 2014-15 (Annexure C-1) and issued policy for the year 2015-2016 (Annexure C-2) stating that the sum insured, which included earlier for secretariat building and furniture and fixtures, to only on "Building Super Structure". The policy was again renewed in the month of May by opposite party No.1 and Policy No.35010111160100000042 dated 17.05.2016 was issued covering risk detailed as per list for item No.1 to 25 for a sum of Rs.1,06,70,27,356/-, which included covering of property of different departments, hostels and secretariat building (Administrative Block) of the University against the risk of Fire and Burglary, which included furniture, fixtures, books, periodical, fans, ACs computers, coolers, almirahs, UPS and printers etc. Premium paid for renewal was Rs.2,44,349/-.
2. Unfortunately, on 14.05.2017, a fire incident took place in the Secretariat building (Administrative Block) of the complainant university. DDR was lodged by the police and opposite parties were also informed and requested to assess the loss. All relevant documents and information were provided by the complainant to the Surveyor appointed by the opposite parties to assess the loss. There was no break in the continuity of the policy, in question.
3. However, it was revealed that at the time of renewal of policy effective from 21.05.2015, the opposite parties committed a mistake while recording the nature of assets covered in such policy. While issuing policy for the year 2015-2016, the opposite parties bifurcated the total insured value on their own and put the insured value of secretarial building under the category "Building-super structure". It was informed by the opposite parties that such a mistake might have happened because in that years 2015-2016, a newly joined official had issued the policy document. It was also discussed that since the said policy is governed by clause 3 i.e. "Designation of property clause" therefore, the claim w.r.t. assets i.e. furniture, fixtures, computers, electrical appliances etc. shall be considered in the same manner as was covered in the insurance policies of the period prior to the year 2015-2016 because the policy of 2015-2016 was just a renewal and no instructions were given to opposite parties to make any changes in the coverage of assets.
4. According to the complainant, the opposite parties through their Surveyor vide email dated 26.10.2017 (Annexure C-10) informed the complainant that its claim had been assessed to be 'NIL'.
5. The complainant took the policy on the basis of depreciated value of assets and accordingly, filed the claim of insurance as per the depreciated value of damaged assets and not on the full value of assets, as detailed in Para 14 of the complaint to the extent of Rs.43,67,668/- as against the original cost of Rs.48,59,610/-. However, the claim of the complainant was settled as 'No claim' by opposite party No.1
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vide letter dated 07.11.2017 (Annexure C-12).
6. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also, indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Parties to pay the amount of claim of Rs.43,67,668/- on depreciated value of damaged assets; award Rs.30 Lakhs as compensation for harassment and mental agony besides Rs.55,000/- as litigation expenses.
7. On the other hand, the opposite parties in their written statement stated that the complainant is not taking the general insurance policy but taking standard fire and special perils policy which is a specific policy. It was further stated that every policy has different terms and conditions and every policy issued by the company is a specific policy covering articles as mentioned in the policy and nothing more nothing less. It was further stated that the insurance policy was issued to the complainant with full knowledge and every condition of the policy was explained and copy of the same was also given alongwith the policy. It was denied that policy for the year 2015-2016 was not issued under the instructions and knowledge of the complainant. It was further stated that the complainant university failed to provide the documents as desired by the Surveyor. It was further stated that the complainant university was duly informed about the decision taken by the opposite parties on the basis of the surveyor report and as per the terms and conditions of the insurance policy. It was further stated that the claim was repudiated as per the reasons mentioned in Annexures R-1 and R-2, which was as per the terms and conditions of the insurance policy. It was further stated that the Opposite Parties were neither deficient, in rendering service nor did they indulge into unfair trade practice. The remaining averments, made in the complaint, were denied.
8. The parties led evidence in support of their case.
9. We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
10. The factum of the policy, in question, renewed from time to time on yearly basis; payment of premium against renewal of the said policy and incident of fire in the Secretariat building (Administrative Block) of the complainant university on 14.05.2017 is not in dispute.
11. The claim filed by the complainant to indemnify the loss, which occurred in the said fire incident, was repudiated by the opposite parties vide letter dated 07.11.2017 (Annexure C-12) on the ground that the loss fell within the compulsory policy excess as per policy terms and conditions.
12. The questions that fall for consideration by us are as under:-
(i) Whether the policy, in question, under whose terms and conditions, the claim was settled as 'No Claim' was a fresh policy or was renewal of earlier policy, which was being renewed for the last more than 20 years?
(ii) Whether the claim of the complainant falls under compulsory excess clause i.e. Clause No.13(a)(3) of the Policy, in question, or not?
13. Qua the first issue, when we raised a simple query to the Counsel for the opposite parties whether it is the same policy, which is being renewed for the last 20 years, he answered in the affirmative. It was also admitted that no fresh proposal was got filled from the complainant university by the opposite parties for issuing the policy for the year 2016-2017 or prior thereto. The policy is being renewed on yearly basis.
14. Perusal of policy for the year 2014-2015 (Annexure C-1), which was being renewed for the last more than 20 years, shows that it was a Standard Fire and Special Perils Policy covering furniture, fittings, fixtures and other contents including F/F, Books, AC, Computer, compound wall, building plinth and foundation etc. and total premium paid was Rs.1,63,866/- against total sum insured of Rs.85,28,60,483/-.
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The said policy was again renewed for the period from 21.05.2015 to 20.05.2016 (Annexure C-2) by paying a premium of Rs.1,76,371/-. This time, as is evident from page 26 of the file, the only mistake that the opposite parties committed that they bifurcated the sum insured as under:-
Buildings-superstructure - Rs. 3,76,64,700.00
On Furniture, Fittings, fixtures - Rs.94,33,75,119.00
and other contents.
15. The policy, in question, was again renewed for next year i.e. 2016-2017 by continuing the same mistake as was committed in the previous policy for the year 2015-2016. This time the sum insured for "On Building-superstructure" was Rs.3,76,64,700.00 and "On furniture, Fittings, Fixtures and other contents"
was Rs.1,02,93,62,656.00.
16. Once policy is the same having same terms and conditions and is being renewed on yearly basis, the Insurance Company cannot at its own alter, amend or change the terms and conditions or the property description of the articles insured thereunder till such time, any instruction is issued by the insured. In their reply, the opposite parties did not say anything qua the mistake which was committed by their person while renewing the policy for the year 2015-2016 and rather in a very casual manner denied the allegations. The opposite parties cannot take benefit of their own wrong.
17. Not only above, the plea of the opposite parties that the complainant university did not supply the required documents/information, in our view, is an afterthought. It is on record that all the requisite documents and information, sought for by the Surveyor or the opposite parties, were duly furnished by the complainant university vide Annexure C-9. The complainant university also furnished total break up of insured value of Rs.3,76,64,700/- w.r.t. Secretariat Building i.e. Administrative Block covered under the policy, in question, on Net Depreciated Value as on 31.02.2016, to the opposite parties (Annexure C-9/2).
18. However, the claim raised by the complainant university qua the damaged assets in the incident of fire was worked out taking into consideration the depreciated cost and the same is tabulated in Para No.14 of the complaint at page 7, as under:-
| Sr. No. |
Description of damaged assets |
Original Cost (Rs.) |
Depreciated Cost (Rs.) |
| 1. |
Furniture |
6,78,313.00 |
3,73,072.00 |
| 2. |
Electrical and sub mains cables |
5,15,350.00 |
2,88,745.00 |
| 3. |
Computer and peripherals |
1,54,721.00 |
44,770.00 |
| 4. |
Printers and photocopiers |
2,64,256.00 |
83,947.00 |
5. Ductables coolers and deserts coolers. 2,29,458.00 1,94,924.00
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| 6. |
Split AC |
1,39,900.00 |
1,25,215.00 |
| 7. |
Work stations |
28,77,612.00 |
20,14,328.00 |
| 8. |
Building |
Not known |
*12,42,667.00 |
Total 48,59,610.00 43,67,668.00
(* Total insured value of Administrative building (Total area 130041 sq. ft.) = Rs.2,85,15,566/- Damaged area = 5667 sq. ft..
Insured value of damaged area = (5667/130041) x 2,85,15,566/-) = 12,42,667/-)
19. The complainant university has very fairly and genuinely calculated the depreciated cost of the assets, which were damaged in the incident of fire, to which the Counsel for the opposite party did not raise any serious objection. Annexure C-9/3 colly., are the Fire Insurance Claim Forms, wherein the complainant university has claimed only the above depreciated values for the damaged assets. Annexure C-9/7 is the detail of capitalization qua the above assets justifying the figures. The next document (Annexure C-9/8) is the estimate for retrofitting work at Accounts branch, Admin Block of the complainant university estimating an expenditure of Rs.32,88,000/-. Exhaustive evidence has been brought on record by the complainant university to prove that damage caused, which has also taken care of by the Surveyor in its Survey Report dated 06.11.2017 (Annexure R-3) under the heading "Observations at site". However, the view expressed by the Surveyor under "Admissibility" of the claim that the policy covers only the building of the secretarial block is and not the computers, office equipment, electrical installations, furniture fixture and fittings is not correct. The Surveyor considered the claim only qua the building to the tune of Rs.36,78,108.00 and other assets such as computers, office equipment, electrical installations, furniture fixture and fittings etc. are not included. As already observed by us in the preceding paras, the policy taken in 1997 is being renewed by the opposite parties every year without any break and it is the same policy, wherein all the aforesaid assets are also covered. The Surveyor has also arbitrarily recommended the net loss of the insured after adjusting depreciation, salvage and under insurance to the tune of Rs.3,11,722.00 and then put the excess clause, under which, the insured was to bear an excess of Rs.5 Lakhs. Thus, findings and recommendation of the Surveyor to close the claim as "No Claim" is totally against the terms and conditions of the policy, in question. The deficiency in rendering service on the part of the opposite parties is writ large as firstly they committed error while renewing the policy for the year 2015-2016 & then 2016-2017 and thereafter repudiating the genuine claim of the complainant university. It may be stated here that in last more than 20 years, no claim was ever raised by the complainant university on account of fire incident and when raised, the same was arbitrarily repudiated. The opposite parties are liable to indemnify the claim on the basis of depreciated value, which the complainant university has rightly claimed in its complaint to the tune of Rs.43,67,668/-.
20. It is ironical that Insurance Company charges hefty amounts as insurance premium and whenever claim is raised in case of any eventuality, fire etc., they try to find one excuse or the other to deny and repudiate the claim on arbitrary grounds. By repudiating the genuine claim of the complainant university, the opposite parties have also indulged into unfair trade practice, for which, the complainant university is entitled to exemplary cost. In our considered opinion, grant of an amount of Rs.5,00,000/- as exemplary cost would serve the ends of justice.
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21. No other point was urged by the Counsel for the parties.
22. For the reasons recorded above, the complaint is partly accepted, with costs and the opposite parties are, jointly and severally, held liable and directed as under:-
To pay an amount of Rs.43,67,668/- to the complainant university
alongwith interest @9% per annum (simple) from the date of repudiation of the claim i.e. 07.11.2017, within a period of 45 days from the date of
(i) receipt of a certified copy of this order, failing which, the said amount shall carry penal interest @11% p.a. (simple), instead of 9% p.a. (simple), from the date of default i.e. w.e.f expiry of period of 45 days, till realization.
Pay compensatory/exemplary cost to the tune of Rs.5,00,000/- on account of deficiency in service and unfair trade practice and Rs.33,000/- as litigation costs to the complainant university, within a period of 45 days (ii)
from the date of receipt of a certified copy of the order, failing which, the said amounts shall carry interest @9% p.a. (simple), from the date of filing the complaint till realization.
23. Certified Copies of this order be sent to the parties, free of charge.
24. The file be consigned to Record Room, after completion. Pronounced.
25.04.2019.
[JUSTICE JASBIR SINGH (RETD.)]
PRESIDENT
(PADMA PANDEY)
MEMBER
(RAJESH K. ARYA)
MEMBER
Ad
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