LAWS(NCD)-2004-9-71

JASVINDER SINGH Vs. NEW INDIA ASSURANCE CO LTD

Decided On September 15, 2004
JASVINDER SINGH Appellant
V/S
NEW INDIA ASSURANCE CO. LTD. Respondents

JUDGEMENT

(1.) M/s. Kayasens, Surveyors, appointed by the Insurance Company, submitted their elaborate report dated 18.2.2000 and assessed the net loss at Rs. 49,79,539/-. Yet, the Insurance Company, for the reasons best known to it, failed to pay the said amount despite recommendation by the Regional Office. It is contended that there was unfair trade practice by the Insurance Company. We, for the reasons stated below, hold that deduction was totally unjustified and arbitrary.

(2.) The aforesaid conclusion is arrived at by considering the fact that the complainant has taken an insurance policy in respect of plant and machinery, building and stocks of raw materials including stocks in process in connection with business of manufacturing various kinds of ply-boards, block-boards, etc. For such manufacturing activity, the complainant is required to have raw materials in the form of wood which is purchased locally and also maintain semi-finished stocks. It is contended that fire occurred at his premises on 12.10.1999 and that for the assessed loss of Rs. 92,23,490/-, the Insurance Company paid only a sum of Rs. 35,35,976/-. This delayed payment was made after a lapse of one year. It is, therefore, submitted that there was an unfair trade practice indulged in by the Insurance Company. The complainant has, therfore, prayed that the Insurance Company be directed to pay: (1) Shortfall of the claim of Rs. 56,87,514.22 (Rupees fifty-six lakhs eighty-seven thousand five hundred fourteen and twenty-two paise only). (2) Rs. 75,00,000/- (Rupees seventy five lakhs only) for the loss of business, delay in settlement of claim, undue expenses, compensation for the trauma, misery, pain, dismay caused to the complainant. (3) That is, total claim is for a sum of Rs. 1,31,87,614/- with interest @ 20% per annum till the date of payment.

(3.) By a registered letter dated 6th September, 2000, the Insurance Company informed the complainant that Competent Authority has agreed to approve the following claims on the basis of coverage under respective policies: (A) Loss approved for building and/or sheds covered vide policy No. 11/7452 Rs. 10,78,238.50 Less pro-rata 'Re-instatement of sum insured for the period w.e.f. 12.10.1999 to 7.8.2000. 5% S. Tax included Rs. 5,144.00 Total Rs. 10,73,094.50 (B) Loss approved for plant and machinery covered vide policy No. 11/7155 Rs. 5,59,084.32 Less pro-rata "Re-instatement of (C) Loss approved for stocks covered vide policy No. 11/7362 Rs. 19,26,663.48 Less pro-rata "Re-instatement of sum insured premium for the period w.e.f. 12.10.1999 to 24.4.2000 Rs. 12,204.00 Total Rs. 19,14,459.48 Total A+B+C Rs. 35,45,976.30 Less Excess clause as per Policy Rs. 10,000.00 Net amount payable Rs. 35,35,976.00 Before releasing the payment we would like you to return the Discharge Voucher, duly signed by you, enclosed herewith in duplicate.