State Consumer Disputes Redressal Commission
Oriental Insurance Company Limited, vs M/S Sona Castings Limited, on 19 December, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH
First Appeal No. 51 of 2009
Date of institution : 15.1.2009
Date of Decision : 19.12.2012
1. Oriental Insurance Company Limited, Regd. & Head Office at Oriental
House PB No. 7037/A-25/27 Asaf Ali Road, New Delhi.
2. Oriental Insurance Company Limited, Divisional Office at 4-5-6-, Block-
E (Patiala Road), Rajpura.
3. Oriental Insurance Company Limited, Branch Office at Loha Bazar,
Mandi Gobindgarh, Tehsil Amloh, Distt. Fatehgarh Sahib
(All 1 to 3 through its authorized signatory Chief Regional Manager,
Oriental Insurance Company Limited, Regional Office SCO No. 109 to
111, Sector 17-D, Chandigarh)
....Appellants.
Versus
M/s Sona Castings Limited, G.T. Road, Sirhind Side, Mandi Gobindgarh, Tehsil
Amloh, Distt. Fatehgarh Sahib through its Director Shri Pawan Kumar Goyal.
...Respondent.
2nd Appeal
First Appeal No. 52 of 2009
Date of institution : 15.1.2009
1. Oriental Insurance Company Limited, Regd. & Head Office at Oriental
House PB No. 7037/A-25/27 Asaf Ali Road, New Delhi.
2. Oriental Insurance Company Limited, Divisional Office at 4-5-6, Block-E
(Patiala Road), Rajpura.
3. Oriental Insurance Company Limited, Branch Office at Loha Bazar, Mandi
Gobindgarh, Tehsil Amloh, Distt. Fatehgarh Sahib
(All 1 to 3 through its authorized signatory Chief Regional Manager,
Oriental Insurance Company Limited, Regional Office SCO No. 109 to
111, Sector 17-D, Chandigarh)
....Appellants.
Versus
M/s Sona Castings Limited, G.T. Road, Sirhind Side, Mandi Gobindgarh, Tehsil
Amloh, Distt. Fatehgarh Sahib through its Director Shri Pawan Kumar Goyal.
...Respondent.
3rd Appeal
First Appeal No. 575 of 2009
Date of institution : 22.4.2009
M/s Sona Castings Limited, G.T. Road, Sirhind Side, Mandi Gobindgarh, Tehsil
Amloh, Distt. Fatehgarh Sahib through its Director Shri Pawan Kumar Goyal.
....Appellant.
Versus
First Appeal No. 51 of 2009 2
1. Oriental Insurance Company Limited, Regd. & Head Office at Oriental
House PB No. 7037/A-25/27 Asaf Ali Road, New Delhi.
2. Oriental Insurance Company Limited, Divisional Office at 4-5-6, Block-E
(Patiala Road), Rajpura.
3. Oriental Insurance Company Limited, Branch Office at Loha Bazar, Mandi
Gobindgarh, Tehsil Amloh, Distt. Fatehgarh Sahib
(All 1 to 3 through its authorized signatory Chief Regional Manager,
Oriental Insurance Company Limited, Regional Office SCO No. 109 to
111, Sector 17-D, Chandigarh)
...Respondents.
4th Appeal
First Appeal No. 576 of 2009
Date of institution : 22.4.2009
M/s Sona Castings Limited, G.T. Road, Sirhind Side, Mandi Gobindgarh, Tehsil
Amloh, Distt. Fatehgarh Sahib through its Director Shri Pawan Kumar Goyal.
....Appellant.
Versus
1. Oriental Insurance Company Limited, Regd. & Head Office at Oriental
House PB No. 7037/A-25/27 Asaf Ali Road, New Delhi.
2. Oriental Insurance Company Limited, Divisional Office at 4-5-6, Block-E
(Patiala Road), Rajpura.
3. Oriental Insurance Company Limited, Branch Office at Loha Bazar, Mandi
Gobindgarh, Tehsil Amloh, Distt. Fatehgarh Sahib
(All 1 to 3 through its authorized signatory Chief Regional Manager,
Oriental Insurance Company Limited, Regional Office SCO No. 109 to
111, Sector 17-D, Chandigarh)
...Respondents.
First Appeal against the order dated 18.11.2008 of
the District Consumer Disputes Redressal Forum,
Fatehgarh Sahib.
Before:-
Shri Piare Lal Garg, Presiding Member.
Shri Jasbir Singh Gill, Member.
Present in F.A. No. 51 of 2009:-
For the appellants : Sh. Rahul Sharma, Advocate for Mrs. V.A. Talwar, Advocate For the respondent : Sh. J.S. Toor, Advocate PIARE LAL GARG, PRESIDING MEMBER:
This order will dispose of following four appeals:-
S. First Appeal Appellant's Name Respondent's Name Order
No. No.
1. 51 of 2009 Oriental Ins. Co. Ltd. M/s Sona Castings Ltd. 18.11.2008
& Ors.
2. 52 of 2009 Oriental Ins. Co. Ltd. M/s Sona Castings Ltd. 18.11.2008
& Ors.
3. 575 of 2009 M/s Sona Castings Oriental Ins. Co. Ltd. & Ors. 18.11.2008
Ltd.
4. 576 of 2009 M/s Sona Castings Oriental Ins. Co. Ltd. & Ors. 18.11.2008
Ltd.
First Appeal No. 51 of 2009 3
The above mentioned four appeals are against the impugned orders dated 18.11.2008 passed by the District Consumer Disputes Redressal Forum, Fatehgarh Sahib(in short the "District Forum") and are being disposed off in a single order as in all the appeals the question of law and facts involved are the same. The facts are taken from 'First Appeal No. 51 of 2009' and the parties would be referred by their status in this appeal.
2. Brief facts of the case are that the respondent got their induction furnace consisting of furnace, transformer, invertor, convertor section, D.C. Choke, Rectofoer, Transformer and Capacitors Bank with appellant No. 3(wrongly mentioned as appellant No. 2 in the memo of parties) for an amount of Rs. 30 lacs against the payment of Rs. 54,165/- as premium for the period of 11.2.2000 to 10.2.2001.
3. It was alleged that on 20.11.2000 the furnace of the respondent firm got out of order due to damage of four P.C. invertors, thristol, IPC MF capacitor, IPC power supply and some parts of cards, (PCB). The intimation regarding the incident that the respondent has suffered loss to the tune of Rs. 1,75,000/- was given to the appellants. Surveyor was deputed by the appellants to survey and assess the loss suffered by the respondent firm. The respondent approached many times to appellant No. 3 for the payment of the claim but the matter was being put off on one pretext or the other. So many letters were also written by the respondent firm to the appellants but all in vain. Legal notice dated 17.8.2001 was also served by the respondent, which was duly replied by the appellants stating that the appellants were ready to settle the claim. On receipt of the reply, the respondent again approached the appellants for the payment of the claim. The appellants wrongly and illegally deducted First Appeal No. 51 of 2009 4 excess clause, depreciation @ 30% and minimum policy clause @ 1% from the claim of the respondent against the terms and conditions of the policy as there was no such clause in the policy. The complaint was filed by the respondent with the prayer that the appellants may be directed to pay Rs. 1,75,000/- of the claim to the respondent with interest @ 24% per annum and also special compensation on account of financial loss, unnecessary harassment suffered by the respondent and due to negligence and deficiency in service of the appellants.
4. Upon notice, reply was filed by the appellants taking preliminary objections that the complaint of the respondent was not maintainable, had got no cause of action to file the complaint, concealed the material facts and the District Forum had no jurisdiction to try and decide the complaint as question of law and facts was involved in the complaint. On merits, it was denied that Pawan Kumar Goyal was duly authorized to file the complaint but the issuance of the cover note No. 465672 dated 1.2.2000 for the period of 11.2.2000 to 10.2.2001 for an amount of Rs. 30 lacs was not denied. It was also admitted that the intimation regarding the damage/loss was given on 20.11.2000 by the respondent and on receipt of the intimation Sh. Shamsher Chand, Consultant/Engineer was deputed to conduct the survey and to submit the report, who submitted his report on 5.3.2001 and assessed the loss to the tune of Rs. 74,532/-, subject to the production of bills and other papers. It was also reported that the control panel equipment was damaged due to fluctuation of voltage, which was purchased in 1995 by the respondent and used the same for six years before the date of damage. It was denied that the respondent had suffered a loss of Rs. 1,75,000/-. Service of the legal notice and its reply was also admitted. It is pleaded that the deductions were made as per the terms and conditions of the policy. It was further First Appeal No. 51 of 2009 5 alleged that the respondent was failed to fulfill the legal obligations, which were intimated vide letter dated 30.5.2001 to the respondent and he was asked to deposit the salvage of the damaged items or reinstatement value but the respondent failed to deposit the same. Again vide letter dated 24.7.2001 the appellants were requested to the respondent to fulfill the above requirements for the release of the amount of the claim. The Surveyor also wrote a letter dated 7.1.2001 to the respondent to furnish the required documents but the same were not submitted by him to the Surveyor. There was no delay on the part of the appellants and that the delay of the payment of the claim was due to non-submission of the requisite documents as well as salvage. It was prayed that the complaint be dismissed with an amount of Rs. 10,000/-.
First Appeal No. 52 of 2009
5. Brief facts of the case are that the respondent got their induction furnace consisting of furnace, transformer, invertor, convertor section, D.C. Choke, Rectofoer, Transformer and Capacitors Bank with appellant No. 3 for an amount of Rs. 30 lacs against the payment of Rs. 54,165/- as premium for the period of 11.2.2000 to 10.2.2001.
6. On 27.8.2000, the furnace of the respondent had gone out of order due to damage of power bushing 1 Nos., MF Capacitor 2400 volt, 3438 KVR, 550 HZ (3 Nos.) and intimation to the said damage was given by the respondent to the appellants as well as loss of Rs. 2,90,000/-.
7. The respondent approached many times to appellant No. 3 for the payment of the claim but the matter was being put off on one pretext or the other. Legal notice dated 17.8.2001 was also served by the respondent, which was duly replied by the appellants on 15.9.2001 stating that the appellants were ready to settle the claim. First Appeal No. 51 of 2009 6
8. On receipt of the reply, the respondent again approached the appellants for the payment of the claim. The appellants wrongly and illegally deducted excess clause, depreciation @ 25% and minimum policy clause @ 1% from the claim of the respondent against the terms and conditions of the policy as there was no such clause in the policy. The complaint was filed by the respondent with the prayer that the appellants may be directed to pay Rs. 2,90,000/- as claim to the respondent with interest @ 24% per annum and also special compensation on account of financial loss, unnecessary harassment suffered by the respondent and due to negligence and deficiency in service of the appellants.
9. Appellants admitted that the furnance of the respondent had gone out of order on 27.8.2000. Col. Chander Prakash, Surveyor and Loss Assessor was appointed by the appellants, who inspected the premises of the respondent and assessed the loss to the tune of Rs. 1,37,315/-.
10. The respondent had not submitted the site report, estimate and bills as intimated to him by the appellants vide its letters dated 17.5.2001 and 24.7.2001 for the reasons best known to the respondent, as such, the claim was not paid/settled by the appellants. There was delay on the part of the respondent and not on the part of the appellants for non settlement of the claim.
First Appeal No. 575 of 2009
11. The respondent-M/s Sona Castings Limited(appellant) also filed First Appeal No. 575 of 2009 against the order of the District Forum for the modification of the order and for enhancement of the claim amount. First Appeal No. 576 of 2009
12. The respondent-M/s Sona Castings Limited(appellant) also filed First Appeal No. 576 of 2009 against the order of the District Forum First Appeal No. 51 of 2009 7 for the modification of the said order and for the enhancement of the claim amount.
First Appeal No. 51 of 2009
13. The complaint of the respondent was dismissed by the District Forum vide its order dated 24.12.2008 and relegated the matter to the Civil Court as the points in dispute could not be adjudicated/decided by the District Forum in a summary manner.
14. The appeal was filed by the respondent against the order of the District Forum dated 24.12.2008 which was decided by the State Consumer Disputes Redressal Commission, U.T., Chandigarh and the order of the District Forum was set aside and case was remanded back to the District Forum to decide the same on merits within three months. If any amount is admitted by the respondents/opposite parties then the same be paid immediately without delay to the appellant/complainant.
15. The complaint was again decided on merits by the District Forum, Fatehgarh Sahib on 18.11.2008 and the appellants were directed to pay Rs. 74,580/- with interest @ 9% per annum from 20.11.2000 till its payment with Rs. 40,000/- as compensation and Rs. 500/- as costs.
16. The present appeal is filed by the appellants on the grounds that the compensation of Rs. 40,000/- as levied by way of penalty by the District Forum is wrong and liable to be set aside as the loss was suffered by the respondent. There was no deficiency in service on the part of the appellants. It is also held by the Supreme Court that once interest is paid then the same takes care of the element of compensation also, as such, the order of the District Forum is liable to be set-aside, which is not sustainable in the eyes of law.
17. There is no dispute between the parties that the induction furnace consisting of furnace, transformer, invertor, convertor section, D.C. First Appeal No. 51 of 2009 8 Choke, Rectofoer, Transformer and Capacitors Bank were insured with the appellants for an amount of Rs. 30 lacs for the period of 11.2.2000 to 10.2.2001 and an amount of Rs. 54,165/- was paid as premium by the respondent to the appellants.
18. There is also no dispute that the firm had suffered a loss due to non-working of the parts of the induction furnace on 20.11.2000 and the respondent had intimated to appellant No. 3 regarding the loss of Rs. 1,75,000/- due to non working of the induction furnace.
19. It is also admitted case of the parties that Sh. Shamsher Chand, Surveyor and Loss Assessor was appointed by the appellants to assess the loss due to damage of equipments of induction furnace of the respondent. The surveyor inspected the factory of the respondent and vide its report Ex. R-3 dated 5.3.2001 assessed the loss of Rs. 74,532/-.
20. We have perused the Survey report of the Surveyor and the relevant para of assessment after deducting depreciation and respective clauses, which is reproduced:-
"ASSESSMENT AFTER DEDUCTING DEPRECIATION AND
RESPECTIVE CLAUSES
S. No. Particulars Estimated Considered
1. Invertor Thyristors 4 Nos @ Rs. 16000/- 64,000.00 34525.00
2. Power Supply Unit 11,000.00 3500.00
3. MF Capacitor 1 90,000.00 35007.00
4. P.C.B. 1,100.00 NA
Labour Charges as settled with insured 10,000.00 1500.00
1,86,000.00 74532.00
21. The respondent had not specifically mentioned in the complaint that under what terms and conditions of the policy the respondent was entitled for an amount of Rs. 1,75,000/-.
22. It is also not denied by the respondent that the appellants had offered Rs. 74,532/- to the respondent, which was assessed by the Surveyor and the respondent had also not anywhere pleaded that the First Appeal No. 51 of 2009 9 salvage was deposited and the documents were submitted to the appellants as well as to the Surveyor, which were required as intimated to the respondent by the appellants and Surveyor vide letters as mentioned in the reply of the complaint.
23. So from the above discussion, the respondent was also at fault for not depositing of the salvage as well as non-submission of the requisite documents with the appellants. The respondent had also not produced any report of any Technical Expert to prove that he had suffered the loss to the tune of Rs. 1,75,000/- to rebut the report of the Surveyor.
24. The submission of the counsel for the appellants has force that Rs. 40,000/- awarded as compensation by the District Forum is unjustified as the District Forum has granted interest to the respondent on the amount of claim i.e. Rs. 74,532/-.
25. It is settled law that if the interest is awarded to the consumer than the compensation cannot be granted to the consumer if the mental tension or physical harassment suffered by the consumer is proved due to the act of the appellants. It is held by the Hon'ble National Commission in case "N.M. Meena versus Megacity (Bangalore) Developers Pvt. Ltd.", 2009(3) CLT 1 in para No. 7 as follows:-
"7. After hearing the parties, we are satisfied that once the interest has been awarded @ 18% p.a., the petitioners/complainants, normally would not have been entitled to any compensation, but since the other party is not in revision petition before us, we are not interfering with this order. As per law laid down by the Hon'ble Supreme Court in catena of judgments, the grant of interest @ 18% p.a. is itself a sufficient compensation. When the State Commission has granted compensation of Rs. 1 lakh along with interest @ 18% p.a., we see no justification to increase this amount of compensation as no ground has been shown to us to justify this increase."
26. In view of the above discussion, First Appeal No. 51 of 2009 of the appellants-Insurance Co. is partly allowed and the order of the District Forum is modified to the effect that the appellants will pay Rs. 74,532/- to First Appeal No. 51 of 2009 10 the respondent with interest @ 9% per annum from 20.2.2001 i.e. after three months from the occurrence, on the deposit of the salvage by the respondent with the appellant as well as litigation costs. However, the award of payment of Rs. 40,000/- as compensation is quashed. If the salvage is not deposited by the respondent then the appellants are directed to pay the above amount after deducting Rs. 5,000/- i.e. the value of the salvage. No order as to costs.
27. There is no evidence for the enhancement of the amount awarded by the District Forum, as such, First Appeal No. 575 of 2009 is dismissed. No order as to costs.
First Appeal No. 52 of 2009
28. We have perused the Surveyor Report Ex. R-3 dated 4.12.2000. The surveyor had assessed the loss to the tune of Rs. 1,37,315/-.
29. The appellants had also pleaded that the salvage was also not deposited by the respondent with the appellants but in the report Ex. R-3, Surveyor has not directed the respondent to deposit the salvage or its value to the appellants, as such, the version of the appellants that the respondent was at fault for not depositing of the salvage or its value is not correct.
30. In view of the above discussion, First Appeal No. 52 of 2009 of the appellants-Insurance Co. is partly allowed and the order of the District Forum is modified to the effect that the appellants will pay Rs. 1,37,315/- to the respondent with interest @ 9% per annum from 27.11.2000 i.e. after three months from the occurrence till realization. However, the payment of Rs. 40,000/- awarded as compensation is quashed as per the settled law. No order as to costs.
First Appeal No. 51 of 2009 11
31. There is no evidence for the enhancement of the order of the District Forum, as such, First Appeal No. 576 of 2009 is dismissed. No order as to costs.
32. The arguments in these appeals were heard on 10.12.2012 and the orders were reserved. Now the orders be communicated to the parties.
33. The appellants in First Appeal No. 51 of 2009 had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal and Rs. 49,532/- in compliance with the order dated 23.1.2009. These amounts with interest accrued thereon, if any, be remitted by the registry to the respondent by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining amount, if any due, shall be paid by the appellants to the respondent within 30 days from the receipt of the copy of the order.
34. The appellants in First Appeal No. 52 of 2009 had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal and Rs. 1,12,315/- in compliance with the order dated 23.1.2009. These amounts with interest accrued thereon, if any, be remitted by the registry to the respondent by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining amount, if any due, shall be paid by the appellants to the respondent within 30 days from the receipt of the copy of the order.
35. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
First Appeal No. 51 of 2009 12
36. Copy of this order be placed on:-
S. First Appeal Appellant's Name Respondent's Name Order No. No.
1. 52 of 2009 Oriental Ins. Co. Ltd. M/s Sona Castings Ltd. 18.11.2008 & Ors.
2. 575 of 2009 M/s Sona Castings Oriental Ins. Co. Ltd. & Ors. 18.11.2008 Ltd.
3. 576 of 2009 M/s Sona Castings Oriental Ins. Co. Ltd. & Ors. 18.11.2008 Ltd.
(Piare Lal Garg) Presiding Member December 19, 2012. (Jasbir Singh Gill) as Member