National Consumer Disputes Redressal
Hdfc Ergo General Insurance Company ... vs Azad Body Builder Private Limited on 14 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 312 OF 2010 (Against the Order dated 16/07/2010 in Complaint No. 34/2007 of the State Commission None) 1. HDFC ERGO GENERAL INSURANCE COMPANY LIMITED FORMERLY KNOWN AS HDFC CHUBB GENERAL INSURANCE, RAMON HOUSE H.T.PAREKH MARG, MUMBAI MAHARASHTRA ...........Appellant(s) Versus 1. AZAD BODY BUILDER PRIVATE LIMITED JORAWAR SINGH GATE JAIPUR RAJASTHAN 2. STATE BANK OF INDIA, COMMERCIAL BRANCH,ANUKAMPA TOWER CHURCH ROAD JAIPUR RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
For the Appellant : Mr. Joy Basu, Sr. Advocate with Mr. Burzin
Somandy, Mr. Gaurav Sharma, Ms. Tejaswita
Nalawade & Mr. Abhinav, Advocates For the Respondent : For the Res. No.1 : Mr. Anil Sehgal, Advocate
For the Res. No.2 : Deleted
Dated : 14 Oct 2015 ORDER
PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
This appeal has been filed by the appellant against the order dated 16.07.2010 passed by the learned Rajasthan State Consumer Disputes Redressal Commission, Jaipur (in short, 'the State Commission') in Consumer Complaint No. 34 of 2007 - Azad Body Builder Pvt. Ltd. Vs. HDFC Chubb Gen. Ins. Co. Ltd. by which, complaint was allowed.
2. Brief facts of the case are that complainant/respondent is in the field of constructing body on vehicles and in this connection, stores wood, glass, seat covers, etc. in the stock. Complainant obtained insurance policy from OP/appellant for a period of one year from 31.3.2005 to 30.3.2006 for his workshop, building, furniture and stock. On expiry of this policy, complainant obtained another policy for a period of one year from 31.3.2006 to 30.3.2007 on same terms and conditions, but OP bifurcated stock and stock in process in the policy without any intimation to complainant. It was further submitted that on 17.1.2008, complainant's premises got fired and report was lodged at Police Station and intimation was given to OP. OP conducted spot survey. Complainant clamed Rs.71.54,129/-, but OP's surveyor observed damage of Rs. 36,90,226/-, but as per final survey report, complainant was paid only Rs.70,242/- for loss of damage to building and furniture. Alleging deficiency on the part of OP, complainant filed complaint before State Commission. OP No. 1 & 2 resisted complaint and submitted that person filing complaint was authorised to file only civil suit and had no right to file complaint. OP accepted issuance of insurance policies, but submitted that if there was any discrepancy in the policy, he should have brought to the notice of OP within 15 days and payment was made as per surveyors report and prayed for dismissal of complaint. OP No. 2 submitted that bank has only advanced loan and has been impleaded wrongly and prayed for dismissal of complaint. Learned State Commission after hearing both the parties allowed complaint partly and directed OP No. 1 to pay Rs.27,40,000/- along with compensation of Rs.30,000/- and cost of litigation Rs.10,000/- against which, this appeal has been filed along with application for condonation of delay.
3. Respondent No. 2 was deleted on the request of appellant.
4. As there is delay of only 29 days in filing appeal, I deem it appropriate to condone the delay for the reasons mentioned in the application.
5. Heard leaned Counsel for the parties and perused record.
6. Learned Counsel appellant submitted that inspite of non-coverage of stock in store, learned State Commission committed error in allowing compensation pertaining to stock in store; hence, appeal be allowed and impugned order be set aside. On the other hand, learned Counsel for the respondent submitted that order passed by learned State Commission is in accordance with law; hence, appeal be dismissed.
7. It is admitted case of the parties that OP insured premises of complainant along with plant & machinery, furniture and stock and stock in process for a period from 31.3.2005 to 30.3.2006 and again for subsequent year from 31.3.2006 to 30.3.2007.
8. Perusal of policies reveals that in both the polices total coverage was for Rs.2,57,00,000/- and complainant paid premium of Rs.38,234/- against each policy. There is no difference of amount insured in both polices pertaining to building, plant & machinery, furniture, fixture and fittings. In first policy, stock and stock in process was insured for Rs.2,40,00,000/- whereas in disputed second policy, insurance coverage was for Rs.15,00,00,000/- pertaining to stock (chesis) and Rs.90,00,000/- pertaining to stock (work in process).
9. The core question to be decided in this case is whether this bifurcation in second policy was made at the request of complainant and whether damaged raw material is covered under stock (work in process).
10. Complainant has pleaded in the complaint that this bifurcation was not intimated by OP to the complainant. OP in paragraph 24 of the written statement submitted that policy was issued as desired by the complainant as per their instructions and proposal. Learned Counsel for the OP could not place any proposal on record by which it can be inferred that any proposal was submitted by complainant while obtaining second policy. Complainant could not place any record to substantiate that complainant instructed OP to bifurcate stock and stock in process in subsequent policy. In such circumstances, it becomes clear that OP suo moto without any instruction or request from complainant bifurcated stock and stock in process into stock (chesis) and stock (work in process) while renewing policy. No sensible person would bifurcate his stock and stock in process in two parts when he is getting it insured for the same amount by paying some premium. In such circumstances, it can be held that aforesaid bifurcation was not done by OP on the request of the complainant.
11. Learned Counsel for the OP submitted that if there was any discrepancy in the policy the complainant ought to have brought it to the notice of OP. It is true that complainant if aware about discrepancy, ought to have brought to the notice of OP. When complainant was not aware about this discrepancy and this bifurcation was made by OP suo moto, complainant's claim cannot be defeated on the basis of bifurcation made in subsequent policy.
12. Learned Counsel for the appellant submitted that terms and conditions of policy are to be strictly construed. He placed reliance on judgment of Hon'ble Apex Court in (2004) 8 SCC 644 - United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal in which it was observed that the terms of policy had to be construed as it is and we cannot add or subtract something. It was further observed that the insurance policy has to be construed having reference only to the stipulations contained in it and no artificial far-fetched meaning could be given to the words appearing in it. No outside aid should be sought unless the meaning is ambiguous. He also placed reliance on judgment of Hon'ble Apex Court in C.A. No. 2080 of 2002 - Vikram Greentech (I) Ltd. & anr. Vs. New India Assurance Co. Ltd. in which it was held that the terms of insurance policy have to be construed strictly to determine the extent of liability of the insurer. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in re-writing the contract or substituting the terms which were not intended by the parties. I agree with the proposition of law laid down by Hon'ble Apex Court, but in the case in hand, bifurcation for liability in subsequent policy was made by OP suo moto without any request on the part of complainant, complainant is not bound by that bifurcation and he is entitled to claim compensation as per coverage mentioned in first policy.
13. Even if for the sake of arguments it is presumed that complainant is bound by terms and conditions of second policy meaning thereby coverage of Rs.1,50,00,000/- for stock (Chesis) and Rs.90,00,000/- for stock (work in process), learned Counsel for the complainant submitted that damage caused to the goods falls within purview of stock (work in process). Learned Counsel for the appellant submitted that three types of stocks were to be kept by complainant, firstly, stock (chesis), secondly, stock including chesis on which some work has been done which will fall with purview of stock (work in process) and thirdly, raw material kept in stock for use in building body on chesis. Learned Counsel for the appellant submitted that stocks of raw material kept separately for use in body building on chesis does not form part of insurance coverage. On the other hand, learned Counsel for the respondent has drawn my attention towards surveyors final report dated 16.7.2007 in which in the heading 'work in process' at page 9, it has been mentioned that there were 23 chesis standing at insured's premises at various stages of process. He has also given table of chesis which reveals that five chesis were complete and star chesis having sitting capacity of 24 contained material of Rs.1,19,633/-. Thus, it becomes clear that for completing 23 chesis, complainant was required to have stock of raw materials to the extent of Rs.1,19,633/- X 23 = Rs.27,51,559/- and learned State Commission has allowed only Rs.27,40,000/- as compensation against loss of raw material and in such circumstances, learned State Commission has not committed any error in allowing complaint deeming loss covered by the insurance policy.
14. I do not find any illegality in the impugned order and appeal is liable to be dismissed.
15. Consequently, appeal filed by the appellant is dismissed. Parties to bear their own costs.
......................J K.S. CHAUDHARI PRESIDING MEMBER