Almost a decade after losing his poultry business in the Kurnool floods, the Circuit Bench of the National Consumer Disputes Redressal Commission on Wednesday directed an insurance company and PSU bank to pay insurance claim to the tune of ₹ 89,49,999.
The Circuit Bench, comprising president Justice R K Agrawal and member M Shreesha, was dealing with an appeal filed by Sona Poultry Farm proprietor Md Ghouse, a resident of Srinivasa Nagar in Kurnool district.
The appeal
In his appeal, Mr Ghouse stated that he had opened accounts in Canara Bank and sought insurance cover for his business from the United India Insurance Company Ltd. After the floods, the insurance company rejected the claim. The appeal was filed after the Andhra Pradesh Consumer Disputes Redressal Commission had dismissed the case and upheld the insurance company's repudiation of the claim.
The appellant said the policy was taken from April 9, 2009 to April 8, 2010 and he lost raw material including feed, eggs and other things in the floods.
While a claim request of ₹1,26,16,535 was raised, a surveyor from the company visited various locations where the material was stored and valued the loss at ₹89,49,999. The company repudiated the claim in February 2010 on grounds that the address of risk location was different from that mentioned on forms. It claimed it was not informed of the change of address either by the bank, or appellant.
While the bank stated that per terms and conditions it should not be held responsible for rejection of the claim, the insurance company claimed that the bank had committed an error of oversight by erroneously recording a different address at the time of doing the paperwork.
The counsel for Mr Ghouse stated that a bank official inspected the site and submitted reports at regular intervals. He also pointed out that in internal correspondence, the bank admitted to the error in recording address of the site.
‘No inspection done’
The Circuit Bench noted that the insurance company did not carry out inspection of the site before issuing and renewing the policy. It also said that the bank's contention that the appellant should have been ‘vigilant’ with respect to recording of address is ‘totally unsustainable’. It reiterated that the company not inspecting the site before issuing policy amounts to a deficiency in service and is also against Insurance Regulatory and Development Authority regulations. It also held the repudiation of insurance claim is unjustified.
Apart from directing the bank and company to jointly pay the insurance claim of ₹89,49,999, it also ordered costs of ₹25,000 be paid.
