JAGDISH SINGH Vs. NATIONAL INSURANCE CO LTD

JUDGEMENT

(1.) The complainant had got his cold-storage under construction insured with the opposite party Insurance Company for Rs. 20 lacs with effect from 4.5.1990 to 3rd of May, 1991. While the cold-storage was under construction and only roof remained to be built, as a result of a cyclonic typhoon on the 28th July, 1990 the building under construction collapsed completely. He estimated the damage to the tune of Rs. 10 lacs and lodged a claim on 4.7.1990.

(2.) The opposite party Insurance Company got the damaged property surveyed. The first spot survey was done in August, 1990 and the final loss survey was done in September, 1991 who recommended net assessed loss of Rs. 6,93,706/- considering that against the estimated cost of construction of Rs. 20 lacs construction work worth Rs. 13 lacs had been done. On 12th July, 1992 the opposite party-Insurance Company repudiated it liability. The complainant has also claimed Rs. 5 lacs as compensation for escalation in the cost of construction materials and for business loss due to the inordinate and unjustified delay in the settlement of his insurance claim.

(3.) The opposite party-Insurance Company in its reply to the complaint as also during the hearing stated that a fire policy 'A' had been issued on 4.5.1990. This was issued inadvertently. This fire policy 'A' can be issued only for insuring dwellings, officers, hotels, shops and small scale industries. Buildings under construction are covered by fire policy 'C. Though fire policy 'A' was issued inadvertently, the premium charged was that in respect of fire policy 'C. However, the premium charge in fire policy 'C for extra perils including typhoon, hurricane, tornado etc., was not charged. The mistake was discovered, however, in 1992 and an endorsement policy was issued to the complainant correcting the above mistake, i.e. substituting fire policy 'C' for fire policy 'A'. The opposite party-Insurance Company, however, refused to entertain the claim on the ground that perils on account of typhoon, hurricane, cyclone have not been covered presuming that the fire policy 'C' was effective from the very beginning It also assailed the claim for damages for Rs. 15 lacs on the ground that the claim of Rs. 15 lacs was highly exaggerated and inflated.