The consumer complaint of M/s. Jagdish Woollen\'s (P) Ltd., Through Its Director, Shri Raj Kumar Matta v/s New India Assurance Company Ltd., Through Its Authorized Representative, Delhi Regional Office-I filed under Section 21 of the Consumer Protection Act, 1986, concerning the indemnification of an insurance claim following a fire. The central issues revolve around the calculation of the claim amount, the validity of surveyor reports, and the application of reinstatement value in insurance settlements.

The Complainant, a private limited company, sought indemnification for losses sustained due to a fire at its insured premises. The insured value of the premises and goods was Rs. 3.10 crores, and the initial claim was for Rs. 1,03,83,335. The insurer paid Rs. 40,00,000. Subsequently, an indemnification amount of Rs. 44,66,476 was deposited without a discharge voucher. The Complainant, as per IRDA guidelines, engaged an independent licensed surveyor, who was also an empanelled surveyor of the Respondent insurance company.

 

 

The Complainant approached the National Consumer Disputes Redressal Commission, seeking compensation for the actual loss, release of the remaining claim amount, compensation for unfair trade practices, punitive damages, and litigation expenses. The Complainant argued that the report of the independent surveyor should be considered, while the insurance company's surveyor report should be set aside, alleging it was biased. The Complainant contended that the insurance policy was on a Reinstatement Value Basis, but the insurer's surveyor assessed the loss on a depreciated basis. They cited relevant judgments, including Oswal Plastic Industries v. Manager, Legal Deptt. N.A.I.C.O Ltd., where the Supreme Court ruled that the insurance company should pay the reinstatement value, not the depreciated value. The Complainant also argued that the claim settlement was delayed, and a lesser amount was paid without issuing a discharge voucher.

The Respondent submitted that the Complainant failed to provide necessary repair/replacement bills and payment proof, which are prerequisites for Reinstatement Value Basis assessment. They argued that reasonable adjustments were made towards costs and taxes. The Respondent claimed the Complainant obtained the second surveyor report belatedly and that this surveyor did not conduct a physical examination of the site. The Respondent relied on judgments to contend that the Complainant was not a consumer under the Consumer Protection Act, as the policy was for commercial loss indemnification and the claim amount would be used for profit generation.

The Commission addressed the following key issues:

Consumer Status: The Commission determined that the Complainant company qualified as a 'consumer' under the Consumer Protection Act, as the insurance policy was to indemnify losses to its premises and goods from fire, citing National Insurance Company Limited v. Harsolia Motors and Ors.

Surveyor Appointment: The Commission found that the appointment of the surveyor by the Respondent insurance company was valid, as it was done within 72 hours of the intimation of loss, adhering to IRDA regulations.

Surveyor Reports: The Commission acknowledged that while a surveyor's report is a basis for claim settlement, it is not binding. In this case, the insurer's surveyor submitted the report after a delay, and the Respondent admitted that the claim was calculated based on market value and physical examination, with depreciation applied, which was contrary to the Reinstatement Value Basis of the policy.

Reinstatement Value: The Commission emphasized that since the policy was issued on a Reinstatement Value Basis, the claim should be calculated accordingly, not on a depreciated value basis, citing Oswal Plastic Industries v. Manager, Legal Deptt. N.A.I.C.O Ltd.

The Commission directed the Complainant to furnish the necessary documents for calculating the claim amount on a reinstatement value basis. The Respondent insurance company was directed to recalculate the claim amount based on the provided documents and pay the additional claim amount within one month from the order. The depreciation applied in the surveyor's report was to be removed.