MARGAO: The National Consumer Disputes Redressal Commission (NCDRC) bench dismissed an appeal filed by an insurance company challenging the order of the State Consumer Disputes Redressal Commission (GSDRC).
NCDRC dismissed the insurance company’s objections concerning the classification of the property, which the company referred to as a ‘temporary shack’ rather than a ‘restaurant.’
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The bench ruled that such objections cannot be brought up at a later stage, when the entire structure was burned down in a fire.
NCDRC’s order was given in connection with the petition filed by Bhupender Gahlawat who had obtained a fire insurance policy from the insurance company for his shack-cum-restaurant at Velsao.
On May 15, 2012, when the insurance policy was in force, a major fire damaged the restaurant. A loss of Rs 17,63,265 was assessed by an independent surveyor, and a claim was submitted by the complainant to the insurance company.
However, the insurance company repudiated the claim on the ground that the complainant misrepresented some material facts and failed to disclose them to the insurance company while obtaining the policy.
Feeling aggrieved, the complainant had filed a consumer complaint with GSDRC, which had allowed the complaint and then subsequently directed the insurance company to disburse Rs 17,63,265 to the complainant along with Rs 50,000 in compensation and Rs 10,000 for legal costs.
Dissatisfied with this order, the insurance company filed an appeal with NCDRC.
The insurance company argued that while obtaining the policy, the complainant concealed the information that the restaurant’s property was allegedly illegal. This contention was based on a show cause notice that had been issued to the complainant regarding illegal construction on the concerned property. It further argued that the complainant had also allegedly concealed the fact that the local panchayat issued an order to demolish the restaurant, which was in the form of a ‘temporary shack’.
The insurance company further submitted that it would not have issued the policy if it had known that the Tourism Department permitted a ‘temporary shack’ and not a restaurant, typically.
However, NCDRC observed that the complainant had fulfilled all the formalities before erecting the temporary shack, which was being run as a restaurant. With regards to the contention of the show cause notice for demolition of the restaurant, NCDRC held that the insurance company failed to prove that a copy of the notice was presented to the complainant. All the complaints against the complainant regarding illegal construction were made after the insurance policy was obtained. Thus, NCDRC rejected the contention of the insurance company.
that the complainant had misrepresented material facts at the time of obtaining the fire policy. NCDRC also rejected the insurance company’s contention that the insured structure was just a temporary shack and not a typical restaurant. It held that such objections regarding the description of the property could not be raised at a later stage when the entire structure was burned down in a fire.
Consequently, the appeal was dismissed, and the impugned order of GSDRC was upheld.
