State Consumer Disputes Redressal Commission
National Insurance Company Limited vs M/S P.K. & Compa on 17 January, 2014
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 19 of 2012
Date of institution: 5.1.2012
Date of Decision:17.1.2014
National Insurance Company Limited, Sultanpur Road, Kapurthala through
its Manager, now through the Authorized Signatory of Chandigarh
Regional Office, SCO No. 332-334, Sector 34-A, Chandigarh.
.....Appellant/Opposite Party
Versus
M/s P.K. & Company, Nakodar Road, Kapurthala, through its Prop. Sh.
Sham Sunder Agarwal.
.....Respondent/Complainant
Argued By:-
For the appellant : Sh. Nitin Gupta, Advocate for
Sh. R.C. Gupta, Advocate
For the respondent : Sh. Rohit Ahuja, Advocate
2nd Appeal
First Appeal No. 432 of 2012
Date of institution: 9.4.2012
M/s P.K. & Company, Nakodar Road, Kapurthala, through its Proprietor
Sh. Sham Sunder Aggarwal.
.....Appellant/Complainant
Versus
National Insurance Company Limited, Sultanpur Road, Kapurthala through
its Manager.
.....Respondent/Opposite Party
Argued By:-
For the appellant : Sh. Rohit Ahuja, Advocate
For the respondent : Sh. Nitin Gupta, Advocate for
Sh. R.C. Gupta, Advocate
First Appeal against the order dated
16.11.2011 passed by the District Consumer
Disputes Redressal Forum, Kapurthala.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Vinod Kumar Gupta, Member
ORDER
FIRST APPEAL NO. 19 OF 2012 2 Gurcharan Singh Saran, Presiding Judicial Member This order will dispose of two above mentioned appeals. Both the appeals are arising out of the impugned order dated 16.11.2011 passed by the District Consumer Disputes Redressal Forum, Kapurthala(hereinafter called "the District Forum") in consumer complaint No.90 dated 10.8.2011 vide which the complaint filed by the complainant was partly allowed with the direction to the OP to pay a sum of Rs. 4,71,586/- alongwith interest @ 9% p.a. from the date of order till realization.
2. The complaint was filed by the complainant (hereinafter called "the complainant") on the allegations that he was running the business of supplying rice husk to various industries and had obtained the insurance policy from opposite party for Rs. 60 lacs vide cover note Nos. 102449 dated 19.11.2009, 104169 dated 4.6.2010 w.e.f. 19.11.2009 to 18.11.2010 and 4.6.2010 to 3.6.2011, respectively. Due to heavy rains in the 4th week of July, 2010, the rice husk of the complainant lying there was destroyed/washed and accordingly, he suffered huge financial loss between 22.7.2010 to 30.7.2010 and on 30.7.2010, he lodged claim with the OP and Surveyor had visited the spot on 31.7.2010. The Surveyor in his report dated 12.8.2010 assessed the loss of Rs. 4,71,586/- but the OP repudiated the claim vide letter dated 31.12.2010, accordingly, the complaint.
3. The complaint was contested by the OP, filing written statement taking preliminary objections that the complaint of the FIRST APPEAL NO. 19 OF 2012 3 complainant is not maintainable in the present form; the complainant has got no locus-standi or cause of action; the complainant has not approached the Hon'ble Forum with clean hands and has suppressed the true facts; the complainant is estopped by his act and conduct; the claim of the complainant is not covered under the policy as no fortuitous covered peril has operated; the matter has already been adjudicated by the Hon'ble Forum and that the insurance policy is for commercial purpose. On merits, the policy has been admitted. The complainant had lodged the claim, which was considered and was rightly repudiated as claim was not covered under the policy, therefore, there is no merit in the complaint and the same be dismissed.
4. The parties were allowed by the learned District Forum to lead their evidence.
5. In support of his allegations, the complainant had tendered into evidence affidavit of Sham Sunder Aggarwal Ex. C-1, order of the District Forum, Kapurthala dated 6.7.2011 Ex. C-2, cover notes Exs. C-3 to C-7. On the other hand, the opposite party had tendered into evidence affidavit of Nand Kishore, Branch Manager of OP Ex. O-A, affidavit of Sumant Sud, Surveyor & Loss Assessor Ex. O-B, repudiation letter dt. 31.12.2010 Ex. O-1, surveyor report Ex. O- 2, policy terms and conditions Ex. O-3, insurance policy Ex. O-4, photographs Exs. O-5 to O-8.
6. After going through the allegations in the complaint, written statement filed by the OP, evidence and documents brought FIRST APPEAL NO. 19 OF 2012 4 on the record, the learned District Forum partly allowed the complaint as stated above.
7. Aggrieved with the order passed by the learned District Forum, the complainant as well as opposite party have filed the present appeals.
8. We have heard the learned counsel for the parties.
9. The First Appeal i.e. F.A. No. 19 of 2012 filed by the OP/appellant on the grounds that the learned District Forum has gravely erred in not appreciating the objection raised by the Appellate Authority that the 2nd complaint on the same cause of action between the same parties is not maintainable; the learned District Forum has not appreciated that the loss due to rains only is not covered under the Standard Peril Policy. The rice husk was lying in the low lying area without any precaution and reasonable care.
10. Firstly taking the plea that it was 2nd complaint, the first complaint was decided by the learned District Forum vide order dated 6.7.2011 on the ground that it was premature. In case the complaint has not been decided on merits then 2nd complaint is maintainable. The settled law is that the complaints under the Consumer Protection Act, 1986 are to be decided keeping in view the interest of justice. The procedural technicalities cannot hinder the dispensation of justice. In this context, reference can be made to the judgment of Hon'ble Supreme Court reported as "NEW INDIA ASSURANCE CO. LTD. v. R. SRINIVASAN" I(2000) CPJ 19 (SC) in which the Hon'ble Supreme Court was pleased to observe as under:-
FIRST APPEAL NO. 19 OF 2012 5
"20. In the instant case, the vital fact of there being an insurance cover in favour of the respondent is not disputed. The loss suffered by the respondent is not disputed and the claim of the respondent is also not questioned. The only point urged before the State Commission as also before the National Commission and, for that matter, before us is that on account of the first complaint having not been restored, the second complaint would not lie. The interest of justice, in our opinion, cannot be defeated by this rule of technicality. The rules of procedure, as has been laid down by this Court a number of times, are intended to serve the ends of justice and not to defeat the dispensation of justice. The respondent had suffered loss which was squarely covered by the Policy of Insurance granted by the appellant. Since his claim is not being questioned before us on merits and is being sought to be defeated on the technical plea referred to above, we are not prepared to interfere with the orders passed by the District Forum, the State Commission and the National Commission, particularly as it is stated before us that the whole of the claim amount has already been paid to the respondent."
It was also held by this Commission in F.A. No. 577 of 2010 "Master Parteek Kumar Goyal vs. The Rayat Educational & Research Trust & Others", decided on 14.8.2013 : 2013 (4) CLT 181 (PB) by following the above referred judgment. In this case, the earlier complaint filed by the complainant was dismissed in default and not decided on merits. Application for restoration was withdrawn and second complaint filed. District Forum dismissed the complaint on the ground that 2nd complaint not maintainable. It was held by this Commission that this observation of the District Forum is not tenable in the eyes of law because the provisions of Order 9 Rule 8 of CPC are not applicable to the Consumer Foras.
11. The 2nd point is that the rice husk was lying in the low lyine area without any precaution and reasonable care exercised by the insured. Certainly, the rice husk in large quantity was collected by the respondent/complainant and it was inspected by the official of the FIRST APPEAL NO. 19 OF 2012 6 insurance company before giving the policy and at that time it was not pointed out or that the policy cannot be issued in case it was lying in the low lying area. On this point, there is judgment of Hon'ble National Commission III(2011) CPJ 90 (NC) "Shambhu Nath Balmukand vs. New India Assurance Company Ltd.". In that case, the insurance company had repudiated the claim. Loss assessed was due to structural failure of pits, which led the water to seep from weak walls and un-plastered surface having unsuitable protection. It was observed that the OP had inspected the plant of the complainant including the pits where damage to rab was caused and it was only after satisfying the nature of the structure of these pits that the insurance company had agreed to issue the insurance policy. That being the position, it was not open for the Surveyor to have gone into the question whether the pits have been suitably built.
12. Same is the position here and no contrary judgment has been cited by the appellant-opposite party, therefore, the claim cannot be repudiated on this plea.
13. The next proposition is whether the claim of the respondent/complainant is maintainable. The claim of the complainant/respondent is maintainable under Clause 6 of the policy, which reads as under:-
"6. Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood and Inundation.
Loss, destruction or damage directly caused by Storm, Cyclone, Typhoon, Tempest, Hurricane, Tornado, Flood or Inundation excluding those resulting from earthquake, Volcanic eruption or other convulsions of nature. (Whatever earthquake cover is given as an "add on cover" the FIRST APPEAL NO. 19 OF 2012 7 words excluding those resulting from earthquake volcanic eruption or other convulsions of nature" shall stand deleted)."
14. Flood and Inundation is covered under this clause. Inundation can be for any reason and it has been specifically pleaded in the complaint that due to heavy rains the water had accumulated caused damage to the rice husk. On this point also the learned District Forum has relied upon the judgment II (2009) CPJ 311 (NC) "United India Insurance Co. Ltd. vs. Dipendu Ghosh & Anr.". In that case also, flood water entered into the factory/godown during the rainy season and the loss was due to moisture in view of the water logging - Claim repudiated by the insurance company on the plea that the loss was not caused directly by storm, cyclone, flood and inundation, loss not covered by period covered under policy - Contention unacceptable. Loss caused from direct and proximate cause of inundation, covered under the policy." Here the situation is more graved because the rainy water had entered into the premises, cause inundation and consequently, damage to the insured property, therefore, we do not see any reason how the damage caused to the insured property of the respondent/complainant cannot be covered.
15. No other point has been raised.
16. In view of the above discussion, we do not see any merit in the appeal filed by the appellant/opposite party and the same is dismissed with no order as to costs.
FIRST APPEAL NO. 432 OF 2012 Misc. Application No. 716 of 2012 FIRST APPEAL NO. 19 OF 2012 8
17. There is an application under Section 5 of the Limitation Act that there is delay of 115 days in filing the appeal. It has been stated in the application that due to some financial crises, he could not immediately file the appeal. Proceeding of the award were stayed by this Commission on the appeal filed by the respondent/opposite party, therefore, it has resulted delay.
18. Financial difficulty is no ground but in case the party has a good case then the same should not be rejected on the ground of limitation. When both the parties have filed the appeal, then both the appeals should be disposed of on merits. Accordingly, we are of the opinion that the application for condontion of delay should be allowed and the delay of 115 days is hereby condoned.
Main Case on merits
19. It has been contended by the counsel for the appellant- complainant in the grounds of appeal that his insurance policy was covering stock upto Rs. 60 lacs whereas his stock was Rs. 78,79,352/- whereas 10% has been deducted on account of previous loss and 60% on account of salvage. Therefore, finding so recorded by the learned District Forum are not correct and compensation amount has not been awarded to the appellant/complainant and no interest has been allowed.
20. No doubt that the report of the Surveyor be respected but the report of the Surveyor is not the last word, it should be upon some basis or principles. In case we go through the report of the Surveyor, the total property has been valued at Rs. 78,79,352/- and it was insured for Rs. 60 lacs and under insurance was Rs. 18,79,352/-, FIRST APPEAL NO. 19 OF 2012 9 which comes to 23.60% and same stock after 5% storage, loss will come to the value of Rs. 55,15,547/-, which has been assessed as Rs. 7,87,935/- but once he has taken storage loss 5% the Surveyor of the appellant-opposite party cannot justified 10% less for previous loss when the policy was taken for this year, therefore, the amount of Rs. 7,87,935/- has been wrongly deducted by the Surveyor. Then for salvage 60% has been deducted, which comes to Rs. 9,45,523/-. During the course of arguments, it was put to the counsel for the appellant whether he is ready to return the salvage to the opposite party/respondent in case he is to receive the amount of Rs. 9,45,523/- from the respondent but he did not respond. Therefore, value of salvage has been correctly deducted. Accordingly, the award passed by the learned District Forum requires modification apart from Rs. 4,71,586/-, the appellant will also be entitled to Rs. 7,87,935/-, which was deducted on account of loss 10% of previous loss.
21. Accordingly, the appeal filed by the appellant-complainant is partly accepted. The award passed by the learned District Forum is modified that the appellant/complainant will be entitled to Rs. 12,59,521/-. He will be further entitled to 9% interest on this amount from the date of filing the complaint till payment.
22. The arguments in these appeals were heard on 14.1.2014 and the orders were reserved. Now the orders be communicated to the parties as per rules.
23. The appellant in F.A. No. 19 of 2012 had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if FIRST APPEAL NO. 19 OF 2012 10 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 appellant. Remaining amount shall be paid by the appellant to the respondent within 30 days from the receipt of the copy of the order.
24. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
25. Copy of this order be placed on F.A. No. 432 of 2012.
(Gurcharan Singh Saran)
Presiding Judicial Member
January 17, 2014. (Vinod Kumar Gupta)
as Member
FIRST APPEAL NO. 19 OF 2012 11