HOTEL SARA Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) THESE two appeals arise from the same award of the J&K Consumer Protection Commission (hereinafter referred to as 'the Commission) dated 5 June 2002 made in complaint no.92/1999 filed by Hotel Sara through its proprietor, Ms. Jehan Sara Rashid.

(2.) THE complainant -claimant is in appeal insofar as the Commission did not allow her claim for an amount beyond the sum of Rs. 4,99,500.00 for which a cheque was handed over by the Opposite Party, Insurance Company, to the Financial Corporation (the claimants financier) in course of the proceeding before the Commission. The Insurance Company has filed the appeal against the imposition of interest (@ of 9%) for the delay in making payment of the settlement amount.

(3.) THE complainant -claimant made a complaint before the Commission in regard to non -payment of the assured amount under the insurance policy taken by her from the Insurance Company with respect to her hotel building at Aharabal. The case of the complainant -claimant was that she had a big hotel at Aharabal that consisted of two separate complexes, namely, A & B. It was further her case that complex A was constructed from her own funds and it was commissioned in the year 1987. Later, she wanted to expand the hotel by constructing another building complex for which she approached the State Financial Corporation which sanctioned her loan of Rs. 16.58 lakhs on 23 July 1988. The construction of the building of complex B, with the financial assistance received from the Corporation, was started but soon thereafter the State was affected by insurgency and militancy and in those conditions the construction of complex B remained incomplete. It was further stated by the complainant that she had taken two insurance policies one in respect of complex A exclusively in her own name and the other for complex B jointly with the financier - - for a sum of Rs. 11,60,000.00 for which the amount of annual premium was Rs.2320.00. The premium amounts were duly paid. The complainant further stated that the hotel buildings covered by the insurance policies were in the occupation of security forces. On 30 November, 1996 the security forces vacated the hotel premises and it came under the watch and guard of a chowkidar employed by the complainant. Within a week, however, the militants set the hotel buildings on fire resulting in their complete destruction. The complainant lodged an FIR and also submitted its claim under the insurance policies before the Opposite Party the Insurance Company. The Insurance Company first deputed one Irfan Ahmad, surveyor, for preliminary survey. After that, one Omkar Pajnu was appointed surveyor to assess the loss. He assessed the loss at Rs.6,00,000.00, reporting that there was total loss of the building. The complainant requested the Insurance Company it, payment in terms of the report of the surveyor. No payment was, however, made and the Insurance Company appointed another investigator of which no information was given to the complainant. As net claim remained unsettled for a long time, the complainant finally came to the Commission and filed the complaint. The Insurance Company admitted before the Commission that the occurrence of arson had taken place in which the hotel building of the complainant was damaged. It, however, completely denied the claim of the complainant that there were two separate buildings, complexes A and B; according to the Opposite. Party, there was only one building in which the complainant ran her hotel under the name and style of Hotel Sara and the building was constructed by taking loan from the Financial Corporation. The hotel was financed by State Financial Corporation in regard to which the Insurance Company had issued the policy in question. The Insurance Company also admitted the appointment of Irfan Alam as preliminary surveyor and of Omkar Pajnu as the assessor. It was stated that Omkar Pajnu assessed the loss at Rs. 5,92,441.00. It was further stated that later the Insurance Company deputed one G.M. Bhat for re -assessment who assessed the loss at Rs. 5,52,452.00. It was further the case of the Insurance Company that later, on the basis of negotiations, the complainant had agreed to accept the sum of Rs. 4,99,500.00 in full and final settlement of her claim arising from the episode of arson and hence, she was not entitled to pay any amount in excess of that sum.