SRINAGAR: The Jammu and Kashmir Consumer Disputes Redressal Commission in Srinagar has directed United India Insurance Company to pay Rs 3.48 lakh to the legal heirs of a deceased homeowner whose residential house suffered extensive damage during the devastating 2014 Kashmir floods, holding the insurer deficient in service for failing to justify substantial deductions made while settling the insurance claim.
The commission, comprising President Dr Farah Deeba and Member Shabnam Munshi, passed the order on June 6 while deciding a complaint that had remained pending for more than 11 years.
The complaint was originally filed through attorney holder S Balbair Singh on behalf of S Sital Singh. During the pendency of the proceedings, both the complainant and the attorney holder passed away, following which the case was pursued by the legal heirs.
The commission observed that the matter belonged to the “old stock” of cases and had awaited disposal for over a decade. It noted that the complainant’s double-storeyed residential house in Srinagar had suffered severe damage after remaining submerged during the September 2014 floods.
According to the complaint, the house was insured under a Standard Fire and Special Perils Policy issued by United India Insurance Company for a sum assured of Rs 15 lakh. The policy was valid from June 2014 to June 2015.
The complainant had alleged that floodwaters caused extensive structural damage, rendering the house unsafe and unfit for habitation. Owing to the scale of destruction, the family was compelled to reconstruct the house and sought compensation from the insurer.
However, the insurance company settled the claim at only Rs 4.13 lakh, prompting the complainant to approach the consumer forum seeking indemnification of the actual loss, along with compensation and litigation costs.
During the proceedings, the insurance company admitted that the policy existed and that the loss had occurred during the floods. It contended that an independent survey was conducted by M/s N. Kumar Surveyors Pvt. Ltd., which assessed the payable loss at Rs 4.13 lakh after applying the average clause on account of alleged under-insurance.
The insurer further argued that the complainant had accepted the amount as full and final settlement by executing a discharge voucher and furnishing consent to the assessment.
After examining the material on record, the commission found that the extent of damage and the subsequent reconstruction of the house demonstrated that the losses suffered were substantial and not merely superficial.
The commission observed that the evidence available on record established that the amount paid by the insurer did not adequately compensate the complainant for the actual loss suffered.
“Taking a holistic view of all the materials/evidence discussed hereinabove coupled with prolonged pendency of the complaint before this commission, we feel that the matter requires to be settled on approximation on the strength of the aforenoted materials without being unduly harsh to any of the parties,” the commission said.
It assessed the net payable loss at Rs 7.50 lakh, equivalent to 50 per cent of the insured amount of Rs 15 lakh. Since Rs 4.13 lakh had already been paid, the commission directed the insurer to pay the balance amount of Rs 3.37 lakh to the legal heirs of the complainant.
In addition, the commission awarded Rs 11,000 towards litigation expenses, taking the total amount payable to Rs 3.48 lakh. The insurer has been directed to comply with the order within 45 days.
The commission held that the insurance company was deficient in service for failing to adequately indemnify the insured loss.
The complainant was represented by advocate Amir Khurshid, while the insurance company was represented by advocate NH Khuroo.
The ruling underscores that insurance companies cannot rely solely on claims of “full and final settlement” without producing supporting documents before the consumer forum. It also reiterates that legal heirs are entitled to pursue consumer complaints and receive compensation even after the death of the original complainant during the course of litigation.
