- (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 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 Company 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 were 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 facts 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/-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. After giving our anxious consideration to the arguments advanced by both sides, we have come to the conclusion that the decision of the State Commission is perfectly just and correct and deserves to be upheld and these appeals have only to be dismissed. We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the insurer to settle the claim of the insured within a reasonable time and the prayer for the grant of compensation in respect of such delay will not fall within the jurisdiction of the Redressal Forums constituted under the Consumer Protection Act. The provision of facilities in connection with insurance has been specifically included within the scope of the expression "service" by the definition of the said word contained in the Section 2 (l) (o) of the Act. Our attention was invited by Mr. Malhotra, learned counsel for the insurance company to the decision of the Queen's Bench in National Transit Insurance Co. Ltd. v. Customs and Central Excise Commissioners (1 ). The observations contained in the said judgement relating to the scope of the expression "insurance" occurring in the schedule of the enactment referred to therein are of ho assistance at all to us in this case because the context in which that expression is used in the English enactment considered in that case is entirely different. Having regard to the philosophy of the Consumer Protection Act and its avowed object of providing cheap and speedy redressal to consumers affected by the failure on the part of persons providing "service" for a consideration properly carry out their obligations, we do not find it possible to hold that the settlement of insurance claims will not be covered by the expression "insurance" occurring in Section 2 (l) (d) (should be 2 (1) (o) ? ). Whenever there is a default or negligence in regard to such settlement of an insurance claim that will constitute a deficiency' in the service on the part of the insurance company and it will be perfectly open to the concerned aggrieved consumer to approach the Redressal Forums under the Act seeking appropriate relief. We, accordingly, overrule the objection raised by the insurance company questioning the jurisdiction of the State Commission to adjudicate upon the complaint. 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. 2,95,701/ -. 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/ -. The argument advanced before us by Mr. Mathur appearing on behalf of the Appellant in Appeal No. 3 does not also impress us. It was urged by him that the State Commission was in error in not granting him interest on the amount of loss assessed by it for the full period of 13 months. The State Commission has been quite liberal in the assessment of the loss and after taking into account all the circumstances in which the delay in settling the claim had occurred it has considered it reasonable to fix the quantum of compensation to be awarded in respect of such delay at Rs. 13,438/ -. We find no justification to interfere with the conclusion recorded by the State Commission that a sum of Rs. 13,438/- would constitute reasonable compensation for the delay that had occurred in settling the claim. It was suggested to us by the counsel appearing for the appellant in First Appeal No. 3 of 1989 that the State Commission was apparently weighed down by the consideration that the total amount awarded by it should not exceed the amount of rupees four lakhs for which there is insurance coverage. We do not think that there is any justification for this submission. It is not as if the State Commission had considered itself tied down to any such rigid limit as suggested by the counsel. On the other hand, the Commission independently considered the question of quantification of damage caused by the delay and came to the conclusion that the assessment of the damage at Rs. 13,438/- would be fair and reasonable. In the result, we confirm the order of the State Commission and dismiss these appeals. The parties will bear their respective costs in First Appeal No. 3 of 1989. In the First Appeal No. 4 of 1989, the Appellant (Insurance company) will pay the costs to the Respondent which we fix at Rs. 1,000/ -.
(3.) THE security bond, if any, furnished by the Respondent in the First Appeal No. 4 of 1989 (Complainant before the State Commission), as a condition for withdrawing the amount deposited by the insurer before the State Commission will stand discharged. Order pronounced on July 28, 1989. .;