National Consumer Disputes Redressal
New India Assurance Co. Ltd. vs Punjab State Power Co. Ltd. on 26 February, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 130 OF 2015 (Against the Order dated 22/09/2014 in Appeal No. 814/2014 of the State Commission Punjab) 1. NEW INDIA ASSURANCE CO. LTD. DIVISIONAL OFFICE, 2090 THE MALL, BATHINDA PUNJAB ...........Petitioner(s) Versus 1. PUNJAB STATE POWER CO. LTD. THROUGH CHIEF MANAGER, GHTP, LEHRA MOHABAT, DISTRICT : BATHINDA PUNJAB ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN, PRESIDING MEMBER HON'BLE MR. DR. B.C. GUPTA, MEMBER For the Petitioner : Mr. S.M. Tripathi, Advocate For the Respondent : PUNJAB STATE POWER CO. LTD.
Dated : 26 Feb 2015 ORDER The complainant is a company incorporated under the provisions of the Companies Act. The complainant company has set up thermal plants at several places including Lehra Mohabat in District Bathinda of Punjab. The company obtained a Standard Fire & Peril Policy from the petitioner insurance company in respect of the aforesaid power plant, for a sum of Rs.2396.025 crores for the period from 01.4.2012 to 31.3.2013. In an incident of fire, which happened on 27.9.2012, the Conveyor Belts and other equipments in the aforesaid power plant were damaged. An intimation being given to the insurance company, a surveyor was appointed who visited the site of the accident and assessed the total loss to the complainant at Rs.14,25,000/-. However, the aforesaid claim was not paid to the complainant company on the ground that it fell within 'Excess Clause'. The complainant brought it to the notice of the insurance company that Excess Clause had not been incorporated in the policy issued to them by the insurance company for the period in question. The insurance company however, maintained that Excess Clause was applicable to all insurance policies. Being aggrieved from the refusal of the insurance company, the complainant company approached the concerned District Forum by way of a complaint.
2. The complaint was resisted by the petitioner insurance company, primarily on the ground that the Excess Clause was applicable to all the policies and therefore, the claim lodged by the complainant company was not payable.
3. Vide its order dated 13.5.2014, the District Forum, directed the petitioner insurance company to pay a sum of Rs.13,51,079/- to the complainant, along with interest on that amount @ 9% per annum with effect from 01.01.2013. The petitioner company was also directed to pay Rs.1.00 lac as compensation and cost to the complainant.
4. Being aggrieved from the order passed by the District Forum, the insurance company approached the concerned State Commission by way of an appeal. The said appeal having been dismissed vide impugned order dated 22.9.2014, the said company is before this Commission by way of the present revision petition.
5. It can hardly be disputed that since the Excess Clause was not contained in the insurance policy issued to the complainant, the said clause cannot be applied to the case before this Commission.
6. The terms of the insurance policy being sacrosanct and there being no such clause in the said policy, the insurance company must reimburse the complainant for the loss suffered by it in respect of the plant and machinery. Therefore, there is no merit in the contention as far as the payment of principal of Rs.13,51,079/- with interest is concerned. In the case before us, the insurance policy issued to the complainant stipulated reduction of only Rs.10,000/- for each and every loss arising out of the Peril and act of God. Therefore, the petitioner company is entitled to deduction of only a sum of Rs.10,000/- from the claim amount of Rs.13,51,079/- and has to pay the balance amount to the complainant company along with interest as per the rate awarded by the District Forum.
7. The main contention of the learned counsel for the petitioner company is that since the complainant is a Corporation, compensation on account of alleged harassment etc., is not justified to it. In support of his contention, he relied upon the decision of the Hon'ble Supreme Court in Sikka Papers Limited Vs. National Insurance Company III (2009) CPJ 90 (SC), where the Hon'ble Supreme Court inter-alia held as under:
"19. By way of footnote, we may observe that claim of Rs.10,00,000/- made by the complainant for mental harassment is wholly misconceived and untenable. The complainant is a company and, therefore, claim for mental harassment is not legally permissible. It is only the natural person who can claim damages for mental harassment and not the corporate entity".
8. In the case before us, the District Forum awarded a sum of Rs.1.00 lacs towards compensation and costs. Though compensation cannot be awarded to a corporate entity, costs can certainly be awarded. We therefore, modify the order passed by the State Commission by directing that though no payment against the compensation will be payable by the petitioner, it shall pay a sum of Rs.25,000/- to the complainant towards the cost of litigation.
Subject to the aforesaid two modifications, the order passed by the State Commission is upheld. The revision petition stands disposed of.
......................J V.K. JAIN PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER