Summary
A householder's insurance claim for flood damage to his basement was repudiated on the ground that the loss was caused by seepage, a peril not named in the policy, and the NCDRC dismissed his complaint. The Court held, on the first survey report and the engineers' certificates, that the proximate cause was flooding from heavy rainfall and not seepage, rejected the unexplained second survey report as arbitrary, set aside the NCDRC order and remanded the matter solely for quantification of compensation.
Issues
- Whether the damage to the insured basement was caused by seepage of water (not a named peril) or by flooding due to heavy rainfall (a covered peril).
- Whether the insurer's second survey report, which reversed the first surveyor's finding on the cause of loss without explanation, could be relied upon to repudiate the claim.
Provisions considered
- Section 23, Consumer Protection Act, 1986The appeal to the Supreme Court against the NCDRC's order dismissing the consumer complaint was brought under this provision. (¶ 1)
Held
- The first survey report, prepared promptly after inspection, recorded that water entered from the flooring following heavy rain and not from the entrance or openings; the amended certificate of one consulting engineer and the certificate of another attributed the basement flooding to heavy downpour. On this material the cause of damage was flooding due to heavy rainfall, not seepage or inherent structural defect. (¶¶ 27, 28, 29)
- A structural engineer's certificate that dealt only with water seepage in the structural elements of the building, and said nothing about the basement or the cause of the damage claimed, established no causal link with the loss and could not be relied upon to reject the claim. (¶¶ 27, 28)
- Where a prompt first survey had comprehensively assessed the cause and extent of damage and nothing showed it to be deficient, the insurer's commissioning of a second survey without cogent reasons, and a second report that reversed the cause of loss to 'seepage' without addressing the first report's findings or offering new material, was arbitrary and without basis; the second survey report was set aside. (¶ 30)
- The decision in Mahavir Road and Infrastructure Pvt. Ltd. v. Iffco Tokio General Insurance Co. Ltd. was distinguishable because there the surveyor had found no evidence of flood damage, whereas here the evidence showed flooding of the basement from heavy rainfall. (¶ 28)
Result
Appeal disposed of; the NCDRC's findings set aside and the matter remanded to the NCDRC for the limited purpose of determining the quantum of compensation payable under the policy terms and applicable law; pending applications disposed of.