State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs M/S Shital Fabers on 25 April, 2018
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.28 of 2018
Date of Institution: 16.01.2018
Order reserved on:23.04.2018
Date of Decision : 25.04.2018
The New India Assurance Co. Ltd., SCO No.36-37, Sector 17-A,
Chandigarh, through its duly Authorized Officer.
.....Appellant/opposite party
Versus
M/s Shital Fibres Ltd., Registered Office A-17, Focal Point
(Extension) Jalandhar-144004 through its Authorized Person Sh.
Harpreet Singh S/o Sh. Mohinder Singh.
.....Respondent/complainant
First appeal against order dated
06.12.2017 passed by the District
Consumer Disputes Redressal
Forum, Jalandhar.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member
Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Vinod Gupta, Advocate
For the respondent : Sh. Karan Nehra, Advocate
.................................................
AND 2) First Appeal No.103 of 2018 Date of Institution: 27.02.2018 Order reserved on:23.04.2018 Date of Decision : 25.04.2018 First Appeal No.28 of 2018 2 M/s Shital Fibres Limited, Registered Office: A-17, Focal Point (Extension) Jalandhar-144004, through its Authorized Person Sh. Harpreet Singh S/o Sh. Mohinder Singh Jal.
.....Appellant/complainant Versus
1. M/s The New India Assurance Company Limited, through its Managing Director/Chairman, Regd. Office: New India Assurance Building, 87, M.G. Road, Fort, Mumbai-400001.
2. The Senior Divisional Manager, M/s The New India Assurance Co. Ltd., Office-II, 356, Guru Teg Bahadur Nagar, Jalandhar- 144003.
.....Respondents/opposite parties First appeal against order dated 06.12.2017 passed by the District Consumer Disputes Redressal Forum, Jalandhar.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member Smt. Surinder Pal Kaur, Member Present:-
For the appellant : Sh. Karan Nehra, Advocate For the respondents : Sh. Vinod Gupta, Advocate ................................................. J.S KLAR, PRESIDING JUDICIAL MEMBER :-
By this common order, we intend to dispose of the above referred two connected first appeals, as they have arisen out of the same order dated 06.12.2017 of the District Consumer Disputes Redressal Forum Jalandhar (in short the 'District Forum), as such, they can be disposed of together. The order shall be pronounced by us in main first appeal no.28 of 2018 titled as "New India Assurance Co. Ltd. Vs. M/s Shital Fibers Ltd.", which has been filed by opposite party (OP) against order dated 06.12.2017 of First Appeal No.28 of 2018 3 District Forum, vide which the complaint of the complainant was partly accepted by directing OPs to pay Rs.19,99,000/- to complainant. The appellant of this appeal is OP in the original complaint before the District Forum and respondent of this appeal is complainant therein and they be referred as such, hereinafter for the sake of convenience.
2. First appeal no.103 of 2018 has been filed by complainant now appellant against order dated 06.12.2017 of the District Forum praying for awarding of 12% interest on the awarded amount by District Forum from 15.04.2012. The appellant of this appeal is complainant in the complaint before the District Forum and respondents of this appeal are the opposite parties therein and they be referred as such hereinafter, as arrayed in the complaint.
3. M/s Shital Fibers Limited through its authorized person Harpreet Singh S/o Mohinder Singh filed complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against opposite parties (OPs) on the allegations, that OPs are engaged in the business of providing insurance coverage with regard to the person and property of General Public for consideration through out India and more particularly at Jalandhar. The complainant is a registered private limited company, duly registered with the Registrar of Companies in the year 1993 in accordance with the provisions of 'The Companies Act'. Sh. Harpreet Singh S/o Sh. Mohinder Singh has been authorized to act on behalf of the complainant by passing First Appeal No.28 of 2018 4 resolution dated 14.08.2013 by Board of Directors of complainant for signing all the documents, pleading etc. on behalf of the complainant company. It was further averred that to save all the risk of loss/damage of building, machinery and stocks (Raw, finished, semi-
finished) and goods of stock in process, packing material etc., complainant has been taking the insurance policies to insure the same from the concerned insurance companies for the last many years. The complainant got insured for all risk of loss/damage its building, plant and machinery, electrical fitting/installation, stocks (Floater) of all kinds of raw material used for manufacturing of Blanket/Carpets, including finished, semi-finished goods in process, packing material and such other goods of allied nature in the trade of the complainant, lying and or stored in factory premises/shed at 22 places including at C-81, Focal Point, Extension, Jalandhar of several Crore of Rupees with the OPs and with M/s Bharti AXA General Insurance Company Ltd. at Jalandhar under several policies by paying premium of Rs.72,798/- for a policy i.e. Fire Floater Policy bearing No.36100011110300000008 for the period from 01.07.2011 to 30.06.2012. The OPs sent only four pages of the above mentioned policy without any terms and conditions thereof to the complainant and even OPs had never communicated any terms and conditions of the above mentioned policy to the complainant. As ill luck would have it, on the night of 15.04.2012 at about 11:30 PM, factory building at C-81, Focal Point Extension, Jalandhar, suddenly First Appeal No.28 of 2018 5 collapsed damaging the entire plant and machinery/stock/electrical installations and other contents lying/installed within the building at C-81, Focal Point Extension, Jalandhar. Intimation of this incident of collapse of above mentioned building was also reported in electronic and print media in the country. The fire brigade reached on the spot of occurrence and criminal case was also registered in this regard, but there was no loss of human life. On the receipt of the intimation, OPs appointed the Surveyor for the assessment of the loss and on demand of the Surveyor M/s Consolidated Surveyors Pvt. Ltd, the documents and information were supplied to the said surveyor and the said surveyor submitted an assessment report as under:-
"That as per the survey and assessment report of M/s Consolidated Surveyors Pvt. Ltd, 171, Sector 36-A, Chandigarh, Cause of Loss, all technical experts are of the opinion that if substandard material is used or the design/construction of the building is faulty it would not last for six years. In our opinion the drain, sewerage line and the digging of the pit has also a major role in the building collapse. The possibility of subsidence under the foundation of the building cannot be ruled out. On analysis of reports of all the experts, the correspondence between the Govt. Departments of Irrigation and Sewerage, test reports of the material issued by Guru Nanak Engineering College, Ludhiana obtained by Police Department leads to the only one cause of loss i.e. First Appeal No.28 of 2018 6 Subsidence under the foundation of the building. The rear part of the building towards drainage, collapsed first and rear wall and columns fell towards the drainage, which also establishes that the subsidence has taken place. In losses, in which the cause of loss after the incident, could not be proved and is has doubts, the benefit of doubt is normally given to the insured".
As per the Survey and Assessment Report of the Surveyor, the loss of the share of the New India Insurance Company was Rs.14,39,859/-, but the OP No.2, vide its letter dated 18.06.2013 repudiated the claim of the complainant being the claim inadmissible due to "Non operation of any insured peril". The OPs illegally, arbitrarily, without application of mind, repudiated the claim of the complainant, vide its registered letter dated 18.06.2013. The complainant suffered mental tension, harassment, inconvenience, financial loss etc. and is entitled for the total claim of Rs.19,99,000/-. The complainant prayed that OPs be directed to pay insurance claim of Rs.19,99,000/- to the complainant including compensation for mental tension, harassment, inconvenience, financial loss etc, deficiency in service, negligence and unfair trade practice.
4. Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant vehemently by raising preliminary objections that the complainant has not come to the Forum with clean hands and has tried to mislead the Forum by concealing the real facts about the dismissal of the complaint at the First Appeal No.28 of 2018 7 admission stage on 04.07.2013, which was filed by the complainant before the National Commission, New Delhi, vide Complaint No.155 of 2013, titled "M/s Shital Fibers Ltd. Vs. M/s Bharti Axa General Insurance Co. Ltd.", on the same cause of action and a part of the same claim has been claimed in the present complaint by complainant and as such the complaint is liable to be dismissed. The complaint is not maintainable against the OPs, as the claim of the complainant was repudiated, as per terms and conditions of the insurance policy, vide letter dated 18.06.2013 after due application of mind, as the claim of the complainant is not admissible due to "Non operation of any insured peril". It was denied that there is any deficiency in service, negligence and unfair trade practice on the part of the OP. The claim was repudiated by OP, as per terms and conditions of the policy. The complainant company is commercial unit and is not covered under the definition of Consumer under the Act and as such, the complaint is liable to be dismissed. On merits, the facts of purchase of the insurance policy as well as causing damage to the complainant company and submission of claim were not denied. The report of S.S. Sidhu BE (Civil) is that building structure collapsed due to faulty design and construction. The said building was constructed in the year 2006-07 and the building survived for 5-6 years after its construction and no cracks were observed in the columns and beams of the building. The fall of the structure was unforeseen and all of a sudden. The National First Appeal No.28 of 2018 8 commission relied upon the report of Er. S.S. Sidhu in the connected complaint filed by complainant that the claim of complainant fell under the exclusions clause 8th of the insurance policy and has been rightly repudiated. The insurance claim was repudiated by OPs letter being inadmissible due to "Non operation of any insured peril". OPs prayed for dismissal of the complaint.
5. The complainant tendered in evidence affidavit of authorized person Ex.CA and another affidavit of Jatinder Kumar Ex.CB alongwith copies of documents Ex.C-1 to Ex.C-7 and closed the evidence. As against it, OPs tendered in evidence two affidavits Ex.OA and Ex.OB alongwith documents Ex.O-1 to Ex.O-8 and closed the evidence. On conclusion of evidence and arguments, the District Forum allowed the complaint of the complainant, as referred to above. Aggrieved by above order, OPs now appellant, has directed first appeal no.28 of 2018 against the same, whereas, the complainant has preferred first appeal no.103 of 2018 for awarding of interest @12% on the awarded amount.
6. We have heard the submissions of ld. counsel for the parties at considerable length and have also gone through the record of the case. Before, we proceed to decide the appeal on merits, it is apposite to look into this point as to whether the District Forum, which passed the order under challenge in these appeals was within its pecuniary jurisdiction to decide it. The counsel for the insurance company forcefully contended that the District Forum has assumed First Appeal No.28 of 2018 9 the jurisdiction in this case to try the complainant which was not vested in it by law, despite the fact that the value of the subject matter in dispute exceeded Rs.20,00,000/-. It is foremost point to be adjudicated in these appeals by us. Any order passed by District Forum without holding pecuniary jurisdiction is a nullity. We have examined the pleadings and evidence on the record in this case. The complainant is a private limited company and it took the insurance policy from OPs for security of the stocks, machinery and so on. Factory premises of the complainant suddenly collapsed damaging the entire plant, machinery, stocks, electrical installations and other contents lying installed within its building at C-81, Focal Point Extension Jalandhar on the night of 15.04.2012 at 11:30 PM. The OPs repudiated the claim on the ground that the claim fell within the exclusion clause of the insurance policy and is not covered. The complainant filed claim for recovery of Rs.19,99,000/- from OPs in this complaint. Our attention has been drawn to the report of the surveyor deputed by OPs for assessing the loss in the insured premises, which is dated 31.03.2013 Ex.C-5 on the record. He reported the loss of Rs.90,03,806/- and after adjusting the additional 1% for debris removal Rs.90,038/-, minus the excess clause of Rs.4,54,692/-. He found the net loss as Rs.86,39,151/- in this case to complainant. The OPs also tendered in evidence the report of surveyor vide Ex.OP-4 on the record to the effect that the net loss has been assessed as Rs.86,39,151/- by the surveyor. The First Appeal No.28 of 2018 10 complainant company took two policies for the factory premises and the stocks and the material lying thereat including building, plant, machinery and so on. One policy was taken from New India Insurance Company Limited and second was taken from M/s Axa General Insurance Company Limited. The complainant filed the complaint on this cause of action against M/s Bharti Axa General Insurance Company Limited before the National Commission, vide complaint no.155 of 2013, decided on 04.07.2013. The compensation of Rs.4,19,04,368/- towards loss and damage and Rs.25,00,000/- as punitive losses and Rs.20,00,000/- towards compensation has been claimed by complainant in that complaint before the National Commission. This complaint was dismissed by the National Commission, vide order Ex.OP-1 on 04.07.2013 and Hon'ble Supreme Court has remanded the matter to the National Commission by reversing the order of the National Commission for adjudication on merits again. The complainant took the insurance policy for a sum of Rs.Six Crore from OPs vide Ex.C-3 on the record. The complainant has split up the cause of action in this case, which is indivisible one in this case. The complainant filed the complaint against Bharti Axa General Insurance Company before the National Commission regarding this cause of action and also filed this complaint before the District Forum Jalandhar by bifurcating the same cause of action. It is not explained to us as to how this claim has been apportioned to the tune of Rs.19,99,000/- by the First Appeal No.28 of 2018 11 complainant, when the net loss in the factory premises has been found by the surveyor to the tune of Rs.86,39,151/-. We find force in the submission of counsel for OPs that cause of action is indivisible one and it cannot be split up and the principle of constructive res judicata operates in this case. A person is not entitled to file the successive complaints by splitting up the same cause of action. Even otherwise, the loss assessed by the surveyor is to the tune of Rs.86,39,151/-, which is beyond the pecuniary jurisdiction of District Forum and the District Forum was, thus, not competent to entertain and adjudicate this complaint due to lack of pecuniary jurisdiction. We, thus, hold that even otherwise, the cause of action cannot be split up by the complainant by bifurcating it and hence the complaint as presented by complainant is not competent before District Forum.
7. As a result of our above discussion, we reverse the order dated 06.12.2017 of the District Forum under challenge in this case and resultantly accept first appeal no.28 of 2018 filed by The New India Insurance Company, whereas first appeal no.103 of 2018 filed by complainant stands dismissed resulting in dismissal of the complaint. The complainant is at liberty to file its complaint before appropriate competent Forum. The complainant can seek the invocation of Section 14 of Limitation Act, 1963 in this regard.
8. Appellant of First Appeal No.28 of 2018 had deposited an amount of Rs.25,000/- in this Commission at the time of filing the appeal and further deposited Rs.14,74,250/- in compliance with First Appeal No.28 of 2018 12 order of this Commission. These amounts alongwith interest, which accrued thereon, if any, be remitted by the registry to appellant of this appeal, being opposite party no.1 in complaint, by way of crossed cheque/demand draft after the expiry of 45 days subject to stay order, if any.
9. Arguments in above referred appeals were heard on 23.04.2017 and the orders were reserved. Certified copies of the orders be communicated to the parties as per rules.
10. The appeals could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (SURINDER PAL KAUR) MEMBER April 25, 2018 (MM)