National Consumer Disputes Redressal
United India Insurance Co. Ltd. vs Sarvodaya India Ltd. on 24 July, 2020
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1037 OF 2017 (Against the Order dated 18/01/2017 in Appeal No. 1823/2011 of the State Commission Rajasthan) 1. UNITED INDIA INSURANCE CO. LTD. REGIONAL MANAGER, REGIONAL OFFICE, 8TH FLOOR,KANCHANJUNGA, BUILDINGS,18,BARAKHAMBA ROAD, NEW DELHI ...........Petitioner(s) Versus 1. SARVODAYA INDIA LTD. THROUGH DIRECTOR, SH.SUSHIL JAIN, S/O SH.MAHAVEER JAIN, 44,45,48,49, GROWTH CENTRE, CHITTIRGARH ROAD,HAMIRGARH TEHSIL & DISTRICT : BHILWARA RAJASTHAN ...........Respondent(s) REVISION PETITION NO. 1038 OF 2017 (Against the Order dated 18/01/2017 in Appeal No. 1824/2011 of the State Commission Rajasthan) 1. UNITED INDIA INSURANCE CO. LTD. REGIONAL MANAGER REGIONAL OFFICE 8TH FLOOR, KANCHANJUNGA BUILDINGS 18, BARAKHAMBA ROAD NEW DELHI ...........Petitioner(s) Versus 1. SARVODAYA INDIA LTD. 44, 45, 48, 49, GROWTH CENTRE CHITTIRGARH ROAD, HAMIRGARH, TEHSIL AND DISTT. THROUGH DIRECTOR SH. SUSHIL JAIN S/O SH. MAHAVEER JAIN BHILWARA, RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. PREM NARAIN,PRESIDING MEMBER
For the Petitioner : Mr. Pradeep Gaur , Advocate For the Respondent : Ms. Ishita Jakhmola, Advocate
Dated : 24 Jul 2020 ORDER
These two revision petitions have been filed by the petitioner United India Insurance Company Limited against the two separate orders dated 18th January 2017 passed in two appeal Nos. 1823 and 1824 of 2011. The first case is in respect of an insured DG Set whereas the second case is in respect of an insured compressor for which the respondent had taken the insurance from the petitioner.
2. Brief facts of these two cases are mentioned below:
RP No. 1037 of 20173 DG sets installed in the respondent/complainant company were insured from 01.04.2009 to 31.03.2010 by the petitioner Insurance Company. Mechanical fault developed on DG Set No.2 on 16.06.2009. After intimation to the Insurance Company a surveyor was appointed who submitted his report dated 11.01.2010 and assessed Rs.69,953/- as the net loss. The surveyor also stated that the fault developed due to shortage of water in the cooling system of the DG Set. There was no trained person to operate the DG Sets. On the basis of the surveyor's report, the Insurance Company repudiated the claim vide it's letter dated 22.02.2010 on the ground that there was violation of condition No. 5a of the insurance policy which relates to taking due care and proper precaution in operation and maintenance of the insured machine.
3. Aggrieved by the repudiation, the complainant filed a consumer complaint before the District Forum being consumer complaint No. 142 of 2010. The complaint was resisted by the Insurance Company on the same grounds as given in the repudiation letter. The District Forum partly allowed the complaint and directed the Insurance Company to pay Rs.69, 953/- to the complainant.
4. Not satisfied with the order of the District Forum, the complainant preferred an appeal being appeal No. 1823 of 2011 before the State Commission. The State Commission allowed the appeal and modified the order of the District Forum with the effect that the Insurance Company shall also pay an amount of Rs.3,48,739/- totaling to Rs. 4,18,692/-.
5. Hence the present revision petition.
RP No.1038 of 20176. A compressor being used by the respondent complainant was also insured with the petitioner opposite party from 1st April 2008 till 31st March 2009. On 20th July 2008 suddenly there was noise in the compressor and it stopped working. On intimation to the Insurance Company, a surveyor was appointed who submitted his report on 27.02.2009 and assessed the net loss of Rs. 34,432/-. The insurance claim was closed by the Insurance Company wide their letter dated 13th April 2010 for non submission of necessary documents like log book, repair bill etc. despite repeated requests by the surveyor.
7. Aggrieved by the repudiation, the complainant filed a consumer complaint being complaint No. 157 of 2010 before the District Forum. The complaint was resisted by the Insurance Company on the same grounds on which the repudiation was made. However, the District Forum allowed the complaint and directed the Insurance Company to pay Rs.34,432/- to the complainant.
8. Not satisfied with the order of the District Forum, the complainant preferred an appeal before the State Commission being appeal No. 1824 of 2011 and the State Commission allowed the appeal and directed the Insurance Company to pay additionally Rs.3,24,324/- totaling to Rs.3,58,756/-.
9. Hence the present revision petition.
10. The learned counsel for the petitioner Insurance Company stated that the surveyor has clearly recorded that the DG Set was not properly maintained and it was damaged due to non-availability of water supply for the cooling system. Hence it is a clear case of negligence and improper maintenance on the part of the complainant and therefore as per condition No. 5a of the insurance policy, the claim cannot be allowed. The learned counsel for the Insurance Company further stated that the District Forum had decided the complaint on the basis of the loss assessed by the surveyor but the State Commission has wrongly interpreted the report of the surveyor. In fact, the net assessed loss on repair replacement method is Rs.69, 953.86 and it is not the expenditure incurred on opening and refitting. In the final assessment the surveyor has already considered the expenditure on replacement of parts along with opening and refitting charges. On the other hand, the learned counsel for the complainant stated that the surveyor has assessed the expenditure on replacement of parts to be Rs.3,48,739 which has been rightly allowed by the State Commission. It is wrong to say that the DG Set was not properly maintained as the same was being maintained and was in use for quite some time.
11. Coming to the other case relating to compressor, the learned counsel for the petitioner Insurance Company stated that the complainant did not supply any of the relevant documents to the surveyor and therefore though the surveyor has assessed the net loss, he has not recommended the claim. District Forum has rightly allowed the claim as per the net assessment of the surveyor however, the State Commission has not correctly appreciated the report of the surveyor. Rs. 34,433 is the net assessed loss on repair replacement method rather than the opening and refitting charges as interpreted by the State Commission. The State Commission has totally allowed the expenditure for the replacement of parts as per the survey report though the surveyor has deducted depreciation out of this amount in the final assessment. Clearly the compressor was an old one and out of warranty and therefore depreciation needs to be applied to the cost of new parts. On the other hand, the learned counsel for the respondent complainant stated that the surveyor has deducted 90% depreciation on the cost of new parts which is not justified. The State Commission has rightly allowed the claim of the respondent on the basis of the expenditure on the replacement of parts as assessed by the surveyor. Thus, there is no error in the order of the State Commission and the same should be upheld. In the remarks column of the report, the surveyor has stated that the claim is genuine. Once the surveyor finds the claim as genuine there was no ground for the Insurance Company to have rejected the claim.
12. I have carefully considered the arguments advanced by both the learned counsel for the parties and have examined the record. So far as the claim in respect of the DG Set is concerned, the surveyor in its report has recorded the following:-
"Admissibility Ïn light of observations made by us on the basis of available information & inspection made by the loss did not falling within ambit of the policy."
Remarks
1. The loss is not occurred due to covered peril as insured intimated in cause of accident that this loss is resulted due to failure of hosepipe but during my inspection occurrence of no such event were found, the loss is due to gross negligence as proper water supply was not maintained in engine. The log book was not maintained, log book was not supplied at the time of survey/inspection, after several reminders it was produced looks like it was prepared after occurrence of loss could not be accepted as a regularly maintained log book.
Looking towards the above breach of policy conditions in my opinion the claim was treated as NO CLAIM."
13. From the report of the surveyor it is quite clear that the DG Set got damaged due to inadequate cooling on account of lack of water. This is a clear case of negligence and improper maintenance by the complainant. Condition 5(a) reads as under:-
5 (a) The Insured shall take all reasonable steps to maintain the insured property in efficient working order and to ensure that no item is habitually or intentionally over loaded. The Insured shall fully observe the manufacturer's instructions for operating, inspection and overhaul, as well as government, statutory municipal and all other binding regulations in force concerning the operation and maintenance of the insured plant and machinery."
14. In my view, this condition fully covers the case of damage of the DG set and therefore repair charges including the replacement of parts cannot be allowed. The surveyor has assessed opening and refitting charges as Rs.25,000/- and therefore at the most Rs.25,000/- can be allowed because without opening of the set it may not have been possible to know the exact cause of damage. Thus for this claim, the complainant does not deserve more than Rs.25,000/-.
15. So far as the damage to the compressor is concerned, the surveyor has recorded the following:-
"Admissibility In light of observations made by us on the basis of available information & inspection made by the loss appears falling within ambit of the policy."
The cause & nature of loss appears genuine & believable.
Rate of parts allowed as per OEM & Labour charges allowed as per authorized repairer.
Average clause was not applicable.
Repairing charges bill along with receipt, claim form, Xerox of log book, statement of operator, technical report of engineer was not produced up to till date by insured, it seems insured was not interested in this claim & it was requested to underwriters to close this claim as NO CLAIM."
16. Even though the surveyor has not recommended the claim because of non-submission of various documents by the complainant however, the surveyor has found the claim to be genuine. Therefore taking lenient view, the claim can be allowed on the basis of the surveyors report. The surveyor has assessed the loss as follows:-
SCHEDULE OF ASSESSMENT B) Towards replacement of parts:
S. No. Description Qty.
Rate(Rs.) Estimate (Rs.) Assessed 1 New screw element suitable for atlas copco make GA22-7.5 AP rotary screw compressor 01 no.
311850.00 311850.00 311850.00 2 Element mounting kit (disallowed policy exclusion) 01 no.
1684.001 1684.00 0.00 3 Kit oil separator (disallowed policy exclusion) 01 no.
14890.00 148490.00 0.00 4 Oil filter (disallowed policy exclusion) 01 no.
1363.00 1363.00 0.00 5 Air filter (disallowed policy exclusion) 01 no.
1611.00 1611.00 0.00 6 Unloaded valve kit (disallowed intact) 01 no.
11914.00 11914.00 0.00 7 Minimum pressure valve kit (disallowed intact0 01 no.
1884.00 1884.00 0.0 Sub total 345196.00 311850.00 Add CVAT@4% 13807.84 12474.00 Grand total 359003.84 324324.00 B) Towards opening refitting charges S. no.
Description Qty.
Rate (Rs.) Estimate (Rs.) Assessed (Rs.)
1. Opening refitting of screw element 1 no.
15000.00 15000.00 15000.00 Sub Total 15000.00 15000.00 Gross assessed loss for parts & repairing Less depreciation @90% on 324324.00 339324.00
-291891.60 Subtotal 47432.40 Assessed loss by applying compulsory excess (8000.00) -8000.00 Sub total 39432.00 Less value of salvage -5000.00 Net assessed loss on repair replacement method 34432.00
17. The District Forum has allowed the claim on the basis of the assessment done by the surveyor. However, the State Commission has grossly erred in allowing the expenditure on replacement of parts as addition to the loss assessed by the surveyor. It is seen that the surveyor has not given any reason for applying 90% depreciation on the cost of replacement of parts. The surveyor has recorded that warranty has already expired and therefore in my view, a depreciation @50% shall be sufficient to be directed for the parts. From this aspect, if one recalculates the net loss on the basis of repair replacement method on the same lines as the surveyor has done it, one gets a figure of Rs.1,64,162/-. Thus, in this case the respondent complainant may be eligible to get at the most Rs.1,64,162/-.
18. Based on the above discussion, the revision petition No.1037 of 2017 is allowed and the orders of the Fora below are set aside and the complaint stands dismissed except that the petitioner Insurance Company shall pay Rs.25000/- to the complainant as opening charges. The revision petition No. 1038 of 2017 is partly allowed and the order of the State Commission dated 18th January 2017 passed in appeal No. 1824 of 2011 is modified to the extent that the petitioner Insurance Company will pay Rs.1,64,162/- to the complainant instead of Rs.3,58,756/- as ordered by the State Commission. This amount will carry interest at the rate of 9% as ordered by the State Commission. The cost of litigation of Rs.20,000/- awarded by the State Commission is also maintained. Orders passed in both the revision petitions should be complied by the petitioner Insurance Company within a period of 30 days from the date of receipt of this order.
...................... PREM NARAIN PRESIDING MEMBER