National Consumer Disputes Redressal
M/S. Advanced Healthcare Resources ... vs New India Assurance Co. Ltd. & Ors. on 20 January, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 211 OF 2010 1. M/S. ADVANCED HEALTHCARE RESOURCES INDIA PVT. LTD. & ORS. Through ITs Vice Chairman & CEO,
Gate No.2,St. Johns Medical College, Hospital Campus, Sarjapur Road, Kormangala Bangalore-560034 Karnataka 2. RAVI NARASIMHAN R/O. No.136, 16th Main Road, Jayanagar, IV Block Bangalore-560011 Karnataka 3. INDRANI NARASIMHAN No.136, 16th Main Road, Jayanagar, IV Block Bangalore-560011 Karnataka ...........Complainant(s) Versus 1. NEW INDIA ASSURANCE CO. LTD. & ORS. Through Its Chairman & Managing Director,
B.H.Road, Tumkur-572102 Karnataka 2. THE NEW INDIA ASSURANCE CO.LTD., Through Sr.Dvn, Manager XIII (672300) Mayur Complex KIADB Main Road Bangalore-58 3. THE NEW INDIA INSURANCE CO LTD., Through Br. Manager Tumkur shopping complex, B.H. Road Tumkur-572103 Karnataka ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE DR. S.M. KANTIKAR, MEMBER
For the Complainant : Mr. S. N. Bhat, Advocate For the Opp.Party : Mr. P. K. Seth, Advocate
Dated : 20 Jan 2016 ORDER
JUSTICE J.M. MALIK, PRESIDING MEMBER
1.M/s. Advanced Health Care Resources India Pvt. Ltd., the complainant No. 1 is a private limited company. The complainant took loan from Corporation Bank for the purchase of MRI Machine which comprises of three components namely:
(i) GE VECTOR MRI SYSTEM (inclusive of all types of coils camera with console & system, C Spin,
(ii) Brain Coil, Shoulder Coil, Magnet: Model Vectra GE 39232 AG SL NO.498 AGFA Scopix LT 28 Lase,
(iii) Console & OFC Chiller - 2002.
The said MRI machine was installed at complainant's Kerala MRI Centre, Lissile Hospital Campus, Ernakulam. The complainant got this machinery insured from the New India Assurance Co. Ltd., OP, in this case. The insurance policy was renewed from year to year. The last insurance policy issued by the insurance company OP was valid for the period from 30.04.2007 to 29.04.2008, the copy of which has been placed on record as Exhibit C1.
2. The said MRI machine suffered a breakdown on 09.02.2008 and became totally non-functional. The information was furnished to the insurance company on 11.02.2008. The copy of letter is annexed with the complaint as Annexure C2. M/s. Wipro GE Healthcare is the authorised servicing agency for the said MRI machine. It noted that the cost of repair of the machine was very high and that it would not be financially viable to repair the machine. The copies of their letters dated 04.08.2008 and 19.08.2008 are annexed as Annexure C3 and C4 respectively.
3. The insurance company got the survey done through Shri H.S. Mahabala, a surveyor on 20.02.2008. Vide letter dated 10.04.2008 (Annexure C5) he submitted that the assessment would be made in accordance with the terms & conditions of the insurance policy. The copy of his report did not see the light of the day. The insurance company wrote a letter dated 12.01.2009 (Annexure C6) that Mr. T. Thomas of M/s. T. Thomas Grom Surveyors would inspect the machine. The complainant raised no objection vide letter dated 24.01.2009, the copy of which was placed on record as Annexure C7. M/s. Wipro GE Healthcare also wrote a letter dated 30-03-2009 to the complainant stating that the prevailing selling price for an MRI machine having similar features was Rs.1.8 crore. Its true copy (Annexure C9) has been placed on record. The complainant sent a letter dated 09.05.2009 to the opposite party for expediting the matter and its copy was placed on the record as Annexure C10 and reminder was sent on 16.05.2009 and its copy has been annexed as Annexure C11. The copy of another reminder has also been placed on the record as Annexure C12. The complainant has also placed the covering letter dated 10.06.2009 and claim form (Exhibit C13) and reminder letter dated 15.06.2009 as Annexure C14 and letters as Annexures C14, C15 and C16.
4. The complainant received a handwritten letter dated 18.7.2009 from one Mr. B. Gopala Krishna claiming that he had been appointed by the OP insurance company as surveyor for the purpose of assessing the claim of the complainant. Its copy has been placed on the record as Annexure C17. Thereafter, correspondence went on between the parties and copies of letters dated 27.07.2009 (Exhibit C18) dated 27.07.2009 (Annexure C19), letter dated 27.07.2009 (Annexure C20), letter dated 28.07.2009 (Annexure C21), surveyor's letter demanding more documents (Annexure C22) form the part of the record. The complainant has also placed copies of other correspondence dated 05.08.2009, 20.08.2009, 19.12.2009 as Exhibits C23, C24, C25, and dated 06.02.2010 as Annexure C67.
5. Ultimately, the Insurance Company repudiated the claim of the complainant vide letter dated 17.02.2010. Its relevant portion runs as follows:
"We acknowledge receipt of your letter dt.06-02-2010. You had obtained the above referred policy (renewal of earlier policies), representing to us that the equipment to be covered is make of year 2002. On your such representation, we, the insurer, in good faith, issued the policy which was renewed from time to time. Now it is revealed and evident from the Final Report of the Surveyor, that the policy was obtained by misrepresentation, misdecription as well as by concealment of facts, that the equipment sought to be covered at inception of cover was not of year 2002, but it is 1994 make. Also, the policy covers Section VIII, wherein the scope of cover is 'Cost of Reinstatement of Data', and not Machinery breakdown.
Taking into consideration all these facts and circumstances of the claim, policy terms & conditions, the undersigned has arrived in good faith that the claim in question is not entertainable/payable and hence the same is treated as closed.
We reserve our right to repudiate the claim under any other grounds, which may be available to us in future."
6. The complainant has called into question the above said repudiation of its claim. It is further averred that the said MRI machine was originally insured with M/s. Oriental Insurance Co. Ltd. during 04.04.2003 to 03.04.2004. The year of manufacture was shown as 2000. The OP took over the insurance cover subsequently and issued insurance policy for the period from 28.10.2004 to 27.10.2005 and in the said policy the year of manufacture was noted as 2000. In the subsequent policies the year of manufacture was mentioned as 2000.
7. Earlier too, the complainants have made a claim for equipment breakdown and the OP got a survey conducted through its surveyor and by letter dated 03.03.2009 settled the claim of the complainant for Rs.19,85,950/-. In the said letter dated 30.03.2009, the OP company stated that the machinery was of six and half years' old one. The instant policy about the MRI machine was issued on 30.04.1999 to 29.04.2000 and it appears that while renewing the policy, the OP wrongly mentioned the year of manufacture as 2002 instead of 2000. The OP did not send the terms & conditions of the policy but only sent the schedule of the policy to the complainant. As a matter of fact, the OP knew the correct year of manufacture as 2000. There was no misrepresentation as such.
8. Again, the assertion of the insurer OP that the policy covers only "cost of re-instatement of data" is again a false and untenable assertion. If the liability is limited to cost of reinstatement of data, then there is no need to go into the year of manufacture of the equipment. The said assertion is false. The true copy of the insurance policy issued by M/s. Oriental Insurance Co. in respect of the said MRI machine is annexed as Annexure C28. The copy of the insurance policy for the period 28.10.2004 to 28.10.2005 issued by the OP insurance company in respect of the above said MRI machine has been annexed as Exhibit C29 and the copies of the further policies have been annexed as Exhibit C30. There was further correspondence. It is averred that cost of replacement of the equipment as of now is about Rs.1,80,00,000/-. The equipment has to be replaced. The salvage amount that could be realised from the equipment is of about Rs.5,00,000/-. The complainants are entitled to Rs.1,00,75,000/- along with interest at the rate of 18% per annum. With this prayer, the complaint was filed before this Commission on 19.11.2010.
DEFENCE
9. The OP has enumerated the following defences. Shri Ravi Narasimhan and Smt. Indrani Narsimhan, husband and wife, complainant Nos.2&3, the shareholders of the company have got no privity of contract with the opposite parties. The policy was taken up by complainant No.1, who is a juristic person. Consequently, the complaint by complainant Nos.2 & 3 is liable to be dismissed. The MRI machine which was got insured by the complainant No.1 from the opposite parties was stated to be of 2002, but actually the same was of 1994 make. The delay in the process of finalising the claim was due to complainant No.1's non-cooperation, suppression and concealment in providing required documents and information to opposite parties and its surveyors. The complainant obtained the insurance policy for Rs.1,00,00,000/- vide policy effective from 04.08.2002 to 03.08.2007 at Bangalore. The copy of insurance policy has been placed on record as Exhibit R1. The complainant No.1 had taken five claims amounting to Rs.6,13,463/- from the opposite party. Within the expiry of the aforesaid policy, the same GE Vector MRI System with serial No.39323 stated to be lying at Kerala MRI Centre, Ernakulam was got insured by complainant No.1 from another branch office of the opposite party at Tumkur in the sum of Rs.1,00,80,000/- effective from 30.04.2007 to 29.04.2008 the copy of which has been annexed with the complaint as Annexure C1. It is admitted that the OP received letter dated 11.02.2008 but there is neither mention of the specific date of loss nor the policy reference relating to the equipment.
10. It was nowhere mentioned in the said letter that the machinery 'became totally non-functional' as is sought to be projected in the complaint. Annexure C-4 is a fabricated document. There is overwriting in the date in the first line of the letter. The date appears as 'second February, 2008, whereas, the actual date is 'second February, 2007'. A copy of the aforesaid letter dated 19.8.2008 of Wipro GE Healthcare has been annexed as Annexure R-2. It is, thus, clear that MRI machine became non-functional on 2.2.2007.
11. Again, complainant No. 1 got insured the aforesaid non-functional MRI Machine by stating the same to be lying at Kerala MRI Centre, Lissie Hospital Campus, Ernakulam Kerala and for this reason, complainant No. 1 took another policy (Annexure C-1 of the complaint) from a different Branch Office of Opposite Parties with respect to the same non-functional MRI machine, even before the expiry period of policy 00000149 (Annexure R-1) as per which, the MRI machine was lying at Jubilee Camdarc Diagnostic Centre, Champarapet, Bangalore. The complainant also filed letter dated 4.8.2008 of Wipro GE Healthcare, which is not specifically addressed to complainant No. 1 but is addressed to 'Whom it may concern' and gives only description and function of 7 specific parts, which were defective in Kerala MRI system. It does not refer to any machine number, model number of which the parts were found to be defective.
12. Again, Annexure C-3 of the complaint does not give any particular reference to the inspection carried out by Wipro GE Health Care of Lissie Hospital, Ernakulam or the extent of damages to the equipment. If Annexure C-3 (letter dated 4.8.2008 of Wipro GE Healthcare) is read with Annexure R-2 (letter dated 19.8.2008 of Wipro GE Healthcare), the same would show that it refers to faults in the MRI machine having taken place on 2.2.2007 and not on 2.2.2008, as is being projected by the complainant No. 1. Annexure C-3 also mentions about the equipment being an old model. There is no specific reference to model number or the year of manufacture of the equipment, therein.
13. Preliminary Surveyor, Mr. Mahabala, vide his letter dated 23.2.2008 asked the complainant to produce purchase invoice copy, quotation for estimated cost of replacement of similar model and capacity, claim form (duly completed), service reports form Wipro GE, Logbook, details, etc. However, the complainant failed to produce the same. Mr. Mahabala released his preliminary Survey report dated 22.10.2008 indicating the probable loss to be around Rs. 5 lakhs.
14. M/s Thomas Grom Surveyors, Cochin was prompted because Mr. Mahabala's report was only a preliminary report. The delay was caused due to non-cooperative attitude of the complainant. Letter dated 26.3.2009 of Wipro GE is vague as it does not indicate as to who had evaluated the worth of the equipment and when. The said letter was released from Bangalore for equipment situated in Ernakulam, without drawing reference to their physical verification of the damaged equipment.
15. The second surveyor was appointed as complainant No. 1 did not co-operate and supply the necessary documents, as one of the pre-requisite for processing the claim. The claim form, filled in, only on 10th August, 2009 on behalf of Jubilee Camdarc Diagnostic Centre, Bangalore, was given, despite having asked from complainant No. 1 by the Surveyor, as early as 23.2.2008, vide annexure R-3. It is also averred that in the four years' of insurance association with Complainant No. 1, its 15 claims were settled, amounting to Rs.35,07,229/-, against a premium payment of only Rs.9,61,744/-. Again, as revealed from Survey report of Mr. Gopalakrishnan, the year of manufacture of MRI machine is 1994 and not 2000, as is now falsely claimed by complainant No. 1. Even in the claim form submitted by complainant No. 1 to the OP, Ext. C-13, filed with the complaint, the year of manufacture has been given as 2002. This is not the question of manufacture as 2002 or 2000, but as established by Surveyor, Mr. Gopalakrishna in his survey report, the year of manufacture of MRI Machine is 1994. All the other allegations have been denied.
16. We have heard the learned counsel for the parties. The complainants' counsel raised three submissions. They have factories at 2 or 3 places. MRI machine in question, suffered a breakdown on 9.2.2008. In their replication, the complainants had made the position clear. Learned counsel for the complainants has invited our attention towards the letter dated 30.3.2009 written by New India Assurance Company Ltd. This letter mentions :
"1.Location : Kerala MRI CENTRE, LISSIE HOSPITAL CAMPUS, ERNAKULAM
2. Name of Instrument : Gradient Coil of GE Vectra MRI
3. HOW MANY YEARS OLD : 6 ½ YEARS OLD ON DATE OF LOSS
4. DATE OF CLAIM : 05.07.2006
5. DATE OF CLAIM SETTLEMENT : 18.10.2006"
At the foot of the letter, it is written :
"thus, we have paid Rs.19,55,950/- towards settlement of above claim."
17. It was argued that the OP had engaged as many as three Surveyors. It accepted the tailor made report of 3rd Surveyor, which has got no value in the eyes of law. The policy was obtained for the period from 28th October, 2005 to Midnight of 27.10.2006 and premium service tax was paid in the sum of Rs.2,57,868/-. The policy in question was for the period from 30.4.2007 to midnight of 29.4.2008. Its IDV is Rs.3,22,00,000/- and premium in the sum of Rs. 4.22 lakhs was mentioned. It mentions the following particulars.
"M/s Advanced Healthcare Recources India (P) Ltd.
Gate No. 2, St. John's Medical College Hospital Campus, Koramangala, Bangalore Dist.
Bangalore, Karnataka 560034"
18. It was argued that the complainants have taken enough time and delayed the compensation for considerable time. It was argued that the complainants are deficient and the claim of the complainants should be allowed.
19. All these arguments have left no impression upon us. The report of the Surveyor, Shri B. Gopalakrishnan is relevant:
" Grounds for Denial of the Claim:-
The claim made on Total Loss of the machine (or) Equipment is not sustainable, because
i) Company covers only the equipment or machine which belongs to the 2002 year of manufacturing. But the equipment presented to Surveyor is of 1994 year of manufacturing. This machine shown is not covered by Company in the Policy. Hence, there is no liability attached to the company with regard to any loss or damage.
ii) Cover is for only with regard to Sec.8.
Apart from this, another point which the insured meritoriously deserves for non-eligibility of the claim is that "Non-Production" of documents. Again here also, this is clubbed with concealment and suppression of Facts.
(a) The copy Original Purchase bill of the equipment (0.5T Vectra MRI System) not provided.
(b) The Inspection Report of the Senior Branch Manager (Ref. NIA/301/ENGG. Claims/2009, dated June 25, 2009 written to the Divisional Office XII Peenya, Bagalore 560058 indicates the Year of Manufacture of the MRI machine under claim as 1994. In the same letter, the Sr. branch Manager writes that he had visited the premises of the location of the risk at Kerala at KERALA MRI CENTRE alongwith Surveyor Mr. T. Thomas for inspection.
This has led to investigation of the entire claim. Finally, it was crystallized that ....."
In AIR 1994 SC 853 the Apex court has held that non-production of document will lead to adverse inference. Insurance operates on "Utmost Good Faith", contemplates an honest effort to ascertain truth of facts.
20. During the arguments, we enquired from learned counsel for the complainants as to where was the original invoice. Learned counsel for the complainants made a vain attempt to avoid this question by stating that the same was lying with the Corporation Bank from whom it had taken the loan. It is surprising to note that no effort was made to produce the original invoice, either before this Commission or before the Surveyor. An integument of suspicion envelopes the case of complainants. This is a lame explanation. It tips the scale in favour of opposite parties.
21. The complainants have produced a certificate dated 12.10.2009 from the Corporation Bank, which runs as follows:
" TO WHOMSOEVER IT MAY CONCERN.
This is to inform that GE-Vectra MRI system, located at Lisie Hospital, Kochi belonging to M/s Advanced Health Care Resources India Pvt. Ltd., Bangalore has been hypothecated to our bank. The said machine is insured with M/s New India Assurance Company vide policy number 672301/48/07/55/00000059 dated 07-05-2007 and Insurance premium has been paid through the company's overdraft account maintained with our branch."
Such like reports or certificates carry exiguous value. The complainants made no effort to get it produced before the Surveyor. There lies no rub in summoning the said document of infinite importance before this Commission.
22. Moreover, the complainants have not come to the Commission with clean hands. The relevant portion of letter dated 19.8.2007 issued by Wipro GE Healthcare runs as follows:
"The last failure on second February 2008 can be attributed to power related issues, as the equipment was functional till previous day.
It is crystal clear that the complainant has changed the above said typed version/document from 2007 to 2008 with pen. There is overwriting, which is visible to the naked eyes.
23. The observations of the Surveyor are mentioned as follows:
"The insured had intimated the loss on 09.02.2008 to the insurers. Accordingly, the company also sent a Surveyor by name Mr. H. S. Mahabala of Bangalore, who in turn visited the risk at Lissie Hospital at Ernakulam, Kerala on 21.2.2008 as per his report. Later submitted a preliminary Survey Report on 22.10.08, but asking certain documents and details from the insured, including the original purchase bill of the machine under claim. Till date, there is no response to this particular document from insured, even after several communications, both from company as well as by the undersigned."
"The insured was frivolous, heedless and never cared to fulfil this requirement which is sine que non. The Onus of providing all documents and information lies on insured. May be a deliberate attempt to camouflage or to wriggle out the issue, the insured tries to tag a slogan/harping on Delay from company!)"
"Several months have run over so far since the time of alleged claim of loss (or) breakdown of the machine was reported. I have gone through the file pertaining to the claim. The crux of the issue is to obtain the vital documents, on the basis of which only Survey report (final ) could be prepared. Also another issue is location of risk, which is at a different state namely Kerala and the policy issued by a Tumkur branch of insurer of Karnataka. One such very important document is the copy of Original Purchase bill of the machine. This was sought for, by the Surveyor Sri H. S. Mahabala way back on 22.10.2008 after his preliminary Survey was completed......."
"The Undersigned had verified document to that effect and Inferred that the equipment under claim is originally belonging to the year 1994-95. This is evidenced through the First Annual Maintenance Contract with M/S :Soni Medical Resources and M/S : Wipro GE Health Care. Even the Logbook copy also was seen and for both, the attested copies were obtained from M/S : Wipro GE Health Care, Ernakulam and accordingly they were submitted to the insurers by the undersigned. These documents namely the Attested copies of the first Annual Maintenance Contract and logbook drive us to a pushfulness and assertive decision of denial of the claim. This report is made possible only after snoop at various quarters like service/Repairer/Supplier of machine, Registrar of Companies, Bankers etc. It is a bonafide exercise to reach a finality of the claim and to know the Truth- It is determined and resolved to deny the claim after perusal of all Records encompassing all aspects. There is not even an iota of truth in the claim form. Thus the claim is vitiated......."
"During visit, I discussed in detail with Mr. Ganesh Acharya about failure of MRI unit and feels that it might be due to erratic power supply from electricity board. But no records available about the erratic power supply. If we see the extent of damages, there may be an erractic Power supply. According to the insured and may personal inspection, the MRI is protected by UPS and voltage stabilizer (5KVA on line KRYCARD stabilizer) working on stabilized DC volts. Any Spikes and voltage surges will damage the units. Though they have protected the above items by UPS & Voltage Stabilizer, under normal usage, Voltage Surges do not affect or damage the system. But heavy voltage surge flowing through the system, due to voltage fluctuation will certainly damaging the parts which cannot be averted. The incident, therefore, was an unforeseen and sudden one result in physical internal damage to the electronic parts......".
"We've to depend on corroborative evidence with regard to "CAUSE OF LOSS" either due to short ckt (or) Quality Failure in Electric Supply (harmonic/Surge/Fluctuation in volt) But loss is there. Total loss.
Whole machine failed.
Apart from this, as already highlighted in Preamble, in absence of documents and informations from insured, (especially Purchase Invoice copy, which is a Vaxatious issue here in this case) the claim deserves to be thrown out at the threshold itself. As otherwise, the insurance company will be prejudiced......"
"Material and information gathered.
= 1994 model machine = Mr OmSoni - sold the machine in 1999 to Mr. Ravi Narasimhan of the insured."
24. It is surprising to note that the evidence in rebuttal was not produced. Affidavit of Om Soni would have gone a long way to establish the case of the complainants. The ball was in the court of the complainants. The inaction on their part is pernicious. In his absence, the case of the complainants collapses like a pricked balloon.
25. Recommendations:- (Surveyor's report)
(a) False statement in claim form
(b) The information sought for Mr. John Finance Manager of M/s Lissie Hospital, Campus, Ernakulam on visit 2.4.09 gives two shocking aspects
(i) Camera and accessories sold or shifted to some other place of insured.
(ii) O. S. in Sub - court in ERNAKULAM, Kerala as O.S. No. 735/2008 towards eviction of the insured from the Hospital premises. The insured had falsely stated to the undersigned that he had to obtain permission to enter for inspection. The Finance Manager Mr. John clearly told the undersigned on the visit on 02.08.2009 to Lissie Hospital that the premises are under the control of the insured under lock and key with insured. The undersigned tried to visit the premises and met one Mr. Prasad (Who is watch-keeping) on 02.09.2009 wherein the said watchman phoned up Mr. Ravi Narasimhan in front of me, and then informed the undersigned as he had been asked not to allow me inside. This is in violation of condition of "Right of entry" as per condition 7 of contract.
(iii) Refusal to take Surveyor B. Gopalakrishnan inside the Kerala MRI Centre to take Photos, is bad in attitude of the insured. The undersigned all the way went to Kerala twice, which consumes a lot of time and effort.
(iv) Scrap offer @ Rs. 5 lakhs. (v) The insured has made an imbroglio and we are now to separate and distinguish the issues."
26. The case of the complainants is littered with the evidence of its weaknesses. They have made a feckless attempt to assail the repudiation of their claim. The complaint is hereby dismissed but there shall be no orders as to costs.
......................J J.M. MALIK PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER