SRINAGAR: The Jammu and Kashmir State Consumer Disputes Redressal Commission has directed United India Insurance Company Limited to pay Rs 8,53,084 to Srinagar resident Abdul Rashid Sumji after holding that the damage to his excavator was caused by its accidental submergence in the Jhelum and not by normal wear and tear, as claimed by the insurer.
The Commission, in its order pronounced on July 29, 2026, allowed Sumji’s complaint and directed the insurance company to pay the amount within 30 days. In case of failure to make the payment within the stipulated period, the insurer will be liable to pay interest at 6 per cent per annum on the entire awarded amount of Rs 8,53,084 from July 30, 2026, until final payment.
The five-page order was passed by the J&K State Consumer Disputes Redressal Commission, Srinagar, comprising President (O) Nighat Sultana and Member Maheep Gupta. The complaint, C.C. No. 603 of 2015, had been instituted on August 26, 2015.
Sumji was represented by advocate Sajood Amin, while United India Insurance Company was represented by advocate Rifat Khalida.
According to the complaint, Sumji’s excavator was insured with the company and, during the currency of the policy issued on February 23, 2015, the machine accidentally got submerged in the River Jhelum. The excavator remained underwater and suffered extensive damage.
The insurance company, however, repudiated the claim through a letter dated August 10, 2015, contending that the loss had occurred due to normal wear and tear, which was excluded under the policy.
Sumji challenged the repudiation before the Commission, maintaining that the damage was accidental and therefore covered under the policy. He sought reimbursement of Rs 18,82,353, which he claimed to have incurred towards repairs, besides interest at 18 per cent per annum and compensation of Rs 26 lakh under different heads.
The insurance company defended the repudiation, relying on the report of an IRDA-authorised surveyor, who had concluded that the loss was attributable to normal wear and tear and therefore fell within a named exclusion under the policy.
The Commission, however, noted that the insurer had subsequently raised an additional objection concerning the validity of the driving licence. The Commission refused to consider that ground, holding that an insurer cannot introduce a new ground for repudiation beyond those mentioned in its repudiation letter.
“It is a settled legal position that it is not permissible for the insurance company to take any additional ground in addition to the grounds taken in the repudiation letter,” the Commission observed.
The Commission agreed that loss caused by normal wear and tear was not payable under the policy. The crucial question, therefore, was whether the excavator had suffered accidental damage or whether the loss was actually attributable to normal wear and tear.
On this point, the Commission found the insurer’s case wanting.
It noted that the insurance company had failed to adduce evidence and that its right to lead evidence had been closed. The Commission further held that the burden of establishing the applicability of an exclusion clause rested on the insurer.
“As the insurance company did not lead any evidence to prove its contention of loss having occurred due to normal wear and tear, the stand taken by the Company is not tenable,” the Commission said.
The Commission added that “justice demands that under such circumstances, the benefit of doubt must be passed to the complainant.”
It consequently held that the loss was caused by the submergence of the machine in water and that Sumji was entitled to indemnification under the insurance policy.
The Commission, however, did not accept the entire Rs 18,82,353 repair expenditure as the amount payable under the policy. It called for the claim file from the insurance company to determine the actual admissible loss.
The surveyor’s assessment showed the gross assessed loss at Rs 18,40,551 after deduction of inadmissible items. A depreciation deduction of Rs 11,04,331, salvage deduction of Rs 81,082 and under-insurance deduction of Rs 1,20,152 were subsequently applied. After an excess clause deduction of Rs 50,000, the net liability was assessed at Rs 4,84,986.
The Commission found the surveyor’s deductions on account of depreciation and under-insurance to be properly justified and declined to interfere with the net assessment of Rs 4,84,986.
The surveyor had noted that the excavator had been purchased in 2011 and had been used for about three years and nine months. Its life was considered to be five years, resulting in depreciation at 20 per cent per year, subject to a maximum of 60 per cent.
The surveyor also found that the insured had submitted a quotation of Rs 61.23 lakh for a new excavator while the machine was insured for Rs 50 lakh. This resulted in an under-insurance factor of 18.34 per cent.
The Commission then added compensation for the prolonged delay in settlement of the claim. Interest at 6 per cent per annum on the assessed loss of Rs 4,84,986 was calculated from the date of institution of the complaint—August 26, 2015—to the date of the order—July 29, 2026, covering 3,990 days. This amounted to Rs 3,18,098.
Another Rs 50,000 was awarded towards mental agony and litigation expenses.
The total award thus came to Rs 8,53,084, comprising Rs 4,84,986 as assessed loss, Rs 3,18,098 as compensation for delay and Rs 50,000 towards mental agony and litigation expenses.
The Commission clarified that it had confined its assessment to the quantum of loss and had not relied upon other observations of the surveyor or arguments advanced by the insurer concerning non-admissibility of the claim, since those aspects had not been proved by the insurance company.
The complaint, filed in 2015, was accordingly allowed. The Commission directed the insurer to make payment within 30 days and imposed a further interest liability of 6 per cent per annum on the full awarded amount in case of default.
The order was announced on July 29, 2026, and signed by Member Maheep Gupta and President (O) Nighat Sultana.
