Skip to main content

Report of the surveyor forms the basis for settlement of the Insurance claim

In New India Assurance Co. Ltd. vs M/S. Jamia Hamdard, EPABX system installed at the office ofrespondent was insured under Fire & Special Perils Insurance Policy for a sum insured of Rs.15,00,000/-. On 02.10.2004, it was reported that the said EPABX went out of order since 2.10.2004 and was claimed to be total loss. The surveyors inspected the affected machine on 28.10.2004.  A claim for Rs.9,24,000/- was submitted by respondent to the surveyors.  The Service Engineers of the insured machine had confirmed that the damage has taken place to the system cards due to very high voltage due to lightning and the surveyor agreed with the views of the Service Engineers.   In view of the exclusion being applicable, the claim was not within the scope of the policy and was repudiated by letter dated 10.2.2005. The respondent complained before the District Forum which allowed the claim  directed the petitioner to pay to the respondent Rs.15 lacs with compensation of Rs.5,00,000/- for mental agony, harassment and deficiency of service and Rs.20,000/- costs. The appeal of the petitioner was rejected by the State Forum.

The petitioner appeal before the National Forum under several grounds:-

1) No claim can be allowed for more amount than the claim filed with the insurance company. The original claim was for Rs.9,24,000/-, however, the District Forum has allowed the claim for the total sum assured of Rupees 15 lacs and the State Commission has also confirmed the same.
2) Exclusion clause number 7 of the general exclusions of the policy is attracted in the present case as the cards were damaged due to direct impact of electricity high voltage caused by lightning. No other component has been damaged which could have been paid for. 
3) No reasoning has been given for not accepting the report of the surveyor. 
4) The forum below have directed compensation for mental agony and harassment but as per the judgment of Hon'ble Supreme Court in the case of Sikka Papers Limited Vs. National Insurance Company Ltd. & Ors. , it has been decided that no such compensation is payable to any institution.

The NCDRC held that :-

1) Lightning is covered under the policy without any qualifications attached to this  peril. In the General Exclusion Clause No. 7, though the component damaged with fire on account of lightening is also excluded, however, in the present case, there was no fire on account of lightning and therefore the component damaged from lightning is not excluded due to this clause. From the above analysis, it is clear that the damage to the cards is covered under the policy.
2) As per judgment of the Supreme Court in Sri Venkateswara Syndicate vs. Oriental Insurance Company Limited & Anr and  Sikka Papers Limited Vs. National Insurance Company Limited, the report of the surveyor forms the basis for settlement of the Insurance claim unless there are cogent reasons for not accepting the same. Moreover, when the claim submitted before the surveyor was only for rupees 9,24,000/-, there is no basis for granting a compensation of Rupees 15 lakhs under the insurance policy. 
3) AN institution is not entitled to get any compensation for harassment and mental agony as laid down by the Hon'ble Supreme Court in Sikka papers Limited.

Comments

Post a Comment

Most viewed this month

Michigan House Approves 'Right-to-Work' Bill

Amid raucous protests, the Republican-led Michigan House approved a contentious right-to-work bill on  Dec 11 limiting unions' strength in the state where the (Union for American Auto Workers)  UAW was born. The chamber passed a measure dealing with public-sector workers 58-51 as protesters shouted "shame on you" from the gallery and huge crowds of union backers massed in the state Capitol halls and on the grounds. Backers said a right-to-work law would bring more jobs to Michigan and give workers freedom. Critics said it would drive down wages and benefits. The right-to-work movement has been growing in the country since Wisconsin fought a similar battle with unions over two years ago. Michigan would become the 24th state to enact right-to-work provisions, and passage of the legislation would deal a stunning blow to the power of organized labor in the United States. Wisconsin Republicans in 2011 passed laws severely restricting the power of public s...
Post a Comment
Read more

Power to re-assess by AO and disclosure of material facts

In AVTEC Limited v. DCIT, the division of the Delhi High Court held that AO is bound to look at the litigation history of the assessee and cannot expect the assessee to inform him.  In the instant case, the Petitioner, engaged in the business of manufacturing and selling of automobiles, power trains and power shift transmissions along with their components, approached the High Court challenging the re-assessment order passed against them. For the year 2006-07, the Petitioner entered into a Business Transfer Agreement with Hindustan Motors Ltd, as per which, the Petitioner took over the business from HML.  While filing income tax return for the said year, the petitioner claimed the expenses incurred in respect of professional and legal charges for the purpose of taking over of the business from HML as capital expenses and claimed depreciation. Article referred: http://www.taxscan.in/assessing-officer-bound-look-litigation-history-assessee-delhi-hc-read-order/8087/
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more