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2010 DIGILAW 40 (JK)

National Insurance Co. Ltd. v. Gh. Nabi Shalla

2010-02-03

MOHAMMAD YAQOOB MIR

body2010
1. Grievance projected against the order passed on 29.1.2000 by Divisional Consumer Protection Forum, Srinagar and also against the order dated 31.5.2000 passed by J&K State Consumer Protection Commission, is that the loss suffered by the respondent No.1 was not covered by the policy of insurance and in alternative the depreciation as was recommended by the surveyor should have been accepted. 2. The factual matrix is required to be precisely noticed as shall be unavoidable for proper adjudication of the controversy. 3. The residential house of the respondent No.1 (complainant) situated at Bemina Srinagar was insured with the petitioner as is substantiated by the insurance policy bearing No.421001/3601279/96-97 which was effective for a period of 12 months commencing from 11.12.1996 to 10.12.1997. Within the said period during the intervening night of 8/9th February, 1997, un-identified gunmen entered into the said house of the complainant. All the members of family of the complainant were confined in one room and threatened to death in case any alarm is raised. In the process household goods including cupboards were ransacked and valuables including domestic items were robbed off. In this connection case was registered as crime No.39 of 1997 P/S Parimpora for commission of offences punishable under Sections 357, 385, 166 & 342 RPC. 4. The complainant reported the matter to the petitioner insurance company who deputed a surveyor. The surveyor, namely, Mushtaq Ahmad Bacha, after conducting proper survey has prepared a detailed report dated 28.5.1998 wherein he has recorded that the cause of loss seems to be militant/terrorist related activity, a peril covered under the purview of subject insurance policy and has further recorded in his opinion that insureds claim qualifies for admission and indemnification as per the conditions laid down in the contract of insurance. The surveyor has in detail mentioned the articles as got damaged or lost which include jewelry and cash but the loss on the said counts amounting to Rs.3,14,000 being not covered by the insurance policy has not been allowed. However, rest of loss to the articles has been assessed at Rs.105930/ but depreciation at the rate of 50% amounting to Rs.56,730 has been deducted and as a result thereof the net loss has been assessed at Rs.56,730. 5. However, rest of loss to the articles has been assessed at Rs.105930/ but depreciation at the rate of 50% amounting to Rs.56,730 has been deducted and as a result thereof the net loss has been assessed at Rs.56,730. 5. The complainant filed complaint before Divisional Consumer Protection Forum claiming Rs.1,25,420/ along with interest @ 18% from the date of loss, in addition has claimed compensation of Rs.50,000 on account of deficiency in service and Rs.5000/ as litigation expenses and has added that depreciation recommendation by the surveyor is untenable as depreciation should have been allowed from 10 to 20% not 50%. 6. The petitioner company before the Divisional Forum had stated that the insurance company is prepared to indemnify the complainant to the extent recommended by the surveyor. 7. The Divisional Consumer Forum has recorded two issues for adjudication i.e.: (1) Whether risk is covered by policy of insurance; and (2) Whether depreciation recommended by surveyor has been properly worked out. 8. It is contended by the learned counsel for the petitioner is that the loss suffered by the complainant falls within the category of burglary, housebreaking (including larceny or theft) i.e. section II of the insurance policy said risk is not covered by the insurance policy. 9. This contention though has not been raised before the Divisional Consumer Protection Forum but has been raised before J&K State Consumer Protection Commission. Learned Commission while repelling the contention has opined that on examination of the insurance policy it is found that the policy covers the terrorist risk. Learned Commission has further observed that the report of the surveyor is clearly suggestive of the fact that militants covered with masks had entered the house of the complainant and on gun point had caused loss. Finally the State Commission has up-held the judgment of the Divisional Forum. 10. The opinion framed by the State Commission is absolutely in accordance with law and it does not suffer from any illegality. 11. It shall be quite apt to quote relevant portion of the insurance policy under the heading "BUILDING AND CONTENTS: "The Company will indemnify the insured in respect of loss or damage to the Contents/Building whilst contained in the insured premises by: (a) ....... (b) ....... (c) ....... (d) Riot, strike of Malicious Act and terrorism". 12. 11. It shall be quite apt to quote relevant portion of the insurance policy under the heading "BUILDING AND CONTENTS: "The Company will indemnify the insured in respect of loss or damage to the Contents/Building whilst contained in the insured premises by: (a) ....... (b) ....... (c) ....... (d) Riot, strike of Malicious Act and terrorism". 12. The loss suffered by the respondent-complainant is admitted to have been suffered due to terrorism i.e. at gun point un-identified persons covering their faces with masks have entered the house of the respondent-complainant confining the family members in one room and then after ransacking have run away with valuable items which would clearly indicate that the complainant and his family members were terrorized by the militants and as a result thereof made complainant to suffer losses, details of which are given in the report of surveyor. 13. The relevant portion of the wording of insurance policy as referred above clearly indicates that the petitioner company has to indemnify the insured in respect of the loss or damage to the contents/building whilst contained in the insured premises by `terrorism. The word `terrorism as occur in clause (d) referred to above would clearly take into its sweep the acts of un-identified militants who while entering into the insured premises have confined the complainant and members of his family in one room. If the same is not termed to be `terrorism then what else can be termed to be so. The complainant and family had been reduced to a state of terror. They have been terrified and intimidated and finally the said gunmen succeeded to take the valuables after destroying certain articles as were available in the insured house. 14. The second contention raised to the effect that the depreciation of 50% as recommended by the surveyor is cogent, has been correctly rejected both by the learned Divisional Forum as well as learned State Commission. The surveyor in an arbitrary manner without any basis and unreasonably has recommended 50% depreciation. No yardstick has been applied. The respondent-complainant has suffered huge loss which include jewelry items worth lacs as were un-covered by the policy. The other items which were covered and assessed could not be reduced to 50% by allowing 50% depreciation. Though depreciation is permissible but same shall be reasonable and must not be based on surmises. No yardstick has been applied. The respondent-complainant has suffered huge loss which include jewelry items worth lacs as were un-covered by the policy. The other items which were covered and assessed could not be reduced to 50% by allowing 50% depreciation. Though depreciation is permissible but same shall be reasonable and must not be based on surmises. Depreciation of 20% as accepted by the Divisional Forum and maintained by the State Commission is not only reasonable but is also appropriate, therefore, this contention also fails. 15. It is further contended by learned counsel that interest granted @ 18% is absolutely on higher side and interest was allowable only with effect from the date of filing of claim or at least three months after receiving the surveyors reports. 16. This contention is misplaced as the learned Divisional Forum has granted interest @ 10% only and has granted it with effect from 1.9.1997 i.e. seven months after the occurrence. The period of seven months has been reckoned to be a sufficient period for insurance company to settle the claim, therefore, on this count also no interference is warranted. 17. Cumulative effect of the afore-stated discussion is that the petition fails so is dismissed.