State Consumer Disputes Redressal Commission
M/S Om Shri Rupesh Steel Pvt.Ltd. vs B.M , The Oriental Insurance Co. Ltd. & ... on 29 August, 2018
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/2018/334
Instituted on : 25.05.2018
M/s Om Shree Rupesh Steel Private Limited,
Through : Authorized - Director Shankar Lal Agrawal,
S/o Shri Kundan Lal Agrawal,
Factory : Village Chiraipani, Near Gerwani,
Raigarh, Tahsil & District Raigarh (C.G.) ... Appellant (Complainant)
Vs.
1. Branch Manager,
Oriental Insurance Company Limited,
Canal Avenue, Bargarh,
Tahsil and District Bargarh (Orissa)
2. Divisional Manager,
Oriental Insurance Company Limited,
Divisional Office, Raigarh,
Tahsil and District Raigarh .... Respondents (OPs)
PRESENT :
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER
HON'BLE SMT. RUCHI GOEL, MEMBER
COUNSEL FOR THE PARTIES :
Shri R.K. Rastogi, Advocate for the appellant (complainant.).
Shri R.P. Agrawal, Advocate for the respondents (OPs).
ORDER
DATED : 29/AUGUST/2018 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT.
This appeal is directed against the order dated 22/03/2018, passed by District Consumer Disputes Redressal Forum, Raigarh (C.G.) (henceforth "District Forum") in Complaint Case No.110/2016. By the impugned order, learned District Forum, has dismissed the complaint of the complainant.
// 2 // 2 Briefly stated the facts of the complaint of the complainant are that, the complainant M/s Om Shree Rupesh Private Limited is situated at Village Chiraipani, District Raigarh (C.G.) and Shri Shankar Lal Agrawal is director of the said company. The complainant had obtained loan of Rs.7,00,00,000/- (Rupees Seven Crores) from Punjab National Bank, Raigarh (According to Annexure P-1). The complainant had obtained Standard Fire and Special Perils Policy from the O.P. No.1 for security of its plant and raw material sponge iron, which were kept in the plant (factory). The sum insured was Rs.7,61,00,000/-. The complainant deposited premium of Rs.68,831/- with the O.P.. The policy was effective for the period from 18.03.2011 to 17.03.2012. In the policy, the risk of Spontaneous Combustion of raw material was also covered. The complainant again obtained insurance policy for the above materials for the period from 18.03.2012 to 17.03.2013 for the sum insured Rs.11,12,00,000/-. The policy was again renewed for the period from 26.03.2013 to 25.03.2014. The sum insured was Rs.7,61,00,000/-. The complainant again obtained insurance policy for the period from 29.03.2014 to 28.03.2015. The sum insured was Rs.25,35,000/-. The premium amount was paid by the complainant to the Insurance Company. The policy was again renewed for the period from 29.03.2015 to 28.03.2016. The sum insured was Rs.25,35,00,000/-. During the existence of the insurance policy 29.03.2015 to 28.03.2016 on 16.02.2016 at about 7.30 to 8.00 P.M., the flame was oozing out from the raw materials, which were kept in the plant (factory) of the complainant and it caught fire. The complainant immediately tried to extinguish the fire and all directors of the company, were reached to the plant (factory). The intimation regarding the incident was given to the Insurance Company (OPs). Shri Ajay Athaley, was // 3 // appointed by the Insurance Company as Preliminary Surveyor, who inspected the factory premises and took photographs and recorded statements of the employees. Thereafter the directors of the company submitted the claim. Shri Ajay Athaley, Surveyor recorded statements of the Manager Manmohan Singh and Madhav Chandra. On being direction given by the Surveyor Ajay Athaley, the complainant got valuation of loss suffered by him due to Spontaneous Combustion and assessed loss to the tune of Rs.16,74,240/- . Ajay Athaley, Surveyor gave his detailed report regarding the loss suffered by the complainant, but the Surveyor for giving benefit to the Insurance Company, assessed the loss to the tune of Rs.9,09,941/- instead of Rs.16,74,240/-. The complainant again obtained insurance policy for the period from 031.03.2016 to 39.03.2017. The sum insured was Rs.25,35,00,000/-. The complainant submitted his claim, but the Insurance Company violated the procedure given in Insurance Regulatory and Development Authority's Manual and repudiated the claim of the complainant on the ground that sponge iron is not covered under the Insurance Policy, whereas the Insurance Company had obtained premium for Spontaneous Combustion also from the complainant, therefore, the OPs committed deficiency in service by repudiating the claim of the complainant. The complainant is entitled to get the compensation from the OPs, as mentioned in relief clause of the complaint.
3. The OPs filed their written statement and averred that it is admitted that the complainant's plant is situated at Village Chiraipani, District Raigarh (C.G.) and Shri Shankar Lal Agrawal is authorized director. It is also admitted that the complainant obtained loan of Rs.7,00,00,000/- from Punjab National Bank, // 4 // Raigarh. The complainant had obtained Standard Fire and Special Perils Policy, as mentioned by the complainant in the complaint for the period from 17.03.2011 to 16.03.2012 for the sum insured Rs.7,61,00,000/-, thereafter the complainant again obtained insurance policy in the year 2012 for the period from 18.03.2012 to 17.03.2013 for sum insured Rs.11,12,00,000/- for the raw materials. The complainant obtained insurance policy for the period from 26.03.2013 to 25.03.2014 for sum insured Rs.25,35,00,000/- for raw materials. When the OPs received intimation regarding incident of fire, Shri Ajay Athaley, was appointed by the OPs as Spot Surveyor, who inspected the factory premises. Shri Ajay Athaley, Surveyor assessed the loss to the tune of Rs.9,09,941/-. In the Standard Fir and Special Policy, the risk of Spontaneous Combustion, is not covered. The raw materials were burnt due to humidity and due to Spontaneous Combustion, the raw materials were burnt, and the risk of Spontaneous Combustion is not covered under the insurance policy, therefore, the claim of the complainant was repudiated by the OPs (Insurance Company. The OPs did not commit any deficiency in service, therefore, the complaint is liable to be dismissed.
4. The complainant has filed documents. Annexure P-1 are Authority Letter and bank documents, Annexure P-2 is insurance policy dated 17.03.2011, Annexure P-3 is insurance policy dated 16.03.2012, Annexure P-4 is insurance policy dated 25.03.2013, Annexure P-5 is insurance policy dated 28.03.2014, Annexure P-6 is insurance policy dated 27.03.2015, Annexure P-7 is intimation given to Police Station on 17.02.2016, Annexure P-8 is intimation given to the Divisional Office of the Insurance Company on 17.02.2016, Annexure P-9 is // 5 // copy of Statement of Madhav Chandra dated 17.02.2016, Annexure P-10 is copy of Statement of Manmohan Singh dated 17.02.2016, Annexure P-11 is copy of Final Survey Report of Shri Ajay Athaley, Surveyor dated 05.03.2016, Annexure P-12 is copy of insurance policy for the period from 31.03.2016 to 30.03.2017, Annexure P-13 is copy of letter dated 22.06.2016 sent by the Insurance Company to the complainant, Annexure P-14 is copy of Claim Process Manual of Fire Claim, Annexure P-15 is copy of legal notice dated 05.08.2016 sent by Om Sai Associates to the Branch Manager, Oriental Insurance Company Limited, Bargarh.
5. The OPs have also filed documents. Document No.1 is letter dated12.08.2016 sent by the O.P. No.1 to the complainant, document No.2 is Final Survey Report dated 08.03.2016 of Shri Ajay Athaley, Surveyor & Loss Assessor, document No.3 is letter dated 09.03.2016 sent by D.O. Raigarh of the Insurance Company to B.O. of Insurance Company, document No.4 is Standard Fire and Special Perils Policy Schedule for the period from 26.03.2013 to 25.03.2014, document No.5 is Standard Fire and Special Perils Policy Schedule for the period from 29.03.2014 to 28.03.2015, document No.6 is terms and conditions of Standard Fire and Special Perils Policy (Material Damage), document No.7 is Standard Fire and Special Perils Policy Schedule for the period from 29.03.2015 to 28.03.2016.
6. Learned District Forum, after having considered the material placed before it by the parties, has dismissed the complaint of the complainant.
// 6 //
7. Shri R.K. Rastogi, learned counsel appearing for the appellant (complainant) has argued that , the complainant M/s Om Shree Rupesh Private Limited is situated at Village Chiraipani, District Raigarh (C.G.) and Shri Shankar Lal Agrawal is director of the said company. The complainant had obtained loan of Rs.7,00,00,000/- (Rupees Seven Crores) from Punjab National Bank, Raigarh (According to Annexure P-1). The complainant had obtained Standard Fire and Special Perils Policy from the O.P. No.1 for security of its plant and raw material sponge iron, which were kept in the plant (factory). The sum insured was Rs.7,61,00,000/-. The complainant deposited premium of Rs.68,831/- with the O.P. The policy was effective for the period from 18.03.2011 to 17.03.2012. In the policy, the risk of Spontaneous Combustion of raw material was also covered. The complainant again obtained insurance policy for the above materials for the period from 18.03.2012 to 17.03.2013 for the sum insured Rs.11,12,00,000/-. The policy was again renewed for the period from 26.03.2013 to 25.03.2014. The sum insured was Rs.7,61,00,000/-. The complainant again obtained insurance policy for the period from 29.03.2014 to 28.03.2015. The sum insured was Rs.25,35,000/-. The premium amount was paid by the complainant to the Insurance Company. The policy was again renewed for the period from 29.03.2015 to 28.03.2016. The sum insured was Rs.25,35,00,000/-. During the existence of the insurance policy 29.03.2015 to 28.03.2016, on 16.02.2016 at about 7.30 to 8.00 P.M., the flame was oozing out from the raw materials, which were kept in the plant (factory) of the complainant and it caught fire. The complainant immediately tried to extinguish the fire and all directors of the company, were reached to the plant (factory). The intimation regarding the incident was given to the Insurance // 7 // Company (OPs). Shri Ajay Athaley, was appointed by the Insurance Company as Preliminary Surveyor, who inspected the factory premises and took photographs and recorded statements of the employees. Thereafter the directors of the company submitted the claim. Shri Ajay Athaley, Surveyor recorded statements of the Manager Manmohan Singh and Madhav Chandra. On being direction given by the Surveyor Ajay Athaley, the complainant got valuation of loss suffered by him due to Spontaneous Combustion and assessed loss to the tune of Rs.16,74,240/- . Ajay Athaley, Surveyor gave his detailed report regarding the loss suffered by the complainant, but the Surveyor gave benefit to the Insurance Company and assessed the loss to the tune of Rs.9,09,941/- instead of Rs.16,74,240/-. The complainant again obtained insurance policy for the period from 31.03.2016 to 30.03.2017. The sum insured was Rs.25,35,00,000/-. The complainant submitted his claim, but the Insurance Company violated the procedure given in Insurance Regulatory and Development Authority's Manual and repudiated the claim of the complainant on the ground that sponge iron is not covered under the Insurance Policy, whereas the Insurance Company had obtained premium for Spontaneous Combustion also from the complainant, therefore, the OPs committed deficiency in service by repudiating the claim of the complainant. The impugned order passed by the District Forum, is erroneous and is liable to be set aside. The complainant is entitled to get the compensation from the OPs, as mentioned in relief clause of the complaint. The appeal filed by the appellant (complainant) be allowed.
// 8 //
8. Shri R.P. Agrawal, learned counsel appearing for the respondents (OPs) has argued that the complainant obtained loan of Rs.7,00,00,000/- from Punjab National Bank, Raigarh. The complainant had obtained Standard Fire and Special Perils Policy, as mentioned by the complainant in the complaint for the period from 17.03.2011 to 16.03.2012 for the sum insured Rs.7,61,00,000/-, thereafter the complainant again obtained insurance policy in the year 2012 for the period from 18.03.2012 to 17.03.2013 for sum insured Rs.11,12,00,000/- for the raw materials. The complainant obtained insurance policy for the period from 26.03.2013 to 25.03.2014 for sum insured Rs.25,35,00,000/- for raw materials. When the OPs received intimation regarding incident of fire, Shri Ajay Athaley, was appointed by the OPs as Spot Surveyor, who inspected the factory premises. Shri Ajay Athaley, Surveyor assessed the loss to the tune of Rs.9,09,941/-. In the Standard Fir and Special Policy, the risk of Spontaneous Combustion, is not covered under the insurance policy. The raw materials were burnt due to moisture and due to Spontaneous Combustion, the raw materials were burnt, and the risk of Spontaneous Combustion is not covered in the insurance policy, therefore, the claim of the complainant was repudiate by the OPs (Insurance Company. The OPs did not commit any deficiency in service. The impugned order passed by the District Forum, is just and proper and does not call for any interference by this Commission. The appeal filed by the appellant (complainant) be dismissed.
9. We have heard learned counsels appearing for both the parties and have also perused the record of the District Forum, as well as the impugned order passed by the District Forum.
// 9 //
10. It is admitted fact that the complainant's plant (factory) is situated at Village Chiraipani, District Raigarh (C.G.) and Shri Shankar Lal Agrawal is its director, therefore, he is competent to file the instant complaint against the OPs.
11. The complainant has filed copies of Standard Fire and Special Perils Policy Schedule (Annexure P-2 to Annexure P-6). Annexure P-2 is copy of Standard Fire & Special Perils Policy Schedule in which it is mentioned that the sum insured is Rs.7,61,00,000/ and the policy is effective for the period from 18.03.2011 to 17.03.2012. Annexure P-3 is copy of Standard Fire & Special Policy Schedule, in which it is mentioned that the sum insured for basic fire cover is Rs.11,12,00,000/- and the policy is effective for the period from 18.03.2012 to 17.03.2013, Annexure P-4 is copy of Standard Fire & Special Perils Policy Schedule, in which it is mentioned that the sum insured is Rs.7,61,00,000/- and the policy is effective for the period from 26.03.2013 to 25.03.2014, Annexure P-5 is copy of Standard Fire and Special Perils Policy Schedule, in which it is mentioned that the sum insured is Rs.25,35,00,000/- and the policy is effective for the period from 29.03.2014 to 28.03.2015, Annexure P-6 is copy of Standard Fire and Special Perils Policy Schedule, in which it is mentioned that the sum insured is Rs.25,35,00,000/- and the policy is effective for the period from 29.03.2015 to 28.03.2016.
12. Now we shall examine whether Spontaneous Combustion is covered under the Standard Fire & Special Perils Policy ?
// 10 //
13. Annexure P-2 is copy of Standard Fire & Special Perils Policy Schedule effective for the period from 18.03.2011 to 17.03.2012, in which against Risk Description it is mentioned that "Eng Wrk-Structural Steel fabricators, Sheet Metal fabricators. Hot/Cold Rolling, Pipe Excluding Stamping, Pressing, Forging Mills, Metal Smelting, Foundries, Galvanising works, Metal Extraction, Ore processing (other than Aluminum, copper, zinc.). In Annexure P-3 which is copy of Standard Fire & Special Perils Policy Schedule effective for the period from 18.03.2012 to 17.03.2013 against Risk Description, the same thing is mentioned. In internal page 2 of the Policy Schedule, it is mentioned that "The insurance under the policy is subject to warranties & Clauses otherwise stated here in : 1. Endorsement - Spontaneous Combustion - Add On Cover,
2. Endorsement - Earthquake (Fire And Shock) - Add On Cover". Annexure P-4 is copy of Standard Fire & Special Perils Policy Schedule, effective for the period from 26.03.2013 to 25.03.2014, against Risk Description the same thing is mentioned. In internal page 2 of the Policy Schedule it is mentioned "The Insurance under this policy is subject to Warranties & Clauses otherwise stated herein : 9. Endorsement - Spontaneous Combustion - Add On Cover". Annexure P-6 is copy of Standard Fire & Special Perils Policy Schedule effective for the period from 29.03.2015 to 28.03.2016. During existence of the above policy, the fire incident took place on 16.02.2016in the plant (factory) of the complainant. In endorsement, it is specifically mentioned "9. Endorsement - Spontaneous Combustion - Add On Cover". Therefore, the defence of the respondents (OPs) that the risk of Spontaneous Combustion, is not covered under Standard Fire and Special Policy, is not acceptable.
// 11 //
14. Document No.2 has been filed by the respondents (OPs), which is Final Survey Report given by Shri Ajay Athaley, Surveyor/Loss Assessor. In the Final Survey Report, it is mentioned thus :-
"Cause of Fire : Exact cause of fire could not be ascertained, however in the stock of sponge iron, fire generally occurs due to spontaneous combustion. It is the same, as burning process in the furnace except it proceeds at a much lower rate. If the sponge iron is stocked for a long period and it comes in contact with moisture, the temperature suddenly rises to ignition point and due to physical absorption of atmospheric oxygen, it catches fire since the policy covers the risk of spontaneous combustion. The loss is within the scope of policy". In the Survey Report, it is also mentioned that the loss is within scope of the policy. Looking to the Final Survey Report of Shri Ajay Athaley, Surveyor, it appears that the loss is within the scope of the policy.
15. The Surveyor has been appointed by the respondents (OPs), therefore, the finding recorded by the Surveyor in his Survey Report, is binding on complainant as well as OPs and according to the Surveyor, the Spontaneous Combustion, is covered under the insurance policy, therefore, the defence of the OPs that the Spontaneous Combustion, is not covered under the insurance policy, is not acceptable.
16. In Devendra Malhotra Vs. United India Insurance Co. Ltd. & Anr. 2016 (3) CLT 525 (NC), Hon'ble National Commission, has observed thus :-
"Consumer Protection Act, 1986, Sections 2 (1) (g), 19 & 21 (a) (ii)- Insurance claim Surveyor report Held It is a established legal proposition that the report // 12 // made by the surveyor, who is a professional in his field, cannot disbelieved, unless there are cogent and convincing reasons to do so."
17. In Oriental Insurance Co. Ltd. Vs. Pavan Enterprises & Anr. I (2016) CPJ 503 (NC), Hon'ble National Commission has observed thus :-
"12. I see no reason to discard the report of the Surveyor. He appears to be a guideless witness. No motive was ever attributed to him. There must be some reasonable ground or doubt to reject his report. The report of the Surveyor carries infinite significance as was held in Roshan Lal Oil Mills Ltd. & Ors., 2014 (SLT Soft) 1 = 2014 (CPJ Soft) 1 = (2000) 10 Supreme Court Cases 19 and in D.N. Badoni v. Oriental Insurance Co. Ltd., I (2012) C.P.J. 272 (NC)."
18. In New India Assurance Co. Ltd., vs. Pave Infrastructures Pvt. Ltd., 2015 (3) CPR 577 (NC), Hon'ble National Commission has observed that "Loss of assessment by approved Surveyor can be discarded only on cogent reasons".
19. In Garg Acrylics Ltd., Through Sh. Anish Bansal G.M. (G.M.) Authorised Representative vs. United India Insurance Co. Ltd., 2015 (1) CPR 273 (NC), Hon'ble National Commission has observed thus :-
"11.................. This is settled Law that the report of the surveyor is to be given much more weightage than any other piece of evidence. See the Law laid down in United India Insurance Co. Ltd. & Others Versus Roshan Lal Oil Mills Ltd. & Ors. (2000) 10 Supreme Court Cases 19 & in D.N. Badoni Vs. Oriental Insurance Co. Ltd. I (2012) C.P.J. 272 (NC)".
20. In The Oriental Insurance Co. Ltd., Through its Regional Manager vs. Ishwar Singh, 2015 (1) CPR 157 (NC), Hon'ble National Commission has observed thus :-
"17. Counsel for the petitioner has also drawn our attention to the Apex Court Judgment in the case Sri Venkateswara Syndicate vs. Oriental Insurance // 13 // Company Ltd., and Another, (2009) 8 Supreme Court Cases 507 wherein the Apex Court has held as under :-
"There is no disputing the fact that the surveyor/surveyors are appointed by the insurance company under the provisions of the Insurance Act and their reports are to be given due importance and one should have sufficient grounds not to agree with the assessment made by them".
21. The Surveyor's Report is reliable document and the appellant (complainant) has not filed any evidence to discard the Surveyor's Report, therefore, the Surveyor's Report is dependable and reliable for assessment of loss and the report of the Surveyor, is binding on both the parties. According to the Surveyor's Report, the complainant is only entitled for the amount, which was assessed by the Surveyor. The Surveyor has rightly assessed the loss suffered by the complainant to the tune of Rs.9,17,539/-, therefore, the complainant is only entitled for getting Rs.9,17,539/- from the respondents (OPs) instead of 16,74,240/-.
22. Therefore, we find that the finding recorded by the District Forum, is erroneous and is not sustainable and is liable to be set aside.
23. Hence the appeal filed by the appellant (complainant) is partly allowed and the impugned order dated 22.03.2018, passed by the District Forum, is set aide and it is directed that :-
(i) The respondents (OPs) will pay a sum of Rs.9,17,539/- (Rupees Nine Lakhs Seventeen Thousand Five Hundred Thirty Nine), as assessed by the Surveyor, to the complainant within 45 days from the date of this order.
// 14 //
(ii) The respondents (OPs) will pay interest @ 9% p.a. on Rs.9,17,539/- from the date of filing of the complaint i.e. 06.09.2016 till realization.
(iii) The respondents (OPs) will also pay a sum of Rs.10,000/- (Rupees Ten Thousand) towards cost of litigation to the appellant (complainant).
(Justice R.S. Sharma) (D.K. Poddar) (Narendra Gupta) (Smt. Ruchi Goel)
President Member Member Member
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