Upholding orders passed by fora below, the national consumer disputes redressal commission (NCDRC) directed New India Assurance Co Ltd to pay Rs10 lakh, the entire sum assured in the policy, for a four-storey building damaged during an earthquake. As against the policy of Rs10 lakh, New India Assurance had offered Rs72,436 to the policyholder for the damage to his house.
In an order, Dr Inder Jit Singh (presiding member) from NCDRC says, "Both the fora below have concurrent findings on the assessment of loss and admissibility of the claim up to the sum insured. We do not find any reason to interfere with the findings of the state commission."
The case is related to captain Dip Bahadur Chettri from Darjeeling district and an insurance policy of Rs10 lakh he bought on 21 July 2005 for his four-storey building. During an earthquake of a magnitude of 6.9 on the Richter scale on 18 September 2011, his home was substantially damaged, making the building unfit for residing. He filed a claim with New India Assurance.
The surveyor appointed by the insurer assessed the value of the damaged building at Rs13.38 lakh as against the sum insured of Rs10 lakh. Considering it as an under-insurance policy, New India Assurance offered Rs72,436 to captain Chettri. He rejected it and filed a complaint before the Siliguri district consumer disputes redressal forum.
The district forum allowed the complaint. After considering the contentions of the insurance company, the forum concluded that the policy having been issued for Rs10 lakh, captain Chettri is entitled to this amount, even when the damage amount was much higher. It directed New India Assurance to pay Rs10 lakh, the sum assured, Rs5,000 as litigation cost and Rs10,000 towards mental torture with interest at 10%pa (per annum) if the money was not paid within 45 days to captain Chettri.
Aggrieved by the district forum order, New India Assurance filed an appeal before the West Bengal state consumer disputes redressal commission. While dismissing the appeal, the state commission imposed an additional cost of Rs25,000 payable to captain Chettri by the insurance company.
New India Assurance challenged the order before NCDRC.
The insurance company contended that it was a case of under-insurance. "District forum in its order has observed that damage amount assessed by a sub-assistant engineer at Darjeeling municipality is Rs32.12 lakh, the valuation of the building as per the surveyor's report was Rs13.38 lakh and surveyor assessed the amount payable as Rs72,438."
"The state commission failed to appreciate the record from a proper perspective and has gravely erred in passing the impugned order. The respondent (Capt Chettri) has made no effort to justify his claim and has not been able to bring on record any document or evidence to negate the assessment of the surveyor. The fora below failed to appreciate that the surveyor had a plausible conclusion after checking and examining the matter in detail. The survey report is an important piece of document and has to be given due weightage and consideration by the court. The state commission has committed a grave error in not following the set principle of law in this regard," New India Assurance contended.
It further argued that by applying the average clause, the surveyor assessed its liability at Rs1.12 lakh only. "The assessment was made after considering the depreciation value at 59.4%, i.e. total for 33 years from 1978 to 2011. The report was examined by the company, and after application of mind on survey report and terms and conditions of the insurance company, the claim was settled for Rs72,436."
The counsel for captain Chettri contended that the surveyor report is not binding on the insurer or the insured. "The ground raised by New India Assurance regarding the public works department (PWD) schedule for assessing the construction cost is unwarranted and misleading. Firstly, such contention was never raised by the insurance company before the district forum. Secondly, the state commission has aptly discarded the contention of assessing the construction cost as per the PWD schedule. Hence, the revision petition be dismissed being devoid of merits."
After hearing both sides, the NCDRC bench of Dr Singh observed that there is no clause in the policy for making depreciation at 59.4%, and the claim has to be settled based on specified terms and conditions of the policy, and none of the parties can deviate from the same.
"The state commission did not agree with the value of the building as calculated by the surveyor and observed the value of repairing cost as estimated by him was not in consonance with policy terms and conditions. The state commission also did not agree with the cost of construction of the house at Rs850, stating that it was without any basis. Further, the state commission disagreed with the estimates of the renovation based on the PWD schedule, stating that the general public cannot get such works done at PWD rates," the bench noted.
"We find no irregularity or material irregularity or jurisdictional error in the order of the state commission, hence, the same is upheld. Accordingly, the revision petition is dismissed," NCDRC says, while directing New India Assurance to pay Rs10 lakh, the sum assured along with the cost and compensation as mentioned by the fora below.
(Revision Petition No3365 of 2018 Date: 29 August 2023)