National Consumer Disputes Redressal
National Insurance Co. Ltd. vs Nikita Papers Pvt. Ltd. on 19 April, 2006
Equivalent citations: IV(2006)CPJ68(NC)
ORDER
K.S. Gupta, J. (Presiding Member)
1. This revision is directed against the order dated 14.10.2004 of Consumer Disputes Redressal Commission Uttar Pradesh, Lucknow, dismissing appeal against the order dated 10.4.2001 of a District Forum with certain modifications.
2. Facts giving rise to this revision lie in a narrow compass. Respondent/complainant got the DG set 380 KVA installed at its Mill insured for a period of one year on 29.5.1998 with the petitioner/opposite party-Insurance Company. On 10.2.1999, the DG set broke down and the petitioner was informed of it that day itself. D.G. set was taken to M/s. U.P. Engine and Machine Pvt. Ltd., Muzaffar Nagar, authorised service centre, for repairs. On 12.2.1999, the petitioner/Insurance Company was intimated of DG set being lying for repairs with M/s. U.P. Engine and Machine Pvt. Ltd. The petiioner appointed Amitabh Surender as spot Surveyor. M/s. Thaper, Shrinivas & Kapoor Pvt. Limited, was appointed as final Surveyor. On 6.10.1999, the respondent deposited the damaged DG set with the petitioner. Still on claim not being settled, the respondent filed complaint which as contested by the petitioner. Complaint was mainly contested on the ground that respondent had violated the conditions of Policy. During inspection, Amitabh Surendar noticed that the DG set was completely dismantled by the Service Engineer. It was further alleged that petitioner had the right either to reject the claim altogether or settle it as on non-standard basis at 75% of the actual loss suffered. By the order dated 10.4.2001, the District Forum allowed, the complaint with direction to the petitioner to pay amount of Rs. 3,24,623 on total loss basis and Rs. 50,000 by way of compensation towards mental agony with interest @ 9% p.a. from the date of filing of complaint after deduction of the amount received by the respondent during the pendency of complaint.
3. Submission advanced by Mr. Yogesh Malhotra for petitioner was two fold. First, there was violation of condition No. 6 of the policy by the respondent. Second Fora below should have allowed deduction for Rs. 11,300 towards excess-normal and Rs. 55,404 on account of crankshaft under the policy.
4. Condition No. 6 of the Policy which is alleged to have been violated, runs as under:
Duties following an Accident : In the event of any occurrence which might give rise to a claim under this policy the Insured shall-
(a) immediately notify the Company by telephone or telegram as well as in writing giving an indication as to the nature and extent of loss or damage;
(b) take all reasonable steps within his power to minimize the extent of the loss or damage or liability;
(c) preserve the damaged or defective part and make them available for inspection by an official or Surveyor of the company;
(d) furnish all such information and documentary evidence as the Company may require.
The company shall not be liable for any loss or damage of which no notice and completed claim form have been received by the company within fourteen days of its occurrence.
Upon notification of a claim being given to the company the insured may proceed with the repair of any minor damage not exceeding Rs. 2,500 provided that the carrying out of such repairs is without prejudice to any question of liability of the company and that any damaged part requiring replacement is kept for inspection by the company but in all other cases a representative of the company shall have the opportunity of inspection the damage before any alterations, repairs or replacements or effected nothing contained herein shall prevent the insured from taking such steps as are absolutely necessary to maintain the operation of the plant.
The liability of the Company under this Policy in respect of any item of property sustaining damage for which indenmnity is provided shall cease if the said item is kept in operation without being repaired to the satisfaction of the Company.
5. Copy of the report dated 7.4.1999 of Amitabh Surender, spot Surveyor is at pages 59 and 60. This report notices that during inspection it was found that D.G. set in question was completely dismantled by the Service Engineer and not a single part was in assembled condition. Particularly relying on this observation, it was urged by Mr. Malhotra that it being a case of 'alterations', is covered by said Condition No. 6 of the policy and Insurance Co. was thus, entitled to settle the claim on non-standard basis at 75%. The word 'alteration' has been defined in concise Oxford Dictionary, 10th Edition as "change in character, direction, etc.". In our view, mere dismantling of DG set would not amount to 'alteration' within the meaning of said Condition No. 6 of the policy. Claim made, thus, could not have been settled on non-standard basis by the petitioner-Insurance Co.
6. This brings us to the second submission referred to above. Copy of the report dated 18.9.1996 of M/s. Thaper, Srinivasan and Kapoor, final Surveyor is at pages 61-67. Para No. 13 of this report under the heading 'Excess' is reproduced below:
13.0 Excess-The policy specifies an excess deduction of 1% of the sum insured. As the sum insured is Rs. 11,30,000, the excess deduction shall be Rs. 11,300.
In addition to the above, the Policy specifies an excess deduction of 20% of the cost of crankshaft replacement. As the cost of replacement of the crankshaft was Rs. 2,77,020 (being the cost of crankshaft - Rs. 2,37,020, and the labour charges for the complete job which was required to be done for the replacement of the crankshaft - Rs. 40,000), the excess applicable on account of replacement of the crankshaft shall be Rs. 55,404 (20% of Rs. 2,77,020).
7. Para No. 14 under the heading 'Adjustment' of the report runs as under:
14.0 Adjustment:
Net loss assessed Rs. 3,26,118
Less: Underinsurance
0.44% Rs. 1,435
_____________
Adjusted loss Rs. 3,24,683
Less: Excess
(a) Normal, under
Policy Rs. 11,300
(b) On account of
crankshaft Rs. 55,404
Rs. 66,704
______________
Net adjusted loss Rs. 2,57,979
8. Obviously, as per conditions of Policy, a contract between the parties, the petitioner-Insurance Company is entitled to the deduction of said amount of Rs. 11,300 and Rs. 55,404, totalling Rs. 66,704. Order passed by State Commission, thus, deserves to be modified to that extent. Order accordingly. No order as to cost.