State Consumer Disputes Redressal Commission
Iffco Tokio Gic Ltd vs M/S Sew Electricals Pvt Ltd on 9 February, 2018
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
MAHARASHTRA, MUMBAI
Appeal Nos.A/14/621 & A/14/622
(Arising out of common order dated 28/10/2013 in CC/10/69 & CC/10/70 Addl.D.F.
Mumbai Suburban)
IFFCO Tokio GIC Ltd.
Plot no.34/35, 3rd floor,
White Castle, Union Park
Above MTNL Exchange
Chembur, Mumbai 400 071. .....Appellant
Versus
M/s.SEW Electricals Pvt.Ltd.
Unit no.206, Peninsula Centre
Dr.S.S.Rao Road
Parel, Mumbai 400 012. .........Respondent
BEFORE: Smt.Usha S.Thakare, Presiding Judicial Member
D.R.Shirasao, Judicial Member
PRESENT:Mr.A.S.Vidyarthi-Advocate for appellant
Mr.M.M.Shetty-Advocate for respondent
ORDER
Per Hon'ble Smt.Usha S. Thakare, Presiding Judicial Member
1. Being aggrieved by the common order passed in consumer complaint nos.69/2010 and 70/2010 dated 28/10/2013, original opponent-Iffco Tokio General Insurance Company Ltd. has filed two appeals. Both the consumer complaints were filed by M/s.SEW Electricals Pvt.Ltd. through Chief Finance Officer and power of attorney holder against the Insurance company by alleging deficiency in service. The facts of both the cases are identical. The issues involved are identical. Hence, the learned District Forum preferred to decide both the consumer complaints by common order. The learned District Forum was pleased to allow consumer complaints 1 partly under impugned order. The learned District Forum held the insurance company guilty for deficiency in service. Direction was given in consumer complaint no.69/2010 to the opponent/Insurance company to pay an amount of Rs.3,60,450/- with interest @ 10% p.a. from the date of repudiation of claim. It was further directed to the opponent/Insurance company to pay an amount of Rs.15,000/- towards mental pain and agony and amount of Rs.5000/- towards costs.
2. Consumer complaint no.70/2010 was partly allowed and direction was given to the opponent/Insurance company to pay an amount of Rs.7,02,400/- with interest @ 10% p.a. from the date of repudiation of claim. It was further directed to the opponent/Insurance company to pay an amount of Rs.15,000/- towards mental pain and agony and amount of Rs.5000/- towards costs.
3. Facts giving rise to appeal no.A/14/621 in short are as under:-
The complainant/respondent is a private limited company. Consumer complaint bearing no.69/2010 was filed through Chief Finance Officer and power of attorney holder against the Insurance company by alleging deficiency in service. The complainant/respondent had undertaken a contract on 15/02/2007 for supply of installation, testing and commissioning of electrical L.T./L.V. system for Ashok Towers, Parel, Mumbai, against a work order no.PLL/1022/WO/086/RDK/2007 from M/s.Peninsula Land Ltd. for project of residential complex. As per terms of the contract, the complainants were responsible for insurance of the materials and security of the materials stored at site. Therefore with the intent to secure the safety and security of material at the site, the complainant obtained the Erection All Risk policy insurance cover from the opposite party.
4. The opposite party on accepting premium of Rs.99,194/- issued the insurance policy bearing no.32024169 in favour of the complainant. It is 2 alleged by the complainant that at the site all tools and materials were kept in a store which was located on the floor slab of parking level-2 and in between towers "C" and "D". The store was enclosed by full height GI corrugated sheets with two doors opening towards tower "C" and other towards tower "D". The doors were made of GI corrugated sheets with M.S. angle frame structure; locking bolts were welded horizontally to them. The store had partially covered openings in the wall of parking level 2 to let sunlight in. The store had a skylight 6' dia circular opening located in its floor slab. This opening was partially covered with a shuttering sheet made from M.S.Copper strips stock was reportedly stacked on this shuttering sheet. Site construction workers stayed in temporary arrangement in parking level 1. The complainant had taken all safe precautions to ensure safety of the material stored in the store room.
5. On 24/09/2009 store supervisor Mr.Pramod Arekar arrived at the office at the usual office hours at 9 a.m. and to conduct the regular work requested his staff to issue copper earthing strips for installation for towers "A" and "B". But unfortunately the staff did not find the strips where they were normally stored in their stores. The store keeper informed Mr.Arekar about the missing strips. Both Mr.Arekar and the store keeper went to the location and observed that the complete stock of earthing strips was missing. Immediately the First Information Report was lodged at the Boiwada police station on 25/09/2009. Information was immediately given to opponent /Insurance company about incident of theft and submitted the burglary claim form claiming the loss of Rs.3,60,450/-. On receiving the claim form, opponent appointed Mehta and Padamsey Private Limited surveyor to investigate the incident of theft. Complainant submitted the documents and information to the surveyor as per demand. Queries were answered by the complainant. The opponent without applying the mind, in an arbitrary manner repudiated the genuine claim of the complainant.
3Therefore, the complainant had filed consumer complaint no.69/2010 by alleging deficiency in service against the opponent/insurance company. The complainant has requested to declare the opponent as guilty of deficiency in service and unfair trade practice as per the provisions of the Consumer Protection Act, 1986. Complainant has requested to direct the opponent to reimburse the expenses incurred by the complainant to the tune of Rs.3,60,450/- along with interest @ 24% p.a. from the date of lodging of the claim till realization of the same. Complainant also claimed compensation of Rs.2,00,000/- towards mental harassment and Rs.50,000/- towards costs of litigation.
6. Facts giving rise to appeal no.A/14/622 in short are as under:-
The complainant/respondent is a private limited company. Consumer complaint bearing no.70/2010 was filed through Chief Finance Officer and power of attorney holder against the Insurance company by alleging deficiency in service. The complainant/respondent had undertaken a contract on 14/03/2008 for supply of installation, testing and commissioning of electrical set up for Symantec at Pune, against a purchase order no.78304430 from M/s.Symentec Software India Pvt. Ltd. for project of Baner Road, Pune. As per terms of the contract, the complainants were responsible for insurance of the materials and security of the materials stored at site. Therefore, with the intent to secure the safety and security of material at the site, the complainant obtained the Erection All Risk policy insurance cover for the period 13/03/2008 to 12/10/2008 from the opposite party.
7. The opposite party on accepting premium of Rs.97,124/- issued the insurance policy bearing no.32022890 in favour of the complainant. It is alleged by the complainant that on 19/07/2008 Store keeper Mr.Narendrakumar Appa Jadhav arrived at the office at the usual office hours to conduct the regular work but unfortunately when he reached at the 4 location, he found certain cables were missing. On checking the stock he found that the stock is not matching with the balance stock and observed that the copper cable was missing. Immediately he informed the local police station at Pune and FIR was lodged. Complainant through its agent immediately intimated to the opponent /Insurance company about incident of theft and submitted the burglary claim form claiming the loss of Rs.7,02,400/-. On receiving the claim form, opponent appointed M/s.Cunningham Lindsey International Private Limited surveyor to investigate the incident of theft. The complainant submitted the documents and information to the surveyor as per demand. On 12/02/2009, the opponent without applying mind rejected the genuine claim of the complainant. The ground of repudiation is baseless. Therefore, complainant had filed consumer complaint no.70/2010 by alleging deficiency in service against the opponent/insurance company. The complainant has requested to declare the opponent as guilty of deficiency in service and unfair trade practice as per the provision of the Consumer Protection Act, 1986. Complainant has requested to direct the opponent to reimburse the expenses incurred by the complainant to the tune of Rs.7,02,400/- along with interest @ 24% p.a. from the date of lodging of the claim till realization of the same. Complainant also claimed compensation of Rs.2,00,000/- towards mental harassment and Rs.50,000/- towards costs of litigation.
8. The opponent/Insurance company had filed written statements in both the consumer complaints and resisted the claim. The opponent/Insurance Company has denied all adverse allegations made by the complainant. It is submitted that false consumer complaints are filed to extract money from the Insurance company. The allegations of deficiency in service and unfair trade practice are specifically denied. It is submitted that the complainant does not fall within the definition of "consumer". He has 5 no right to file consumer complaint before the District Forum. The complainant had filed two reports in police station. In First Information Reports it is casually informed to police that goods worth Rs.3,60,450/- and goods worth Rs.7,02,400/- were stolen. Detailed description of the stolen articles was not given. The claims of the complainant were rightly and legally rejected by the Insurance Company. The claims of the complainant were not genuine and they were not as per terms and conditions of the insurance policy. The opponent is not liable to indemnify the complainant as per contract. The consumer complaints are liable to be dismissed with costs.
9. Both the parties have led their evidence by filing affidavits along with documents. After considering the evidence on record and after giving thoughtful consideration to the arguments advanced on behalf of both the parties, Learned District Forum was pleased to allow both the consumer complaints partly. It was declared that the opponent/Insurance company is guilty of deficiency in service. In consumer complaint bearing no.69/2010, the opponent was directed to pay an amount of Rs.3,60,450/- to the complainant with interest @ 10% p.a. from the date of repudiation of the claim. It was further directed to pay Rs.15,000/- towards compensation and Rs.5000/- towards costs of litigation. In consumer complaint bearing no.70/2010, the opponent was directed to pay an amount of Rs.7,02,400/- to the complainant with interest @ 10% p.a. from the date of repudiation of the claim. It was further directed to pay Rs.15,000/- towards compensation and Rs.5000/- towards costs of litigation.
10. The opponent was directed to comply the order within one month from the date of order. Being dissatisfied with the order, Insurance company/original opponent/appellant has filed appeal bearing no.A/14/621 to challenge the order passed in consumer complaint no.CC/10/69 and appeal bearing no.A/14/622 to challenge the order passed in consumer 6 complaint no.CC/10/70.
11. Heard learned counsel Mr.A.S.Vidyarthi for the appellant and learned counsel Mr.M.M.Shetty for respondent. It is vehemently urged by learned counsel Mr.Vidyarthi that common order passed by Learned District Forum is illegal and incorrect. Learned District Forum committed an error in appreciating the evidence in its proper perspective. Learned District Forum failed to consider that insurance policy was taken by the complainant/ respondent for 'commercial purpose'. The complainant/ respondent does not fall within the definition of 'consumer'. The dispute is not tenable before the Consumer Fora. The evidence on record is sufficient to establish that the appellant/insurance company is not guilty of deficiency in service. There is no negligence or unfair trade practice on the part of the appellant. There is inordinate delay in filing FIR and giving intimation to the Insurance company. Learned District Forum should have rejected both the consumer complaints. Leaned counsel Mr.Vidyarthi has requested to set aside the illegal common order by allowing both the appeals to avoid injustice.
12. Learned counsel Mr.Shetty for the respondent supported the order and findings of the learned District Forum and urged to dismiss both the appeals for want of merit.
13. Appellant has raised the objection that the respondent had obtained insurance policies for 'commercial purpose'. The main question is whether insurance policies taken by the respondent were for 'commercial purpose'. It is an admitted fact that the appellant/Insurance company issued insurance policies in favour of the respondent after accepting premium from the respondent. When the alleged loss was occurred at that time insurance policies were in force.
14. It is settled principle of law that the contract of insurance has nothing to do with the commercial purpose. The respondent did not obtain 7 insurance policies for gaining profit. To gain profit was not the primary aim of the respondent while obtaining insurance policies. The contract of insurance is contract of indemnity and, therefore, there is no question of commerce in obtaining coverage. The insured who takes the insurance policies cannot trade or carry on any commercial activity with regard to insurance policy taken by him.
15. In the case of Harsolia Motors v/s. National Insurance Co.Ltd. reported in MANU/CF/0083/2004, Hon'ble National Commission while deciding Appeal no.159 of 2004 on 03/12/2004 in para 23 and 24 observed as under:-
"Similarly, a hospital which hires the services of a medical practitioner, it would be a commercial purpose. But, if a person avails of such services for his ailment it would be held to be not a commercial purpose.
Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words for any commercial purpose it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit."
16. In the case in hand, the policies were obtained by the complainant/respondent to protect the goods and articles lying on the spot. There can be no commercial purpose in taking the insurance policy.
817. In case of M/s.Polyplex Corporation Ltd. v/s. National Insurance Co.Ltd. and others reported in 2017(2)CPR 58 (NC), Hon'ble National Commission held as under:-
"that the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit. It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product."
18. It is to be noted here that while deciding case of M/s.Polyplex Corporation Ltd. v/s. National Insurance Co.Ltd. and others reported in 2017(2)CPR 58 (NC), the Hon'ble National Commission has placed reliance on the ruling laid down by the Hon'ble National Commission in the case of Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) cited supra. The observation of the Hon'ble National Commission in para 7 is as under:-
"7. The first question which arises for consideration is as to whether the complainant can be said to be a consumer as defined in Section 2(1)(d) of the Consumer Protection Act or not. It has been held by this Commission in Harsolia Motors Vs. National Insurance Co. Ltd. I(2005) CPJ 27 (NC) decided on 03.12.2004 that since an insurance policy is taken for reimbursement or for indemnity for the loss which may suffer on account of insured perils, the services of the insurer cannot be said to have been hired or availed for a commercial purpose and therefore, this Commission does possess the requisite jurisdiction to entertain a consumer complaint wherever a defect or deficiency in the services rendered by an insurer is made out. The learned counsel for the OP states that as far as the loss of profit is concerned, the claim would not 9 be covered by the decision of this Commission in Harsolia Motors (supra). I however, find no merit in this contention. In Harsolia Motors (supra), this Commission upheld the plea that the insurance policy is availed for indemnifying the loss which the insured may suffer and therefore, the services of the insurer are availed for protection and not for making profit. It is immaterial whether the loss is on account of destruction or damage of a product or it is on account of the insured being deprived of the profit, which it would in the normal course have made, by use of the insured product. So long as the reimbursement on account of loss of profit is one of the -5- products of the insurance policy, it remains covered by the decision in Harsolia Motors (supra). Therefore, I find no merit in the contention that the insurance policy to the extent it pertains to reimbursement on account of the loss of profit, cannot be the subject matter of a consumer complaint".
19. On the basis of the above rulings, we find no hesitation to hold that consumer complaints filed by the respondents are tenable. By paying premium, the complainant/respondent availed insurance policy. Contract of indemnity was in force when loss was caused. The complainant/respondent is a 'consumer' within the meaning of section 2(1)(d) of Consumer Protection Act, 1986 and the complaints are rightly entertained by the learned District Forum. We do not find any substance in the arguments advanced on behalf of the appellant that the complainant is not a 'consumer' and, therefore, complaints filed by the complainant are not tenable. The learned District Forum rightly entertained the consumer complaints filed by the complainant/respondent.
20. The fact that Insurance company/appellant had issued insurance policy in favour of the complainant is not denied. The appellant company accepted the premium from the complainant and agreed to indemnify the complainant/respondent in case of loss. Cover notes filed by the complainant/ respondent are not denied by the appellant.
1021. In Consumer complaint no.69/2010, the work order issued by M/s.Peninsula Land Ltd. is filed by the respondent on record. Said work order shows that the respondent had undertaken the work pertaining to electricity at Ashok Towers, Parel, Mumbai. Bills of purchased articles are also filed on record, which are sufficient to hold that the respondent had purchased goods and articles for completion of work. Those articles were stored at premises of site of Ashok Tower at Parel. The insurance policy was obtained in connection with said project for Rs.16,50,13,030/-. These facts are not under challenge.
22. In Consumer complaint no.70/2010, the work order establishes that the respondent had undertaken a job in connection with electric work. Said electric work was to be completed at Baner Road, Pune. Work order was issued by M/s.Symantec Software India Pvt.Ltd. The respondent had to construct electricity project and to do the work for supply of electricity. The respondent had obtained policy for Rs.5,01,100.92 for work to be completed at Baner Road, Pune. The cover note is filed on record by the respondent in consumer complaint no.70/2010. The work undertaken by the respondent and nature of insurance are not denied by the appellant/Insurance company.
23. In both the complaints, complainant/respondent had filed copies of electricity bills and copies of stock registers. Quality and quantity of purchased goods and articles are noted down in the bills as well as stock register. It is evident from the record that the complainant/respondent came to know that stock of earthing strips, copper cable and stock of some articles were missing. Immediately the complainant had taken verification of the stock on the basis of stock register. When the complainant/ respondent was sure that articles brought for the project and stored at the site were stolen, complainant had filed report in police station. Crime was 11 registered against the unknown persons.
24. Learned counsel Mr.Vidyarthi vehemently urged that there is inordinate delay of 23 days in filing FIR. The respondent did not establish loss of copper cables. The loss was discovered at the time of taking inventory and said loss is not covered under the policy.
25. We are not impressed by the argument advanced on behalf of the appellant. It is put forth before us that it is the practice of the respondent to verify the articles in the first week of every month. But when stock was found less, immediately verification of the stock was taken as per stock register. When the respondent was sure that theft was occurred, then only like a prudent person he had filed report in concerned police station. Respondent was diligent in taking verification. Without verification he was not supposed to file vague report in police station. He was answerable how much stock was lying at the site and how much stock was stolen. Certainly the respondent had taken search of the articles which were found missing and then verification/inventory was done. The complainant/respondent cannot be said to be at fault in doing verification of the articles. The respondent had rightly filed FIR on inventory. Any prudent person will first verify how much articles were stolen? What is the value of stolen articles? and then only will file report.
26. Immediate information of theft was given to appellant-Insurance company by the respondent. Respondent submitted burglary claim form for claiming loss. It is to be noted here that the respondent obtained one policy for an amount of Rs.16,50,13,030/- and another policy for Rs.50,110,092/-. The policies are obtained to cover huge amount. The respondent had paid premium of Rs.97,124/- for policy no.32022890 and premium of Rs.99,154/- for policy bearing no.32024169. When the respondent was in a position to pay huge amount towards premium for policy, the respondent 12 has no reason to file false claim to grab the amount. The reasons put forth by the appellant company for rejection of claim are not appealable. The argument that in fact no theft was occurred is not sustainable.
27. It appears that both the claims of the respondent are rejected on the basis of exclusion clause. Said exclusion clause was not reproduced in repudiation letters as well as in surveyor's report. Insurance policies are not filed by the appellant on record to point out the nature of the exclusion clause. The policies were never filed before the learned District Forum, though documents are available with the appellant/Insurance company.
28. The learned District Forum rightly arrived at the conclusion that without any sufficient cogent genuine reason, the appellant/Insurance company repudiated the claim of the respondent. In fact contract of indemnity was in force. The appellant /Insurance company agreed to indemnify the complainant/ respondent in case of loss. The appellant company had denied the genuine claims and, as such, guilty of deficiency in service. The common order passed by the learned District Forum in consumer complaint nos.69 of 2010 and 70 of 2010 is just legal and correct. It requires no interference. As a result, both the appeals deserve to be dismissed. Hence the following order:-
ORDER Appeal bearing nos.A/14/621 and A/14/622 are hereby dismissed. Parties to bear their own costs.
Pronounced on 9th February, 2018.
[USHA S.THAKARE] PRESIDING JUDICIAL MEMBER [D.R.SHIRASAO] JUDICIAL MEMBER Ms. 13 14