Page 56 - Insurance Times July 2023
P. 56

11. While dealing with the aforesaid issue, relevant clause  in that case, the company shall be liable to pay such
             9 of Section 2 of the policy is required to be considered,  sum as would be requisite to reinstate or repair such
             which reads as under: -"9. If the Company at its option,  property if the same could lawfully be reinstated to its
             reinstate  or  replace  the  property  damaged  or  former condition. Present is the case dealing with second
             destroyed, or any part thereof, instead of paying the  eventuality,  namely,  the  company was unable  to
             amount of the loss or damage, or join with any other  reinstate or repair the property.
             Company or Insurer(s) in so doing the Company shall not
                                                                 The surveyor in its report determined the loss on the
             be bound to reinstate exactly or completely but only as
                                                                 basis of reinstatement value at Rs. 29,17,500/- and on
             circumstances permit and in reasonably sufficient
                                                                 the basis of depreciated value at Rs. 12,60,000/-.
             manner, and in no case shall the Company be bound to
                                                                 Though, the complainant claimed Rs. 76,64,000/- being
             expend more in reinstatement than it would have cost
                                                                 the value of the new machinery, however, as rightly
             to reinstate such property as it was at the time of the
                                                                 observed by the State Commission as well as the
             occurrence of such loss or damage nor more than the
                                                                 NCDRC, the complainant shall not be entitled to the said
             sum insured by the Company thereon. If the Company
                                                                 amount. However, at the same time considering second
             so elect to reinstate or replace any property the insured
                                                                 part of Clause 9 reproduced hereinabove, in case
             shall at his own expense furnish the Company with such
                                                                 company is unable to reinstate or repair the property
             plans, specifications,  measurements,  quantities  and
                                                                 insured, the insurance company shall be liable to pay
             such other particulars as the Company may require, and
                                                                 such sum as would be requisite to reinstate or repair
             no acts done or caused to be done, by the Company
                                                                 such property if the same could lawfully be reinstated
             with a view to reinstatement or replacement shall be
                                                                 to its former condition.
             deemed an election by the Company to reinstate or
             replace. If in any case the Company shall be unable to  For the aforesaid purpose, the report of surveyor wound
             reinstate  or  repair  the  property  hereby insured,  be relevantevidence to consider the sum required to
             because of any municipal or other regulations in force
                                                                 reinstate or  repair. Therefore, as per second part of
             affecting the alignment of streets or the construction
                                                                 Clause 9 of Section 2 of the policy, the complainant shall
             of buildings or otherwise, the Company shall, in every
                                                                 be entitled to the reinstatement value and not the
             such case, only be liable to pay such sum as would be
                                                                 depreciated value. The NCDRC has mis-interpreted and
             requisite to reinstate or repair such property if the same
                                                                 mis-read the Clause 9. The NCDRC has seriously erred
             could lawfully be reinstated to its former condition."
                                                                 in observing and holding that the insurance company
          12. On true interpretation and on fair reading of above  shall be liable to pay the depreciated value only and not
             clause, firstly the option is given to  the insurance  the reinstatement value.
             company to reinstate or replace property damaged or
                                                                 The State Commission was  absolutely justified  in
             destroyed  instead of paying the amount of loss or
                                                                 awarding the reinstatement value. The impugned
             damage. If the insurance company exercises the option
                                                                 judgment and order passed by the NCDRC awarding the
             of reinstatement or replaces the property damaged,
                                                                 depreciated value and not the reinstatement value is
             the company shall not be bound to reinstate completely
                                                                 unsustainable for the reasons stated hereinabove.
             or partly but only as circumstances permit and in
             reasonably sufficient manner, and in no case shall the  13. In view of the above and for the reasons stated above,
             company be bound to expend more in reinstatement    the present appeal succeeds. The impugned judgment
             than it would have cost to reinstate such property as it  and order passed by the NCDRC is hereby quashed and
             was at the time of the occurrence of such  loss or  set aside.
             damage not more than the sum insured by the company
                                                              14. The order passed by the State Commission is hereby
             thereon.
                                                                 restored. The complainant shall be entitled to Rs.
             However, in any case the company is unable to reinstate  29,17,500/- being the reinstatement value with interest
             or repair the property insured, because of any municipal  @ 7% from the date of order of the State Commission
             or other regulations in force affecting the alignment of  i.e., 10.11.2014 till the actual payment. The present
             streets or the construction of buildings or OTHERWISE,  appeal is accordingly allowed. No costs.


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