RAWAT BROTHERS Vs. ORIENTAL INSURANCE CO LTD

JUDGEMENT

(1.) The complainant, Rawat Brothers, a partnership firm, registered with the Registrar of Firms. The firm runs a hotel at Joshiyara in Uttarkashi. The hotel business was set up in the year 1985 by obtaining financial assistance from Uttar Pradesh Financial Corporation, the respondent No. 2, to the tune of Rs. 15 lakhs. This financial assistance was given by respondent pursuant to the direction given by the State of U.P. for the development of the backward areas. The hotel known as Hotel Baghirathi Palace is a large building having about 30 rooms and other facilities. The entire building and other articles are mortgaged/hypothecated in favour of the U.P. Financial Corporation.

(2.) The complainant, Rawat Brothers, had the hotel building insured under the policy known as Fire Policy-A from the Oriental Insurance Company Ltd. the respondent No. 1. The policy was effective from 21.9.1991 to 20.9.1992. The total insured value of the building and other fixtures came to Rs. 25,75,000/- out of which the value of the building of the hotel was Rs. 22,00,000/-, fixtures, fittings and electrical installations were insured at Rs. 3,25,000/-, furniture, etc. was insured for Rs. 50,000/-. Before the insurance proposal was finalised the representative of the Oriental Insurance Company visited the hotel site and satisfied himself about the value of the building and other articles which were yet to be insured.

(3.) On the night between October 19-20, 1991, a severe earthquake took place as a result of which large-scale devastation took place in the entire Uttarkashi District. Thousands of people were left homeless and almost all of the permanent constructions in the area were either razed to the ground or suffered severe damages. The hotel Baghirathi Palace also suffered extensive damages. It developed cracks and it became unfit for human occupation. It has been alleged that as a result of the earthquake not only the building was damaged but also the land in front of the building subsided. The subsistence is continuing and causing great danger to all the inmates of the hotel. The complainant reported the damage caused to its hotel to the Insurance Company. The Insurance Company deputed a Surveyor to go to the spot and make his survey of the building set up by the complainant.