UMEDILAL AGGARWAL Vs. UNITED INDIA ASSURANCE CO LTD

JUDGEMENT

(1.) THESE two appeals which are in the nature of cross appeals have been filed against the order of the State Commission, Rajasthan dated 15.3.89 in complaint case number 4 of 1988. The Appellant in Appeal No. 3 of 1989 was the Complainant before the State Commission and the Opposite Party in the said complaint - the United India Assurance Company Ltd. - is the Appellant in Appeal number 4 of 1989. The complaint pertained to the delay on the part of the insurance company in settling a claim for compensation for the loss of goods by fire. The Complainant who had a shop by name Mangla Textiles, Alwar had insured his stock-in-trade in the said shop with the United India Assurance under a Policy dated 28.1.1986 in respect of which cover note No. 698765 dated 22.12.1986 had been issued by the insurance company. On September 16,1987 there was a fire in the premises of the shop as a result of which there was a considerable loss caused to the textile goods stocked in the shop. Immediately after the fire incident, a claim was made by the insured before the insurance company for indemnification of the loss caused to him by the fire. Though, a survey was done and the damage was assessed promptly within about a month after the matter was referred to the insurance company, the insurance company did not act upon that survey report but caused a protracted investigation to be conducted and two more subsequent surveys also were got done. Even after all that, the claim of the insured was not settled by the insurance company for a period of nearly thirteen months, Feeling aggrieved by the inordinate delay on the part of the insurer in settling the claim the insured approached the State Commission with the complaint praying for orders being passed against the insurer for payment of the value of the goods destroyed together with damages for the delay in settling the claim.

(2.) THE insurance company took as many as six preliminary objections before the State Commission which are all found by the commission to be devoid of merits. After carefully examining all the materials placed before it the State Commission came to the conclusion that the loss caused to the insured (Complainant) on account of the fire accident could reasonably be estimated at Rs. 3,86,562.10. Taking into account all the acts and circumstances of the case, the State Commission was of the view that in addition to the aforesaid amount the Complainant is also entitled to be paid a further sum of Rs. 13,438.00 as compensation for the failure of the insurer to settle the claim within a reasonable time. In the result, the insurance company (Appellant in Appeal No. 4 of 1989) was directed to pay to the Complainant, a sum of rupees four lakhs in all. It is against this order that the parties have come up before us, the contention put forward by the Appellant in Appeal No. 3 of 1989, who was the Complainant before the State Commission being that he should have been allowed reasonable interest for the entire period of about 12 months during which there was non-settlement of his claim by the insurance company, and the plea taken by the insurance company in its Appeal (First Appeal No. 4 of 1989), being that a contract of insurance, particularly the process of settlement of claims as distinct from the concluding of the contract of coverage does not fall within the purview of the Consumer Protection Act.

(3.) ANOTHER contention put forward by Mr. Malhotra on behalf of the insurance company was that the State Commission should have accepted the estimate of loss as assessed by the insurance company at Rs. 2,05,701.00. We are unable to accede to this contention. The State Commission has set out valid and convincing reasons for assessing the loss suffered by the insured at Rs. 3,86,562.00.