Rajasthan High Court - Jodhpur
United India Insurance Co. Ltd vs Nine 2 Nine Super Market ... on 4 April, 2025
Author: Nupur Bhati
Bench: Nupur Bhati
[2025:RJ-JD:18019] (1 of 10) [CW-2855/2025]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 2855/2025
Nine 2 Nine Super Market, Through Its Proprietor Smt. Kanta
Devi W/o Shri Praveen Kankriya, Aged About 52 Years, Resident
Of 235, 3Rd B Road, Sardarpura, Jodhpur (Raj.).
----Petitioner
Versus
1. United India Insurance Company Ltd., Through Chief
Regional Manager, City Centre, Olympic Road, Jodhpur.
2. Administrative Officer, United India Insurance Company
Ltd., Variety Management Service Building, Near Saras
Dairy, Heavy Industrial Area, Jaipur.
----Respondents
Connected With
S.B. Civil Writ Petition No. 649/2025
United India Insurance Co. Ltd., Regional Office At City Centre,
Olympic Road, Jodhpur Through Its Authorized Officer.
----Petitioner
Versus
Nine 2 Nine Super Market, Through Its Proprietor Smt. Kana
Devi, W/o Sh. Praveen Kankariya, 235 Third B Road, Sardarpura,
Jodhpur.
----Respondent
For Petitioner(s) : Mr. Anil Bhandari for Insured
For Respondent(s) : Mr. Jagdish Vyas for the Insurance
Company.
HON'BLE DR. JUSTICE NUPUR BHATI
Order
04/04/2025
1. These petitions were listed in the daily cause list on
27.03.2025 in the category of 'For Admission - Fresh with Stay'
and after hearing both the parties, the matter was partly allowed.
However, upon going through the judgment which was cited at Bar
by learned counsel representing the petitioner, it came to the
notice of the Court that the facts of the cited judgment are
[2025:RJ-JD:18019] (2 of 10) [CW-2855/2025]
entirely different and does not align with the present case and
thus, the matter is listed today in the 'To be mentioned' category.
2. These petitions have been filed by the respective petitioners
under Articles 226 & 227 of the Constitution of India challenging
the impugned judgment and award dated 14.08.2024 passed by
the learned Permanent Lok Adalat (for brevity 'PLA') in Public
Utility Services Case No.15/2021. The prayer made in both the
instant petitions reads as under:
[SBCWP No.2855/2025]:-
"It is, therefore, respectfully prayed that this petition
for writ in the nature of mandamus may kindly be
allowed in toto and the following reliefs may kindly be
granted in favor of the petitioner and the writ petition
preferred by the petitioner may kindly be allowed the
judgment and award dated 14.08.2022 [sic] passed by
Permanent Lok Adalat may kindly be modified as per
raised in the instant petition.
Any other appropriate order or direction, which this
Hon'ble Court deems fit and proper, may kindly be
passed in favor of the petitioner."
[SBCWP No.649/2025]:-
"It is therefore, most humbly and respectfully prayed
that this writ petition may kindly be allowed and by
way of an appropriate writ, order or direction the
impugned judgment and award dated 14.08.2024
(Annexure-5) passed by the learned Permanent Lok
Adalat, Jodhpur Metro in Case No. 15/2021 may kindly
be quashed and set aside.
Any other relief which may be considered just and
proper in the facts and circumstances of the case may
kindly be passed in favour of the petitioner company."
3. Since, both the writ petitions arise out of the similar
controversy, therefore, the same are being decided together by
this common order. For the sake of convenience, facts of SBCWP
No.2855/2025 are being taken illustratively.
4. Succinctly stated facts of the case are that the petitioner-
shop was insured with the respondents under 'Shopkeepers
[2025:RJ-JD:18019] (3 of 10) [CW-2855/2025]
Insurance Policy' from 24.08.2017 to 23.08.2018. On 22.05.2018,
the petitioner-shop collapsed due to excavation work being carried
out in the adjoining plot by a third party. Thereafter, a claim was
made before the respondents under the Shopkeepers Insurance
Policy for the loss suffered by the petitioner-shop, which came to
be repudiated by the respondents vide communication dated
28.03.2019 on the ground that no perils covered under the
insurance policy have operated in the cause of loss. Aggrieved of
the same, the petitioner-shop (through its proprietor) filed an
application (Annex.1) under Section 22C of the Legal Services
Authorities Act, 1987 before the learned PLA. The respondents
filed their reply (Annex.2) to the application (Annex.1) denying
averments made therein. The learned PLA vide judgment and
award dated 14.08.2024 (hereinafter as 'impugned award') partly
allowed the claim of the petitioner-shop and awarded
Rs.15,30,152/- along with interest on the said amount @ 8% from
the date of filing the application till the date of passing of the
impugned award (Annex.3) amounting to Rs.4,38,663/- and also
awarded cost of litigation to the tune of Rs.5,000/-. A direction
was also given to the effect that in case of non-compliance of the
impugned award within two months from the date of decision, the
said amount shall carry interest @8% per annum from the date of
passing of the impugned award till the date of actual payment.
Aggrieved of the same, the petitioner-shop (through its
proprietor) has filed the writ petition- S.B.C.W.P. No.2855/2025
seeking enhancement of the amount awarded by the learned PLA;
and the respondents have filed- S.B.C.W.P. No.649/2025 for
quashing and setting aside of the impugned award (Annex.3).
[2025:RJ-JD:18019] (4 of 10) [CW-2855/2025]
5. Learned counsel for the petitioner-shop submits that under
the Shopkeepers Insurance Policy, there is no provision for
depreciation and deduction of old stocks, hence, the learned PLA
has erred in making deduction of Rs.1,97,956/- towards
depreciation and of Rs.48,623/- towards old stocks. He also
submits, while placing reliance upon Regulation 9 of the IRDA
(Protection of Policy Holders Interest), Regulation, 2002, that as
the respondents failed to settle the claim within 30 days from the
date of receipt of the surveyor's report i.e., 24.09.2018, hence the
petitioner-shop was entitled to payment of interest at the rate of
2% above the bank rate from the date of receipt of the surveyor's
report. He placed reliance upon the judgment passed by the
Hon'ble Division Bench of this court in United India Insurance
Company Ltd. and Ors. vs. M/s Lariya Art Palace Private
Ltd. [D.B. Civil Misc. Appeal No.1932/2024, decided on
05.12.2024].
6. Per contra, learned counsel for the respondents submits that
the terms of the policy in question do not cover the peril which
operated in the cause of loss, therefore, the learned PLA has erred
in allowing the claim of the petitioner shop while erroneously
placing reliance upon the judgment passed by the Hon'ble
Supreme Court in Sangrur Sales Corporation vs. United India
Insurance Company Ltd. and Anr., (2020) 16 SCC 292, as
the policy in question in that case i.e., "Standard Fire and Special
Perils Insurance Policy" was entirely different from the policy in
question in the present case i.e., "Shopkeepers Insurance Policy".
He also submits that the learned PLA has rightly made deduction
towards depreciation and old stocks hence, no interference is
[2025:RJ-JD:18019] (5 of 10) [CW-2855/2025]
required by this court. He also submits that old stock was
perishable in nature and deduction for the same has been
provided under the Guidelines for Claim Settlement. He also
submits that the interest @ 2% above the prevailing bank rate is
payable only in cases where claim is not settled or rejected within
the stipulated time period, however, in the present case, after the
receipt of the surveyor's report on 24.09.2018, certain
clarifications were sought, and the last clarification was received
vide communication dated 12.02.2019, and after examining the
same the claim was rejected on 28.03.2019, hence there was no
delay in rejection of the claim and therefore, the interest @ 2%
above the prevailing bank rate is not payable. He also submits
that the learned PLA has erred in giving direction for payment of
interest @ 8% on the total awarded sum in case the payment is
not made within a period of 2 months from the date of the award
as the same would amount to interest on interest.
7. In rebuttal, learned counsel for the petitioner-shop submits
that clause (e) of Section-I of the insurance policy covers loss
caused by Subsidence and Landslide (including Rock Slide)
damage and clause (g) of Section-I of the policy covers loss
caused by impact damage, hence, the cause of loss in the present
case, which was due to excavation work being carried out by a
third party in the adjoining plot, was covered under clauses (e)
and (g) of Section-I of the insurance policy. He thus, submits that
the present case is covered by the judgment passed by the
Hon'ble Supreme Court in Sangrur Sales Corporation (Supra)
as well as in United India Insurance Co. Ltd. vs. Pushpalaya
Printers, (2004) 3 SCC 694.
[2025:RJ-JD:18019] (6 of 10) [CW-2855/2025]
8. Heard the learned counsel representing the parties and
perused the material available on record.
9. This court deems it appropriate to first deal with the
contentions raised by the respondents regarding the non-coverage
of the peril which operated in cause of loss in the present case and
also regarding the misplaced reliance by the learned PLA on the
judgment passed by the Hon'ble Supreme Court in Sangrur
Sales Corporation (Supra). The relevant part of the insurance
policy in question is reproduced as under:
"SECTION 1 - BUILDING/CONTENTS (Excluding
Money and Valuables)
The Company will indemnify the Insured in respect of
loss of or damage to the Building/Contents, whilst
contained in the insured premises by:
(a) Fire Lightning Explosion of gas in domestic
appliances
(b) Bursting and overflowing of water tanks, apparatus
or pipes
(c) Aircraft or articles dropped therefrom
(d) Riot, Strike or Malicious Act
(e) Earthquake, Fire and/or Shock, Subsidence and
Landslide (including Rockslide) damage
(f) Flood, Inundation, Storm, Tempest, Typhoon,
Hurricane, Tornado or Cyclone
(g) Impact damage
SPECIAL EXCEPTIONS
The Company shall not be liable in respect of
(i) loss or damage to livestock, motor vehicles, and
pedal cycles
(ii) loss of or damage to money, securities for money,
stamps, bullion, deeds, bonds, bills of exchange,
promissory notes. Stock and share certificates,
business booked, manuscripts, documents of any kind,
unset precious stones and jewelry and valuables.
(iii) the first Rs. 2,500/- or 21/2% of the sum insured,
whichever is less of each and every loss arising under
section (1) (f) hereof.
SPECIAL CONDITION OF AVERAGE
xxx"
[2025:RJ-JD:18019] (7 of 10) [CW-2855/2025]
9.1. Thus, it is clear that clause (e) of Section I of the insurance
policy covers the loss of or damage to the Building/Contents by
Earthquake, Fire and/or Shock, Subsidence and Landslide
(including Rockslide) damage. In the present case, admittedly, the
shop in question collapsed due to the excavation work being
carried out on an adjoining plot by a third party resulting in
subsidence/impact damage. Thus, the cause of loss was
subsidence, which is evidently an insured perils under Clause (e)
of Section I of the insurance policy, hence, was covered under the
insurance policy. Therefore, the contentions of the counsel for the
respondents regarding the non-coverage of the peril which
operated in cause of loss as well as regarding the misplaced
reliance by the learned PLA on the judgment passed by the
Hon'ble Supreme Court in Sangrur Sales Corporation (Supra)
are not sustainable.
10. So far as the contention of the counsel for the petitioner-
shop regarding the erroneous deductions made by the learned PLA
towards depreciation and old stocks is concerned the same is not
without substance for the reason that no such deductions are
stipulated under the insurance policy in question, therefore, in
absence of any stipulations in this regard, the learned PLA has
erred in making deduction of Rs.1,97,956/- towards depreciation
and of Rs.48,623/- towards old stocks.
11. As far as the contention regarding payment of interest is
concerned, this court deems it appropriate to refer to Regulation 9
of the IRDA (Protection of Policy Holders Interest), Regulation,
2002, and the same is reproduced as under:
"9. Claim procedure in respect of a general
insurance policy
[2025:RJ-JD:18019] (8 of 10) [CW-2855/2025]
(1) An insured or the claimant shall give notice to the
insurer of any loss arising under contract of insurance
at the earliest or within such extended time as may be
allowed by the insurer. On receipt of such a
communication, a general insurer shall respond
immediately and give clear indication to the insured on
the procedures that he should follow. In cases where a
surveyor has to be appointed for assessing a loss/
claim, it shall be so done within 72 hours of the receipt
of intimation from the insured.
(2) Where the insured is unable to furnish all the
particulars required by the surveyor or where the
surveyor does not receive the full cooperation of the
insured, the insurer or the surveyor as the case may
be, shall inform in writing the insured about the delay
that may result in the assessment of the claim. The
surveyor shall be subjected to the code of conduct laid
down by the Authority while assessing the loss, and
shall communicate his findings to the insurer within 30
days of his appointment with a copy of the report being
furnished to the insured, if he so desires. Where, in
special circumstances of the case, either due to its
special and complicated nature, the surveyor shall
under intimation to the insured, seek an extension from
the insurer for submission of his report. In no case shall
a surveyor take more than six months from the date of
his appointment to furnish his report.
(3) If an insurer, on the receipt of a survey report,
finds that it is incomplete in any respect, he shall
require the surveyor under intimation to the insured, to
furnish an additional report on certain specific issues as
may be required by the insurer. Such a request may be
made by the insurer within 15 days of the receipt of the
original survey report.
Provided that the facility of calling for an additional
report by the insurer shall not be resorted to more than
once in the case of a claim.
(4) The surveyor on receipt of this communication shall
furnish an additional report within three weeks of the
date of receipt of communication from the insurer.
(5) On receipt of the survey report or the additional
survey report, as the case may be, an insurer shall
within a period of 30 days offer a settlement of the
claim to the insured. If the insurer, for any reasons to
be recorded in writing and communicated to the
insured, decides to reject a claim under the policy, it
shall do so within a period of 30 days from the receipt
of the survey report or the additional survey report, as
the case may be.
(6) Upon acceptance of an offer of settlement as stated
in sub regulation (5) by the insured, the payment of
the amount due shall be made within 7 days from the
[2025:RJ-JD:18019] (9 of 10) [CW-2855/2025]
date of acceptance of the offer by the insured. In the
cases of delay in the payment, the insurer shall be
liable to pay interest at a rate which is 2% above the
bank rate prevalent at the beginning of the financial
year in which the claim is reviewed by it."
Thus, it is evident from bare perusal of the above regulation that
as per clause (5) of Regulation 9, the insurer has to offer
settlement of claim to insured within a period of 30 days from
receipt of survey report or additional survey report. Similarly, in
cases where the insurer decides to reject a claim under the policy,
it shall do so within a period of 30 days from the receipt of the
survey report or the additional survey report, as the case may be.
Further, the opening phrase as used in Regulation 9 (6) i.e., 'Upon
acceptance of an offer of settlement as stated in sub regulation
(5) by the insured', makes it evident that the payment of interest
@ 2% above the bank rate prevalent at the beginning of the
financial year in which the claim is reviewed by it, is payable only
upon acceptance of offer of settlement, in case made by the
insurer under clause (5) of Regulation 9.
12. In the present case, the respondents have repudiated the
claim of the petitioner vide communication dated 28.03.2019,
thus, evidently there was no offer of settlement of claim by the
respondents, in sequitur, clause (6) of Regulation 9 is not
applicable. Thus, the contention of petitioner regarding interest
@ 2% above the bank rate as provided under Regulation 9 (6) is
not tenable and also the judgment relied upon by the petitioner in
this regard is distinguishable on facts, hence, not applicable.
13. Thus, in view of discussion in the above paragraphs, the
amount of claim as awarded by the learned PLA deserves to be
modified. Accordingly, the amount awardable to the petitioner is
as under:
[2025:RJ-JD:18019] (10 of 10) [CW-2855/2025]
Particular Awarded by Modified/awarded by This
Learned PLA Court
Total Stock Damaged [A] Rs.15,84,214.78/ Rs.16,32,837.86/-
- (Rs.15,84,214.78/- +
Rs.48,623.08/-)
Net Loss of Electrical Items [B] Rs.2,35,535/- Rs.4,33,492/-
(Rs.2,35,535.30/- +
Rs.1,97,956.70/-)
[A] + [B] Rs.15,30,152/- Rs.20,66,329.86/-
Interest @8% p.a. on [A] + [B] from the Rs.4,38,643/- Rs.5,92,348/-
date of filing of application before
learned PLA upto date of decision by
learned PLA (i.e., from 11.01.2021 to
14.08.2024, total 3 years 7 months) [C]
Total: [A] + [B] + [C] Rs.19,68,795/- Rs.26,58,678/-
14. Therefore, the petitioner would be entitled to the payment of
modified amount of Rs.26,58,678/- along with Rs.5,000/- as
litigation cost as awarded by the learned PLA. The aforesaid
amount shall be payable in terms of the direction given by the
learned PLA vide impugned award dated 14.08.2024 as modified
by this court. Any amount, if already paid or disbursed, shall be
adjusted.
15. Accordingly, in view of the above, the S.B.C.W.P. No.
No.2855/2025 is partly allowed and S.B.C.W.P. No.649/2025 is
dismissed.
16. Pending application (s), if any, shall stand disposed of. No
order as to the cost.
(DR. NUPUR BHATI),J
246-247-/Devesh/-
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